EXHIBIT 4.2
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OFFERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT XXXXXX THE APPLICABLE SECURITIES LAWS OR
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH REGISTRATION
IS NOT REQUIRED.
SUBJECT TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL
BECOME VOID AFTER 5:00 P.M. EASTERN TIME ON OCTOBER 11, 2006 ("EXPIRATION
DATE").
VISIONICS CORPORATION
WARRANT TO PURCHASE 36,036 SHARES OF
COMMON STOCK, $.01 PAR VALUE PER SHARE ("COMMON STOCK")
For VALUE RECEIVED, Xxxxxx Xxxxxx & Company, Inc. ("Warrantholder"), is
entitled to purchase, subject to the provisions of this Warrant, from Visionics
Corporation, a Delaware corporation ("Company"), at any time not later than 5:00
P.M., Eastern time, on the Expiration Date, at an exercise price per share equal
to $16.86 (the exercise price in effect being herein called the "Warrant
Price"), 36,036 shares ("Warrant Shares") of Common Stock. The number of Warrant
Shares purchasable upon exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time as described herein.
Section 1. Registration. The Company shall maintain books for the
transfer and registration of the Warrant. Upon the initial issuance of the
Warrant, the Company shall issue and register the Warrant in the name of the
Warrantholder.
Section 2. Transfers. As provided herein, this Warrant may be
transferred only pursuant to a registration statement filed under the Securities
Act of 1933, as amended ("Securities Act") or an exemption from such
registration. Subject to such restrictions, the Company shall transfer this
Warrant from time to time upon the books to be maintained by the Company for
that purpose, upon surrender thereof for transfer properly endorsed or
accompanied by appropriate instructions for transfer and such other documents as
may be reasonably required by the Company to establish that such transfer is
being made in accordance with the terms hereof, and a new Warrant shall be
issued to the transferee and the surrendered Warrant shall be canceled by the
Company.
Section 3. Exercise of Warrant. Subject to the provisions hereof, the
Warrantholder may exercise this Warrant in whole or in part at any time upon:
surrender of the Warrant, together with delivery of the duly executed Warrant
exercise form attached hereto as Appendix A (the "Exercise Agreement") and
payment by cash,
certified check or wire transfer of funds (or by cashless exercise as provided
below) for the Warrant Price for that number of Warrant Shares then being
purchased, to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof). The Warrant Shares
so purchased shall be deemed to be issued to the holder hereof or such holder's
designee, as the record owner of such shares, as of the close of business on the
date on which this Warrant shall have been surrendered (or evidence of loss,
theft or destruction thereof and security or indemnity satisfactory to the
Company shall have been provided to the Company), the Warrant Price shall have
been paid and the completed Exercise Agreement shall have been delivered.
Certificates for the Warrant Shares so purchased, representing the aggregate
number of shares specified in the Exercise Agreement, shall be delivered to the
holder hereof within a reasonable time, not exceeding seven (7) business days,
after this Warrant shall have been so exercised. The certificates so delivered
shall be in such denominations as may be requested by the holder hereof and
shall be registered in the name of such holder or such other name as shall be
designated by such holder. If this Warrant shall have been exercised only in
part, then, unless this Warrant has expired, the Company shall, at its expense,
at the time of delivery of such certificates, deliver to the holder a new
Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.
Each exercise hereof shall constitute the representation and warranty of
the Warrantholder to the Company that the representations and warranties
contained in Article 5 of the Purchase Agreement (as defined below) are true and
correct in all material respects with respect to the Warrantholder as of the
time of such exercise.
Section 4. Compliance with the Securities Act of 1933. The Company may
cause the legend set forth on the first page of this Warrant to be set forth on
each Warrant or similar legend on any security issued or issuable upon exercise
of this Warrant, unless counsel for the Company is of the opinion as to any such
security that such legend is unnecessary.
Section 5. Payment of Taxes. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the registered holder of this Warrant, and in such case,
the Company shall not be required to issue or deliver any certificate for
Warrant Shares or any Warrant until the person requesting the same has paid to
the Company the amount of such tax or has established to the Company's
reasonable satisfaction that such tax has been paid. The holder shall be
responsible for income taxes due under federal, state or other law, if any such
tax is due.
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Section 6. Mutilated or Missing Warrants. In case this Warrant shall be
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Shares, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond with respect thereto, if
requested by the Company.
Section 7. Reservation of Common Stock. The Company hereby represents
and warrants that there have been reserved, and the Company shall at all
applicable times keep reserved until issued (if necessary) as contemplated by
this Section 7, out of the authorized and unissued Common Stock, sufficient
shares to provide for the exercise of the rights of purchase represented by the
Warrant. The Company agrees that all Warrant Shares issued upon exercise of the
Warrant shall be, at the time of delivery of the certificates for such Warrant
Shares, duly authorized, validly issued, fully paid and non-assessable shares of
Common Stock of the Company.
Section 8. Adjustments. Subject and pursuant to the provisions of this
Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(a) If the Company shall at any time or from time to time while
the Warrant is outstanding, pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, subdivide its outstanding shares of Common
Stock into a greater number of shares or combine its outstanding shares of
Common Stock into a smaller number of shares or issue by reclassification of its
outstanding shares of Common Stock any shares of its capital stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Warrantholder thereafter exercising
the Warrant shall be entitled to receive the number of shares of Common Stock or
other capital stock which the Warrantholder would have received if the Warrant
had been exercised immediately prior to such event upon payment of a Warrant
Price that has been adjusted to reflect a fair allocation of the economics of
such event to the Warrantholder. Such adjustments shall be made successively
whenever any event listed above shall occur.
(b) If any capital reorganization, reclassification of the
capital stock of the Company, consolidation or merger of the Company with
another corporation in which the Company is not the survivor, or sale, transfer
or other disposition of all or substantially all of the Company's assets to
another corporation shall be effected, then, as
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a condition of such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition, lawful and adequate provision shall be made
whereby each Warrantholder shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions herein specified and in
lieu of the Warrant Shares immediately theretofore issuable upon exercise of the
Warrant, such shares of stock, securities or assets as would have been issuable
or payable with respect to or in exchange for a number of Warrant Shares equal
to the number of Warrant Shares immediately theretofore issuable upon exercise
of the Warrant, had such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition not taken place, and in any such
case appropriate provision shall be made with respect to the rights and
interests of each Warrantholder to the end that the provisions hereof
(including, without limitation, provision for adjustment of the Warrant Price)
shall thereafter be applicable, as nearly equivalent as may be practicable in
relation to any shares of stock, securities or properties thereafter deliverable
upon the exercise thereof The Company shall not effect any such consolidation,
merger, sale, transfer or other disposition unless prior to or simultaneously
with the consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation or merger, or the corporation
purchasing or otherwise acquiring such assets or other appropriate corporation
or entity shall assume the obligation to deliver to the holder of the Warrant
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase, and the other obligations
under this Warrant. The provisions of this paragraph (b) shall similarly apply
to successive reorganizations, reclassifications, consolidations, mergers,
sales, transfers or other dispositions.
(c) In case the Company shall fix a payment date for the making
of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or assets
(other than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends or distributions referred to in Section
8(a)), or subscription rights or warrants, the Warrant Price to be in effect
after such payment date shall be determined by multiplying the Warrant Price in
effect immediately prior to such payment date by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding multiplied
by the Market Price per share of Common Stock (as defined below), less the fair
market value (as determined by the Company's Board of Directors in good faith)
of said assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, and the denominator of which shall be the total
number of shares of Common Stock outstanding multiplied by such Market Price per
share of Common Stock. "Market Price" as of a particular date (the "Valuation
Date") shall mean the following: (a) if the Common Stock is then listed on a
national stock exchange, the closing sale price of one share of Common Stock on
such exchange on the last trading day prior to the Valuation Date; (b) if the
Common Stock is then quoted on the Nasdaq National Market ("Nasdaq"), the
closing sale price of one share of Common Stock on Nasdaq on the last
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trading day prior to the Valuation Date or, if no such closing sale price is
available, the average of the high bid and the low sales price quoted on Nasdaq
on the last trading day prior to the Valuation Date; or (c) if the Common Stock
is not then listed on a national stock exchange or quoted on Nasdaq, the fair
market value of one share of Common Stock as of the Valuation Date, which shall
be determined in good faith by the Board of Directors of the Company and the
Warrantholder. The Board of Directors of the Company shall respond promptly, in
writing, to an inquiry by the Warrantholder prior to the exercise hereunder as
to the Market Value of a share of Common Stock as determined by the Board of
Directors of the Company. In the event that the Board of Directors of the
Company and the Warrantholder are unable to agree upon the fair market value in
respect of subpart (c) hereof, the Company and the Warrantholder shall jointly
select an appraiser, who is experienced in such matters. The decision of such
appraiser shall be final and conclusive, and the cost of such appraiser shall be
borne evenly by the Company and the Warrantholder. Such adjustment shall be made
successively whenever such a payment date is fixed.
(d) For the term of this Warrant, in addition to the provisions
contained above, the Warrant Price shall be subject to adjustment as provided
below. An adjustment to the Warrant Price shall become effective immediately
after the payment date in the case of each dividend or distribution and
immediately after the effective date of each other event which requires an
adjustment.
(e) In the event that, as a result of an adjustment made pursuant
to Section 8(a), the holder of this Warrant shall become entitled to receive any
shares of capital stock of the Company other than shares of Common Stock, the
number of such other shares so receivable upon exercise of this Warrant shall be
subject thereafter to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Warrant
Shares contained in this Warrant.
(f) Except as provided in subsection (g) hereof, if and whenever
the Company shall issue or sell, or is, in accordance with any of subsections
(f)(1) through (f)(7) hereof, deemed to have issued or sold, any shares of
Common Stock for a consideration per share less than the Warrant Price in effect
immediately prior to the time of such issue or sale, then and in each such case
(a "Trigger Issuance") the then-existing Warrant Price, shall be reduced, as of
the close of business on the effective date of the Trigger Issuance, to a price
determined as follows:
Adjusted Warrant Price = (A x B) + D A+C
where
"A" equals the number of shares of Common Stock outstanding
(including any Additional Shares of Common Stock (as defined below) immediately
preceding such Trigger Issuance);
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"B" equals the Warrant Price in effect immediately preceding
such Trigger Issuance;
"C" equals the number of Additional Shares of Common Stock
(as adjusted for stock splits, stock combinations, recapitalizations, and
dividends and the like) issued or deemed issued hereunder as a result of all
Trigger Issuances; and
"D" equals the aggregate consideration, if any, received or
deemed to be received by the Company upon such Trigger Issuance.
For purposes of this subsection (f), "Additional Shares of Common Stock"
shall mean all shares of Common Stock issued by the Company or deemed to be
issued pursuant to this subsection (f), other than Excluded Issuances (as
defined in subsection (g) hereof).
For purposes of this subsection (f), the following subsections (f)(1) to
(f)(7) shall also be applicable (subject, in each such case, to the provisions
of subsection (g) hereof) and to each other subsection contained in this
subsection (f):
(1) Issuance of Rights or Options. In case at any time the
Company shall in any manner grant (directly and not by assumption in a merger or
otherwise) any warrants or other rights to subscribe for or to purchase, or any
options for the purchase of, Common Stock or any stock or security convertible
into or exchangeable for Common Stock (such warrants, rights or options being
called "Options" and such convertible or exchangeable stock or securities being
called "Convertible Securities") whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is issuable upon the exercise of
such Options or upon the conversion or exchange of such Convertible Securities
(determined by dividing (i) the sum (which sum shall constitute the applicable
consideration (the "Consideration")) of (x) the total amount, if any, received
or receivable by the Company as consideration for the granting of such Options,
plus (y) the aggregate amount of additional consideration payable to the Company
upon the exercise of all such Options, plus (z), in the case of such Options
which relate to Convertible Securities, the aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Warrant Price
in effect immediately prior to the time of the granting of such Options, then
the total number of shares of Common Stock issuable upon the exercise of such
Options or upon conversion or exchange of the total amount of such Convertible
Securities issuable upon the exercise of such Options shall be deemed to have
been issued for such price per share as of the date of granting of such Options
or the issuance of such Convertible Securities and thereafter shall be deemed to
be outstanding for purposes of
6
adjusting the Warrant Price. Except as otherwise provided in subsection 8(f)(3),
no adjustment of the Warrant Price shall be made upon the actual issue of such
Common Stock or of such Convertible Securities upon exercise of such Options or
upon the actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities.
(2) Issuance of Convertible Securities. In case the Company
shall in any manner issue (directly and not by assumption in a merger or
otherwise) or sell any Convertible Securities, whether or not the rights to
exchange or convert any such Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is issuable upon such conversion
or exchange (determined by dividing (i) the sum (which sum shall constitute the
applicable Consideration) of (x) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible Securities,
plus (y) the aggregate amount of additional consideration, if any, payable to
the Company upon the conversion or exchange thereof, by (ii) the total number of
shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Warrant Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of all
such Convertible Securities shall be deemed to have been issued for such price
per share as of the date of the issue or sale of such Convertible Securities and
thereafter shall be deemed to be outstanding for purposes of adjusting the
Warrant Price, provided that (a) except as otherwise provided in subsection
8(f)(3), no adjustment of the Warrant Price shall be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities and (b) no further adjustment of the Warrant Price shall be made by
reason of the issue or sale of Convertible Securities upon exercise of any
Options to purchase any such Convertible Securities for which adjustments of the
Warrant Price have been made pursuant to other provisions of this subsection
8(f)(2).
(3) Change in Option Price or Conversion Rate. Upon the
happening of any of the following events, namely, if the purchase price provided
for in any Option referred to in subsection 8(f)(1) hereof, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in subsections 8(f)(1) or 8(f)(2), or the
rate at which Convertible Securities referred to in subsections 8(f)(1) or
8(f)(2) are convertible into or exchangeable for Common Stock shall change at
any time (including, but not limited to, changes under or by reason of
provisions designed to protect against dilution), the Warrant Price in effect at
the time of such event shall forthwith be readjusted to the Warrant Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold; and on the termination of any such Option or
any such right to convert or exchange such Convertible Securities (including
without limitation upon the redemption or purchase for Consideration of all such
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Convertible Securities by the Company), the Warrant Price then in effect
hereunder shall forthwith be changed to the Warrant Price which would have been
in effect at the time of such termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such termination,
never been issued.
(4) Stock Dividends. Subject to the provisions hereof, in
case the Company shall declare a dividend or make any other distribution upon
any stock of the Company (other than the Common Stock) payable in Common Stock,
Options or Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration.
(5) Consideration for Stock. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for cash, the
Consideration received therefor shall be deemed to be the net amount received by
the Company therefor, after deduction therefrom of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for a Consideration other than cash, the
amount of the Consideration other than cash received by the Company shall be
deemed to be the fair value of such Consideration as determined in good faith by
the Board of Directors of the Company, after deduction of any expenses incurred
or any underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any Options shall be issued in connection with the
issue and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
for such consideration as determined in good faith by the Board of Directors of
the Company.
(6) Record Date. In case the Company shall take a record of
the holders of its Common Stock for the purpose of entitling them (i) to receive
a dividend or other distribution payable in Common Stock, Options or Convertible
Securities or (H) to subscribe for or purchase Common Stock, Options or
Convertible Securities, then such record date shall be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(7) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company or any of its wholly-owned subsidiaries, and the
disposition of any such shares shall be considered an issue or sale of Common
Stock for the purpose of this subsection (f).
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(g) Anything herein to the contrary notwithstanding, the
Company shall not be required to make any adjustment of the Warrant Price in the
case of the issuance of any of (A) capital stock, Options or Convertible
Securities issued to directors, officers, employees or consultants of the
Company in connection with their service as directors of the Company, their
employment by the Company or their retention as consultants by the Company
pursuant to an equity compensation program approved by the Board of Directors of
the Company or the compensation committee of the Board of Directors of the
Company, (B) sales of shares of Common Stock upon the conversion or exercise of
Options or Convertible Securities issued prior to the date hereof or (C) capital
stock issued as full or partial consideration for a merger or acquisition, or a
strategic allegiance or alliance in which the Company with respect to such
strategic allegiance or alliance issues shares of its equity securities having
an aggregate Fair Market Value (as defined below) of less than $ 10 million,
approved by the Board of Directors of the Company. The "Fair Market Value" of a
security as of a particular date (the "Valuation Date") shall mean the
following: (a) if the security is then listed on a national stock exchange, the
closing sale price of one security on such exchange on the last trading day
prior to the Valuation Date; (b) if the security is then quoted on Nasdaq, the
closing sale price of one security on Nasdaq on the last trading day prior to
the Valuation Date or, if no such closing sale price is available, the average
of the high bid and the low sales price quoted on Nasdaq on the last trading day
prior to the Valuation Date; or (c) if the security is not then listed on a
national stock exchange or quoted on Nasdaq, the fair market value of one
security as of the Valuation Date, shall be determined in good faith by a
nationally selected investment banking firm or other nationally recognized
business appraiser selected by the Board of Directors of the Company. The
decision of such appraiser shall be final and conclusive, and the cost of such
appraiser shall be borne evenly by the Company and the Investors (pro rata in
respect of their ownership of Securities at such time) as such terms are defined
in that certain Purchase Agreement among the Company and the Investors dated
October 5, 2001. An "Excluded Issuance" shall mean each of items (A), (B) and
(C) above.
Section 9. Fractional Interest. The Company shall not be required to
issue fractions of Warrant Shares upon the exercise of the Warrant. If any
fractional share of Common Stock would, except for the provisions of the first
sentence of this Section 9, be delivered upon such exercise, the Company, in
lieu of delivering such fractional share, shall pay to the exercising holder of
this Warrant an amount in cash equal to the current Fair Market Value of such
fractional share of Common Stock.
Section 10. Extension of Expiration Date. If the Company fails to cause
any Registration Statement covering Registrable Securities (capitalized terms
used in this section are as defined in the Registration Rights Agreement dated
October 5, 2001) (the "Registration Rights Agreement") to be declared effective
prior to the applicable dates set forth therein, or if any of the events
specified in clause (B) or (C) of Section 2(c) of the Registration Rights
Agreement occurs and the Blackout Period (whether alone, or in
9
combination with any other Blackout Period) continues for more than 60 days in
any 12 month period, or for more than a total of 90 days, then the Expiration
Date of this Warrant shall be extended one day for each day beyond the 60-day or
90-day limits, as the case may be, that the Blackout Period continues.
Section 11. Benefits. Nothing in this Warrant shall be construed to give
any person, firm or corporation (other than the Company and the Warrantholder)
any legal or equitable right, remedy or claim, it being agreed that this Warrant
shall be for the sole and exclusive benefit of the Company and the
Warrantholder.
Section 12. Notices to Warrantholder. Upon the happening of any event
requiring an adjustment of the Warrant Price, the Company shall promptly give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Failure to give such notice to the Warrantholder or any
defect therein shall not affect the legality or validity of the subject
adjustment.
Section 13. Identity of Transfer Agent. The Transfer Agent for the
Common Stock is Xxxxx Fargo Shareowner Services. Upon the appointment of any
subsequent transfer agent for the Common Stock or other shares of the Company's
capital stock issuable upon the exercise of the rights of purchase represented
by the Warrant, the Company will mail to the Warrantholder a statement setting
forth the name and address of such transfer agent.
Section 14. Notices. Any notice pursuant hereto to be given or made by
the Warrantholder to or on the Company shall be sufficiently given or made if
sent by certified mail, return receipt requested, postage prepaid, addressed as
follows:
Visionics Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
or such other address as the Company may specify in writing by notice to the
Warrantholder complying as to delivery with the terms of this Section 14.
Any notice pursuant hereto to be given or made by the Company to or on
the Warrantholder shall be sufficiently given or made if personally delivered or
if sent by an internationally recognized courier services by overnight service,
to the address set forth on the books of the Company or, as to each of the
Company and the Warrantholder, at such other address as shall be designated by
such party by written notice to the other
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party complying as to delivery with the terms of this Section 14. All such
notices, requests, demands, directions and other communications shall, when sent
by courier be effective one (1) day after delivery to such courier as provided
and addressed as aforesaid.
Section 15. Registration Rights. The initial holder of this Warrant is
entitled to the benefit of certain registration rights in respect of the Warrant
Share as provided in the Registration Rights Agreement, and any subsequent
holder hereof may be entitled to such rights.
Section 16. Successors. All the covenants and provisions hereof by or
for the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 17. Governing Law. This Warrant shall be deemed to be a contract
made under the laws of the State of New York, without giving effect to its
conflict of law principles, and for all purposes shall be construed in
accordance with the laws of said State; provided, however, that, insofar as the
Company is incorporated under the laws of the State of Delaware, the General
Corporation Law of the State of Delaware (or any successor statute) shall govern
those matters that apply to the internal governance of the Company.
Section 18. Cashless Exercise.
(a) Net Issue Election. Notwithstanding any other provision
contained herein to the contrary, the Warrantholder may elect to receive,
without the payment by the Warrantholder of the aggregate Warrant Price in
respect of the shares of Common Stock to be acquired, shares of Common Stock
equal to the value of this Warrant or any portion hereof by the surrender of
this Warrant (or such portion of this Warrant being so exercised) together with
the Net Issue Election Notice annexed hereto as Appendix B duly executed, at the
office of the Company. Thereupon, the Company shall issue to the Warrantholder
such number of fully paid, validly issued and nonassessable shares of Common
Stock as is computed using the following formula:
X = Y (A - B)
---------
A
where
"X" = the number of shares of Common Stock which the Warrantholder has
then requested be issued to the Warrantholder
"T"= the total number of shares of Common Stock covered by this Warrant
which the Warrantholder has surrendered at such time for cashless exercise
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"X"= the "Fair Market Value" of one share of Common Stock as at the time
the net issue election is made
"B" = the Warrant Price in effect under this Warrant at the time the net
issue election is made.
Section 19. Call Provision. Notwithstanding any other provision
contained herein to the contrary, in the event that the closing bid price of a
share of Common Stock as traded on Nasdaq (or such other exchange as the Common
Stock may then be listed) exceeds 150% of the Warrant Price for twenty (20)
consecutive trading sessions and all of the Warrant Shares issuable hereunder
are registered pursuant to an effective Registration Statement (as defined in
the Registration Rights Agreement), the Company, upon ten (10) business days
prior written notice (the "Notice Period"), following such twenty (20) day
period, to the Warrantholder, may demand that the Warrantholder exercise its
rights with regard to all Warrant Shares and the Warrantholder must exercise its
rights prior to the expiration of the Notice Period or if such exercise is not
made or if only a partial exercise is made, any and all rights to further
exercise rights to acquire Warrant Shares hereunder shall cease upon the
expiration of the Notice Period.
Section 20. Amendments and Waivers. This Warrant may be amended only by
a writing signed by the Company and the Warrantholder.
IN WITNESS WHEREOF, Visionics Corporation has caused this Warrant to be
duly executed, as of the day and year first above written.
VISIONICS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
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APPENDIX A
VISIONICS CORPORATION
WARRANT EXERCISE FORM
To: Visionics Corporation
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant ("Warrant") for, and to purchase
thereunder by the payment of the Warrant Price and surrender of the Warrant,
shares of Common Stock ("Warrant Shares") provided for therein, and requests
that certificates for the Warrant Shares be issued as follows:
--------------------------------------------
Name
--------------------------------------------
Address
--------------------------------------------
Address
--------------------------------------------
Federal Tax ID or Social Security No.
and delivered by
- certified mail to the above address, or
- electronically (provide DWAC Instructions: or
- other (specify:
and, if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of
the Warrant Shares purchasable upon exercise of this Warrant be registered in
the name of the undersigned Warrantholder or the undersigned's Assignee as below
indicated and delivered to the address stated below.
By exercising the rights represented by this Warrant, the undersigned
hereby certifies that, as of the date of exercise of this Warrant, the
representations and warranties contained in Section 5 of the Purchase Agreement
are true and correct in all material respects with respect to the undersigned.
Dated:_____________, ____
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Note: The signature must correspond Signature:
with the name of the registered ------------------------
holder as written on the first page
of the Warrant in every particular, --------------------------------
without alteration or enlargement Name (please print)
or any change whatever, unless the
Warrant has been assigned.
--------------------------------
--------------------------------
Address
--------------------------------
--------------------------------
Federal Identification or
Social Security No.:
------------
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APPENDIX "B"
NET ISSUE ELECTION NOTICE
To: Visionics Corporation
Date:_______________________
The undersigned hereby elects under Section 18 of this Warrant to
surrender the night to purchase __________ shares of Common Stock pursuant to
this Warrant and hereby requests the issuance of __________ shares of Common
Stock. The certificate(s) for the shares issuable upon such net issue election
shall be issued in the name of the undersigned or as otherwise indicated below.
---------------------------
Signature
---------------------------
Name for Registration
---------------------------
Mailing Address
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