EXHIBIT 4.2
EXHIBIT C
to Securities Purchase Agreement
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of June 30,
1999, by and among Identix Incorporated, a corporation organized under the laws
of the State of Delaware (the "Company"), and the undersigned (the "Initial
Investors").
WHEREAS:
A. The Company and the Initial Investors have entered into a Securities
Purchase Agreement dated the date hereof (the "Securities Purchase Agreement;"
capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement). In
connection with the Securities Purchase Agreement, the Company has agreed, upon
the terms and subject to the conditions contained therein, to issue and sell to
the Initial Investors (i) shares of the Company's common stock, par value $0.01
per share (the "Common Stock"), (ii) the Series 1 Warrants, (iii) the Series 2
Warrants (together, the Series 1 Warrants and the Series 2 Warrants are the
"Warrants"). The shares of Common Stock issued on the Closing Date under the
Securities Purchase Agreement (the "Closing Date") are referred to herein as the
"Shares" and the shares of Common Stock issuable upon exercise of or otherwise
pursuant to the Warrants are referred to herein as the "Warrant Shares."
B. To induce the Initial Investors to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), and applicable state securities laws;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Initial
Investors, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS.
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As used in this Agreement, the following terms shall have the
following meanings:
(i) "Investors" means the Initial Investors and any permitted
transferees or assignees who agree to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
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(ii) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "Registrable Securities" means (i) the Shares, (ii) the
Warrant Shares, (iii) any shares of Common Stock issued to an Investor in lieu
of any cash penalty payment pursuant to Section 2(c) hereof and (iv) any shares
of capital stock issued or issuable, from time to time (with any adjustments),
as a distribution on or in exchange for or otherwise with respect to any of the
foregoing, whether as default payments or otherwise.
(iv) "Registration Statement" means one or more registration
statements of the Company under the Securities Act registering all of the
Registrable Securities, including the Initial Registration Statement, any
Uncovered Shares Amendments and Uncovered Shares Registration Statements (each,
as defined below).
2. REGISTRATION.
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a. Mandatory Registration. The Company shall file with the United
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States Securities and Exchange Commission ("SEC"), on or prior to the date which
is two (2) business days after the Closing Date (the "Filing Deadline") a
Registration Statement on Form S-3 (or, if Form S-3 is not then available, on
such form of Registration Statement as is then available to effect a
registration of all of the Registrable Securities, subject to the consent of the
Initial Investors as to the use of such form (as determined pursuant to Section
11(j) hereof)) covering the resale of at least 3,079,711 shares of Common Stock,
which Registration Statement, to the extent allowable under the Securities Act
and the Rules promulgated thereunder shall state that such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon exercise of the Warrants to prevent dilution
resulting from stock splits, stock dividends or similar transactions (the
"Initial Registration Statement"). Upon the request of the Investors made more
than 15 business days after the Closing Date but prior to the Effective Date of
the Initial Registration Statement, the Company will file a pre-effective
amendment to the Initial Registration Statement (the "Pre-Effective Amendment")
such that the Initial Registration Statement shall additionally cover
Registrable Securities equal to a good faith estimate of the number of shares of
Common Stock issuable upon exercise of the Series 1 B Warrants (with a
presumption that such estimate will equal the maximum number of shares of Common
Stock issuable under the Series 1 B Warrant). The Pre-Effective Amendment shall
be filed as soon as practicable, but in all events within five (5) days, after
such request. The Registrable Securities included in the Initial Registration
Statement shall be registered on behalf of the Investors as set forth in Section
11(k) hereof. The Initial Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided to (and subject to the review by) the Initial Investors and
their counsel at least two business days prior to its filing or other
submission. If for any reason (including, but not limited to, a determination
by the staff of the
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SEC that all or any portion of the Warrant Shares or any other Registrable
Securities cannot be included in the Initial Registration Statement (an "SEC
Determination")) the Initial Registration Statement declared effective by the
SEC does not include all of the Registrable Securities (any such shares that are
not included being the "Uncovered Shares"), the Company shall prepare and file
with the SEC, as soon as practicable, but in any event prior to the later of (x)
the tenth (10th) day after an Investor delivers to the Company notice of the
existence of any Uncovered Shares and (y) the tenth (10th) day after the date on
which the Initial Registration Statement is declared effective by the SEC (such
later date referred to herein as the "Uncovered Share Filing Deadline"), either
(a) an amendment (the "Uncovered Shares Amendment") to the Initial Registration
Statement effecting a registration of all of the Uncovered Shares or (b) a
registration statement which registers all of the Uncovered Shares (the
"Uncovered Shares Registration Statement"). The Uncovered Shares Amendment or
the Uncovered Shares Registration Statement (and each amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall be
provided to the Initial Investors and their counsel for review and comment at
least two business days prior to its filing or other submission. The Company
shall use its best efforts to cause each of the Initial Registration Statement
and the Uncovered Shares Amendment or the Uncovered Shares Registration
Statement to become effective as soon as practicable after the filing thereof.
b. Underwritten Offering. The Investors may offer and sell the
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Registrable Securities pursuant to a Registration Statement filed in accordance
with Section 2(a) in an underwritten offering. In any such underwritten
offering, the Investors who hold a majority in interest of the Registrable
Securities subject to such underwritten offering, shall have the right to select
one legal counsel to represent the Investors and an investment banker or bankers
and manager or managers to administer the offering, which investment banker or
bankers or manager or managers shall be reasonably satisfactory to the Company.
In the event that any Investors elect not to participate in such underwritten
offering, the Registration Statement covering all of the Registrable Securities
shall contain appropriate plans of distribution reasonably satisfactory to the
Investors participating in such underwritten offering and the Investors electing
not to participate in such underwritten offering (including, without limitation,
the ability of nonparticipating Investors to sell from time to time and at any
time during the effectiveness of such Registration Statement).
c. Payments by the Company.
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(i) The Company shall use its best efforts to cause each Registration
Statement required to be filed pursuant to Section 2(a) hereof to become
effective as soon as practicable, but, as to the Initial Registration Statement
including all Registrable Securities for which the Investors have requested a
Pre-Effective Amendment filed pursuant to Section 2(a), in no event later than
the ninetieth (90th) day after the Closing Date (the "Registration Deadline"),
and as to any Uncovered Shares Amendment or Uncovered Shares Registration
Statement, in no event later than the sixtieth (60th) day after the Uncovered
Share Filing Deadline (the "Uncovered Share Registration Deadline"). If (A) the
Registration Statement(s) covering the Registrable Securities required to be
filed by the Company pursuant to Section 2(a) hereof is not filed with the SEC
by the Filing Deadline or the Uncovered Share Filing Deadline, as applicable,
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or (B) the Initial Registration Statement including all Registrable Securities
for which the Investors have requested a Pre-Effective Amendment is not declared
effective by the SEC on or before the Registration Deadline, or (C) any
Uncovered Share Registration Statement is not declared effective by the SEC on
or before the Uncovered Share Registration Deadline, or (D) after a Registration
Statement has been declared effective by the SEC, sales of all the Registrable
Securities (including any Registrable Securities required to be registered
pursuant to Section 3(b) hereof) required to be included therein (except, in the
case of the Initial Registration Statement, for Uncovered Shares which are the
subject of an SEC Determination) cannot be made pursuant to the Registration
Statement because such Registration Statement ceases to be effective under the
Securities Act or the Company informs the Investors that they should not use the
Registration Statement for sales of Registrable Securities (each a "Registration
Suspension"), then the Company will, subject to Section 2(c)(iv) below, make
payments to the Investors in such amounts and at such times as shall be
determined pursuant to this Section 2(c) as relief for the damages to the
Investors by reason of any such delay in or reduction of their ability to sell
the Registrable Securities (which remedy shall not be exclusive of any other
remedies available to obtain specific performance by the Company of its
obligations hereunder).
(ii) Filing and Effectiveness Deadlines. In the event the penalty
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provisions of Section 2(c)(i) are triggered with respect to the Initial
Registration Statement, the Company shall pay to each Investor an amount equal
to (A) the Investment Amount (as defined in the Securities Purchase Agreement)
paid by such Investor (or if such Investor is not an Initial Investor, the
Investment Amount paid by such Investor's transferor or assignor with respect to
the transferred Shares and Warrants) for the Shares and Warrants purchased by
such Investor (or such Investor's transferor or assignor) pursuant to the
Securities Purchase Agreement (the "Aggregate Purchase Price"), multiplied by
(B) one percent (with respect to the period commencing on the Filing Deadline or
the Registration Deadline, as applicable; provided that such percentage shall
increase to and remain at two percent (2%) for purposes of all calculations to
the extent that such calculations apply to time periods after the thirtieth
(30th) day after the Filing Deadline or the Registration Deadline, as
applicable), multiplied by (C) the sum of (1) the quotient calculated by
dividing (aa) the number of days after the Filing Deadline and prior to the date
the Registration Statement as required to be filed pursuant to Section 2(a), is
filed with the SEC by (bb) thirty, plus (2) the quotient calculated by dividing
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(aa) the number of days after the Registration Deadline and prior to the date
the Registration Statement including all Registrable Securities for which the
Investors have requested a Pre-Effective Amendment pursuant to Section 2(a), is
declared effective by the SEC by (bb) thirty, plus (3) in the event of a
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Registration Suspension, except in the case of a Blackout Period (as defined
below), the quotient calculated by dividing (aa) the sum of the number of
additional days that sales of any Registrable Securities required to be included
in a Registration Statement (except, in the case of the Initial Registration
Statement, for any Uncovered Shares which are the subject of an SEC
Determination) cannot be made pursuant to a Registration Statement after such
Registration Statement has been declared effective by (bb) thirty.
(iii) Uncovered Share Filing and Effectiveness Deadlines. In the
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event the penalty provisions of Section 2(c)(i) are triggered with respect to
any Uncovered Shares, the Company shall pay to each Investor an amount equal to
(A) the aggregate value of the B Warrant
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Shares (as defined in the Series 1 Warrant) issued to such Investor based on a
price per share equal to the Average Price (as defined in the Series 1 Warrant)
of the Company's Common Stock on the effective date of the Initial Registration
Statement, multiplied by (B) one percent (with respect to the period commencing
on the Uncovered Share Filing Deadline or the Uncovered Share Registration
Deadline, as applicable; provided that such percentage shall increase to and
remain at two percent (2%) for purposes of all calculations to the extent that
such calculations apply to time periods after the thirtieth (30th) day after the
Uncovered Share Filing Deadline or the Uncovered Registration Deadline, as
applicable), multiplied by (C) the sum of (1) the quotient calculated by
dividing (aa) the number of days after the Uncovered Share Filing Deadline and
prior to the date the Uncovered Share Amendment or Uncovered Share Registration
Statement, as applicable, in each case as required to be filed pursuant to
Section 2(a), is filed with the SEC by (bb) thirty, plus (2) the quotient
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calculated by dividing (aa) the number of days after the Uncovered Share
Registration Deadline, as applicable, and prior to the date the Uncovered Share
Amendment or Uncovered Share Registration Statement, as applicable, in each case
as filed pursuant to Section 2(a), is declared effective by the SEC by (bb)
thirty.
(iv) Notwithstanding the foregoing, a Registration Suspension effected
by the Company pursuant to a Blackout Period (as defined below) shall not give
rise to an obligation to make such payments. For purposes of this Agreement,
"Blackout Period" shall mean such day or days, not to exceed an aggregate of
thirty (30) business days during any period of twelve (12) consecutive months,
with respect to which the Board of Directors of the Company determines in good
faith (A) that an amendment or supplement to a Registration Statement or
prospectus contained therein is necessary, in light of subsequent events, in
order to correct a material misstatement made therein or to include information
the absence of which would render the Registration Statement or such prospectus
materially misleading and (B) that the filing of such amendment or supplement
would result in the disclosure of information which the Company has a bona fide
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business purpose for preserving as confidential; provided that the Company shall
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be entitled to impose no more than two (2) Blackout Periods during any period of
twelve (12) consecutive months.
(v) Method of Payment. Amounts payable under this Section 2(c) shall
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be paid in cash provided, however, that, with respect to each Investor, upon
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mutual agreement between the Company and such Investor, such amount may be paid
in shares of Common Stock at a price equal to the Market Price (as defined in
the Securities Purchase Agreement) as of the date such shares are issued, and
any shares of Common Stock so issued shall be Registrable Securities.
Payments of cash pursuant hereto shall be made within five (5) days after the
end of each period that gives rise to such obligation, provided that, if any
such period extends for more than thirty (30) days, interim payments shall be
made for each such thirty (30) day period. Delivery of shares of Common Stock
issued as payment of the amounts set forth in this Section 2(c) shall be made
within three (3) business days after the Investor and the Company agree that
such Investor shall receive Common Stock instead of cash. If such payment is
not made, or securities are not delivered, as the case may be, within the
applicable period, the Investor thereafter shall be
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entitled to interest on the unpaid amount at a rate equal of two percent (2%)
per month until such amount is paid in full to the Investor. If the Company is
unable to pay all amounts due and payable with respect to the penalties, the
Company will pay the Investors such amounts pro rata based upon the total
amounts payable to each Investor as a percentage of the total amounts payable to
all Investors.
(vi) Notwithstanding anything else in this Section 2(c), penalties
shall cease accruing under this Section 2(c) upon the expiration of the
Registration Period (as defined below).
d. Eligibility for Form S-3. The Company represents and warrants
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that it is eligible to register the resale of Registrable Securities on a
registration statement on Form S-3 under the Securities Act. To the Company's
knowledge, after reasonable investigation, there exist no facts or circumstances
(including without limitation any required approvals or waivers or any
circumstances that may delay or prevent the obtaining of accountant's consents)
that would prohibit or delay the preparation and filing of a registration
statement on Form S-3 with respect to the Registrable Securities. The Company
shall file all reports required to be filed by the Company with the SEC in a
timely manner so as to maintain or, if applicable, regain its eligibility for
the use of Form S-3.
3. OBLIGATIONS OF THE COMPANY.
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In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
a. The Company shall prepare and file with the SEC, on or before the
Filing Deadline or the Uncovered Share Filing Deadline, as applicable, the
applicable Registration Statement required by Section 2(a) and shall use its
best efforts to cause such Registration Statement to become effective as soon as
practicable after such filing (but in no event later than the Registration
Deadline or the Uncovered Share Registration Deadline, as applicable). The
Company shall keep such Registration Statement effective pursuant to Rule 415 at
all times until the date on which all of the Registrable Securities (in the
reasonable opinion of counsel to the Initial Investors or the Company) may be
immediately sold to the public in a single transaction pursuant to Rule 144(k)
under the Securities Act or otherwise without registration or restriction (the
"Registration Period"). Each such Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein and all
documents incorporated by reference therein) (i) shall comply in all material
respects with the requirements of the Securities Act and the rules and
regulations of the SEC promulgated thereunder and (ii) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein not misleading.
The financial statements of the Company included in the Registration Statement
or incorporated by reference therein will comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC applicable with respect thereto. Such financial
statements will be prepared in accordance with U.S. generally accepted
accounting principles, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in
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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 on summary statements and fairly present in all material respects the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end adjustments)).
b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration Statement
as may be necessary to keep the Registration Statement effective at all times
during the Registration Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement. If for any reason the number
of shares registered under the Initial Registration Statement filed pursuant to
this Agreement plus the number of shares then required to be registered under an
Uncovered Share Amendment or Uncovered Share Registration Statement is, for any
three (3) consecutive trading days (the last of such three (3) trading days
being the "Registration Trigger Date"), insufficient to cover one hundred
percent (100%) of the Registrable Securities (including Registrable Securities
issuable upon exercise of the Warrants (without giving effect to any limitations
on exercise contained in Section 7(g) of the Warrants)), the Company shall amend
the Registration Statement, or file a new Registration Statement (on the
shortest form available therefor, if applicable), or both, so as to cover one
hundred percent (100%) of the Registrable Securities (including Registrable
Securities issuable upon exercise of the Warrants (without giving effect to any
limitations on exercise contained in Section 7(g) of the Warrants)) as of the
Registration Trigger Date, in each case, as soon as practicable, but in any
event within ten (10) days after the Registration Trigger Date. The Company
shall use its best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof. Any failure by the Company to effectuate the provisions of this
Section shall result in the accrual of penalties as set forth in Section 2.
c. The Company shall furnish to each Investor whose Registrable
Securities are included in the Registration Statement and its legal counsel (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto. In the case of the Registration Statement referred to in
Section 2(a), at the request of any Investor, the Company shall furnish to such
Investor a copy of each letter written by or on behalf of the Company to the SEC
or the staff of the SEC at least 2 days prior to the date of submission of such
letter (including, without limitation, any request to accelerate the
effectiveness of any Registration Statement or amendment thereto), and, promptly
upon receipt, each item of correspondence from the SEC or the staff of the SEC,
in each case relating to such Registration Statement (other than any portion, if
any, thereof which contains information for which the Company has sought
confidential treatment), and the Company shall cooperate with each Investor in
making all reasonable
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modifications requested by such Investor to any portion of any letter or other
correspondence from the Company to the SEC that addresses the transactions
contemplated by the Securities Purchase Agreement or such Investor, (ii) on the
date of effectiveness of the Registration Statement or any amendment thereto, a
notice stating that the Registration Statement or amendment has been declared
effective, and (iii) such number of copies of a prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor.
d. In the event the Investors who hold a majority in interest of the
Registrable Securities being offered in an offering select underwriters for the
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering.
e. As promptly as practicable after becoming aware of such event, the
Company shall notify each Investor by telephone and facsimile of the happening
of any event, of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and, except during a Blackout Period, use its best efforts promptly
to prepare a supplement or amendment to the Registration Statement to correct
such untrue statement or omission and deliver such number of copies of such
supplement or amendment to each Investor as such Investor may reasonably
request.
f. The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
and, if such an order is issued, to obtain the withdrawal of such order at the
earliest practicable date (including in each case by amending or supplementing
such Registration Statement) and to notify each Investor who holds Registrable
Securities being sold (or, in the event of an underwritten offering, the
managing underwriters) of the issuance of such order and the resolution thereof
(and if such Registration Statement is supplemented or amended, deliver such
number of copies of such supplement or amendment to each Investor as such
Investor may reasonably request).
g. The Company shall permit a single firm of counsel designated by
the Initial Investors to review the Registration Statement and all amendments
and supplements thereto a reasonable period of time prior to their filing with
the SEC.
h. The Company shall make generally available to its security holders
as soon as practical, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.
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i. At the request of any Investor whose Registrable Securities are
included, in the case of an underwritten offering, in a Registration Statement,
the Company shall furnish, on the date of effectiveness of the Registration
Statement (i) an opinion, dated as of such date, from counsel representing the
Company addressed to the Investors and in form, scope and substance as is
customarily given in an underwritten public offering and (ii) a letter, dated
such date, from the Company's independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
Investors and the underwriters, if any.
j. The Company shall make available for inspection by (i) any
Investor whose Registrable Securities are included in a Registration Statement,
(ii) any underwriter participating in any disposition pursuant to a Registration
Statement, (iii) one firm of attorneys and one firm of accountants or other
agents retained by the Investors, and (iv) one firm of attorneys retained by all
such underwriters (collectively, the "Inspectors") all pertinent financial and
other records, and pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably deemed necessary by each
Inspector to enable each Inspector to exercise its due diligence responsibility,
and cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request for purposes of such due
diligence, provided, however, that each such Inspector shall, if reasonably
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requested to do so by the Company, be required to execute a confidentiality
agreement in form and substance reasonably acceptable to such Inspector and the
Company.
k. The Company shall hold in confidence and not make any disclosure
of information concerning an Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement, or (v) such Investor
consents to the form and content of any such disclosure. The Company agrees
that it shall, upon learning that disclosure of such information concerning an
Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Investor prior
to making such disclosure, and allow the Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
l. The Company shall use its best efforts to promptly either (i)
cause all the Registrable Securities covered by the Registration Statement to be
listed on the NYSE or the AMEX or another national securities exchange and on
each additional national securities exchange on which securities of the same
class or series issued by the Company are then listed, if any, if the listing of
such Registrable Securities is then permitted under the rules of such exchange,
or (ii) secure the designation and quotation, of all the Registrable Securities
covered by the Registration Statement on the NNM and, without limiting the
generality of the foregoing, to arrange for or maintain at least two market
makers to register with the National Association of Securities Dealers, Inc.
("NASD") as such with respect to such Registrable Securities.
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m. The Company shall provide a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
n. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Investors may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request, and, within three (3)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel selected by the Company to deliver, to the transfer agent
for the Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) an opinion of such
counsel in the form attached hereto as Exhibit 1.
o. Following effectiveness of the Initial Registration Statement, at
the request of an Initial Investor or Investors who holds a majority-in-interest
of the Registrable Securities, the Company shall prepare and file with the SEC
such amendments (including post-effective amendments) or supplements to a
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement; provided, however, that
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in the event that the Company files an amendment at the request of the Initial
Investors pursuant to this paragraph and the SEC reviews such amendment, then
the Company shall not be responsible for any penalties under Section 2(c) from
any resulting Registration Suspension arising solely from said review so long as
the Company uses its best efforts to have the Registration Statement declared
effective as soon as practicable following such Registration Suspension.
p. The Company shall comply with all applicable laws related to a
Registration Statement and offering and sale of securities and all applicable
rules and regulations of governmental authorities in connection therewith
(including without limitation the Securities Act and the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated by the SEC).
q. The Company shall take all such other actions as any Investor or
the underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities.
r. From and after the date of this Agreement, the Company shall not,
and shall not agree to, allow the holders of any securities of the Company to
include any of their securities in the Initial Registration Statement under
Section 2(a) hereof or any amendment or supplement thereto under Section 3(b)
hereof without the consent of the holders of a majority in interest of the
Registrable Securities, provided, however, that up to 33,186 shares of the
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Company's Common Stock issuable upon exercise of warrants issued to Xxxxxxxxx &
Xxxxx as compensation for its role in the transactions contemplated by the
Securities Purchase Agreement may be included in the Initial Registration
Statement.
4. OBLIGATIONS OF THE INVESTORS.
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In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
a. Each Investor shall use its best efforts to promptly provide the
Company with any information reasonably requested by the Company relating to
such Investor, the plan of distribution or otherwise within the knowledge of
such Investor in connection with responding to comments received by the Company
from the SEC or in connection with the preparation, filing or effectiveness of
any registration statement hereunder. It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such Investor shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request. At least three (3) business days prior to the first
anticipated filing date of the Registration Statement, the Company shall notify
each Investor of any information the Company requires from each such Investor.
The Company shall provide each Investor with a draft registration statement
prior to filing, and if such Investor does not object to the contents of such
draft within two (2) days of its delivery, the Company may file such
registration statement after such second day.
b. Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement.
c. In the event Investors holding a majority in interest of the
Registrable Securities being offered determine to engage the services of an
underwriter, each Investor agrees to enter into and perform such Investor's
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriter(s) of such offering and the Company and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of the Registrable Securities, unless such Investor has notified
the Company in writing of such Investor's election not to participate in such
underwritten distribution.
d. No Investor may participate in any underwritten distribution
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
-11-
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) agrees to pay its pro rata share of all
underwriting discounts and commissions and any expenses in excess of those
payable by the Company pursuant to Section 5 below. Notwithstanding anything in
this Section 4(d) to the contrary, this Section 4(d) is not intended to limit an
Investor's rights under Section 2(a) or 3(b) hereof.
e. In the event that the Company informs the Investor that the
Company must file an amendment or supplement to the Registration Statement to
correct an untrue statement or omission pursuant to Section 3(d) of this
Agreement, the Investor will not sell any Shares until the Company notifies the
Investor that the Company has filed such amendment or supplement.
5. EXPENSES OF REGISTRATION.
------------------------
All reasonable expenses incurred by the Company in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3 above,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company, shall be borne by the Company. Fees and disbursements of one
counsel selected by the Investors in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3 above shall be deemed reimbursable
"Expenses" under Section 5(e) of the Securities Purchase Agreement.
6. INDEMNIFICATION.
---------------
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the extent permitted by law, the Company will indemnify, hold
harmless and defend (i) each Investor who holds such Registrable Securities, and
(ii) the directors, officers, partners, members, employees and agents of such
Investor and each person who controls any Investor within the meaning of Section
15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), if any (each, an "Indemnified Person"), against
any joint or several losses, claims, damages, liabilities or expenses
(collectively, together with actions, proceedings or inquiries by any regulatory
or self-regulatory organization, whether commenced or threatened, in respect
thereof, "Claims") to which any of them may become subject insofar as such
Claims arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or the omission
or alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or
-12-
any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"). Subject to the restrictions set forth in
Section 6(c) with respect to the number of legal counsel, the Company shall
reimburse the Investors and each other Indemnified Person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person expressly for use in the Registration
Statement or any such amendment thereof or supplement thereto; (ii) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld; and (iii) with respect to any preliminary prospectus,
shall not inure to the benefit of any Indemnified Person if the untrue statement
or omission of material fact contained in the preliminary prospectus was
corrected on a timely basis in the prospectus, as then amended or supplemented,
if such corrected prospectus was timely made available by the Company pursuant
to Section 3(c) hereof, and the Indemnified Person was promptly advised in
writing not to use the incorrect prospectus prior to the use giving rise to a
Violation and such Indemnified Person, notwithstanding such advice, used it.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investors pursuant to Section
9.
b. In connection with any Registration Statement in which an Investor
is participating, each such Investor agrees severally and not jointly to
indemnify, hold harmless and defend, to the same extent and in the same manner
set forth in Section 6(a), the Company, each of its directors, each of its
officers who signs the Registration Statement, its employees, agents and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and any other stockholder
selling securities pursuant to the Registration Statement or any of its
directors or officers or any person who controls such stockholder or underwriter
within the meaning of the Securities Act or the Exchange Act (collectively and
together with an Indemnified Person, an "Indemnified Party"), against any Claim
to which any of them may become subject, under the Securities Act, the Exchange
Act or otherwise, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement; and subject to Section 6(c) such Investor will
reimburse any legal fees and expenses (promptly as such expenses are incurred
and are due and payable) reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably withheld;
provided, further, however, that the Investor shall be liable under this
Agreement (including this Section 6(b) and Section 7) for only that amount as
does not exceed the net proceeds actually received by such Investor as a result
of the sale of Registrable Securities pursuant to such Registration
-13-
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9.
c. Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that such indemnifying party shall not be entitled to assume such
defense and an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential conflicts of interest between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding or the actual or potential defendants in, or targets of, any such
action include both the Indemnified Person or the Indemnified Party and the
indemnifying party and any such Indemnified Person or Indemnified Party
reasonably determines that there may be legal defenses available to such
Indemnified Person or Indemnified Party which are in conflict with those
available to such indemnifying party. The indemnifying party shall pay for only
one separate legal counsel for the Indemnified Persons or the Indemnified
Parties, as applicable, and such legal counsel shall be selected by Investors
holding a majority-in-interest of the Registrable Securities included in the
Registration Statement to which the Claim relates (with the approval of the
Initial Investors if any of them holds Registrable Securities included in such
Registration Statement), if the Investors are entitled to indemnification
hereunder, or by the Company, if the Company is entitled to indemnification
hereunder, as applicable. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is actually prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
7. CONTRIBUTION.
------------
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that (i) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6, (ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section
-14-
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation, and (iii) contribution (together with any indemnification or
other obligations under this Agreement) by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. REPORTS UNDER THE EXCHANGE ACT.
------------------------------
With a view to making available to the Investors the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees,
during the Registration Period, to:
a. file with the SEC in a timely manner and make and keep available
all reports and other documents required of the Company under the Securities Act
and the Exchange Act so long as the Company remains subject to such requirements
(it being understood that nothing herein shall limit the Company's obligations
under Section 5(c) of the Securities Purchase Agreement) and the filing and
availability of such reports and other documents is required for the applicable
provisions of Rule 144; and
b. furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
---------------------------------
The rights of the Investors hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall only
be assignable by an Investor to a Permitted Transferee (as defined in the
Securities Purchase Agreement) and only if: (i) the Investor agrees in writing
with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company after such assignment, (ii) the Company is
furnished with written notice of (a) the name and address of such transferee or
assignee and (b) the securities with respect to which such registration rights
are being transferred or assigned, (iii) following such transfer or assignment,
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (iv)
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions contained herein, and (v) such transfer shall have been made
in accordance with the applicable requirements of the Securities Purchase
Agreement. In addition, and notwithstanding anything to the contrary contained
in this Agreement, the Securities Purchase Agreement or the Warrants, the
Securities (as defined in the Securities Purchase Agreement) may be pledged, and
all rights of the Investors under this Agreement or any other agreement or
document related to the transaction
-15-
contemplated hereby may be assigned, without further consent of the Company, to
a bona fide pledgee in connection with an Investor's margin or brokerage
accounts.
10. AMENDMENT OF REGISTRATION RIGHTS.
--------------------------------
Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with written consent of the Company, and the Investors
who hold a majority in interest of the Registrable Securities. Any amendment or
waiver effected in accordance with this Section 10 shall be binding upon each
Investor and the Company.
11. MISCELLANEOUS.
-------------
a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities and/or any of the Warrants. If the Company receives conflicting
instructions, notices or elections from two or more persons or entities with
respect to the same Registrable Securities or Warrants, the Company shall act
upon the basis of instructions, notice or election received from the registered
owner of such Registrable Securities.
b. Any notices required or permitted to be given under the terms of
this Agreement shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five (5) days after being placed in the mail, if mailed, one
(1) business day after being deposited with a nationally recognized overnight
delivery service, or immediately if delivered personally, by same-day courier or
by confirmed telecopy, (such confirmation being conclusive proof of receipt or
delivery) in each case addressed to a party. The addresses for such
communications shall be:
If to the Company:
Identix Incorporated
000 X. Xxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: President
With a copy to:
Xxxxxxx X. Peers
Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxxxxxxxx Xxx.
Xxxx Xxxx, XX 00000-0000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
-16-
If to an Investor, at such address as such Investor shall have provided in
writing to the Company or such other address as such Investor furnishes by
notice given in accordance with this Section 11(b).
c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
d. This Agreement shall be governed by and construed in accordance
with the laws of the State of California applicable to contracts made and to be
performed in the State of California. Each party irrevocably consents to the
jurisdiction of the United States federal courts and state courts located in San
Francisco, California in any suit or proceeding based on or arising under this
Agreement and irrevocably agrees that all claims in respect of such suit or
proceeding shall be determined in such courts. Each party irrevocably waives
the defense of an inconvenient forum to the maintenance of such suit or
proceeding. Each party further agrees that service of process upon it mailed by
first class mail to the address set forth in Section 11(b) shall be deemed in
every respect effective service of process upon it in any such suit or
proceeding. Nothing herein shall affect any party's right to serve process in
any other manner permitted by law. Each party agrees that a final non-
appealable judgment in any such suit or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
e. This Agreement, the Securities Purchase Agreement and the Warrants
(including all schedules and exhibits thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement, the
Securities Purchase Agreement and the Warrants supersede all prior agreements
and understandings among the parties hereto and thereto with respect to the
subject matter hereof and thereof.
f. Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
g. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates,
-17-
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
j. All consents, approvals and other determinations to be made by the
Investors pursuant to this Agreement shall be made by the Investors holding a
majority in interest of the Registrable Securities (determined as if all
Warrants then outstanding had been exercised by the payment of cash) then held
by all Investors.
k. The initial number of Registrable Securities included on any
Registration Statement and each increase to the number of Registrable Securities
included thereon shall be registered on behalf of each Investor pro rata based
on the number of Registrable Securities held by each Investor at the time of
such establishment or increase, as the case may be. In the event an Investor
shall sell or otherwise transfer any of such holder's Registrable Securities,
each transferee shall be deemed to have registered on its behalf a pro rata
portion of the number of Registrable Securities included on a Registration
Statement for such transferor. Any shares of Common Stock included on a
Registration Statement on behalf of any person or entity which does not hold any
Registrable Securities shall be deemed registered on behalf of the remaining
Investors, pro rata based on the number of shares of Registrable Securities then
held by such Investors. For the avoidance of doubt, (A) the number of
Registrable Securities held by an Investor shall be determined as if all
Warrants then outstanding and held by an Investor were exercised by the payment
of cash and (B) no provision of this subsection shall operate to reduce the
number of Registrable Securities registered on behalf of any Investor pursuant
to the first sentence of this subsection.
l. For purposes of this Agreement, the term "business day" means any
day other than a Saturday or Sunday or a day on which banking institutions in
the State of California are authorized or obligated by law, regulation or
executive order to close.
[Remainder of Page Intentionally Left Blank]
-18-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
IDENTIX INCORPORATED
By:/s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
Its: President and CFO
----------------------------------
INITIAL INVESTORS:
CAPITAL VENTURES INTERNATIONAL
By: Heights Capital Management, Inc.,
Its authorized agent
By: /s/ XXXXXXX XXXXXX
---------------------------------
Name: Xxxxxxx Xxxxxx
-------------------------------
Title: Secretary and General Counsel
------------------------------
-19-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
IDENTIX INCORPORATED
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
Its: President and CFO
----------------------------------
INITIAL INVESTORS:
XXXXXXXX CAPITAL MANAGEMENT, INC.
By: /s/ XXXXX XXXXX
------------------------------
Name: Xxxxx Xxxxx
----------------------------
Title: President
---------------------------
-20-
EXHIBIT 1
to
Registration
Rights
Agreement
[Date]
[Name and address
of transfer agent]
RE: IDENTIX INCORPORATED
Ladies and Gentlemen:
We have acted as counsel to Identix Incorporated, a Delaware corporation
(the "Company"), in connection with the Registration Statement on Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission (the
"Commission") on or about _______ __, 1999, for the purpose of registering under
the Securities Act of 1933, as amended, up to ________ shares of its Common
Stock, $.01 par value (the "Shares") for resale by certain selling stockholders.
It is our opinion that the Registration Statement on Form S-3 (File No.
333- _____________) naming [names of Purchaser] as selling stockholders of the
Shares was declared effective by the Securities and Exchange Commission on July
__, 1999.
Our opinion expressed in this letter is based solely upon a letter from the
Commission date _______, 1999 confirming that the registration was declared
effective and telephone communications between Xxxxx Xxxxxxxx, an attorney of
this office, and M_. ___________, a member of the Commission staff on July __,
1999, confirming that no stop order has been issued as of the date of such
communication.
This opinion is rendered to you in connection with the resale of the shares
under the Registration Statement and is solely for your benefit. This opinion
may not be relied upon by you for any other purpose, or relied upon by any other
person, firm, corporation or other entity for any purpose without our prior
consent. We disclaim any obligation to advise you of any change of law that
occurs, or any facts of which we may become aware, after the date of this
opinion.
Very truly yours,
cc: [Names of Investor]
