Exhibit 2.7
VERICHIP
CORPORATION
REGISTRATION
AGREEMENT
THIS REGISTRATION AGREEMENT (this
“ Agreement ”) is made as of June 10, 2005
between VeriChip Corporation, a Delaware 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 . In the event the Company consummates an initial
public offering on Form S-1, the Company shall include in the
Form S-1 Registration Statement filed with the SEC for its
initial public offering provisions regarding the registration under
the Securities Act pursuant to Rule 415 under the Securities Act of
all Registrable Securities (the “ IPO Shelf
Registration ”); provided that if the managing
underwriter(s) of the Company’s initial public offering
advise the Company in writing that the registration of the
Registrable Securities on a Form S-1 shelf registration statement
on the date the Company consummates its IPO would adversely affect
the initial public offering, then as promptly as practicable after
the consummation of the Company’s initial public offering the
Company shall prepare and file with the Securities and Exchange
Commission a registration statement under the Securities Act on
Form S-1 pursuant to Rule 415 under the Securities Act
registering all Registrable Securities (including the IPO Shelf
Registration, if applicable, the “ Required
Registration ”) and shall cause such Required
Registration to be declared effective under the Securities Act on
the Effective Date. “ Effective Date ” means the
date of the Company’s initial public offering, in the case of
the IPO Shelf Registration, and otherwise the earlier of the date
the Lock-Up Period ends (if there is one) and the date which is 90
days after the Company’s initial public offering.
(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 3 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 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.
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(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 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
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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 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
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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);
(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) enter into such customary
agreements (including underwriting agreements in customary form)
and (provided that the Company need not assume material obligations
in connection therewith) take all such other reasonable actions as
the holders of at least a majority of the Registrable Securities
being sold or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, preparing for and
participating in such number of “road shows” as the
underwriters managing such offering may reasonably
request);
(i) 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
indepen
