UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 21, 2017

 

 

IDENTIV, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware   000-29440   77-0444317

(State or Other Jurisdiction

of Incorporation)

  (Commission File Number)  

(IRS Employer

Identification No.)

2201 Walnut Avenue, Suite 100,

Fremont, California

    94538
(Address of Principal Executive Offices)     (Zip Code)

Registrant’s Telephone Number, Including Area Code: (949) 250-8888

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 1.01 Entry into a Material Definitive Agreement.

On December 21, 2017, Identiv, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with each of 21 April Fund, Ltd. and 21 April Fund, L.P. (each a “Purchaser” and collectively, the “Purchasers”) pursuant to which the Company, in a private placement, agreed to issue and sell to the Purchasers an aggregate of up to 5,000,000 shares of the Company’s Series B Non-Voting Convertible Preferred Stock (the “Preferred Stock”), $0.001 par value per share (collectively referred to as the “Shares”), for an aggregate purchase price of up to $20,000,000 (the “Private Placement”). The Purchasers agreed to invest $12,000,000 to purchase an aggregate of 3,000,000 Shares at a price of $4.00 per share in cash at the initial closing of the Private Placement and, at the sole option of the Company, an additional $8,000,000 to purchase 2,000,000 Shares at a price of $4.00 per share in cash at a second closing of the Private Placement, if any. The Purchase Agreement provides that, to the extent that the Company elects to initiate such second closing, it must do so within 12 months of the initial closing and at a time when no material adverse change in respect of the Company has occurred. The Purchase Agreement also provides for customary representations, warranties and covenants among the parties. Among other things, the Purchase Agreement requires that the Company (i) file prior to the initial closing a certificate of designation providing for the rights, preferences and privileges of the Shares with the Secretary of State of the State of Delaware (the “Certificate of Designation”) and (ii) enter into a Stockholder Agreement (as defined below) with the Purchasers providing for certain contractual arrangements among the parties. The proceeds from the issuance of the Shares are required to be used to pay off existing debt obligations of the Company and to fund future acquisitions of technology, business and other assets by the Company.

The Certificate of Designation authorizes 5,000,000 Shares and provides for the rights, preferences and privileges of such Shares. Each Share is entitled to an annual dividend of 5% for the first six years following the issuance of such Share and 3% for each year thereafter, with the Company retaining the option to settle each year’s dividend after the tenth year in cash. The dividends accrue and are payable in kind upon such time as the Shares convert into the Company’s common stock, par value $0.001 per share (the “Common Stock”). Each share of Preferred Stock is convertible at the option of the holder thereof into the Common Stock: (i) following the sixth (6th) anniversary of the initial closing of the Private Placement or (ii) if earlier, during the thirty (30) day period following the last trading day of any period of three (3) or more consecutive trading days that the closing market price of the Common Stock exceeds $10.00. Each Share is convertible into such number of shares of the Common Stock determined by taking the accreted value of such Share (purchase price plus accrued but unpaid dividends) and dividing such value by the stated value of such Share ($4.00 per share, subject to adjustment for dilutive issuances, stock splits, stock dividends and the like) (the “Stated Value”); provided, however, that the Company shall not convert any Shares if doing so would cause the holder thereof, along with its affiliates, to beneficially own in excess of 19.9% of the outstanding Common Stock immediately after giving effect to the applicable conversion (the “Ownership Limitation”), unless waiver of this restriction has been effected by the holder requesting conversion of Shares. In general, the Shares are not entitled to vote except in certain limited cases, including on change of control transactions where the expected price per share distributable to the Company’s shareholders is expected to be less than $4.00 per share. The Certificate of Designation further provides that in the event of, among other things, any change of control, liquidation or dissolution of the Company, the holders of the Preferred Stock will be entitled to receive, on a pari passu basis with the holders of the Common Stock, the same amount and form of consideration that the holders of the Company’s common stock receive (on an as-if-converted-to-common-stock basis and without regard to the Ownership Limitation).

In connection with the Private Placement, the Company entered into a Stockholder Agreement with the Purchasers, dated as of December 21, 2017 (the “Stockholder Agreement”), pursuant to which the Purchasers have agreed, for a period of 36 months from the initial closing of the Private Placement, to refrain from taking certain actions without the consent of the Company’s Board of Directors, including engaging in any solicitation of proxies or consents with respect to any securities of the Company or any securities convertible or exchangeable into or exercisable for any such securities and other similar activities (the “Standstill Provisions”). The Stockholder Agreement also provides that the Company must file one or more registration statements with the Securities and Exchange Commission (the “SEC”) covering the resale of the shares of Common Stock underlying the Preferred Stock sold in the Private Placement and any Common Stock issued or issuable as a dividend or other distribution with respect to, or in exchange for or in replacement of, the Shares. The Company has agreed to file the registration statements within 120 days of the initial closing of the Private Placement. The Stockholder Agreement includes customary indemnification rights in connection with the registration statements. In addition, the Purchasers have agreed to certain transfer restrictions on the Shares for the duration of the Standstill Period (as defined in the Stockholder Agreement).

The foregoing summary descriptions of the Purchase Agreement, the Certificate of Designation and the Stockholder Agreement do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement, the Certificate of Designation and the Stockholder Agreement, which are attached as Exhibits 10.1, 3.1 and 10.2 hereto, respectively, and incorporated herein by reference.

The representations, warranties and covenants contained in the Purchase Agreement and the Stockholder Agreement were made solely for the benefit of the parties to the Purchase Agreement and the Stockholder Agreement and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Purchase Agreement and the Stockholder Agreement are incorporated herein by reference only to provide investors with information regarding the terms of the Purchase Agreement and the Stockholder Agreement and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC.


Item 3.02 Unregistered Sales of Equity Securities.

Pursuant to the Private Placement described in Item 1.01 above, which description is hereby incorporated by reference into this Item 3.02, the Company has agreed to sell the shares of Preferred Stock to be issued in the Private Placement to accredited investors in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 and Regulation D promulgated thereunder. The Company will rely on this exemption from registration based in part on representations made by the Purchasers in the Purchase Agreement. The securities to be sold in the Private Placement have not been registered under the Securities Act or applicable state securities laws and may not be offered or sold in the United States absent registration under the Securities Act or an exemption from such registration requirements. Neither this Current Report on Form 8-K nor any exhibit attached hereto shall constitute an offer to sell or the solicitation of an offer to buy shares of Common Stock, the Preferred Stock or any other securities of the Company.

 

Item 3.03 Material Modification to Rights of Security Holders.

In connection with the Private Placement, on December 21, 2017, the Company filed the Certificate of Designation with the Secretary of State of the State of Delaware, establishing and designating the rights, powers and preferences of the Preferred Stock. Additional information required to be disclosed under this Item 3.03 is set forth in Item 1.01 above and is incorporated by reference into this Item 3.03.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws: Change in Fiscal Year.

The information required to be disclosed under this Item 5.03 is set forth in Items 1.01 and 3.03 above and is incorporated by reference into this Item 5.03.

 

Item 7.01 Regulation FD Disclosure.

On December 21, 2017, the Company issued a press release announcing the Private Placement. A copy of the press release is furnished as Exhibits 99.1.

 

Item 9.01 Financial Statements and Exhibits

 

Exhibit No.

  

Description

  3.1    Certificate of Designation of Preferences, Rights and Limitations of Series B Non-Voting Convertible Preferred Stock dated December 21, 2017.
10.1    Securities Purchase Agreement dated December 21, 2017.
10.2    Stockholder Agreement dated December 21, 2017.
99.1    Press release dated December 21, 2017 issued by Identiv, Inc.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Identiv, Inc.
December 21, 2017     By:  

/s/ Sandra Wallach

      Sandra Wallach
      Chief Financial Officer

Exhibit 3.1

IDENTIV, INC.

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES B NON-VOTING CONVERTIBLE PREFERRED STOCK

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

The undersigned, Steven Humphreys and Sandra Wallach, do hereby certify that:

1.    They are the President and Secretary, respectively, of Identiv, Inc., a Delaware corporation (the “ Corporation ”).

2.    The Corporation is authorized to issue 10,000,000 shares of preferred stock, none of which have been issued.

3.    The following resolutions were duly adopted by the board of directors of the Corporation (the “ Board of Directors ”):

WHEREAS, the certificate of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of 10,000,000 shares, $0.001 par value per share, issuable from time to time in one or more series;

WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of preferred stock, which shall consist of up to 5,000,000 shares of the preferred stock which the Corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities,

 

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rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:

TERMS OF PREFERRED STOCK

Section  1.      Definitions . For the purposes hereof, the following terms shall have the following meanings:

Accreted Value ” shall have the meaning set forth in Section 3.

Accretion Rate ” shall have the meaning set forth in Section 3. Notwithstanding the foregoing, following the occurrence of a Triggering Event, and for so long as such Triggering Event continues, the Accretion Rate shall automatically increase by an additional 1% quarterly; provided , however , that in no event will the Accretion Rate exceed 9%.

Additional Shares of Common Stock ” shall have the meaning set forth in Section 7(c)(v).

Affiliate ” means, with respect to a Person, any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 of the Securities Act.

Alternate Consideration ” shall have the meaning set forth in Section 7(b).

Beneficial Ownership Limitation ” shall have the meaning set forth in Section 6(d).

Business Day ” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

Change of Control Transaction ” means the occurrence after the applicable Original Issue Date in one or more related transactions of any of (a) an acquisition (whether by way of merger, share exchange, consolidation, business combination or similar transaction) by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Corporation, or by contract) of in excess of 50% of the voting securities of the Corporation, (b) the Corporation merges into or consolidates with any other Person, or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders of the Corporation immediately prior to such transaction own less than 50% of the aggregate voting power of the Corporation or the successor entity of such transaction, or (c) the Corporation sells, leases, licenses, conveys, transfers or otherwise disposes of all or substantially all of its assets to another Person.

 

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Closing ” means a closing of the purchase and sale of Preferred Stock pursuant to Section 2.1 or Section 2.2 of the Purchase Agreement.

Closing Price ” shall mean, with respect to the Common Stock at a time on any date of determination, the consolidated closing bid price per share on the relevant Trading Market immediately preceding such time. If such time takes place during market hours, before the close of the regular session at 4 PM Eastern Time, then the previous trading day’s consolidated closing bid price is used. If such time takes place after the close of the regular session, then that day’s consolidated closing bid price is used.

Commission ” means the United States Securities and Exchange Commission.

Common Stock ” means the Corporation’s common stock, par value $0.001 per share, and any other class or type of securities into which such securities may hereafter be reclassified or changed.

Common Stock Equivalents ” means any securities or instruments of the Corporation or its subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

Conversion Date ” shall have the meaning set forth in Section 6(a).

Conversion Price ” shall have the meaning set forth in Section 6(b).

Conversion Shares ” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance with the terms hereof.

Convertible Securities ” means evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for shares or Common Stock, including but not limited to the Preferred Stock, warrants, notes, or other rights to acquire securities of the Corporation (but excluding Options).

Effective Price ” shall have the meaning set forth in Section 7(c)(v).

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Fully Diluted Limited ” shall have the meaning set forth in Section 7(c)(i).

Fundamental Transaction ” shall have the meaning set forth in Section 7(b).

Holder ” means a holder of Preferred Stock.

Liquidation ” shall have the meaning set forth in Section 5.

 

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Minimum Conversion Price ” means $3.27 subject to appropriate adjustment in the event of any stock dividend, stock split, combination, repurchase or similar recapitalization with respect to the Corporation.

Notice of Conversion ” shall have the meaning set forth in Section 6(a).

Options ” means rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

Original Issue Date ” means, with respect to a share of Preferred Stock, the date of the first issuance of such share of Preferred Stock regardless of the number of transfers of such share of Preferred Stock and regardless of the number of certificates which may be issued to evidence such share of Preferred Stock.

Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

Preferred Stock ” shall have the meaning set forth in Section 2.

Purchase Agreement ” means the Securities Purchase Agreement, dated as of December 21, 2017, by and among the Corporation and certain Holders, as amended, modified or supplemented from time to time in accordance with its terms.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Share Delivery Date ” shall have the meaning set forth in Section 6(c)(i).

Stated Value ” shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.

Subsequent Financing ” shall have the meaning set forth in Section 7(c)(i).

Trading Day ” means a day on which the principal Trading Market is open for business.

Trading Market ” means any of the following markets or exchanges on which Common Stock is listed or quoted for trading on the date in question: the Nasdaq Stock Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

Transfer Agent ” means American Stock Transfer and Trust Company, the current transfer agent of the Corporation with a mailing address of 6201 15th Ave, Brooklyn, NY 11219 and a telephone number of 800.937.5449, and any successor transfer agent of the Corporation.

 

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Triggering Event ” means (a) the failure to pay any amounts owed to any Holder when due, (b) the failure of the Corporation to deliver shares of Common Stock when required in connection with a conversion of Preferred Stock, (c) any material breach by the Corporation of the Purchase Agreement that has not been cured within forty-five (45) days following delivery to the Corporation of written notice in respect thereof, (d) any material breach by the Corporation of the terms of this Certificate of Designation that has not been cured within forty-five (45) days following delivery to the Corporation of written notice in respect thereof and (e) any material breach of the Corporation’s obligations regarding “Registration Rights” pursuant to that certain Stockholder Agreement, dated as of December 21, 2017, by and among the Corporation and certain Holders that has not been cured within forty-five (45) days following delivery to the Corporation of written notice in respect thereof.

Underlying Shares ” means the shares of Common Stock issued and issuable upon conversion of Preferred Stock in accordance with the terms of this Certificate of Designation.

Section  2.      Designation, Amount and Par Value . A series of preferred stock is hereby created out of the authorized and unissued shares of preferred stock, par value $0.001 per share, of the Corporation and shall be designated as Series B Non-Voting Convertible Preferred Stock (the “ Preferred Stock ”). The total number of shares of Preferred Stock that the Corporation is authorized to issue is five million (5,000,000). Each share of Preferred Stock shall have a par value of $0.001 per share and a stated value equal to $4.00 (the “ Stated Value ”).

Section  3.      Dividends . From and after the applicable Closing, the Stated Value for each share of Preferred Stock issued at such Closing will accrete at an annual rate of (i) five percent (5%) for each of the first six (6) years following such Closing and (ii) three percent (3%) for each year thereafter (the “ Accretion Rate ”), in each case, compounded annually at year-end (the Stated Value as so accreted, the “ Accreted Value ”). For each year following the tenth (10 th ) anniversary of the Initial Closing (as defined in the Purchase Agreement), the Corporation shall have the option to eliminate any such year’s accretion in respect of the shares of Preferred Stock owned by any Holder by paying such Holder prior to the end of such year an amount in cash equal to the product obtained by multiplying the Accretion Rate by the Accreted Value for each such share of Preferred Stock at the time that the Corporation selects the option to pay in cash. If the Corporation declares or makes any dividend or other distribution of its assets (or right to acquire its assets), securities, evidences of indebtedness or other property to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, evidences of indebtedness, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) or proposes to redeem or exchange, or redeems or exchanges any shares of Common Stock or any other securities of the Company (other than redemptions

 

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pursuant to any bona fide employee or director incentive or benefit plan of the Corporation adopted by the Board of Directors or redemptions in connection with the cashless exercise of Options) (a “ Distribution ”), then, in each such case, each Holder shall be entitled to participate in such Distribution to the same extent that such Holder would have participated therein if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of the Preferred Stock held by such Holder (without regard to the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution; provided , however , to the extent that such Holder’s right to participate in any such Distribution would result in such Holder exceeding the Beneficial Ownership Limitation, then such Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of such Holder until such time, if ever, as its rights thereto would not result in such Holder exceeding the Beneficial Ownership Limitation. Except as set forth in this Section 3, no other Distributions shall be paid on shares of Preferred Stock other than pursuant to Section 5.

Section  4.      Voting Rights . Except as otherwise provided herein or as otherwise required by law, the Preferred Stock shall have no voting rights. Notwithstanding the foregoing, for so long as (i) at least 500,000 shares of Preferred Stock are outstanding or (ii) any shares of Preferred Stock that cannot be converted in accordance with the terms hereof are outstanding, the Corporation shall not, without the affirmative vote of the Holders owning a majority of the then-outstanding shares of Preferred Stock, (a) amend, alter, waive or repeal (by merger, amendment, recapitalization, consolidation, reorganization or otherwise) this Certificate of Designation (or any provision thereof), (b) amend, alter, waive or repeal (by merger, amendment, recapitalization, consolidation, reorganization or otherwise) its certificate of incorporation, bylaws or other charter documents (or any provision thereof), but not including this Certificate of Designation for purposes of this clause (b), (x) if the amendment would adversely affect the Preferred Stock or the Holders (in their capacity as holders of Preferred Stock), or (y) to create or authorize the creation of any class or series of capital stock unless the same does not rank senior to the Preferred Stock with respect to any power, preference or special right of the Preferred Stock set forth in this Certificate of Designation, (c) issue any shares of Preferred Stock other than pursuant to (x) the Purchase Agreement or (y) a stockholder rights plan in respect of which (1) each Holder and its Affiliates are excluded or exempted Persons, and (2) each Holder has the same rights and obligations as the holders of Common Stock (on an as-converted basis disregarding the Beneficial Ownership Limitation for such purpose), (d) increase or decrease the aggregate number of authorized shares of Preferred Stock, or (e) enter into any agreement with respect to any of the foregoing. Further, in the event of a prospective Change of Control Transaction or Fundamental Transaction where the price per share distributable to the Corporation’s stockholders in respect thereof is anticipated to be less than $4.00 per share, as adjusted pursuant to any provision of Section 7, each Holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such Holder are convertible as of the record date for determining stockholders entitled to vote on such prospective Change of Control Transaction or Fundamental Transaction (disregarding the Beneficial Ownership Limitation for such purpose).

 

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Section  5.      Liquidation . Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, Change of Control Transaction or Fundamental Transaction (each, a “ Liquidation ”), each Holder shall be entitled to receive out of the assets and funds of the Corporation, whether capital or surplus, in respect of each share of Preferred Stock held by such Holder at such time the same amount and form of consideration such Holder would receive if all of the Preferred Stock, plus all accrued and unpaid dividends, thereon was fully converted to Common Stock (disregarding the Beneficial Ownership Limitation for such purposes) immediately prior to such Liquidation, subject to any previously implemented anti-dilution adjustment in accordance with this Certificate of Designation, which amounts shall be paid pari passu with the amounts payable to the holders of Common Stock. A Fundamental Transaction or Change of Control Transaction shall be deemed a Liquidation; provided, that a Change of Control Transaction where the Corporation is the surviving corporation and Common Stock remains listed or quoted on any Trading Market, shall not be deemed a Liquidation. The Corporation shall mail to each Holder written notice of any such Liquidation not less than 20 days prior to the payment date stated therein.

Section  6.      Conversion .

(a)     Conversions at Option of Holder . Each share of Preferred Stock shall be convertible by the Holder thereof, at any time and from time to time, (i) following the sixth (6th) anniversary of the Initial Closing or (ii) if earlier, during the thirty (30) day period following the last Trading Day of any period of three (3) or more consecutive Trading Days that the Closing Price of a share of Common Stock as reflected on a Trading Market exceeds $10.00, in each case, at the option of the Holder thereof, into such number of shares of Common Stock (subject to the Beneficial Ownership Limitation) equal to the quotient obtained by dividing the Accreted Value of such share of Preferred Stock by the Conversion Price then in effect. A Holder shall effect any such conversion by providing the Corporation with the form of conversion notice attached as Exhibit  D to the Purchase Agreement (a “ Notice of Conversion ”). Each Notice of Conversion provided by any Holder shall specify (A) the number of shares of Preferred Stock to be converted by such Holder, (B) the number of shares of Preferred Stock owned by such Holder prior to the conversion at issue, (C) the number of shares of Preferred Stock owned subsequent to the conversion at issue by such Holder and (D) the date on which such conversion is to be effected, which date may not be prior to the date such Holder delivers by facsimile or email such Notice of Conversion to the Corporation (such date, the “ Conversion Date ”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered to the Corporation hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or

 

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mathematical error. To effect any conversion of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing such shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock held by such Holder are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.

(b)     Conversion Price . The conversion price for Preferred Stock shall equal to the Stated Value, subject to adjustment as set forth herein (the “ Conversion Price ”).

(c)     Mechanics of Conversion .

i.     Delivery of Conversion Shares Upon Conversion . Not later than three (3) Trading Days after each Conversion Date (the “ Share Delivery Date ”), the Corporation shall deliver, or cause to be delivered, to the converting Holder the number of Conversion Shares being acquired upon the conversion of the Preferred Stock set forth in the applicable Notice of Conversion.

ii.     Failure to Deliver Conversion Shares . If, in the case of any Notice of Conversion, the applicable Conversion Shares are not delivered to, or as directed by, the applicable Holder by the Share Delivery Date, such Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such Notice of Conversion, in which event the Corporation shall promptly return to such Holder any original Preferred Stock certificate(s) delivered to the Corporation in connection with such Notice of Conversion and such Holder shall promptly return to the Corporation the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion to the extent they are actually received by such Holder following such rescission.

iii.     Reservation of Shares Issuable Upon Conversion . The Corporation covenants that it will reserve and at all times keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of Preferred Stock, as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons (other than the Holders), not less than such aggregate number of shares of Common Stock as shall be issuable upon the conversion of the then outstanding shares of Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable, free and clear of all liens, claims, security interests and other encumbrances created by the Corporation. The Corporation further covenants that, if at any time the Common Stock shall be listed on a Trading Market, the Corporation will, if permitted by the rules of such Trading Market, cause to be listed or quoted on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Preferred Stock.

 

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iv.     Fractional Shares . No fractional shares or scrip representing fractional shares shall be issued upon the conversion of Preferred Stock. As to any fraction of a share which a Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up such fraction to the next whole share.

v.     Transfer Taxes and Expenses . The issuance of any Conversion Shares shall be made without charge to the applicable Holder for any documentary stamp, transfer or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares or other incidental expenses in connection therewith, all of which shall be paid by the Corporation; provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of such Conversion Shares in a name other than that of such Holder, and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the amount of such tax shall have been paid to the Corporation or it shall have established to the reasonable satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.

vi.     Closing of Books . The Corporation will not close its stockholder books or records in any manner which prevents the timely conversion of any Preferred Stock pursuant to the terms hereof.

(d)     Beneficial Ownership Limitation . Notwithstanding anything to the contrary contained herein, the Corporation shall not effect any conversion of Preferred Stock, and a Holder shall not have the right to convert any portion of Preferred Stock, to the extent that, after giving effect to such conversion, such Holder (or any of such Holder’s Affiliates or any Persons acting as a group together with such Holder or any of such Holder’s Affiliates (such Persons, the “ Attribution Parties ”)) would beneficially own in excess of the Beneficial Ownership Limitation. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and the Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) conversion of the remaining, unconverted Preferred Stock beneficially owned by such Holder or any the Attribution Parties and (ii) exercise or conversion of the

 

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unexercised or unconverted portion of any other securities of the Corporation (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by such Holder or any of the Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 6(d) applies, the determination of whether Preferred Stock is convertible (in relation to other securities owned by such Holder together with the Attribution Parties) and of how many shares of Preferred Stock are convertible shall be in the sole discretion of such Holder (provided that such determination by such Holder shall be reasonably acceptable to the Corporation), and the submission of a Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Preferred Stock set forth in such Notice of Conversion may be converted (in relation to other securities owned by such Holder together with the Attribution Parties) and how many shares of the Preferred Stock are convertible, in each case, subject to the Beneficial Ownership Limitation, and the Corporation shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Corporation’s most recent periodic or annual report filed with the Commission, as the case may be; (ii) a more recent public announcement by the Corporation; or (iii) a more recent written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Corporation shall within two (2) Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Preferred Stock, by such Holder or the Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “ Beneficial Ownership Limitation ” shall be 19.9% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of Preferred Stock held by the applicable Holder. A Holder, upon notice to the Corporation, may waive the Beneficial Ownership Limitation provisions of this Section 6(d) applicable to its Preferred Stock; provided that such waiver (A) will not be effective until the 61 st day after such notice is delivered to the Corporation, (B) shall only apply to such Holder and no other Holder, and (C) will not be effective to the extent such waiver would require the prior approval of the Corporation’s stockholders, unless such approval has been obtained. The limitations contained in this Section 6(d) shall apply to a successor holder of Preferred Stock.

 

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Section  7.      Certain Adjustments . From and after the Original Issue Date, the Conversion Price shall be adjusted from time to time by the Corporation as follows:

(a)     Stock Dividends and Stock Splits . If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of, or payment of a dividend on, the Preferred Stock); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Corporation, then, in each case, the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.

(b)     Fundamental Transaction . If, at any time while the Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of Common Stock or any compulsory share exchange pursuant to which Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each, a “ Fundamental Transaction ”), then, each Holder shall have the right to receive for each Conversion Share that would have been issuable to such Holder upon

 

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conversion of the Preferred Stock held by such Holder immediately prior to the occurrence of such Fundamental Transaction (had such conversion occurred immediately prior to the occurrence of such Fundamental Transaction and without regard to the Beneficial Ownership Limitation), at the option of such Holder, the number of shares of capital stock of the successor or acquiring corporation or shares of Common Stock of the Corporation, if it is the surviving corporation, and any additional consideration (the “ Alternate Consideration ”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which the Preferred Stock held by such Holder is convertible immediately prior to such Fundamental Transaction (without regard to the Beneficial Ownership Limitation). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then each Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Preferred Stock following such Fundamental Transaction.

(c)     Sales of Shares Below Conversion Price .

i.    If at any time or from time to time after the date of the filing of this Certificate of Designation, the Corporation grants, issues or sells Additional Shares of Common Stock (a “ Subsequent Financing ”) for an Effective Price less than the then existing Conversion Price, then the Conversion Price shall be reduced, effective as of the closing of such Subsequent Financing, to a price determined by multiplying that Conversion Price by a fraction, the numerator of which shall be (A) the number of shares of Common Stock outstanding as of the close of business on the day preceding the closing of the Subsequent Financing (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of all rights, options or warrants or upon conversion of all securities convertible into or exchangeable for Common Stock (including the Preferred Stock) outstanding as of the close of business on the day preceding the closing of the Subsequent Financing) plus (B) the number of shares of Common Stock which the aggregate consideration received (or by the express provisions hereof is deemed to have been received) by the Corporation for the total number of Additional Shares of Common Stock so issued would purchase at such Conversion Price (prior to such adjustment) and the denominator of which shall be (X) the number of shares of Common Stock outstanding immediately prior to the closing of the Subsequent Financing (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of all rights, options or warrants or upon conversion of all securities convertible into or exchangeable for Common Stock (including the Preferred Stock) outstanding as of the close of

 

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business on the day preceding the closing of the Subsequent Financing) plus (Y) the number of such Additional Shares of Common Stock issued or sold in the Subsequent Financing; provided , however , that notwithstanding the foregoing, to the extent that the adjustments in this Section 7(c) result in a Conversion Price that is less than the Minimum Conversion Price, (x) the aggregate number of shares that the Holders shall be entitled to purchase or receive at a Conversion Prices less than the Minimum Conversion Price shall not exceed 2,847,603 (the “ Fully Diluted Limit ”) and (b) the Conversion Price with respect to amounts in excess of the Fully Diluted Limit shall be the Minimum Conversion Price. For the purpose of making any adjustment required under this Section 7(c), the consideration received by the Corporation for any issue or sale of securities shall (A) to the extent it consists of cash be computed at the amount of cash received by the Corporation, (B) to the extent it consists of property other than cash, be computed at the fair market value of that property as determined in good faith by the Board of Directors, and (C) if Additional Shares of Common Stock, Convertible Securities or Options are issued or sold together with other stock or securities or other assets of the Corporation for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the Board of Directors to be allocable to such Additional Shares of Common Stock, Convertible Securities or Options.

ii.    For the purpose of the adjustment required under this Section 7(c)(i), if the Corporation issues or sells any Convertible Securities or Options (or securities directly or indirectly convertible into or exchangeable for Additional Shares of Common Stock, Convertible Securities or Options), and if the Effective Price of such Common Stock underlying any such Convertible Securities or Options is less than the Conversion Price then in effect, then in each case the Corporation shall be deemed to have issued at the time of the issuance of such Convertible Securities or Options the maximum number of Additional Shares of Common Stock issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, received by the Corporation for the issuance of Convertible Securities or Options, plus, in the case of any Options, the minimum amounts of consideration, if any, payable to the Corporation upon the exercise of such Options, plus, in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Corporation (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion thereof. No further adjustment of the Conversion Price, adjusted upon the issuance of such Convertible Securities or Options, shall be made as a result of the actual issuance of Additional Shares of Common Stock on the exercise of any such rights or options or the conversion of any such Convertible Securities.

 

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iii.    If any such Options or the conversion privilege represented by any such Convertible Securities shall expire without having been exercised, the Conversion Price as adjusted upon the issuance of such Options or Convertible Securities shall be readjusted to the Conversion Price which would have been in effect had an adjustment been made on the basis that the only Additional Shares of Common Stock so issued were the Additional Shares of Common Stock, if any, actually issued or sold on the exercise of such Options or rights of conversion of such Convertible Securities, and such Additional Shares of Common Stock, if any, were issued or sold for the consideration actually received by the Corporation upon such exercise, plus the consideration, if any, actually received by the Corporation for the granting of all such rights or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted, plus the consideration, if any, actually received by the Corporation (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the conversion of such Convertible Securities.

iv.    If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price, which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 7(c)(iv), if the terms of any Option or Convertible Security that was outstanding as of the date hereof are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 7(c) shall be made if such adjustment would result in an increase of the Conversion Price then in effect.

v.    “ Additional Shares of Common Stock ” shall mean all shares of Common Stock issued (or deemed issued hereunder) by the Corporation after the date of the filing of this Certificate of Designation, whether or not subsequently reacquired or retired by the Corporation, other than: (A) shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on Preferred Stock; (B) shares of Common Stock or Options issued to employees, directors, officers, consultants, contractors, or advisors to the Corporation or any of its subsidiaries in connection with the provision of bona fide services pursuant to a plan, agreement or arrangement approved by the Board of Directors; (C) shares of Common Stock or Convertible Securities actually issued upon the exercise of

 

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Options outstanding on the Original Issue Date or thereafter issued in accordance with the Certificate of Incorporation of the Corporation or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities outstanding on the Original Issue Date or thereafter issued in accordance with the Certificate of Incorporation of the Corporation, in each case, provided such issuance is pursuant to the terms of such Option or Convertible Security; (D) shares of Common Stock, Options or Convertible Securities issued to banks, equipment lessors or other financial institutions, or to real property lessors in connection with the provision of bona fide goods or services pursuant to a debt financing, equipment leasing, commercial credit arrangements, real property leasing transactions or similar transaction approved by the Board of Directors; (E) shares of Common Stock, Options or Convertible Securities issued to suppliers or third party service providers in connection with the provision of bona fide goods or services pursuant to transactions approved by the Board of Directors; (F) shares of Common Stock, Options or Convertible Securities issued pursuant to the acquisition of another entity by the Corporation through a merger, the purchase of all or substantially all of the assets of the other entity, other reorganization, or in connection with a joint venture agreement, technology license agreement or other acquisition agreement pursuant to which the Company acquires technology or other assets in a transaction or series of related transactions, in each case, approved by the Board of Directors; and (G) shares of Common Stock, Options or Convertible Securities issued upon conversion of Preferred Stock. The “ Effective Price ” of Additional Shares of Common Stock shall mean the quotient determined by dividing the aggregate consideration received, or deemed to have been received by the Corporation for such issue under this Section 7(c), for such Additional Shares of Common Stock by the total number of Additional Shares of Common Stock issued or sold, or deemed to have been issued or sold by the Corporation under this Section 7(c).

(d)     Calculations . All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.

(e)     Board of Directors . If any event occurs as to which, in the opinion of the Board of Directors, the provisions of this Section 7 are not strictly applicable or if strictly applicable would not fairly protect the rights of the Holders in accordance with the essential intent and principles of such provisions, then, if the Board of Directors determines in its sole discretion that an adjustment is in the Corporation’s best interest, the Board of Directors shall make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as to protect such rights as aforesaid.

 

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(f)     Notice to the Holders .

i.     Adjustment to Conversion Price . Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder by facsimile or email a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

ii.     Notice to Allow Conversion by Holder . If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of Common Stock, (C) the Corporation shall authorize the granting to all holders of Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock, and shall cause to be delivered by facsimile or email to each Holder at its last facsimile number or email address as it shall appear upon the stock books of the Corporation, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Corporation or any of the Subsidiaries, the Corporation shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. Each Holder shall remain entitled to convert the Preferred Stock (or any part hereof) held by such Holder during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

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Section  8.      Miscellaneous .

(a)     Notices . Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at the address set forth above Attention: Chief Financial Officer, e-mail address swallach@identiv.com, or such other facsimile number, e-mail address or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 8. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing on the books of the Corporation, or if no such facsimile number, e-mail address or address appears on the books of the Corporation, at the principal place of business of such Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

(b)     Lost or Mutilated Preferred Stock Certificate . If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.

(c)     Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of laws thereof.

(d)     Severability . If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in

 

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effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

(e)     Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

(f)     Headings . The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

(g)     Status of Converted or Redeemed Preferred Stock . If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series B Non-Voting Convertible Preferred Stock.

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RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Delaware law.

IN WITNESS WHEREOF, the undersigned have executed this Certificate this December 21, 2017.

 

/s/ Steven Humphreys

   

/s/ Sandra Wallach

Name:

  Steven Humphreys    

Name:

  Sandra Wallach

Title:

  President    

Title:

  Secretary

 

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Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into as of December 21, 2017 by and among Identiv, Inc., a Delaware corporation (the “ Company ”), and each of 21 April Fund, Ltd., a Cayman Islands Exempted Company, and 21 April Fund, LP, a Delaware limited partnership (each, a “ Purchaser ” and collectively, the “ Purchasers ”).

Preliminary Statement

A.    The Company and each Purchaser are executing and delivering this Agreement in reliance upon the exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ”), and Rule 506 of Regulation D (“ Regulation D ”) as promulgated by the United States Securities and Exchange Commission (the “ SEC ”) under the Securities Act.

B.    The Purchasers wish to purchase and the Company wishes to issue and sell, upon the terms and conditions stated in this Agreement, up to an aggregate of (i) 5,000,000 shares of the Company’s Series B Non-Voting Convertible Preferred Stock (the “ Preferred Stock ”), $0.001 par value per share (collectively referred to herein as the “ Shares ”). The shares of common stock, par value $0.001 per share, of the Company (the “ Common Stock ”) issuable upon conversion of the Shares are referred to herein as the “ Underlying Shares .”

C.    The Shares and the Underlying Shares issued pursuant to this Agreement are collectively referred to herein as the “ Securities .”

Agreement

The parties, intending to be legally bound, agree as follows:

ARTICLE 1

SALE OF SHARES

Subject to the terms and conditions herein, the Purchasers will purchase from the Company an aggregate of (i) 3,000,000 Shares at a price of $4.00 per share in cash at the Initial Closing and, (ii) at the sole option of the Company, 2,000,000 Shares at a price of $4.00 per share in cash at the Second Closing. The total purchase price payable by the Purchasers for the Shares that the Purchasers are hereby agreeing to purchase is $20,000,000 (the “ Purchase Price ”), of which $12,000,000 will be paid at the Initial Closing and $8,000,000 will be paid, if at all, at the Second Closing. The portion of the Purchase Price and the Shares issuable to each Purchaser are as set forth on the signature page to this Agreement for such Purchaser. The Company will use the proceeds from the issuance of the Shares to pay off existing debt obligations of the Company and to fund future acquisitions of technology, business and other assets by the Company.


ARTICLE 2

CLOSING; DELIVERY

2.1.     Initial Closing . The initial closing (“ Initial Closing ”) of the transactions contemplated hereby will be held at the offices of Perkins Coie LLP, 3150 Porter Drive, Palo Alto, California 94304 at 10:00 a.m. local time on the date hereof or at such other time and place as the Company and the Purchasers mutually agree (such date, the “ Initial Closing Date ”), upon the physical or electronic exchange by the parties hereto and their respective counsel of all documents and deliverables required under this Agreement.

2.2.     Second Closing . Subject to the satisfaction or waiver of each of the conditions set forth in Article 6 (other than those conditions that by their terms are to be satisfied at the Second Closing, but subject to the satisfaction or waiver of such conditions at the Second Closing), after the Initial Closing, the second closing (the “ Second  Closing ”, and together with the Initial Closing, the “ Closings ”) will be held, if at all, at such time as the Company and the Purchasers mutually agree, but in no event later than ten (10) days after the receipt by the Purchasers of a written notice by the Company of its election to consummate the Second Closing (such date, the “ Second Closing Date ”, and together with the Initial Closing Date, the “ Closing Dates ”), which notice will be delivered, if at all, on or before the one-year anniversary of the Initial Closing. Such notice will include the Company’s wire instructions. The Purchasers shall be required to fund the Second Closing unless (i) the Company is subject to any voluntary or involuntary dissolution, liquidation, receivership, bankruptcy, insolvency or winding-up proceedings, (ii) there shall have occurred any state of facts, change, event, effect, occurrence or circumstance that individually or in the aggregate (considered with all other states of facts, changes, events, effects, occurrences or circumstances) has, has had or would reasonably be expected to have or give rise to a material adverse effect on the business, assets, condition (financial or otherwise), properties, operations and results of operations of the Company, or (iii) the Company has breached in any material respect any of the terms of the Certificate of Designation (each of items (i)-(iii) above shall be a “ Conditional Funding Release ”); provided , however , that for the avoidance of doubt, no Conditional Funding Release shall apply, and the Purchasers’ funding obligation in respect of the Second Closing shall remain, if the Purchasers’ failure to fully fund the Second Closing is the cause of the applicable Conditional Funding Release. Notwithstanding anything to the contrary set forth herein, in no event will any Purchaser be required to consummate the Second Closing or purchase any Shares (a) following the one-year anniversary of the Initial Closing or (b) if a Conditional Funding Release event has occurred.

2.3.     Delivery . At the Initial Closing, the Company shall execute and deliver to each Purchaser this Agreement, the Stockholder Agreement in the form attached hereto as Exhibit A (the “ Stockholder Agreement ”), and the other documents referenced in Article 6 . At each Closing, each Purchaser shall pay the Company the applicable portion of the Purchase Price in immediately available funds. At each Closing, the Company shall deliver to each Purchaser either a single stock certificate or confirmation of book entry representing the number of Shares purchased by such Purchaser, as set forth herein to be registered in the name of such Purchaser, or in such nominee’s or nominees’ name(s) as designated by such Purchaser in writing in the form of the Purchaser Suitability Questionnaire of the Purchaser attached hereto as Exhibit B (the “ Purchaser Suitability Questionnaire ”), against payment of the Purchase Price therefor by wire transfer of immediately available funds to such account or accounts as the Company shall designate in writing to the Purchasers prior to the applicable Closing Date.

 

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents, warrants and covenants to the Purchasers as of the date of this Agreement and the Initial Closing Date as follows:

3.1.     Organization and Standing . The Company and each of its wholly-owned subsidiaries is duly incorporated, validly existing, and in good standing under the laws of the jurisdiction of its organization. Each of the Company and its subsidiaries has all requisite power and authority to own and operate its respective properties and assets and to carry on its respective business as presently conducted and as proposed to be conducted. The Company and each of its wholly-owned subsidiaries is qualified to do business as a foreign entity in every jurisdiction in which the failure to be so qualified would have, or would reasonably be expected to have, a material adverse effect, individually or in the aggregate, upon the business, properties, tangible and intangible assets, liabilities, operations, condition (financial or otherwise) or results of operation of the Company and its subsidiaries or the ability of the Company or any of its subsidiaries to timely perform their respective obligations under the Transaction Agreements (as defined below) (a “ Material Adverse Effect ”).

3.2.     Subsidiaries . As used in this Agreement, references to any “subsidiary” of a specified Person shall refer to an Affiliate controlled by such Person directly, or indirectly through one or more intermediaries, as such terms are used in and construed under Rule 405 under the Securities Act (which, for the avoidance of doubt, shall include the Company’s controlled joint ventures, including shared-controlled joint ventures). The Company’s significant subsidiaries, as of the date hereof, are listed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and are the only significant subsidiaries, direct or indirect, of the Company as of the date hereof. All the issued and outstanding shares of each subsidiary’s capital stock have been duly authorized and validly issued, are fully paid and nonassessable, have been issued in compliance with all applicable securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities. As used herein, “ Person ” shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof or any other entity, and an “ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.

3.3.     Power . The Company has all requisite corporate power and authority to execute and deliver this Agreement, the Stockholder Agreement, the Certificate of Designation (as defined below) and any ancillary agreements and instruments to be entered into by the Company hereunder (together, the “ Transaction Agreements ”), to sell and issue the Securities, and to carry out and perform its obligations under the Transaction Agreements.

3.4.     Authorization . The execution, delivery, and performance of the Transaction Agreements by the Company, including the authorization, issuance and delivery of the Securities, has been duly authorized by all requisite corporate or other action on the part of the Company and its officers, directors and stockholders, and this Agreement constitutes, and the other Transaction Agreements will constitute, legal, valid, and binding obligations of the Company enforceable in

 

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accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies (together, the “ Enforceability Exceptions ”).

3.5.     Capitalization . The Company has not issued any capital stock since its most recently filed SEC Document (as defined below) under the Exchange Act, other than (a) pursuant to the exercise of stock options, restricted stock units or other similar awards under the Company’s stock option plans, (b) to consultants, employees and other service providers of the Company in transactions approved by the Company’s Board of Directors, or (c) as disclosed in the most recently filed SEC Document under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Other than as disclosed in the SEC Documents, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

3.6.     Consents and Approvals . Except for any Current Report on Form 8-K or Notice of Exempt Offering of Securities on Form D and the listing of additional shares application pursuant to The NASDAQ Stock Market Listing Requirement 5250(e)(2)(D) to be filed by the Company in connection with the transactions contemplated by the Transaction Agreements, the Company is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any regulatory body, self-regulatory organization, stock exchange or market government or governmental agency in order to consummate the transactions contemplated by the Transaction Agreements.

3.7.     Non-Contravention . The execution and delivery of the Transaction Agreements, the issuance, sale and delivery of the Securities to be sold by the Company, the performance by the Company of its obligations under the Transaction Agreements and the consummation of the transactions contemplated thereby will not (a) conflict with, result in the breach or violation of, or constitute (with or without the giving of notice or the passage of time or both) a violation of, or default under, (i) any bond, debenture, note or other evidence of indebtedness, or under any lease, license, franchise, permit, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or any subsidiary is a party or by which it or its properties may be bound or affected, (ii) the Company’s Fourth Amended and Restated Certificate of Incorporation, as amended and as in effect on the date hereof (the “ Certificate of Incorporation ”), the Company’s Bylaws, as amended and as in effect on the date hereof (the “ Bylaws ”), or the equivalent document with respect to any subsidiary, as amended and as in effect on the date hereof, or (iii) any statute or law, judgment, decree, rule, regulation, ordinance or order of any court or governmental or regulatory body (including The NASDAQ Stock Market), governmental agency, arbitration panel or authority applicable to the Company, any of its subsidiaries or their respective properties, except in the case of clause (i) for such conflicts, breaches, violations or defaults that would not be likely to have, individually or in the aggregate, a Material Adverse Effect, or (b) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the material properties or assets of the Company or any of its subsidiaries or an acceleration of indebtedness pursuant to any

 

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obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness or any material indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or any if its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company is subject. For purposes of this Section  3.7 the term “material” shall apply to agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party or by which it is bound involving obligations (contingent or otherwise) of, or payments to, the Company in excess of $500,000 in a consecutive 12-month period.

3.8.     Shares . The Shares are duly authorized and when issued pursuant to the terms of this Agreement will be validly issued, fully paid, and nonassessable, and will be free of any lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other material restriction (collectively, “ Liens ”) with respect to the issuance thereof; provided , however , that the Shares shall be subject to restrictions on transfer under the Stockholder Agreement, state or federal securities laws as set forth in this Agreement, or as otherwise may be required under state or federal securities laws as set forth in this Agreement at the time a transfer is proposed.

3.9.     Authorization of the Underlying Shares . The Underlying Shares issuable upon conversion of the Shares have been duly and validly reserved for issuance, have been duly authorized by all necessary corporate action and such shares, when issued upon such conversion or exercise in accordance of the terms of the Certificate of Designation of Preferences, Rights and Limitations of Series B Non-Voting Convertible Preferred Stock, in the form of Exhibit C hereto (the “ Certificate of Designation ”), as applicable, will be validly issued and will be fully paid and non-assessable, and will be free of any Liens with respect to the issuance thereof; provided , however , that the Underlying Shares shall be subject to restrictions on transfer under state or federal securities laws as set forth in this Agreement, or as otherwise may be required under state or federal securities laws as set forth in this Agreement at the time a transfer is proposed.

3.10.     No Registration . Assuming the accuracy of each of the representations and warranties of the Purchasers herein and in the Purchaser Suitability Questionnaire, the issuance by the Company of the Securities is exempt from registration under the Securities Act.

3.11.     Reporting Status . The Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the Company has, in a timely manner, filed all schedules, forms, statements, reports and other documents that the Company was required to file pursuant to Section I.A.3.b of the General Instructions to Form S-3 promulgated under the Securities Act in order for the Company to be eligible to use Form S-3 preceding the Closing Date (the foregoing materials, together with any materials filed by the Company under the Exchange Act, whether or not required, collectively, the “ SEC  Documents ”). The SEC Documents complied in all material respects with requirements of the Securities Act and Exchange Act and the rules and regulations of the SEC promulgated thereunder (collectively, the “ SEC Rules ”), and none of the SEC Documents and the information contained therein, as of their respective filing dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect

 

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at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“ GAAP ”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. As used in this Agreement, “ Previously Disclosed ” means information set forth in or incorporated by reference into the SEC Documents filed with the SEC prior to the date hereof (except for risks and forward-looking information set forth in the “Risk Factors” section of the applicable SEC Documents or in any forward-looking statement disclaimers or similar statements that are similarly non-specific and are predictive or forward-looking in nature).

3.12.     Material Changes . Since the date of the latest audited financial statements included within the SEC Documents, except as specifically disclosed in a subsequent SEC Document filed prior to the date hereof, there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) business day prior to the date that this representation is made.

3.14.     Legal Proceedings . Except as Previously Disclosed, there is no action, suit or proceeding before any court, governmental agency or body, domestic or foreign, now pending or, to the knowledge of the Company, threatened against the Company or its subsidiaries wherein an unfavorable decision, ruling or finding would reasonably be expected to, individually or in the aggregate, (i) materially adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, this Agreement or (ii) have a Material Adverse Effect. The Company is not a party to or subject to the provisions of any injunction, judgment, decree or order of any court, regulatory body, administrative agency or other governmental agency or body that might have, individually or in the aggregate, a Material Adverse Effect.

3.15.     No Violations . Neither the Company nor any of its subsidiaries is or, since January 1, 2015, has been in violation of its respective certificate of incorporation, bylaws or other organizational documents, or any statute or law, judgment, decree, rule, regulation, ordinance or order of any court or governmental or regulatory body (including The NASDAQ Stock Market), governmental agency, arbitration panel or authority applicable to the Company or any of its subsidiaries, which violation, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries is in default (and there exists no condition which, with or without the passage of time or giving of notice or both, would constitute a default) in the performance of any bond, debenture, note or any other evidence of indebtedness in any indenture, mortgage, deed of trust or any other material agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or by which the properties of the Company are bound, which would be reasonably likely to have a Material Adverse Effect.

 

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3.16.     Listing Compliance . The Company is in compliance with the requirements of The NASDAQ Stock Market LLC for continued listing of the Common Stock thereon and has no knowledge of any facts or circumstances that could reasonably lead to delisting of its Common Stock from The NASDAQ Stock Market. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or the listing of the Common Stock on The NASDAQ Stock Market, nor has the Company received any notification that the SEC or The NASDAQ Stock Market is contemplating terminating such registration or listing. The transactions contemplated by the Transaction Agreements will not contravene the rules and regulations of The NASDAQ Stock Market. The Company will comply with all requirements of The NASDAQ Stock Market with respect to the issuance of the Securities, including the filing of any listing notice with respect to the issuance of the Securities.

3.17.     Application of Takeover Protections . The Company has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement), or other similar anti-takeover provision pursuant to its charter documents or the laws of its state of incorporation (including, without limitation, under Section 203 of the Delaware General Corporation Law) that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights pursuant to the Transaction Documents.

3.18.     Regulatory Permits . The Company possess all material certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its businesses as described in the SEC Documents (the “ Material Permits ”), and the Company has not received any notice of Proceedings relating to the revocation or modification of any Material Permit.

3.19.     Rights of Registration . Except as provided in the Stockholder Agreement or disclosed in the SEC Documents, the Company is not under any obligation to register under the Securities Act any of its currently outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding securities.

3.20.     Intellectual Property . The Company owns or possesses adequate rights to use all patents, patent applications, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, trademark registrations, service marks, service mark registrations, trade names, mask work rights and other intellectual property necessary to carry on the business now operated by it or proposed to be operated by it as described in the SEC Documents (collectively, the “ Intellectual Property ”), except where the lack of such ownership or rights to use would not have a Material Adverse Effect. The Company has not received a notice (written or otherwise) that any of the Intellectual Property material to the Company’s business has expired, terminated or been abandoned, or is essential for the Company’s business and is expected to expire or terminate or be abandoned within one (1) year from the date of this Agreement. Except as disclosed in the SEC Documents, or as would not, individually or in the aggregate, have

 

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a Material Adverse Effect, to the best of the Company’s knowledge, (i) there is no infringement by third parties engaged in commercial activity of any Intellectual Property of the Company relating to the Company’s business and (ii) there are no non-commercial activities being performed by any third parties which, upon commercialization thereof, could reasonably be expected to infringe on the Intellectual Property of the Company. The Company has taken all commercially reasonable actions necessary to perfect its ownership of and interest in the Intellectual Property.

3.22.     Tax Status . Except for the matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.

3.24.     Acknowledgement Regarding Purchasers’ Purchase of Securities . The Company acknowledges and agrees that the Purchasers are acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Agreements and the transactions contemplated thereby. The Company further acknowledges that the Purchasers are not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Agreements and the transactions contemplated thereby and any advice given by the Purchasers or any of their respective representatives or agents in connection with the Transaction Agreements and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to the Purchasers that the Company’s decision to enter into this Agreement and the other Transaction Agreements has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

3.25.     Disclosure . Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Agreements, the Company confirms that neither it nor any other Person acting on its behalf has provided the Purchasers or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated by the Transaction Agreements other than those specifically set forth in Article 4 .

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

Each Purchaser, severally and not jointly, represents, warrants and covenants to the Company as of the date of this Agreement and the Initial Closing Date as follows:

4.1.     Organization . Such Purchaser is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization.

 

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4.2.     Power . Such Purchaser has all requisite power to execute and deliver this Agreement and to carry out and perform its obligations under the terms of this Agreement.

4.3.     Authorization . The execution, delivery, and performance of this Agreement by such Purchaser has been duly authorized by all requisite action, and this Agreement constitutes the legal, valid, and binding obligation of such Purchaser enforceable in accordance with its terms, except as limited by the Enforceability Exceptions.

4.4.     Consents and Approvals . Except for any filings required under applicable securities law, such Purchaser need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

4.5.     Non-Contravention . Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will violate in any material respect any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which such Purchaser is subject. No approval, waiver, or consent by such Purchaser under any instrument, contract, or agreement to which the Purchaser or any of its Affiliates is a party is necessary to consummate the transactions contemplated hereby.

4.6.     Purchase for Investment Only . Such Purchaser is purchasing the Securities for such Purchaser’s own account for investment purposes only and not with a view to, or for resale in connection with, any “distribution” in violation of the Securities Act. By executing this Agreement, such Purchaser further represents that it does not have any contract, undertaking, agreement, or arrangement with any Person to sell, transfer, or grant participation to such Person or to any third Person, with respect to any of the Securities. Such Purchaser understands that the Securities have not been registered under the Securities Act or any applicable state securities laws by reason of a specific exemption therefrom that depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

4.7.     Disclosure of Information . Such Purchaser has had an opportunity to review the Company’s filings under the Securities Act and the Exchange Act (including risks factors set forth therein) and such Purchaser represents that it has had an opportunity to ask questions and receive answers from the Company to evaluate the financial risk inherent in making an investment in the Securities. Such Purchaser has not been offered the opportunity to purchase the Securities by means of any general solicitation or general advertising.

4.8.     Risk of Investment . Such Purchaser realizes that the purchase of the Securities will be a highly speculative investment and such Purchaser may suffer a complete loss of its investment. Such Purchaser understands all of the risks related to the purchase of the Securities. By virtue of such Purchaser’s experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, such Purchaser is capable of evaluating the merits and risks of such Purchaser’s investment in the Company and has the capacity to protect such Purchaser’s own interests.

 

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4.9.     Advisors . Such Purchaser has reviewed with its own tax advisors the federal, state, and local tax consequences of this investment and the transactions contemplated by this Agreement. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Agreements and the transactions contemplated thereby with such Purchaser’s own legal counsel.

4.10.     Restricted Securities . Such Purchaser understands that the Securities must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from registration is otherwise available.

4.11.     Legend . It is understood by such Purchaser that each certificate or other instrument representing the Shares or the Underlying Shares shall be endorsed with a legend substantially in the following form:

“NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE OR EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

Subject to Section  7.3 , the Company need not register a transfer of Securities unless the conditions specified in the foregoing legend are satisfied. Subject to Section  7.3 , the Company may also instruct its transfer agent not to register the transfer of any of the Securities unless the conditions specified in the foregoing legend are satisfied.

4.12.     Investor Qualification . Such Purchaser is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act. Such Purchaser has truthfully set forth in the Purchaser Suitability Questionnaire the factual basis or reason for qualification as an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act and such information remains true and correct as of the date hereof. Such Purchaser agrees to furnish any additional information that the Company deems reasonably necessary in order to verify the answers set forth in the Purchaser Suitability Questionnaire.

4.13.     Disqualification . Such Purchaser represents that such Purchaser is not subject to any Disqualification Event (as defined in Rule 506(d)(1)(i) through (viii) under the Securities Act), except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed reasonably in advance of the Closing in writing in reasonable detail to the Company.

 

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ARTICLE 5

CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSINGS

The Company’s obligation to complete the sale and issuance of the Shares and deliver the Shares to the Purchasers at each Closing shall be subject to the following conditions to the extent not waived by the Company:

(a)      Receipt of Payment . The Company shall have received payment by wire transfer of immediately available funds in the full amount of the Purchase Price for the Shares being purchased by the Purchasers at such Closing, if applicable, as set forth herein.

(b)      Representations and Warranties . The representations and warranties made by the Purchasers in Section  4 hereof shall be true and correct in all material respects as of, and as if made on, the date of this Agreement, the Initial Closing Date and the Second Closing Date, if applicable.

(c)      Receipt of Executed Documents . The Purchasers shall have duly executed and delivered to the Company the Purchaser Suitability Questionnaire and the Stockholder Agreement.

ARTICLE 6

CONDITIONS TO PURCHASERS’ OBLIGATIONS AT THE CLOSINGS

The Purchasers’ obligation to accept delivery of the Shares and to pay for the Shares at each Closing shall be subject to the following conditions to the extent not waived by the Purchasers:

(a)      Representations and Warranties . The representations and warranties made by the Company in Section  3 hereof shall be true and correct in all respects as of, and as if made on, the date of this Agreement, the Initial Closing Date and the Second Closing Date, if applicable.

(b)     Performance . The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in the Transaction Agreements that are required to be performed or complied with by it on or before the Initial Closing Date or the Second Closing Date, as applicable.

(c)      Officers’ Certificate . The Purchasers shall have received a certificate signed by the Company’s Chief Executive Officer and Chief Financial Officer to the effect that the representations and warranties of the Company in Section  3 hereof are true and correct in all respects as of, and as if made on, the date of this Agreement, the Initial Closing Date and the Second Closing Date, as applicable, and that the Company has satisfied in all respects all of the conditions set forth in this Agreement.

(d)      Good Standing . The Company is validly existing as a corporation in good standing under the laws of Delaware as evidenced by a certificate of the Secretary of State of the State of Delaware, a copy of which was provided to the Purchasers at least one (1) business day prior to the Initial Closing Date and the Second Closing Date, as applicable.

 

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(e)     Secretary’s Certificate . A certificate, executed by the Secretary or the Assistant Secretary of the Company and dated as of the Initial Closing Date or the Second Closing Date, as applicable, as to (A) the resolutions approving the issuance of the Securities as adopted by the Company’s Board of Directors, (B) the Certificate of Incorporation, and (C) the Bylaws, each as in effect as of the Initial Closing Date.

(f)     Board Approval . The terms and conditions of the issuance of the Securities and the Transaction Agreements shall have been approved by majority of the directors of the Company’s Board of Directors prior to the Initial Closing.

(g)     Approvals . The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of the Securities.

(h)     Receipt of Stockholder Agreement . The Company shall have executed and delivered to the Purchasers the Stockholder Agreement substantially in the form attached hereto as Exhibit  A.

(i)     Certificate of Designation . The Certificate of Designation, in substantially the form attached hereto as Exhibit C , shall have been filed with the Delaware Secretary of State.

(j)     Opinion . The Company shall have delivered an opinion of the Company’s legal counsel in a form reasonably satisfactory to the Purchasers.

ARTICLE 7

OTHER AGREEMENTS OF THE PARTIES

7.1.     Securities Laws Disclosure . The Company will file a Current Report on Form 8-K with the SEC describing the terms of the Transaction Agreements (the “ 8-K Filing ”) within the time required by the Exchange Act. Neither the Company, its subsidiaries nor the Purchasers shall issue any press releases or any other public statements with respect to the transactions contemplated hereby without the prior consent of the other; provided , however , the Company or the Purchasers each shall be entitled, without the prior approval of the other, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations.

7.2.     Form  D; Blue Sky Filings . The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Purchasers (provided that the posting of the Form D on the SEC’s EDGAR system shall be deemed delivery of the Form D for purposes of this Agreement). The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain exemption for, or to qualify the Securities for sale to the Purchasers at each Closing under the applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such action promptly upon request of either Purchaser.

 

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7.3.     Reservation of Common Stock; Conversion Notice . Following the date hereof, the Company will immediately reserve and continue to keep available, at all times, free of preemptive or similar rights, a sufficient number of shares of Common Stock equal to, as of any date, the maximum aggregate number of shares of Common Stock then issuable or potentially issuable in the future pursuant to the Transaction Agreements, including, without limitation, any Underlying Shares issuable upon conversion in full of all shares of Preferred Stock, ignoring any conversion or exercise limits set forth therein. The Purchasers agree to use the conversion notice attached hereto as Exhibit  D in connection with any request to the Company to convert the Preferred Shares.

ARTICLE 8

MISCELLANEOUS

8.1.     Survival . The representations, warranties and covenants contained herein shall survive the execution and delivery of this Agreement and the sale of the Securities.

8.2.     Assignment; Successors and Assigns . This Agreement may not be assigned by either party without the prior written consent of the other party; provided , that this Agreement may be assigned by any Purchaser to the valid transferee of any security purchased hereunder if such security remains a “restricted security” under the Securities Act. This Agreement and all provisions thereof shall be binding upon, inure to the benefit of, and are enforceable by the parties hereto and their respective successors and permitted assigns.

8.3.     Notices . All notices, requests, and other communications hereunder shall be in writing and will be deemed to have been duly given and received (a) when personally delivered, (b) when sent by facsimile upon confirmation of receipt, (c) one (1) business day after the day on which the same has been delivered prepaid to a nationally recognized courier service, or (d) five (5) business days after the deposit in the United States mail, registered or certified, return receipt requested, postage prepaid, in each case addressed to, as to the Company, Identiv, Inc., 2201 Walnut Avenue, Fremont, California 94538, Attn: Chief Financial Officer, with a copy to Perkins Coie LLP, 3150 Porter Drive, Palo Alto, CA 94304, Attn: Troy Foster, Esq., facsimile number: (650) 838-4921, and as to a Purchaser at the address and facsimile number set forth below such Purchaser’s signature on the signature pages of this Agreement. Any party hereto from time to time may change its address, facsimile number, or other information for the purpose of notices to that party by giving notice specifying such change to the other parties hereto. Any Purchaser and the Company may each agree in writing to accept notices and other communications to it hereunder by electronic communications pursuant to procedures reasonably approved by it; provided that approval of such procedures may be limited to particular notices or communications.

8.4.     Governing Law . All questions concerning the construction, validity, enforcement and interpretation of the Transaction Agreements shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of law thereof.

 

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8.5.     Severability . In the event that any provision of this Agreement or the application of any provision hereof is declared to be illegal, invalid, or otherwise unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected except to the extent necessary to delete such illegal, invalid, or unenforceable provision unless that provision held invalid shall substantially impair the benefits of the remaining portions of this Agreement.

8.6.     Headings . The headings in this Agreement are for convenience of reference only and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction, or effect.

8.7.     Entire Agreement . This Agreement embodies the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to the subject matter hereof.

8.8.     Finder’s Fee . The Company agrees that it shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by the Purchasers) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold the Purchasers harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim for any such fees or commissions.

8.9.     Further Assurances . The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

8.10.     Counterparts . This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other party. Facsimile signatures shall be deemed originals for all purposes hereunder.

8.11.     Amendments; Waivers . Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by each party hereto, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

8.13.     WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

[Signature pages follows]

 

14


This Securities Purchase Agreement is hereby confirmed and accepted by the Company as of the date first written above.

 

IDENTIV, INC.
By:  

/s/ Steven Humphreys

Name:   Steven Humphreys
Title:   President


This Securities Purchase Agreement is hereby confirmed and accepted by the Purchasers as of the date first written above.

 

PURCHASERS:
21 APRIL FUND, LP
By:  

/s/ Michael M. Kellen

Name:  

Michael M. Kellen

Title:   Authorized Person/Portfolio Manager
Total Preferred Shares:  

1,019,232

1st Close Shares:  

611,539

2nd Close Shares:  

407,693

Address:
Bank of America Merrill Lynch
F/A/O 21 April Fund, LP (843-25315D0)

Asset Management Services

222 Broadway, 11th Floor

New York, NY 10038

Attn: William J. Leggio

william.j.leggio@baml.com

Phone: 646-743-0031
With Copy to:
Timothy Connolly

First Eagle Investment Management, LLC

1345 Avenue of the Americas, 48th Fl

New York, NY 10105

timothy.connolly@feim.com;

FEIM.PF.Statements@feim.com;

Phone: 212-698-3431


This Securities Purchase Agreement is hereby confirmed and accepted by the Purchasers as of the date first written above.

 

PURCHASERS:
21 APRIL FUND, LTD.
By:  

/s/ Michael M. Kellen

Name:  

Michael M. Kellen

Title:  

Authorized Person/Portfolio Manager

Total Preferred Shares:  

3,980,768

1st Close Shares:  

2,388,461

2nd Close Shares:  

1,592,307

Address:
Bank of America Merrill Lynch
F/A/O 21 April Fund, Ltd (843-26315D9)

Asset Management Services

222 Broadway, 11th Floor

New York, NY 10038

Attn: William J. Leggio

william.j.leggio@baml.com

Phone: 646-743-0031
With Copy to:
Timothy Connolly

First Eagle Investment Management, LLC

1345 Avenue of the Americas, 48th Fl

New York, NY 10105

timothy.connolly@feim.com;

FEIM.PF.Statements@feim.com;

Phone: 212-698-3431


Exhibit A

FORM OF STOCKHOLDER AGREEMENT


Exhibit B

PURCHASER SUITABILITY QUESTIONNAIRE

FOR

IDENTIV, INC.

This Questionnaire is to be completed by each ENTITY (trust, corporation, partnership or other organization) purchasing securities of Identiv, Inc., a Delaware corporation (the “ Company ”). The purpose of this Questionnaire is to assure the Company that the proposed investor will meet certain suitability standards in connection with investment in the Company and the purchase of shares of the Company’s Series B Non-Voting Convertible Preferred Stock, $0.001 par value per share (the “ Shares ”), including those imposed by applicable state and federal securities laws and the regulations under those laws.

If the answer to any question is “None” or ”Not Applicable,” please so state. If more space is needed for any answer, additional sheets may be attached.

Your answers will be kept confidential at all times. However, by signing this Questionnaire, you agree that the Company may present this Questionnaire to such parties as it deems appropriate to establish the availability of exemptions from registration or qualification requirements under federal and state securities laws.

1. IDENTIFICATION

 

1.1    Name(s) in which the Shares are to be registered:
  

 

1.2    Tax Identification Number:
  

 

1.3   

Address of principal place of business:

  

 

  

 

1.4    Telephone number:                                                                                         
1.5    Jurisdiction of formation or of incorporation (Name the State or Country):
  

 

1.6   

Form of entity (e.g., corporation, general partnership, limited partnership, trust, etc.):

  

 


1.7 Nature of business (e.g., investment, banking, manufacturing, venture capital investment fund, etc.):

 

                                                                                                                                                                                                         

2. ACCREDITATION

 

2.1 Amount of the proposed investment: $                                                      

 

2.2 Is the entity’s cash flow from all sources sufficient to satisfy its current needs, including possible contingencies, such that the entity has no need for liquidity in this proposed investment?

Yes                      No         

 

2.3 Was the entity specifically formed for the purpose of investing in the Company?

Yes                       No         

 

2.4 Does the entity have the ability to bear the economic risk of the investment, i.e., can the entity afford to lose its entire investment?

Yes                      No         

 

2.5 Is the entity an employee benefit plan governed by the Employee Retirement Income Security Act of 1974 (a 401(k) Plan, Keogh Plan, pension plan, etc., maintained by an employer for its employees)?

Yes                      No         

IF YES , please indicate which, if any, of the following categories accurately describes the entity:

         the employee benefit plan has total assets in excess of $5,000,000.

         the plan is a self-directed plan with investment decisions made solely by persons listed in Section 2.6 below or who are individuals, and each such individual has a net worth in excess $1,000,000 or had an individual income in excess of $200,000 in each of the two most recent years and has a reasonable expectation of reaching the same income level in the current year.

         investment decisions are made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor.

 

2.6 Please indicate which, if any, of the following categories accurately describes the entity:

         A bank.

         A savings and loan association.


         A broker-dealer registered under Section 15 of the Securities Exchange Act of 1934.

         An insurance company.

         An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act.

         A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

         A private business development company defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

         An organization described in Section 501(c)(3) of the Internal Revenue Code with total assets in excess of $5,000,000 not formed for the purpose of investing in the Company.

         A corporation with total assets in excess of $5,000,000, not formed for the purpose of investing in the Company.

         A partnership with total assets in excess of $5,000,000, not formed for the purpose of investing in the Company.

         A Massachusetts or similar business trust with total assets in excess of $5,000,000, not formed for the purpose of investing in the Company.

         Any other trust with total assets in excess of $5,000,000, not formed for the purpose of investing in the Company.

 

2.7 Please indicate if one of the following describes the equity owners of the entity:

         Each equity owner of the entity (i.e., all stockholders, all general and/or limited partners or all beneficiaries, as applicable) is an individual whose net worth or joint net worth with his or her spouse exceeds $1,000,000.

         Each equity owner of the entity is an individual who had a personal income in excess of $200,000 in each of the two (2) most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and reasonably expects to reach the same income level in the current year.

         Each equity owner of the entity is an entity described in at least one category of Question 2.6 above.

         Although not all equity owners are described in the same category above in this Question 2.7, each equity owner is described in at least one such category.


2.8 Please indicate which of the following also describes the equity owners of the entity:

         Each equity owner of the entity has, by reason of his, her or its business and financial experience, the capacity to evaluate the merits and risks of the entity’s proposed investment and to protect his, her or its own interests in connection with the investment.

         Each of the equity owners of the entity is able to bear the economic risk of the entity’s investment, i.e., can afford loss of the entity’s entire investment.

         The beneficial interest of each equity owner in the entity’s proposed investment is less than 10% of such equity owner’s net worth, or joint net worth with his or her spouse.

         Although not all equity owners are described in the same category above in this Question 2.8, each equity owner is described in at least one such category.

3. ADDITIONAL INFORMATION

 

3.1 Has your entity previously invested in private placements of securities of newly-formed, non-public companies or companies without a history of significant profits or earnings?

Never                      Rarely                      On Several Occasions         

 

3.2 Does your entity, by reason of its business and financial knowledge and experience, have the capacity to evaluate the merits and risks of the entity’s proposed investment and to protect the entity’s own interests in connection with its investment in the Company?

Yes                      No         

IF YES , please describe the business and financial knowledge and experience, indicating factual basis for your conclusion that the entity has such capacity.

 

                                                                                                                                                                                                          

 

                                                                                                                                                                                                          

 

                                                                                                                                                                                                          

 

3.3 Do the persons responsible for making the investment decision for the entity, by reason of their business and financial knowledge and experience, have the capacity to evaluate the merits and risks of the entity’s proposed investment?

Yes                      No         

IF YES , please describe the business and financial knowledge and experience, indicating factual basis for your conclusion that those persons have such capacity.

 

                                                                                                                                                                                                          


                                                                                                                                                                                                         

 

                                                                                                                                                                                                         

 

3.4 If you have used the services of a securities broker or dealer or a finder in submitting subscription documentation for the Shares, please identify the broker, dealer or finder:

 

                                                                                                                                                                                                         

 

                                                                                                                                                                                                         

 

3.5 Are you relying on the business or financial experience of an accountant, attorney or other professional advisor in evaluating the merits and risks of this investment in order to protect your own interest?

Yes                      No         

IF YES , please (a) have your advisor complete the Company’s form of Advisor’s Questionnaire and submit it with this Questionnaire, and (b) identify the advisor.

Name of professional advisor:                                                                                                                                                    

4. EXECUTION

The information provided in this Questionnaire is true and complete as of the date provided below in all material respects and the undersigned recognizes that the Company is relying on the truth and accuracy of such information. The undersigned agrees to notify the Company promptly of any changes in the foregoing information that may occur prior to the closing of the sale of Shares of the Company.

 

   Name of Entity:   
                                                                                                                                                     
  

(Please Print or Type)

  
   By:                                                                                                                                             
  

(Signature)

  
   Name:                                                                                                                                        
  

(Please Print or Type)

  
   Title:                                                                                                                                          
  

(Please Print or Type)

  
   Date:                                                                                                                                          


Exhibit C

FORM OF CERTIFICATE OF DESIGNATION


EXHIBIT D

Form of Conversion Notice

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of Series B Non-Voting Convertible Preferred Stock indicated below into shares of common stock, par value $0.001 per share (the “ Common Stock ”), of Identiv, Inc., a Delaware corporation (the “ Corporation ”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.

Conversion calculations:

Date to Effect Conversion:                                                                                                                                                               

Number of shares of Preferred Stock owned prior to Conversion:                                                                                                 

Number of shares of Preferred Stock to be Converted:                                                                                                                  

Accreted Value  of shares of Preferred Stock to be Converted:                                                                                                      

Number of shares of Common Stock to be Issued:                                                                                                                         

Applicable Conversion Price:                                                                                                                                                          

Number of shares of Preferred Stock subsequent to Conversion:                                                                                                  

Address for Delivery:                                                           

or

DWAC Instructions:

Broker no:                           

Account no:                         

 

[HOLDER]
By:  

 

  Name:
  Title:

Exhibit 10.2

STOCKHOLDER AGREEMENT

THIS STOCKHOLDER AGREEMENT is made and entered into as of December 21, 2017 (this “ Agreement ”), by and between Identiv, Inc., a Delaware corporation (the “ Company ”), on the one hand, and 21 April Fund, Ltd. and 21 April Fund, LP (collectively, the “ Investors ”), on the other.

W HEREAS , concurrently with the execution and delivery of this Agreement, the Investors are entering into a Securities Purchase Agreement, dated as of the date hereof (as it may be amended from time to time, the “ Purchase Agreement ”), pursuant to which, among other things, the Investors are acquiring up to 5,000,000 shares of Series B Non-Voting Convertible Preferred Stock of the Company, par value $0.001 per share (the “ Company Preferred Stock ”), all upon the terms and subject to the conditions set forth in the Purchase Agreement;

W HEREAS , the parties hereto desire to enter into this Agreement to establish certain arrangements with respect to the shares of Company Preferred Stock acquired by the Investors, the shares of common stock, par value $0.001 per share, of the Company issuable upon conversion of the Company Preferred Stock (“ Conversion Shares ”), and other related matters; and

W HEREAS , as a condition to the willingness of each party hereto to enter into and perform its obligations pursuant to the Purchase Agreement, each party hereto has requested that the other parties hereto enter into this Agreement, and each party hereto has agreed to do so in order to induce the other parties hereto to enter into, and in consideration of it entering into, the Purchase Agreement.

N OW , T HEREFORE , in consideration of the foregoing, including the willingness of the parties hereto to enter into the Purchase Agreement, and of the representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

 

  1. S TANDSTILL P ROVISIONS

(a)    The Investors agree both jointly and in each of their individual capacities, that during the Standstill Period, neither they nor any other Persons whose investment activities are managed or controlled directly by Michael M. Kellen and/or Andrew Gundlach (collectively, the “ Investor  Group ”) will, and the Investors will cause each member of the Investor Group not to, directly or indirectly, in any manner, alone or in concert with others, without the prior written consent of the Board, to:

(i)    solicit, or knowingly encourage or in any way engage in any solicitation of, any proxies or consents or become a “participant” in a “solicitation,” directly or indirectly, as such terms are defined in Regulation 14A under the Exchange Act of proxies or consents (including, without limitation, any solicitation of consents that seeks to call a special meeting of shareholders or by encouraging or participating in any “withhold” or similar campaign), in each case, with respect to any securities of the Company or any securities convertible or exchangeable into or exercisable for any such securities (collectively, “ Company Securities ”);


(ii)    advise, knowingly encourage, support, instruct or influence any Person with respect to any of the matters covered by this Section 1(a) or with respect to the voting or disposition of any Company Securities at any annual or special meeting of shareholders, or seek to do so;

(iii)    agree, attempt, seek or propose to deposit any Company Securities in any voting trust or similar arrangement, or subject any Company Securities to any arrangement or agreement with respect to the voting thereof, other than any such voting trust, arrangement or agreement solely among the Investor Group and otherwise in accordance with this Agreement;

(iv)    seek or knowingly encourage any person to submit nominations in furtherance of a “contested solicitation” or take other applicable action for the election or removal of directors with respect to the Company;

(v)    form, join in or in any way participate in a partnership, limited partnership, syndicate or other group, including, without limitation, a group as defined under Section 13(d) of the Exchange Act, with any Person (other than the Investor Group and their respective Affiliates) with respect to any Company Securities or take any other action that would divest any Investor of the ability to vote or cause to be voted the Company Securities then held thereby in accordance with this Agreement;

(vi)    make any public disclosure, communication, announcement or statement regarding any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies or affairs, any of its securities or assets or this Agreement that is inconsistent with the provisions of this Agreement;

(vii)    with respect to the Company or the Company Securities, make any communication or announcement (other than in the ordinary course of its business on a confidential basis to their investors) stating how its shares of Company Securities will be voted, or the reasons therefor or otherwise communicate pursuant to Rule 14a-1(l)(2)(iv) under the Exchange Act;

(viii)    effect or seek to effect, offer or propose to effect, cause or participate in, or in any way assist or facilitate any other person to effect or seek, offer or propose to effect or participate in, any tender or exchange offer, merger, consolidation, acquisition, scheme, arrangement, business combination, recapitalization, reorganization, sale or acquisition of assets, liquidation, dissolution, extraordinary dividend, significant share repurchase or other extraordinary transaction involving the Company or any of its subsidiaries or joint ventures or any of their respective securities (each, an “ Extraordinary Transaction ”), or make any public statement or public disclosure regarding any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies or affairs or any of its securities or assets (including with respect to an Extraordinary Transaction) or this Agreement, that is inconsistent with the provisions of this Agreement, including any intent, purpose, plan or proposal that is

 

2


conditioned on, or would require waiver, amendment, nullification or invalidation of, any provision of this Agreement or take any action that could require the Company to make any public disclosure relating to any such intent, purpose, plan, proposal or condition; provided , however , that this clause shall not preclude the tender by the Investors or their respective Affiliates of any Company Securities into any tender or exchange offer or vote with respect to any Extraordinary Transaction;

(ix)    (A) call or seek to call or request the call of any meeting of shareholders, including by written consent, (B) seek, alone or in concert with others, representation on, or nominate any candidate to, the Board, (C) seek the removal of any member of the Board, (D) solicit consents from shareholders or otherwise act or seek to act by written consent or (E) conduct a referendum of shareholders;

(x)    purchase or cause to be purchased or otherwise acquire or agree to acquire Beneficial Ownership of any Common Stock or other securities issued by the Company, or any securities convertible into or exchangeable for Common Stock (including bank debt or obligations for borrowed money of the Company or any of its Subsidiaries), if, in any such case immediately after the taking of such action, the Investors and the Investor Group would, in the aggregate, Beneficially Own more than nineteen and nine tenths percent (19.9%) of the then outstanding shares of Common Stock; provided, however , that, for the avoidance of doubt, the foregoing restriction shall not apply to any Person under common control or otherwise related under Rule 12b-2 of the Exchange Act with any Investor unless the investment activities of such Person are managed or controlled directly by Michael M. Kellen and/or Andrew Gundlach;

(xi)    enter into any negotiations, arrangements, understanding or agreements (whether written or oral) with, or advise, finance, assist, seek to persuade or knowingly encourage, any Third Party to take any action prohibited by this Section 1 or make any statement inconsistent with this Section 1, or make any investment in or enter into any arrangement with any other Person that engages, or offers or proposes to engage, in any of the foregoing; or

(xii)    take any action challenging the validity or enforceability of this Section 1, or publicly make or in any way advance publicly any request or proposal that the Company or Board amend, modify or waive any provision of this Section 1; provided that any Investor may make confidential requests to the Board to amend, modify or waive any provision of this Section 1, which the Board may accept or reject in its sole discretion, so long as any such request is not publicly disclosed by such Investor and is made by such Investor in a manner that does not require the public disclosure thereof by the Company, the Investors or any other Person).

(b)    The Investors further agree that they will not, during the Standstill Period, enter into any discussions or arrangements with any Third Party with respect to any of the foregoing.

 

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  2. R EGISTRATION R IGHTS

(a)    The Company shall use all commercially reasonable efforts to file a registration statement on Form S-3 (the “ Initial  Registration Statement ”) as promptly as practicable, but no later than 120 days following of the date hereof, covering all of the Registrable Securities. Further, the Company shall use commercially reasonable efforts to maintain the effectiveness of the Initial Registration Statement throughout the term of this Agreement.

(b)    Notwithstanding anything herein to the contrary, to the extent the staff of the SEC does not permit all of the Registrable Securities to be registered on the Initial Registration Statement, the Company shall, if requested by the Investors, use reasonable efforts to file additional registration statements successively trying to register on each such registration statement the maximum number of remaining Registrable Securities until all of the Registrable Securities have been registered for resale. Each such additional Registration Statement prepared pursuant hereto shall register for resale at least that number of shares of Common Stock equal to the additional Registrable Securities determined as of the date such additional registration statement is initially filed with the SEC. The Company shall use its reasonable efforts to have each such additional Registration Statement declared effective by the SEC as soon as practicable.

(c)    All expenses incurred in connection with all registrations effected pursuant to Sections 2(a) and 2(b), including all registration, filing and qualification fees (including state securities law fees and expenses), printing expenses, escrow fees, fees and disbursements of counsel shall be borne by the Company; provided, however , that the Company shall not be required to pay the fees of legal counsel to the Investors or, in connection with an underwritten offering, underwriters’ discounts or selling commissions relating to Registrable Securities.

(d)    Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(i)    prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement in accordance with the intended methods of disposition by the Investor set forth in such registration statement;

(ii)    furnish to the Investors such numbers of copies of a prospectus, including all exhibits thereto and documents incorporated by reference therein and a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

(iii)    in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. The Investors shall also enter into and perform their obligations under such an agreement;

 

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(iv)    notify the Investors 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, as then in effect, includes an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(v)    notify the Investors as soon as reasonably practicable after notice thereof is received by the Company of any written comments by the SEC or any request by the SEC or any other federal or state governmental authority for amendments or supplements to such registration statement or such prospectus or for additional information;

(vi)    notify the Investors, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to a prospectus forming a part of such registration statement has been filed;

(vii)    notify the Investors as soon as reasonably practicable after notice thereof is received by the Company of the issuance by the SEC of any stop order suspending the effectiveness of such registration statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final prospectus or the initiation or threatening of any proceedings for such purposes, or any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(viii)    in the case of an underwritten offering, obtain for delivery to the underwriters, if any, an opinion or opinions from counsel for the Company, dated the effective date of the Registration Statement or, in the event of an underwritten offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such underwriters and their respective counsel;

(ix)    in the case of an underwritten offering, obtain for delivery to the Company and the underwriters, a cold comfort letter from the Company’s independent certified public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;

 

5


(x)    cause the Registrable Securities covered by such registration statement to be listed with any securities exchange on which the Common Stock is then listed;

(xi)    use its reasonable efforts to comply with all applicable securities laws, including all such securities laws or Blue Sky laws of such jurisdictions as shall be reasonably required by the Investors, and make available to its stockholders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder.

(e)    The Company and the Investors hereby agree to the following indemnification provisions related to registered offerings.

(i)    The Company will, and does hereby undertake to, indemnify and hold harmless each Investor, each of its officers, directors, employees, members, partners, equityholders and agents, and each person controlling such Investor, with respect to any registration, qualification or compliance effected pursuant to this Section 3, and each underwriter, if any, and each person who controls any underwriter, of the Registrable Securities held by or issuable to the Investor, against all claims, losses, damages and liabilities (joint or several) (or actions in respect thereto) to which they may become subject under the Securities Act, the Exchange Act, or other federal or state law arising out of or based on (A) any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other similar document (including any related registration statement, notification, or the like, including any amendments or supplements thereto) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made or (B) any violation or alleged violation by the Company of any federal, state or common law rule or regulation (including the Securities Act, the Exchange Act and any state security law, rule or regulation) applicable to the Company in connection with any such registration, qualification or compliance and the Company will pay to each such Holder, underwriter, controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with defending any such loss, claim, damage, liability or action.

(ii)    Each Investor will, and if Registrable Securities held by or issuable to such Investor are included in such registration, qualification or compliance pursuant to this Section 3, does hereby undertake to indemnify and hold harmless the Company, each of its directors, employees, agents and officers, and each Person controlling the Company, each underwriter, if any, and each person who controls any underwriter, of the Company’s securities covered by such a registration statement, against all claims, losses, damages and liabilities (joint or several) (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such

 

6


registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made, and will reimburse, as incurred, the Company, each such underwriter and each such director, officer, employee, agent, partner and controlling Person of the foregoing, for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) was made in such registration statement, prospectus, offering circular or other document, in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use therein; provided , however , that the liability of the Investor hereunder shall be limited to the net proceeds received by the Investor from the sale of securities under such registration statement.

(iii)    Each party entitled to indemnification under this Section 2(e) (the “ Indemnified Party ”) shall give notice to the party required to provide such indemnification (the “ Indemnifying Party ”) of any claim as to which indemnification may be sought promptly after such Indemnified Party has actual knowledge thereof, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be subject to approval by the Indemnified Party (whose approval shall not be unreasonably withheld) and the Indemnified Party may participate in such defense at the Indemnifying Party’s expense if representation of such Indemnified Party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2(e), except to the extent that such failure to give notice shall materially adversely affect the Indemnifying Party in the defense of any such claim or any such litigation. An Indemnifying Party, in the defense of any such claim or litigation, may, without the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that includes as an unconditional term thereof the giving by the claimant or plaintiff therein, to such Indemnified Party, of a release from all liability with respect to such claim or litigation.

(iv)    In order to provide for just and equitable contribution in case indemnification is prohibited or limited by a court of competent jurisdiction, the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative

 

7


fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such actions; provided, however, that, in any case, (i) no Investor will be required to contribute any amount in excess (when combined with the amount paid or payable by such Investor pursuant to Section 2(e)(iii)) of the public offering price of all securities offered by it pursuant to such registration statement less all underwriting fees and discounts and (ii) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.

(f)    The Investors shall furnish to the Company such information regarding the Investors and the distribution proposed by the Investors as the Company may reasonably request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Section 2.

(g)    Notwithstanding the foregoing obligations, if the Company furnishes to the Investors a certificate signed by the Company’s chief executive officer or president stating that in the good faith judgment of the Board it would be materially detrimental to the Company and its stockholders for the registration statement being requested by the Investors pursuant to this Section  2 to be filed or for Registrable Securities to be sold under such registration statement, in each case, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company, (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential, or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to (x) defer taking action with respect to such filing or (y) suspend the use or effectiveness of a registration statement, in each case, for a period of no more than ninety (90) days after receipt of the applicable request by the Investors; provided , however , that the Company may not utilize this right more than twice and for more than an aggregate of one hundred twenty (120) days in any twelve-month period.

(h)    Each Investor agrees to enter into an underwriter’s standard form of lock-up agreement as may be reasonably requested by the applicable underwriters in connection with a future underwritten offering that such Investor participates in for such period of time not to exceed ninety (90) days from the effective date of the registration of such underwritten offering. Notwithstanding the foregoing, (i) no Investor shall be subject to any lock-up period of longer duration or other greater restriction than that applicable to any director or officer of the

 

8


Company, (ii) any discretionary waiver or termination of the restrictions of any or all of the lock-up agreements entered into in connection with such underwritten offering by the Company or the underwriters shall apply to the each Investor pro rata based on the number of Company Securities subject to such lock-up agreements, and (iii) the obligations in this Section  2(h) shall apply only if all officers, directors and five (5%) or greater shareholders of the Company enter into similar agreements, and shall not apply to a registration relating solely to employee benefit plans or to a registration relating solely to a transaction pursuant to Rule 145 under the Securities Act.

(i)    In addition to any termination of this Agreement in accordance with Section 6 hereof, the rights of the Investors to cause the Company to register securities and maintain the registration of securities under this Section 2 shall terminate on the date when there are no longer remaining any Registrable Securities or at such time when all such Registrable Securities can be sold without any volume restrictions under Rule 144.

 

  3. D EFINITIONS

As used herein:

(a)    “ Affiliate ” or “ Associate ” shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Exchange Act.

(b)    “ Beneficial Ownership ” shall be interpreted in accordance with the term “beneficial ownership” as defined in Rule 13d-3 under the Exchange Act. For purposes of this Agreement, the Investors shall be deemed to Beneficially Own any securities Beneficially Owned by the Investor Group. The terms “Beneficially Own,” “Beneficially Owned” and “Beneficial Owner” shall have correlative meanings to “Beneficial Ownership.”

(c)    “ Board ” means the Board of Directors of the Company.

(d)    “ Business Day ” means a day (i) other than Saturday or Sunday and (ii) on which commercial banks are open for business in New York, New York.

(e)    “ Common Stock ” means the Company’s common stock, par value $0.001 per share, and any other class or type of securities into which such securities may hereafter be reclassified or changed.

(f)    “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder

(g)    “ Form S-3 ” means such form under the Securities Act as in effect on the date hereof or any successor form under the Securities Act that permits significant incorporation by reference of the Company’s subsequent public filings under the Exchange Act.

(h)    “ Governmental Entity ” means any government or subdivision thereof, domestic, foreign, or supranational or any administrative, governmental or regulatory authority, agency, commission, court, board, bureau, tribunal or body, domestic, foreign or supranational.

 

9


(i)    “ Person ” means an individual, proprietorship, partnership, firm, corporation, association, Governmental Entity or other organization.

(j)    “ Registrable Securities ” means (i) Common Stock issuable or issued upon conversion of the outstanding Company Preferred Stock at any time and (ii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i).

(k)    “ SEC ” means the U.S. Securities and Exchange Commission.

(l)    “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(m)    “ Standstill Period ” means the period beginning on the date hereof and ending on the earlier of (i) 36 months from the date of this Agreement and (ii) the termination of this Agreement pursuant to Section 6 of this Agreement.

(n)    “ Subsidiary ” means any corporation, company or other entity more than fifty percent (50%) of whose voting stock or other similar interests are owned by a Person.

(o)    “ Third Party ” means any Person other than (i) the Company, (ii) the Investors or (iii) any of their respective Affiliates and Associates.

 

  4. T RANSFER R ESTRICTIONS

(a)    During the Standstill Period, each Investor agrees that it will not transfer any shares of Company Preferred Stock except any transfer (i) to other Persons whose investment activities are managed or controlled by Michael Kellen and/or Andrew Gundlach, where the applicable transferee agrees to be bound by the terms of this Agreement for the balance of its term, (ii) in a non-public sale to a Third Party that is a passive investor that has not filed a statement on Schedule 13D pursuant to Rule 13d-l(a) of the Exchange Act and would not, as a result of such transfer, be required to file a statement on Schedule 13D pursuant to Rule 13d-l(a) of the Exchange Act, (iii) pursuant to an effective registration statement under the Securities Act or (iv) in an underwritten public offering, in each case, unless such transfer has been previously approved by the Board.

(b)    Each Investor acknowledges and agrees that the Company Preferred Stock has not been registered under the Securities Act and therefore cannot be sold or transferred unless it is subsequently registered under the Securities Act or an exemption from registration is available.

(c)    Notwithstanding the foregoing or anything herein to the contrary, and in addition to the rights set forth in Section  4.1(a) , each Investor shall be entitled to make distributions of the Company Preferred Stock to, or for the benefit of, the limited partners or stockholders of such Investor; provided that such Investor shall cause such limited partners or stockholders to irrevocably constitute and appoint a representative as an agent and attorney-in-fact to act in the name, place and stead of such limited partners or stockholders with respect to

 

10


the exercise of the rights of the Company Preferred Stock held by such limited partners or stockholders, which such representative shall be (i) managed or controlled directly by Michael M. Kellen, Andrew Gundlach and/or another individual reasonably acceptable to the Company and (ii) unless and until such Investor is dissolved, an Affiliate of such Investor. For the avoidance of doubt, any such transferee shall not be required to agree to be bound by any of the terms of this Agreement as a condition to such distribution.

 

  5. C OVENANTS OF THE I NVESTOR

Each Investor (i) consents to and authorizes the publication and disclosure by the Company and its Affiliates of its identity and holdings of Common Stock and the nature of its commitments and obligations under this Agreement in any announcement or disclosure required by the SEC, any other Governmental Entity, any proxy statement, or any other disclosure document in connection with the Purchase Agreement or this Agreement or otherwise required by applicable law, and (ii) agrees promptly to give to the Company any information the Company may reasonably require for the preparation of any such disclosure documents, which information shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make such information not misleading. Each Investor agrees to promptly notify the Company of any required corrections with respect to any written information supplied by it specifically for use in any such disclosure document, if and to the extent that any such information shall have become false or misleading in any material respect.

 

  6. T ERMINATION

This Agreement and the covenants and agreements set forth in this Agreement shall automatically terminate (without any further action of the parties) upon such time when the Investors have transferred all Conversion Shares issuable upon conversion of the Company Preferred Stock to Third Parties outside of the Investor Group. In the event of termination of this Agreement pursuant to this Section 6, this Agreement shall become void and of no effect with no liability on the part of any party; provided, however , that no such termination shall relieve any party from liability for any willful and material breach hereof prior to such termination; provided, further , that the provisions set forth in this Section 6 shall survive the termination of this Agreement.

 

  7. M ISCELLANEOUS

(a)     Governing Law; Jurisdiction; Waiver of Jury Trial . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION). Each of the parties hereto unconditionally and irrevocably (i) consents and submits to the exclusive jurisdiction of the Delaware Court of Chancery or, in the event that such court does not have jurisdiction over the dispute, to the federal district court of the District of Delaware or to the courts of the State of Delaware (the “ Delaware Courts ”) in connection with any dispute that arises out of or relates to this Agreement or any of the agreements or transactions contemplated by this Agreement, (ii) hereby irrevocably and unconditionally waives any and all jurisdictional, venue and forum non

 

11


conveniens objections or defenses that such party may have in any such action and agrees that it will not attempt to deny or defeat such jurisdiction by motion or other request for leave from any such Delaware Court, (iii) agrees that it will not bring any action arising out of or relating to this Agreement or any other agreement or the transactions contemplated hereby or thereby in any court other than the Delaware Courts in compliance with clause (i) and (iv) consents to service of process in the manner provided for notices in Section 7(e). Notwithstanding the previous sentence, a party may commence any such action in a court other than the Delaware Courts solely for the purpose of enforcing an order or judgment issued by one of such courts. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION UNDER THIS AGREEMENT. THE PARTIES HERETO AGREE THAT ANY OR ALL OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY COURT ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM THAT IS PERMITTED UNDER THIS AGREEMENT SHALL INSTEAD BE TRIED IN A DELAWARE COURT BY A JUDGE SITTING WITHOUT A JURY.

(b)     Specific Performance . Each of the parties hereto acknowledges and agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor. It is accordingly agreed that the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the performance of terms and provisions of this Agreement in any Delaware Court in compliance with Section 7(a)(i), without proof of actual damages (and each party hereby waives any requirement for the securing or posting of any bond or other security against it in connection with such remedy), this being in addition to any other remedy to which a party may be entitled at law or in equity. Each party hereto hereby consents to the right of the other parties hereto to the issuance of such injunction or injunctions, and to the grant of such injunction or injunctions. Each party hereto further agrees not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy for any such breach.

(c)     Assignment . Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties hereto without the prior written consent of the other party, except in the context of a merger, sale of all or substantially all assets or other change of control transaction. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and permitted assigns.

(d)     Amendments; Waivers . This Agreement may not be amended except by an instrument in writing signed on behalf of the Company and the Investors, it being understood that nothing in this Agreement shall be deemed to prohibit an Investor from requesting on a confidential basis an amendment to this Agreement or waiver or modification of its obligations hereunder. Any agreement on the part of a party to any amendment or waiver shall be valid only

 

12


if set forth in an instrument in writing signed on behalf of such party. The failure of a party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

(e)     Notices . All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, or if by facsimile or e-mail, upon written confirmation of transmission by facsimile or e-mail, (ii) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (iii) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

If to the Investors, to:

21 April Fund, LP

Bank of America Merrill Lynch

F/A/O 21 April Fund, LP (843-25315D0)

Asset Management Services

222 Broadway, 11th Floor

New York, NY 10038

Attn: William J. Leggio

william.j.leggio@baml.com

Phone: 646-743-0031

With Copy to:

Timothy Connolly

First Eagle Investment Management, LLC

1345 Avenue of the Americas, 48th Fl

New York, NY 10105

timothy.connolly@feim.com ; FEIM.PF.Statements@feim.com ;

Phone: 212-698-3431

21 April Fund, Ltd.

Bank of America Merrill Lynch

F/A/O 21 April Fund, Ltd (843-26315D9)

Asset Management Services

222 Broadway, 11th Floor

New York, NY 10038

Attn: William J. Leggio

william.j.leggio@baml.com

Phone: 646-743-0031

 

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With Copy to:

Timothy Connolly

First Eagle Investment Management, LLC

1345 Avenue of the Americas, 48th Fl

New York, NY 10105

timothy.connolly@feim.com ; FEIM.PF.Statements@feim.com ;

Phone: 212-698-3431

with a copy (which shall not constitute notice) to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019-6099

Facsimile: 212.728.9968

Attention: Mark Cognetti

Email: mcognetti@willkie.com

If to the Company, to:

Identiv, Inc.

2201 Walnut Avenue, Suite 100

Fremont, California

Attention: Sandra Wallach, Chief Financial Officer

Email: swallach@identiv.com

with a copy (which shall not constitute notice) to:

Perkins Coie LLP

3150 Porter Avenue

Palo Alto, California 94304

Attention: Troy Foster

Facsimile: 650.838.4350

Email: troyfoster@perkinscoie.com

The failure to provide notice in accordance with the required timing, if any, set forth herein shall affect the rights of the party providing such notice only to the extent that such delay actually prejudices the rights of the party receiving such notice.

(f)     Expenses . All fees and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such fees or expenses, except as provided in Section 2(c).

(g)     Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule, law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party or such party waives its rights under this Section 11(g) with respect thereto. Upon such determination that any term or other provision is invalid, illegal

 

14


or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated by this Agreement are fulfilled to the extent possible.

(h)     Legends . For so long as the Company Preferred Stock or the Conversion Shares are subject to any of the restrictions set forth in Sections 1 or 2 of this Agreement, the book-entry or certificated form of such share shall bear a legend substantially similar to the following:

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE OR EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 UNDER SAID ACT. THIS SECURITY AND THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE OR EXERCISABLE ARE SUBJECT TO A STANDSTILL AGREEMENT AVAILABLE UPON REQUEST FROM THE COMPANY.

(i)     Entire Agreement; No Third Party Beneficiaries . This Agreement, the Purchase Agreement (including the exhibits, the annexes and the disclosure schedules thereto) constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies.

(j)     Interpretation . When a reference is made in this Agreement to a Section, such reference shall be to Section of this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized term used in any Schedule or Exhibit but not otherwise defined therein shall have the meaning assigned to such term in this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “hereto,” “hereby,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument or Law defined or referred to herein means such agreement, instrument or Law as from time to time amended, modified or

 

15


supplemented, unless otherwise specifically indicated. References to a person are also to its permitted successors and assigns. Unless otherwise specifically indicated, all references to “dollars” and “$” will be deemed references to the lawful money of the United States of America.

(k)     Counterparts . This Agreement may be executed in counterparts, each of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. Counterparts may be delivered by facsimile or e-mail.

(l)     No Strict Construction . The parties hereto acknowledge that this Agreement has been prepared jointly by them and shall not be strictly construed against any party hereto.

S IGNATURES ON THE F OLLOWING P AGE

 

16


I N W ITNESS W HEREOF , the Company and the Investors have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.

 

I DENTIV , I NC .
By:  

/s/ Steven Humphreys

Name:   Steven Humphreys
Title:   President

 

 

[Signature Page to Stockholder Agreement]


I N W ITNESS W HEREOF , the Company and the Investors have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.

 

21 A PRIL F UND , LP
By:  

/s/ Michael M. Kellen

Name:  

Michael M. Kellen

Title:  

Authorized Person/Portfolio Manager

21 A PRIL F UND , L TD .
By:  

/s/ Michael M. Kellen

Name:  

Michael M. Kellen

Title:  

Authorized Person/Portfolio Manager

 

[Signature Page to Stockholder Agreement]

Exhibit 99.1

 

LOGO

Identiv Secures Investment of up to $20 Million

FREMONT, Calif., December  21, 2017 – Identiv, Inc. (NASDAQ: INVE), a global provider of physical security and secure identification, announced today the closing of a privately placed stock purchase transaction (the “Transaction”) for the sale of preferred stock to each of 21 April Fund, Ltd. and 21 April Fund, L.P. (the “21 April Funds”), private funds managed by First Eagle Investment Management, LLC, for aggregate gross proceeds of up to $20 million. Identiv will use the net proceeds from the Transaction to pay down debt and to fund future acquisitions of technology, business and other assets.

Under the securities purchase agreement with the 21 April Funds (the “Purchase Agreement”), Identiv has issued $12 million of its Series B non-voting convertible preferred stock (the “Preferred Shares”) at $4.00 per share. The stated value of each Preferred Share, $4.00 per share, will accrete at a compounded annual rate of 5% for the first six years following the issuance of such share and 3% for each year thereafter, provided that, for each year after the tenth anniversary of the closing of the Transaction, the Company may elect to settle that year’s accreted value in cash. Subject to certain limitations detailed in the Transaction documents, each Preferred Share and its associated accreted dividends can be converted into common shares of Identiv at a conversion price of $4.00 per share, subject to adjustment for certain dilutive issuances, stock splits, stock dividends or similar events. Under the terms of the Purchase Agreement, Identiv has the option to call an additional $8 million in the aggregate from the 21 April Funds on or before December 21, 2018.

“This transaction accomplishes three goals as we build a leading, substantial-scale security company for the long term. It removes debt overhang; underscores our ability to execute on inorganic opportunities; and demonstrates support for Identiv’s value-building strategy from very credible participants in the investor community”, said Steven Humphreys, Identiv CEO. “Coupled with our solid balance sheet, and positive adjusted EBITDA over five quarters, we’re strongly positioned to focus entirely on executing our organic and inorganic growth strategy to build a leading, highly-valued business. Securing and instrumenting the increasingly-connected physical world is one of the major opportunities of our time. Identiv’s capital structure now aligns with our business opportunity. Ultimately, we believe this strategy will drive significant operating leverage, profitability and value creation for our shareholders.”

Sandra Wallach, Identiv CFO, added: “Importantly, the transaction structure comes with limited preferences, and no liquidation preference. The 21 April Funds are supportive of our long-term goals and strategy to significantly scale our business. Their investment has grown significantly this year since their participation in our public offering in May and subsequent open market purchases. Their latest investment at a 30% premium to recent share price levels supports our long-term goals and strategy.”

Additional information regarding the financing is included in a Current Report on Form 8-K to be filed by Identiv with the Securities and Exchange Commission.


This press release does not and shall not constitute an offer to sell or the solicitation of any offer to buy any of the securities, nor shall there be any sale of the securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Conference Call

Identiv management will hold a conference call today (December 21, 2017) at 4:30 p.m. Eastern Standard Time (1:30 p.m. Pacific Standard Time) to discuss this transaction.

U.S. dial-in number: 1-866-548-4713

International number: 1-323-794-2093

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

The conference call will be broadcasted live and available for replay here and via the Investor Relations section of Identiv’s website .

A replay of the call will be available after 7:30 p.m. Eastern time through January 21, 2018.

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Conference ID: 2116272

About Identiv

Identiv, Inc. is a global provider of physical security and secure identification. Identiv’s products, software, systems, and services address the markets for physical and logical access control and a wide range of RFID-enabled applications. Customers in the government, enterprise, consumer, education, healthcare, and transportation sectors rely on Identiv’s access and identification solutions. Identiv’s mission is to secure the connected physical world: from perimeter to desktop access, and from the world of physical things to the Internet of Everything. Identiv is a publicly traded Company and its common stock is listed on the NASDAQ Capital Market in the U.S. under the symbol “INVE.” For more information, visit identiv.com.

Note Regarding Forward-Looking Information

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those involving future events and future results that are based on current expectations as well as the current beliefs and assumptions of the Company’s management and can be identified by words such as


“anticipates”, “believes”, “plans”, “will”, “intends”, “expects”, and similar references to the future. Any statement that is not a historical fact, including the statements regarding the Company’s market opportunity, positioning to execute on a growth strategy, pursuit of acquisitions and scaling of its business to drive operating leverage and profitability, is a forward-looking statement.

Forward-looking statements are only predictions and are subject to a number of risks and uncertainties, many of which are outside our control, which could cause actual results to differ materially and adversely from those expressed in any forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the Company’s ability to continue momentum in its business; its ability to successfully execute its growth strategy, including its ability to acquire synergistic products, technologies and businesses on commercially reasonable terms, or at all; its ability to deliver positive EBITDA results and, over time, profitability; the level of customer orders, the success of its products and partnerships, industry trends and seasonality, and factors discussed in our public reports, including our Annual Report on Form 10-K for the year ended December 31, 2016 and subsequent reports filed with the U.S. Securities and Exchange Commission. All forward-looking statements are based on information available to us on the date hereof, and we assume no obligation to update such statements.

Investor Relations Contact:

Matt Glover and Najim Mostamand, CFA

Liolios Group, Inc.

949-574-3860

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