APPLIED DIGITAL SOLUTIONS, INC. REGISTRATION AGREEMENT
Exhibit
10.2
APPLIED
DIGITAL SOLUTIONS, INC.
THIS
REGISTRATION AGREEMENT (this “Agreement”)
is
made as of June 10, 2005 between Applied Digital Solutions, Inc., a
Missouri corporation, (the
“Company”),
and
Perceptis, L.P., a Delaware limited partnership (the “Stockholder”).
The
parties to this Agreement are parties to a Share Purchase Agreement of even
date
herewith (the “Purchase
Agreement”).
In
order to induce the Stockholder to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
Closing under the Purchase Agreement. Unless otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings set forth
in
Section
9
hereof.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as
follows:
1.
Required
Registration.
(a)
Filing
of Registration Statement.
The
Company shall prepare and file with the Securities and Exchange Commission
a
registration statement under the Securities Act on Form S-1, or, if
available, Form S-2 or S-3, pursuant to Rule 415 under the Securities
Act
registering all Registrable Securities (the “Required
Registration”)
and
shall use its reasonable efforts to have such Required Registration declared
effective under the Securities Act no later than 30 days after the first to
occur of the Election Date and the VeriChip Exchange Date; provided,
however,
that
the Company shall cause such Required Registration to be declared effective
under the Securities Act no later than the Effective Date. “Effective
Date”
means
the date which is 90 days after the first to occur of the Election Date and
the
VeriChip Exchange Date.
(b)
Effective
Period; Draw-downs.
After
the Effective Date, the Company shall cause such Required Registration to remain
effective for a period ending on the earlier of (i) the second anniversary
of the effectiveness of the Required Registration, (ii) the date on which all
Registrable Securities have been sold pursuant to the Required Registration,
(iii) the date as of which there are no longer any Registrable Securities
in existence and (iv) the date which is one calendar quarter after the
date
on which all such Registrable Securities are eligible to be sold pursuant to
Rule 144 (the “Effective
Period”).
So
long as such Required Registration is effective as required herein and in
compliance with the Securities Act and usable for resale of Registrable
Securities, the holders of Registrable Securities shall be entitled to demand
any number of draw-downs (including underwritten draw-downs, provided that
the
aggregate offering value of the Registrable Securities requested to be included
in such underwritten draw-down must equal at least $750,000) from such Required
Registration and, in connection with any such draw-down, the Company shall
take
all customary and reasonable actions that the Company would take in connection
with an underwritten registration (including, without limitation, all actions
referred to in Section
4
necessary to effectuate such sale in the manner determined by the
holders
of at least a majority of the Registrable Securities to be included in such
underwritten draw-down) as any holder reasonably requests. Notwithstanding
anything to the contrary herein, the Company shall not include any other
securities in such underwritten draw-downs.
(c)
Selection
of Underwriter.
The
holders of at least a majority of Registrable Securities shall have the right
to
retain and select an investment banker and manager to administer any
underwritten draw-downs in connection with the Required Registration, subject
to
the Company’s approval which shall not be unreasonably withheld or
delayed.
(d)
Required
Registration Expenses.
As
further provided in Section
5
below,
all Registration Expenses incurred in connection with the Required Registration
(whether incurred by the Company or the holders of Registrable Securities)
shall
be borne by the Company (including, without limitation, all fees and expenses
of
investment bankers and underwriters).
2.
Piggyback
Registrations.
(a)
Right
to Piggyback.
Whenever on or after the first to occur of the Election Date and the VeriChip
Exchange Date the Company proposes to register any of its securities under
the
Securities Act in an underwritten offering (other than pursuant to a Required
Registration or a registration on Form S-8 or any successor form or any Excluded
Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a “Piggyback
Registration”),
the
Company shall give prompt written notice (in the case of any exercise of demand
registration rights, in any event within three business days after its receipt
of the demand notice) to all holders of Registrable Securities of its intention
to effect such a registration and, subject to the terms of Sections
2(c)
and
2(d)
hereof,
shall include in such registration (and in all related registrations or
qualifications under blue sky laws or in compliance with other registration
requirements and in any related underwriting) all Registrable Securities with
respect to which the Company has received written requests for inclusion therein
within 20 days after the receipt of the Company’s notice.
(b)
Piggyback
Expenses.
The
Registration Expenses of the holders of Registrable Securities shall be paid
by
the Company in all Piggyback Registrations.
(c)
Priority
on Primary Registrations.
If a
Piggyback Registration is an underwritten primary registration on behalf of
the
Company, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number of securities which can be sold in such offering
without adversely affecting the offering, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on
the
basis of the number of shares requested to be included therein by each such
holder, and (iii) third, other securities requested to be included in
such
registration.
(d)
Priority
on Secondary Registrations.
If a
Piggyback Registration is an underwritten secondary registration on behalf
of
holders of the Company’s securities, and the managing underwriters advise the
Company in writing that in their opinion the number of
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securities
requested to be included in such registration exceeds the number which can
be
sold in such offering without adversely affecting the offering, the Company
shall include in such registration (i) first, the securities requested to be
included therein by the holders requesting such registration and the Registrable
Securities requested to be included in such registration, pro rata among the
holders of such securities on the basis of the number of securities so requested
to be included therein by each such holder, and (ii) second, other securities
requested to be included in such registration.
3.
Black
Out Periods.
If, at
any time during which a prospectus for a Required Registration is required
to be
delivered in connection with the sale of any Registrable Securities, the Company
reasonably determines in good faith and upon the advice of its outside legal
counsel that a development has occurred or a condition exists as a result of
which the prospectus contains a material misstatement or omission, or that
a
material transaction in which the Company is engaged or proposes to engage
would
require an amendment to the prospectus or registration statement, a supplement
to the applicable registration statement and related prospectus, or a filing
under the Exchange Act or other public disclosure of material information and
the disclosure of such transaction would be materially premature or materially
injurious to the consummation of the transaction, the Company will promptly
so
notify in writing the holders of the Registrable Securities included in the
Required Registration. Upon receipt of such notification, such holders and
their
affiliates will immediately suspend all offers and sales of Registrable
Securities pursuant to such registration statement. In such event, the Company
will amend or supplement the applicable registration statement and related
prospectus or make such filings or public disclosures as promptly as practicable
consistent with the restrictions set forth in this Section 3
and will
use its best efforts to take such other steps as may be required to permit
sales
of the Registrable Securities thereunder by the holders of Registrable
Securities whose Registrable Securities are included in the Required
Registration and its affiliates in accordance with applicable federal and state
securities laws as promptly as practicable. The Company will promptly notify
the
holders of Registrable Securities whose Registrable Securities are included
in
the Required Registration after it has determined in good faith that such sales
have become permissible in such manner and will promptly deliver copies of
the
prospectus (as so amended or supplemented, if applicable) to the holders of
Registrable Securities whose Registrable Securities are included in the Required
Registration. Notwithstanding the foregoing, under no circumstances other than
a
Required Suspension will the Company be entitled to exercise its right to
suspend offers and sales of any Registrable Securities pursuant to the Required
Registration as provided in this Section
3
(x) for more one time or for a period of greater than five trading days
during the 60 trading days immediately following the effectiveness of the
Required Registration, (y) more than twice in the 180 trading days
immediately subsequent to the 60 trading days immediately following the
effectiveness of the Required Registration or for a period of greater than
60
total trading days during such 180-trading day period, or (z) more than
twice or for a period greater than 60 trading days in any twelve-month period
beginning after the 60 trading days immediately subsequent to the effectiveness
of the Required Registration. In the case of any Required Suspension, the
Company will use its reasonable efforts to avoid or overcome or satisfy the
legal requirement and lift the resulting suspension of offers and sales pursuant
to the Required Registration as soon as practicable. For purposes of this
Section
3,
“Required
Suspension”
means
any suspension of offers and sales of Registrable Securities pursuant to the
Required Registration which the Company is legally required to impose, which
imposition it is not reasonably practicable for the Company to avoid or overcome
through an
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amendment
to the prospectus or registration statement, a supplement to the applicable
registration statement and related prospectus, or a filing under the Exchange
Act or other public disclosure of material information; provided
that, in
circumstances in which it is not reasonably practicable for the Company to
avoid
or overcome such imposition resulting in the existence of a Required Suspension,
the Company shall use its best efforts to avoid or overcome such
imposition.
4.
Registration
Procedures.
With
respect to the Required Registrations and whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall take all necessary actions to effect the
registration and the sale of such Registrable Securities in accordance with
the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a)
prepare
and file with the Securities and Exchange Commission a registration statement,
and all amendments and supplements thereto and related prospectuses as may
be
necessary to comply with applicable securities laws, with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to become effective (provided
that
before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
holders of at least a majority of the Registrable Securities covered by such
registration statement copies of all such documents proposed to be filed, which
documents shall be subject to the review and reasonable comment of such
counsel);
(b)
promptly
notify in writing each holder of Registrable Securities of the effectiveness
of
each registration statement filed hereunder and prepare and file with the
Securities and Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be
necessary to keep such registration statement effective throughout the Effective
Period and comply with the provisions of the Securities Act with respect to
the
disposition of all securities covered by such registration statement during
such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c)
furnish
to each seller of Registrable Securities such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such seller;
(d)
use
its reasonable efforts to register or qualify such Registrable Securities under
such other securities or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided
that the
Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subsection, (ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such jurisdiction);
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(e)
promptly
notify in writing each seller of such Registrable Securities, at any time when
a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading,
and,
at the request of any such seller, the Company shall prepare and provide to
such
seller a reasonable number of copies of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue statement
of
a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(f)
use
its best efforts to cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its best
efforts to secure designation of all such Registrable Securities covered by
such
registration statement as a NASDAQ “national market system security” within the
meaning of Rule 11Aa2-1 of the Securities and Exchange Commission or, failing
that, to secure NASDAQ authorization for such Registrable Securities and,
without limiting the generality of the foregoing, to arrange for at least two
market makers to register as such with respect to such Registrable Securities
with the NASD;
(g)
provide
a
transfer agent and registrar for all such Registrable Securities not later
than
the effective date of such registration statement;
(h)
make
available for inspection by any seller of Registrable Securities, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant
or
agent in connection with such registration statement;
(i)
otherwise
comply with all applicable rules and regulations of the Securities and Exchange
Commission, and in each case in which any holder of Registrable Securities,
in
its sole, good faith judgment, which is not inconsistent with the advice of
its
counsel, is or might be deemed to be an underwriter make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day
of
the Company’s first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions
of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(j)
permit
any holder of Registrable Securities which holder, in its sole, good faith
judgment, is or might be deemed to be an underwriter or a controlling person
of
the Company to participate in the preparation of such registration or comparable
statement and to require the insertion therein of material or information
related to such holder or to underwriters or control persons generally which
is
customarily found in a registration statement, furnished to the Company in
writing, which in the reasonable judgment of such holder and its counsel should
be included (subject to the Company’s reasonable approval of such
material);
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(k)
in
the event of the issuance of any stop order suspending the effectiveness of
a
registration statement, or of any order suspending or preventing the use of
any
related prospectus or suspending the qualification of any common stock included
in such registration statement for sale in any jurisdiction, the Company shall
use its best efforts promptly to obtain the withdrawal of such
order;
(l)
cause
such Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the sellers thereof to consummate the disposition
of such Registrable Securities;
(m)
in
the case of an underwritten public offering in connection with any such
registration, obtain a cold comfort letter from the Company’s independent
registered public accounting firm in customary form and covering such matters
of
the type customarily covered by cold comfort letters; and
(n)
provide
a
legal opinion of the Company’s outside counsel, dated the effective date of such
registration statement (and dated the date of the closing under the underwriting
agreement in connection with any underwritten public offering in connection
with
such registration), with respect to the registration statement, each amendment
and supplement thereto, the prospectus included therein (including the
preliminary prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by legal opinions
of such nature.
5.
Registration
Expenses.
(a)
All
expenses incident to the Company’s performance of or compliance with this
Agreement, including without limitation all registration, qualification and
filing fees, fees and expenses of compliance with securities or blue sky laws,
printing expenses, messenger and delivery expenses, fees and disbursements
of
custodians, and fees and disbursements of counsel for the Company and fees
and
disbursements of counsel(to the extent provided in Section
5(b))
for any
holder of Registrable Securities and all independent certified public
accountants, investment-bankers and underwriters (excluding discounts and
commissions, but including fees and expenses in connection with any block trade
executed in connection with underwritten draw-downs) and other Persons retained
by the Company (all such expenses being herein called “Registration
Expenses”),
shall
be borne by the Company in all registrations. The Company also shall, in any
event, pay its internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit or quarterly review, the expense of
any
liability insurance and the expenses and fees for listing the securities to
be
registered on each securities exchange on which similar securities issued by
the
Company are then listed or on the NASD automated quotation
system.
(b)
In
connection with each Required Registration and each Piggyback Registration,
the
Company shall reimburse the holders of Registrable Securities included in such
registration for the reasonable fees and disbursements of one counsel chosen
by
the holders of at least a majority of the Registrable Securities included in
such registration.
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(c)
To
the extent any expenses relating to a registration hereunder are not required
to
be paid by the Company, each holder of securities included (or requested to
be
included) in any registration hereunder shall pay those expenses allocable
to
the registration (or proposed registration) of such holder’s securities so
included (or requested to be included), and any Registration Expenses not so
allocable shall be borne by all sellers of securities requested to be included
in such registration in proportion to the number of securities requested to
be
so registered.
6.
Indemnification.
(a)
The
Company agrees to indemnify and hold harmless, to the fullest extent permitted
by law, each holder of Registrable Securities, its officers, directors, members,
partners, employees, affiliates and agents and each Person who controls such
holder (within the meaning of the Securities Act or the Securities Exchange
Act)
against all losses, claims, actions, damages, liabilities and expenses caused
by
(i) any untrue or alleged untrue statement of material fact contained
in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission
of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any violation or alleged violation by
the
Company of the Securities Act or any other similar federal or state securities
laws or any rule or regulation promulgated thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and to pay to each holder
of
Registrable Securities, its officers and directors and each Person who controls
such holder (within the meaning of the Securities Act or the Securities Exchange
Act), as incurred, any legal and any other expenses reasonably incurred in
connection with defending any such claim, loss, damage, liability or action
(including any investigation or preparation of filings in connection with
defending against any such claim, loss, damage, liability or action after
brought, incurred or otherwise asserted against any such holder or Person),
except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such holder expressly for use therein
or
by such holder’s failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such holder with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company shall indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act or the Securities
Exchange Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
(b)
In
connection with any registration statement in which a holder of Registrable
Securities is participating, each such holder shall furnish to the Company
in
writing such information and affidavits as the Company reasonably requests
for
use in connection with any such registration statement or prospectus and, to
the
extent permitted by law, shall indemnify the Company, its directors and officers
and each Person who controls the Company (within the meaning of the Securities
Act or the Securities Exchange Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue statement
of material fact contained in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein
or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any information or
affidavit
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so
furnished in writing by such holder expressly for use therein; provided
that the
obligation to indemnify shall be individual and ratable, not joint and several,
for each holder and shall be limited to the amount of proceeds received by
such
holder from the sale of Registrable Securities pursuant to such registration
statement (net of underwriting discounts and commissions).
(c)
Any
Person entitled to indemnification hereunder shall (i) give prompt written
notice to the indemnifying party of any claim with respect to which it seeks
indemnification (provided
that the
failure to give prompt notice shall not impair any Person’s right to
indemnification hereunder to the extent such failure has not prejudiced the
indemnifying party) and (ii) unless in such indemnified party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party
to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party shall
not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent shall not be unreasonably withheld).
An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim shall not be obligated to pay the fees and expenses of more than
one
counsel for all parties indemnified by such indemnifying party with respect
to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other
of
such indemnified parties with respect to such claim. In such instance, the
conflicting indemnified parties shall have a right to retain one separate
counsel, chosen by the holders of at least a majority of the Registrable
Securities included in the registration by such conflicting parties, at the
expense of the indemnifying party. No indemnifying party, in the defense of
such
claim or litigation, shall, except with the consent of each indemnified party,
consent to the entry of any judgment or enter into any settlement which does
not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation.
(d)
Each
party hereto agrees that if for any reason the indemnification provisions
contemplated by Sections
6(a)
or
6(b)
are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute
to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) in
such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party or indemnified party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section
6(d)
were
determined by pro rata allocation (even if the holders or any underwriters
or
all of them 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 Section
6(d).
The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other fees or
expenses
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reasonably
incurred by such indemnified party in connection with investigating or, except
as provided in Section
6(c),
defending any such action or claim. 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 sellers’ obligations in this
Section
6(d)
to
contribute shall be individual and ratable in proportion to the amount of
securities registered by them and not joint and several and shall be limited
to
an amount equal to the proceeds actually received by such seller from the sale
of Registrable Securities effected pursuant to such registration (net of
underwriting discounts and commissions).
(e)
The
indemnification and contribution provided for under this Agreement shall remain
in full force and effect regardless of any investigation made by or on behalf
of
the indemnified party or officer, director, member, partner, employee,
affiliate, agent or controlling Person of such indemnified party and shall
survive the transfer of securities and termination of this Agreement and shall
expire upon the expiration of the statutes of limitations with respect to any
matter covered hereby (or such later time as all claims then outstanding are
fully and finally resolved). The Company also agrees to make such provisions,
as
are reasonably requested by any indemnified party, for contribution to such
party in the event the Company’s indemnification is unavailable for any
reason.
7.
Current
Public Information. The
Company shall file all reports required to be filed by it under the Securities
Act and the Securities Exchange Act and the rules and regulations adopted by
the
Securities and Exchange Commission thereunder and shall take such further action
as any holder or holders of Registrable Securities may reasonably request,
all
to the extent required to enable such holders to sell Registrable Securities
pursuant to (i) Rule 144 adopted by the Securities and Exchange Commission
under
the Securities Act (as such rule may be amended from time to time) or any
similar rule or regulation hereafter adopted by the Securities and Exchange
Commission or (ii) a registration statement on Form S-2 or S-3 or any similar
registration form hereafter adopted by the Securities and Exchange Commission.
Upon request, the Company shall deliver to any holder of Registrable Securities
a written statement as to whether it has complied with such requirements. The
Company shall at all times use its best efforts to cause the Common Stock to
be
listed on one or more of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ National Market System or the NASDAQ SmallCap
market.
8.
Filings
with the SEC.
The
Company has made all filings with the SEC (the “SEC
Documents”)
that
it has been required to make within the past three years under the Securities
Act and the Securities Exchange Act. Each of such filings has complied with
the
Securities Act and the Securities Exchange Act in all material respects. None
of
such filings, as of their respective dates, contained any untrue statement
of a
material fact or omitted to state a material fact necessary in order to make
the
statements made therein, in light of the circumstances under which they were
made, not misleading.
9.
Definitions.
“Common
Stock”
means
the Company’s Common Stock, and any capital stock of any class of the Company
hereafter authorized which is not limited to a fixed sum or
percentage
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of
par or
stated value in respect to the rights of the holders thereof to participate
in
dividends or in the distribution of assets upon any liquidation, dissolution
or
winding up of the Company.
“Excluded
Registration”
means
any underwritten secondary registration on behalf of holders of the Company’s
securities pursuant to a registration agreement in effect as of the date of
this
Agreement which precludes the registration of the Registrable Securities in
such
registration or, if any such registration agreement does not preclude such
registration but gives a party or parties to such agreement the right to
determine whether the Registrable Securities shall be included in such
registration, then any such registration in which such party or parties refuse
to permit the inclusion of Registrable Securities.
“Person”
means
an individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
“Registrable
Securities”
means
(i) the ADSX Shares issued pursuant to the Purchase Agreement and (ii) any
other
Common Stock issued or issuable with respect to the securities referred to
in
clause (i) above by way of a stock dividend or stock split or in connection
with
a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when they have been distributed to
the
public pursuant to a offering registered under the Securities Act or sold to
the
public through a broker, dealer or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force) or repurchased
by
the Company or any Subsidiary. For purposes of this Agreement, a Person shall
be
deemed to be a holder of Registrable Securities, and the Registrable Securities
shall be deemed to be in existence, whenever such Person has the right to
acquire directly or indirectly such Registrable Securities (upon exchange of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected, and such Person shall be entitled to exercise the rights of a holder
of Registrable Securities hereunder.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated from time to time thereunder.
“Securities
Exchange Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated from time to time thereunder.
Unless
otherwise stated, other capitalized terms contained herein have the meanings
set
forth in the Purchase Agreement.
10.
Miscellaneous.
(a)
No
Inconsistent Agreements.
The
Company represents and warrants that it is not a party to or subject to any
agreement that is inconsistent with or violates the rights granted to the
holders of Registrable Securities in this Agreement, and the Company shall
not
hereafter enter into any agreement with respect to its securities that is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
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(b)
Adjustments
Affecting Registrable Securities.
The
Company shall not take any action, and shall use commercially reasonable efforts
not to permit any change to occur, with respect to its securities which would
adversely affect the ability of the holders of Registrable Securities to include
such Registrable Securities in a registration undertaken pursuant to this
Agreement.
(c)
Remedies.
Any
Person having rights under any provision of this Agreement shall be entitled
to
enforce such rights specifically (without posting a bond or other security),
to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. The parties hereto
agree and acknowledge that money damages would not be an adequate remedy for
any
breach of the provisions of this Agreement and that, in addition to any other
rights and remedies existing in its favor, any party shall be entitled to
specific performance and/or other injunctive relief from any court of law or
equity of competent jurisdiction (without posting any bond or other security)
in
order to enforce or prevent violation of the provisions of this Agreement.
(d)
Amendments
and Waivers.
Except
as otherwise provided herein, the provisions of this Agreement may be amended
or
waived only upon the prior written consent of the Company and holders of at
least a majority of the Registrable Securities. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed
as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
(e)
Successors
and Assigns.
All
covenants and agreements in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. In addition, whether
or not any express assignment has been made, the provisions of this Agreement
which are for the benefit of purchasers or holders of Registrable Securities
are
also for the benefit of, and enforceable by, any subsequent holder of
Registrable Securities.
(f)
Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid, illegal or
unenforceable under applicable law, such provision shall be ineffective only
to
the extent of such prohibition, invalidity, illegality or unenforceability
without invalidating the remainder of this Agreement.
(g)
Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts (including
by means of facsimile), any one of which need not contain the signatures of
more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
(h)
Descriptive
Headings.
The
descriptive headings of this Agreement are inserted for convenience only and
do
not constitute a part of this Agreement.
(i)
Governing
Law.
All
matters relating to the interpretation, construction, validity and enforcement
of this Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Delaware without giving effect to any choice
or
conflict of
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law
provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of laws of any jurisdiction other than the
State of Delaware.
(j)
Notices.
All
notices, demands or other communications to be given or delivered under or
by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when delivered personally to the recipient, sent
to
the recipient by reputable overnight courier service (charges prepaid) or mailed
to the recipient by certified or registered mail, return receipt requested
and
postage prepaid. Such notices, demands and other communications shall be sent
to
the Company or to the Stockholder at the address indicated
below:
|
Notices
to the Company:
c/o
Applied Digital Solutions, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
with
a copy to:
Holland
& Knight LLP
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
Notices
to the Stockholder:
Perceptis,
L.P.
c/o
SE Capital, LLC
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇
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with
a copy to:
▇▇▇▇▇▇▇▇
& ▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, P.C.
▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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or
to
such other address or to the attention of such other Person as the recipient
party has specified by prior written notice to the sending party.
(k)
Rights
Cumulative; Waiver.
The
rights and remedies of holders of Registrable Securities and the Company under
this Agreement shall be cumulative and not exclusive of any rights or remedies
which either would otherwise have hereunder or at law or in equity or by
statute, and no failure or delay by either party in exercising any right or
remedy shall impair any such right or remedy or operate as a waiver of such
right or remedy, nor shall any single or partial exercise of any power or right
preclude such party’s other or further exercise or the exercise of any other
power or right. The waiver by any party hereto of a breach of any provision
of
this Agreement shall not operate or be construed as a waiver of any preceding
or
succeeding breach and no failure by either party to exercise any right or
privilege hereunder shall be deemed a waiver of such party’s rights or
privileges hereunder or shall be deemed a waiver of such party’s rights to
exercise the same at any subsequent time or times hereunder.
(l)
No
Strict Construction.
The
parties hereto have participated jointly in the negotiation and drafting of
this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
hereto,
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and
no
presumption or burden of proof shall arise favoring or disfavoring any party
by
virtue of the authorship of any of the provisions of this
Agreement.
(m)
Mutual
Waiver of Jury Trial.
As a
specifically bargained inducement for each of the parties to enter into this
Agreement (with each party having had opportunity to consult counsel), each
party hereto expressly and irrevocably waives the right to trial by jury in
any
lawsuit or legal proceeding relating to or arising in any way from this
Agreement or the transactions contemplated herein, and any lawsuit or legal
proceeding relating to or arising in any way to this Agreement or the
transactions contemplated herein shall be tried in a court of competent
jurisdiction by a judge sitting without a jury.
* * * *
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IN
WITNESS WHEREOF, the parties have executed this Registration Agreement as of
the
date first written above.
APPLIED
DIGITAL SOLUTIONS, INC.
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Its:
CEO
PERCEPTIS,
L.P.
InterAir
GP, Inc.
General
Partner
By:
/s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:
C. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its:
President