EXHIBIT 10.1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") is made as of the 5th
day of October, 2001 by and among Visionics Corporation, formerly known as
Digital Biometrics, Inc., a Delaware corporation (the "Company"), and the
Investors set forth on the signature page affixed hereto (each an "Investor" and
collectively the "Investors").
RECITALS
A. The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended;
B. The Investors wish to purchase, and the Company wishes to sell and
issue to the Investors, upon the terms and conditions stated in this Agreement,
that number of shares of the common stock of the Company, par value $.01 per
share (the "Common Stock") as set forth on the signature page attached hereto
and executed by each such Investor; and
C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in the form attached hereto as EXHIBIT A (the "Registration Rights Agreement"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended and the rules and regulations
promulgated thereunder (the "1933 Act"), and applicable state securities laws.
In consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Definitions. In addition to those terms defined above and elsewhere
in this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings here set forth:
"Affiliate" means, with respect to any Person, any other
Person which directly or indirectly Controls, is controlled by, or is under
common control with, such Person.
"Agreements" means this Agreement, the Registration Rights
Agreement and, if applicable, the Penalty Warrants.
"Closing" means the consummation of the transactions
contemplated by this Agreement, and "Closing Date" means the date of such
Closing.
"Control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Company's Knowledge" means the actual knowledge of the
executive officers of the Company after due inquiry.
"Material Adverse Effect" means a material adverse effect on
the condition, business, assets, or results of operations of the Company and its
subsidiaries as a whole.
"Penalty Warrants" means the Penalty Warrants provided for in
Section 8 of the Registration Rights Agreement.
"Penalty Warrant Shares" means the shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Penalty Warrants.
"Person" means an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically listed
herein.
"SEC Filings" has the meaning set forth in Section 4.6.
"Securities" means the Shares, the Penalty Warrants and the
Penalty Warrant Shares (defined below).
"Shares" means the shares of Common Stock being purchased by
the Investors hereunder.
"1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2. Purchase and Sale of the Shares. Subject to the terms and conditions
of this Agreement, each of the Investors hereby severally, and not jointly,
agrees to purchase, and the Company hereby agrees to sell and issue to each such
Investor, the number of Shares set forth on such Investor's signature page
attached hereto. The number of Shares to be purchased by each Investor shall be
determined by dividing such Investor's aggregate purchase price (as such
aggregate purchase price is set forth on such Investor's signature page attached
hereto) (the "Purchase Price") by an amount equal to Eleven Dollars and Ten
Cents ($11.10) (the "Per Share Purchase Price"). The Per Share Purchase Price is
a fixed price; it does not adjust depending upon the timing of the Closing.
Pursuant to the Registration Rights Agreement, the Company is obligated to issue
the Penalty Warrants if a Registration Statement with respect to the Shares is
not filed or made effective by the dates set forth in Sections 2(a) and 2(c) of
the Registration Rights Agreement. The exercise price of the Penalty Warrants
shall be the Per Share Purchase Price.
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3. Closing. Simultaneous with the execution and delivery of this
Agreement and the Registration Rights Agreement and the delivery of such other
documents as may be required hereunder or as soon thereafter as practicable,
each Investor shall deliver to a separate account maintained by the Placement
Agent pursuant to Rule 15b2-4 under the 1934 Act for the benefit of the Company,
by wire transfer, same day funds in an amount equal to such Investor's Purchase
Price. At such time, the Company shall direct its transfer agent to issue a
certificate or certificates, registered in such name or names as the Investors
may designate, representing all of the Shares. The settlement of the purchase
and sale pursuant to this Agreement shall occur five (5) business days after the
date hereof (and such date shall be deemed the "Closing Date"). The closing of
the purchase and sale of the Shares shall take place at the offices of Bass,
Xxxxx & Xxxx PLC, 000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxx, or at such
other location and on such other date as the Company and the Investors shall
mutually agree. At the Closing Date, the certificates representing the Shares
will be delivered to the Investors against payment therefor by wire transfer to
the Company from the separate account maintained by the Placement Agent.
4. Representations and Penalty Warranties of the Company. The Company
hereby represents and warrants to the Investors that:
4.1 Organization, Good Standing and Qualification. Each of the
Company and its subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted and own its properties. Each of the Company and
its subsidiaries is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property makes such qualification or licensing
necessary unless the failure to so qualify would not have a Material Adverse
Effect. The Company's subsidiaries are reflected on Schedule 4.1 hereto.
4.2 Authorization. The Company has full power and authority
and has taken all requisite action on the part of the Company, its officers,
directors and stockholders necessary for (i) the authorization, execution and
delivery of the Agreements, (ii) authorization of the performance of all
obligations of the Company hereunder or thereunder, and (iii) the authorization,
issuance (or reservation for issuance) and delivery of the Securities. The
Agreements constitute, or, in the case of the Penalty Warrants, upon issuance by
the Company will constitute, the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors'
rights generally.
4.3 Capitalization. Set forth on Schedule 4.3 hereto is (a)
the authorized capital stock of the Company on the date hereof; (b) the number
of shares of capital stock issued and outstanding; (c) the number of shares of
capital stock issuable pursuant to the Company's stock plans; and (d) the number
of shares of capital stock issuable and reserved for issuance pursuant to
securities (other than the Shares and the Penalty Warrants) exercisable for, or
convertible into or exchangeable for any shares of capital stock of the Company.
All of the issued and outstanding shares of the Company's capital stock have
been duly authorized and
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validly issued and are fully paid, nonassessable. Except as set forth on
Schedule 4.3, no Person is entitled to preemptive or similar statutory or
contractual rights with respect to any securities of the Company. Except as set
forth on Schedule 4.3, there are no outstanding warrants, options, convertible
securities or other rights, agreements or arrangements of any character under
which the Company or any of its subsidiaries is or may be obligated to issue any
equity securities of any kind. Except as set forth on Schedule 4.3, there are no
voting agreements, buy-sell agreements, option or right of first purchase
agreements or other agreements of any kind among any of the securityholders of
the Company relating to the securities of the Company held by them. Except as
set forth on Schedule 4.3, the Company has not granted any Person the right to
require the Company to register any securities of the Company under the 1933
Act, whether on a demand basis or in connection with the registration of
securities of the Company for its own account or for the account of any other
Person.
4.4 Valid Issuance. The Company has reserved a sufficient
number of shares of Common Stock for the issuance of the Shares pursuant to this
Agreement. The Shares and Penalty Warrants are duly authorized, and such
Securities, along with the Penalty Warrant Shares when issued in accordance
herewith and with the terms of the Penalty Warrants, will be duly authorized,
validly issued, fully paid, non-assessable and free and clear of all
encumbrances and restrictions, except for restrictions on transfer imposed by
applicable securities laws.
4.5 Consents. The execution, delivery and performance by the
Company of the Agreements and the offer, issuance and sale of the Securities
require no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than filings that have been made
pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws which the Company undertakes to
file within the applicable time periods.
4.6 Delivery of SEC Filings; Business. The Company has
provided the Investors with copies of the Company's most recent Annual Report on
Form 10-K/A for the fiscal year ended September 30, 2000, and all other reports
filed by the Company pursuant to the 1934 Act since the filing of the Annual
Report on Form 10-K/A and prior to the date hereof (collectively, the "SEC
Filings"). The Company hereby represents and warrants that the SEC Filings are
the only filings required of the Company pursuant to the 1934 Act for such
period. The Company is engaged only in the business described in the SEC Filings
and the SEC Filings contain a complete and accurate description of the business
of the Company.
4.7 Use of Proceeds. The proceeds of the sale of the Common
Stock hereunder and the Penalty Warrant Shares (if any) shall be used by the
Company for working capital and general corporate purposes.
4.8 No Material Adverse Change. Since the filing of the
Company's most recent Annual Report on Form 10-K or as otherwise identified and
described in the SEC Filings, or as set forth on Schedule 4.8 hereto, there has
not been:
(i) any change in the consolidated assets,
liabilities, financial condition or operating results of the Company from that
reflected in the financial statements
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included in the Company's most recent Quarterly Report on Form 10-Q, except the
incurrence of operating losses consistent with the historic results of the
Company or changes in the ordinary course of business which have not had, in the
aggregate, a Material Adverse Effect;
(ii) any declaration or payment of any dividend, or
any authorization or payment of any distribution, on any of the capital stock of
the Company, or any redemption or repurchase of any securities of the Company;
(iii) any material damage, destruction or loss,
whether or not covered by insurance to any assets or properties of the Company;
(iv) any waiver, not in the ordinary course of
business by the Company of a valuable right or of a material debt owed to it;
(v) any satisfaction or discharge of any lien, claim
or encumbrance or payment of any obligation by the Company, except in the
ordinary course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company taken as a
whole (as such business is presently conducted and as it is proposed to be
conducted);
(vi) any change or amendment to the Company's
Certificate of Incorporation or by-laws, or material change to any material
contract or arrangement by which the Company or any of its assets or properties
is bound or subject;
(vii) any material labor difficulties or labor union
organizing activities with respect to employees of the Company;
(viii) any transaction entered into by the Company
other than in the ordinary course of business;
(ix) the loss of the services of any key employee, or
material change in the composition or duties of the Company's senior management;
(x) the loss or threatened loss of any customer which
could be material to the Company's business; or
(xi) any other event or condition of any character
that might have a Material Adverse Effect.
4.9 SEC Filings; Material Contracts.
(a) The SEC Filings complied as to form in all
material respects with the requirements of the 1934 Act and did not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
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(b) During the preceding two years, each registration
statement and any amendment thereto filed by the Company pursuant to the 1933
Act and the rules and regulations thereunder, as of the date such statement or
amendment became effective, complied as to form in all material respects with
the 1933 Act and did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading; and each prospectus filed pursuant to Rule
424(b) under the 1933 Act, as of its issue date and as of the closing of any
sale of securities pursuant thereto, did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(c) Except as set forth on Schedule 4.3 hereto, there
are no agreements or instruments currently in force and effect that constitute a
warrant, option, convertible security or other right, agreement or arrangement
of any character under which the Company is or may be obligated to issue any
material amounts of any equity security of any kind, or to transfer any material
amounts of any equity security of any kind.
4.10 No Conflict, Breach, Violation or Default. The execution,
delivery and performance of the Agreements by the Company and the issuance and
sale of the Securities will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under (i) the
Company's Certificate of Incorporation or the Company's Bylaws, both as in
effect on the date hereof (copies of which have been provided to the Investors
before the date hereof), or (ii)(a) any statute, rule, regulation or order of
any governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any of its properties, or (b) except as set
forth on Schedule 4.10, any agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the properties of the
Company is subject.
4.11 Tax Matters. The Company has timely prepared and filed
all tax returns required to have been filed by the Company with all appropriate
governmental agencies and timely paid all taxes owed by it. The charges,
accruals and reserves on the books of the Company in respect of taxes for all
fiscal periods are adequate in all material respects, and there are no material
unpaid assessments against the Company nor, to the knowledge of the Company, any
basis for the assessment of any additional taxes, penalties or interest for any
fiscal period or audits by any federal, state or local taxing authority except
for any assessment which is not material to the Company. All taxes and other
assessments and levies of a material amount that the Company is required to
withhold or to collect for payment have been duly withheld and collected and
paid to the proper governmental entity or third party when due. There are no tax
liens or claims pending or threatened against the Company or any of its
respective assets or property which individually or in the aggregate could have
a Material Adverse Effect. Except as described in the SEC Filings, there are no
outstanding tax sharing agreements or other such arrangements between the
Company and any other corporation or entity.
4.12 Title to Properties. Except as disclosed in the SEC
Filings or Schedule 4.12, the Company has good and marketable title to all real
properties and all other properties
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and assets owned by it, in each case free from liens, encumbrances and defects
that would materially affect the value thereof or materially interfere with the
use made or currently planned to be made thereof by them; and except as
disclosed in the SEC Filings, the Company holds any leased real or personal
property under valid and enforceable leases with no exceptions that would
materially interfere with the use made or currently planned to be made thereof
by them.
4.13 Certificates, Authorities and Permits. The Company
possesses adequate certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now operated
by it and has not received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit that, if determined
adversely to the Company, would individually or in the aggregate have a Material
Adverse Effect.
4.14 No Labor Disputes. No material labor dispute with the
employees of the Company exists or, to the knowledge of the Company, is
currently threatened.
4.15 Intellectual Property. The Company has sufficient title
or adequate rights or licenses to the inventions, know-how, patents, copyrights,
trademarks, trade names, confidential information, domain names and other
intellectual property (collectively, "Intellectual Property Rights"), free and
clear of any material liens, security interests, charges, encumbrances, equities
and other adverse claims, necessary to conduct the business now operated by it,
or presently employed by it, and presently contemplated to be operated by it,
and the Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property Rights. To
the knowledge of the Company, the Company's patents and other Intellectual
Property Rights and the present activities of the Company do not infringe any
patent, copyright, trademark, trade name or other proprietary rights of any
third party.
4.16 Environmental Matters. The Company is not in violation of
any statute, rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal or release
of hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "Environmental Laws"), does not own or operate any real property
contaminated with any substance that is subject to any Environmental Laws, is
not liable for any off-site disposal or contamination pursuant to any
Environmental Laws, and is not subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation that might lead to such a claim.
4.17 Litigation. Except as disclosed in the SEC Filings or on
Schedule 4.17 hereto, there are no pending actions, suits or proceedings against
or affecting the Company, its subsidiaries or any of its or their properties
that, if determined adversely to the Company or such subsidiary, would
individually or in the aggregate have a Material Adverse Effect or would
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement, or which are otherwise material in the context
of the sale of the Securities; and to the Company's knowledge, no such actions,
suits or proceedings are threatened or contemplated.
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4.18 Financial Statements. The financial statements included
in each SEC Filing present fairly and accurately in all material respects the
consolidated financial position of the Company as of the dates shown and its
consolidated results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with United States
generally accepted accounting principles applied on a consistent basis. Except
as set forth in the financial statements of the Company included in the SEC
Filings filed prior to the date hereof, the Company has no liabilities,
contingent or otherwise, except those which individually or in the aggregate
would not have a Material Adverse Effect.
4.19 Insurance Coverage. The Company maintains in full force
and effect insurance coverage that is customary for comparably situated
companies for the business being conducted and properties owned or leased by the
Company, and the Company reasonably believes such insurance coverage to be
adequate against all liabilities, claims and risks against which it is customary
for comparably situated companies to insure.
4.20 Compliance with Nasdaq Continued Listing Requirements.
The Company is in compliance with all applicable Nasdaq National Market
continued listing requirements. There are no proceedings pending or to the
Company's knowledge threatened against the Company relating to the continued
listing of the Company's Common Stock on the Nasdaq National Market and the
Company has not received any notice of, nor to the knowledge of the Company is
there any basis for, the delisting of the Common Stock from the Nasdaq National
Market.
4.21 Brokers and Finders. The Investors shall have no
liability or responsibility for the payment of any commission or finder's fee to
any third party in connection with or resulting from this Agreement or the
transactions contemplated by this Agreement by reason of any agreement of or
action taken by the Company. The Company is obligated to pay a fee to Xxxxxx
Xxxxxx in connection with transactions contemplated hereunder.
4.22 No Directed Selling Efforts or General Solicitation.
Neither the Company nor any Person acting on its behalf has conducted any
general solicitation or general advertising (as those terms are used in
Regulation D) in connection with the offer or sale of any of the Securities.
4.23 No Integrated Offering. Neither the Company nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would adversely affect reliance by
the Company on Section 4(2) for the exemption from registration for the
transactions contemplated hereby or would require registration of the Securities
under the 1933 Act.
4.24 Questionable Payments. Neither the Company nor any of its
subsidiaries nor, to the Company's Knowledge, any of their respective current or
former shareholders, directors, officers, employees, agents or other Persons
acting on behalf of the Company or any subsidiary, has on behalf of the Company
or any subsidiary or in connection with their respective businesses: (a) used
any corporate funds for unlawful contributions, gifts, entertainment or other
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unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company; or (e) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment of any nature.
5. Representations and Warranties of the Investor. Each of the
Investors hereby severally, and not jointly, represents and warrants to the
Company that:
5.1 Organization and Existence. The Investor is a validly
existing corporation, limited partnership or limited liability company and has
all requisite corporate, partnership or limited liability company power and
authority to invest in the Securities pursuant to this Agreement.
5.2 Authorization. The execution, delivery and performance by
the Investor of the Agreements have been duly authorized and the Agreements will
each constitute the valid and legally binding obligation of the Investor,
enforceable against the Investor in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors'
rights generally.
5.3 Purchase Entirely for Own Account. The Securities to be
received by the Investor hereunder will be acquired for the Investor's own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the Investor has no present intention of
selling, granting any participation in, or otherwise distributing the same. The
Investor is not a registered broker dealer or an entity engaged in the business
of being a broker dealer.
5.4 Investment Experience. The Investor acknowledges that it
can bear the economic risk and complete loss of its investment in the Securities
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment contemplated
hereby.
5.5 Disclosure of Information. The Investor has had an
opportunity to receive documents related to the Company and to ask questions of
and receive answers from the Company regarding the Company, its business and the
terms and conditions of the offering of the Securities. The Investor
acknowledges receipt of copies of the SEC Filings. Neither such inquiries nor
any other due diligence investigation conducted by the Investor shall modify,
amend or affect the Investor's right to rely on the Company's representations
and warranties contained in this Agreement.
5.6 Restricted Securities. The Investor understands that the
Securities are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
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5.7 Legends. It is understood that certificates evidencing the
Securities may bear one or all of the following legends:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE FEDERAL 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 UNDER THE APPLICABLE SECURITIES LAWS OR AN OPINION FROM
COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH REGISTRATION IS NOT
REQUIRED.
(b) If required by the authorities of any state in
connection with the issuance of sale of the Securities, the legend required by
such state authority.
5.8 Accredited Investor. The Investor is an accredited
investor as defined in Rule 501(a) of Regulation D.
5.9 No General Solicitation. The Investor did not learn of the
investment in the Securities as a result of any public advertising or general
solicitation.
6. Registration Rights Agreement. The parties acknowledge and agree
that part of the inducement for the Investor to enter into this Agreement is the
Company's execution and delivery of the Registration Rights Agreement. The
parties acknowledge and agree that simultaneously with the execution hereof, the
Registration Rights Agreement is being duly executed and delivered by the
parties thereto.
7. Covenants and Agreements of the Company.
7.1 Opinion of Counsel. On or prior to the Closing Date, the
Company will deliver to the Investors the opinion of legal counsel to the
Company, in form and substance reasonably acceptable to the Investors,
addressing those legal matters set forth in Schedule 7.2 hereto.
7.2 Reservation of Common Stock Pursuant to Exercise of
Penalty Warrants. The Company hereby agrees that if any Penalty Warrants are
issued, it shall at all times prior to exercise or expiration thereof reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of providing for the exercise of the Penalty Warrants,
such number of shares of Common Stock as shall from time to time equal the
number of shares sufficient to permit the exercise of the Penalty Warrants in
accordance with the terms of the Penalty Warrants.
7.3 No Conflicting Agreements. The Company will not take any
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the obligations to the Investors under
the Agreements.
7.4 Listing of Underlying Shares and Related Matters. The
Company hereby agrees, following the Closing of the transactions contemplated by
this Agreement, to take such
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action to cause the Shares and (if applicable) the Penalty Warrant Shares to be
listed on the Nasdaq National Market as promptly as possible but no later than
the effective date of the registration contemplated by the Registration Rights
Agreement. The Company further agrees that if the Company applies to have its
Common Stock or other securities traded on any other principal stock exchange or
market, it will include in such application the Penalty Warrant Shares and will
take such other action as is necessary to cause such Common Stock to be so
listed. For so long as the Investors beneficially own any of the Securities, the
Company will take all action necessary to continue the listing and trading of
its Common Stock on the Nasdaq National Market and will comply in all respects
with the Company's reporting, filing and other obligations under the bylaws or
rules of such exchange, as applicable, to ensure the continued eligibility for
trading of the Shares and the Penalty Warrant Shares thereon. Notwithstanding
anything to the contrary in this section, the Company shall be under no
obligation to list any Penalty Warrant Shares until such time as Penalty
Warrants shall have been issued.
8. Survival and Indemnification.
8.1 Survival. All representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to be representations,
warranties, covenants and agreements as of the date hereof and shall survive the
execution and delivery of this Agreement for a period of twelve months from the
date of this Agreement; provided, however, that the provisions contained in
Section 7 hereof shall survive in accordance therewith.
8.2 Indemnification.
(a) The Company agrees to indemnify and hold
harmless, on an after-tax and after insurance recovery basis, each holder of
Securities and its Affiliates and their respective directors, officers,
employees and agents (each, an "Investor Indemnified Person") from and against
any and all losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorney fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement hereof)
(collectively, "Losses") to which such Person may become subject as a result of
any breach of representation, warranty, covenant or agreement made by or to be
performed on the part of the Company under the Agreements and will reimburse any
such Person for all such amounts as they are incurred by such Person; provided,
however, that if an Investor Indemnified Person is reimbursed under this Section
8.2 for any expenses, such reimbursement of expenses shall be refunded to the
extent it is finally judicially determined that the Losses in question resulted
primarily from the wilful misconduct or gross negligence of such Investor
Indemnified Person.
(b) Each Investor, severally and not jointly, agrees
to indemnify and hold harmless, on an after-tax and after insurance recovery
basis, the Company and its Affiliates and their respective directors, officers,
employees and agents (each, a "Company Indemnified Person") from and against any
and all Losses to which such Person may become subject as a result of any breach
of representation, warranty, covenant or agreement made by or to be performed on
the part of such Investor under the Agreements and will reimburse any such
Person for all such amounts as they are incurred by such Person; provided,
however, that if a Company
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Indemnified Person is reimbursed under this Section 8.2 for any expenses, such
reimbursement of expenses shall be refunded to the extent it is finally
judicially determined that the Losses in question resulted primarily from the
wilful misconduct or gross negligence of such Company Indemnified Person.
8.3 Conduct of Indemnification Proceedings. Promptly after
receipt by any Investor Indemnified Person or Company Indemnified Person (an
"Indemnified Person") of notice of any demand, claim or circumstances which
would or might give rise to a claim or the commencement of any action,
proceeding or investigation in respect of which indemnity may be sought pursuant
to Section 8.2, such Indemnified Person shall promptly notify the party
responsible for providing such indemnification (the "Indemnifying Person") in
writing and the Indemnifying Person shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person,
and shall assume the payment of all fees and expenses; provided, however, that
the failure of any Indemnified Person so to notify the Indemnifying Person shall
not relieve the Indemnifying Person of its obligations hereunder except to the
extent that the Indemnifying Person is materially prejudiced by such failure to
notify. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless: (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the retention of such
counsel; or (ii) in the reasonable judgment of such Indemnified Person, based
upon written advice of its counsel, representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. The Indemnifying Person shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Indemnifying Person shall indemnify and hold
harmless such Indemnified Person from and against any loss or liability (to the
extent stated above) by reason of such settlement or judgment. Without the prior
written consent of the Indemnified Person, the Indemnifying Person shall not
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Person from all liability
arising out of such proceeding.
9. Miscellaneous.
9.1 Successors and Assigns. This Agreement may not be assigned
by a party hereto without the prior written consent of the other party hereto,
except that without the prior written consent of the Company, but after notice
duly given, an Investor may assign its rights and delegate its duties hereunder
in whole or in part to an Affiliate, and without the prior written consent of
the Investors, but after notice duly given and in compliance with this
Agreement, the Company may assign its rights and delegate its duties hereunder
to any successor-in-interest corporation in the event of a merger or
consolidation of the Company with or into another corporation, or any merger or
consolidation of another corporation with or into the Company that results
directly or indirectly in an aggregate change in the ownership or control of
more than 50% of the voting rights of the equity securities of the Company, or
the sale of all or substantially all of the Company's assets. The terms and
conditions of this Agreement shall inure to the benefit
12
of and be binding upon the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. The provisions
of this Section 9.1 shall not interfere in any respect with a transfer by an
Investor of any Securities in compliance with all applicable securities laws.
9.2 Counterparts; Faxes. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile, which shall be deemed an original.
9.3 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.4 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given only upon delivery to each party to be notified by (i)
personal delivery, (ii) telex or telecopier, upon receipt of confirmation of
complete transmittal, or (iii) an internationally recognized overnight air
courier, addressed to the party to be notified at the address as follows, or at
such other address as such party may designate by ten days' advance written
notice to the other party:
If to the Company:
Visionics Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
If to the Investors, to the addresses set forth on
the signature pages hereto.
9.5 Expenses. The parties hereto shall pay their own costs and
expenses in connection herewith.
9.6 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investors.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any Securities purchased under this Agreement at the
time outstanding, each future holder of all such securities, and the Company.
9.7 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
13
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.
9.8 Entire Agreement. This Agreement, including the Exhibits
and Schedules hereto, and the Registration Rights Agreement and the Penalty
Warrants constitute the entire agreement among the parties hereof with respect
to the subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof and thereof.
9.9 Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
9.10 Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
[SIGNATURES BEGIN ON THE NEXT PAGE]
14
IN WITNESS WHEREOF, the parties have executed this Agreement
or caused their duly authorized officers to execute this Agreement as of the
date first above written.
THE COMPANY:
VISIONICS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
15
INVESTOR:
Tonga Partners LP
By: /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Member
Aggregate Purchase Price: $1,536,684
Number of Shares of Common Stock: 138,440
Address for Notice:
Xxxxxxx Capital, LLC - Tonga Partners LP
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
with a copy to:
Xxxxxxx Sachs - Prime Brokerage, 48th Fl.
0 Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
16
INVESTOR:
The Cuttyhunk Fund Ltd.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Director
Aggregate Purchase Price: $1,132,200
Number of Shares of Common Stock: 102,000
Address for Notice:
00 Xxxxx Xxxxxx
Xxxxxxxx XX 12
BERMUDA
with a copy to:
0000 0xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
17
INVESTOR:
Clarion Capital Corporation
By: /s/ Xxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxx
Title: Chairman
Aggregate Purchase Price: $435,675
Number of Shares of Common Stock: 39,250
Address for Notice:
0000 Xxxx 0xx Xx.
Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
18
INVESTOR:
Clarion Partners, L.P.
By: /s/ Xxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxx
Title: General Partner
Aggregate Purchase Price: $217,837.50
Number of Shares of Common Stock: 19,625
Address for Notice:
0000 Xxxx 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
19
INVESTOR:
Clarion Offshore Fund Ltd.
By: /s/ Xxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxx
Title: Investment Manager
Aggregate Purchase Price: $217,837.50
Number of Shares of Common Stock: 19,625
Address for Notice:
0000 Xxxx 0xx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
20
INVESTOR:
Deephaven Private Placement Trading Ltd.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director Private Placement
Funding
Aggregate Purchase Price: $1,999,998
Number of Shares of Common Stock: 180,180
Address for Notice:
Deephaven Capital Management
c/o Xxxxx Xxxxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
21
INVESTOR:
Franklin Street Trust Company
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Secretary/Treasurer
Aggregate Purchase Price: $2,220,000
Number of Shares of Common Stock: 200,000
Address for Notice:
Franklin Street Trust Co.
Attn: Xxxxx Xxxxxx
0000 Xxxxxxx Xxxx, Xxx. 000
Xxxxxx Xxxx, XX 00000
22
INVESTOR:
Xxxxxx X. Xxxxx & Associates, LP
By: /s/ Xxxxxxx Xxxxx
---------------------------
Name: Xxxxxxx Xxxxx
Title: Attorney in Fact
Aggregate Purchase Price: $2,220,000
Number of Shares of Common Stock: 200,000
Address for Notice:
c/x Xxxxxxx Capital LLC
000 Xxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
with copy to:
Xxxxxx X. Xxxxx & Associates, LP
Attn: Xxxxx Xxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
23
INVESTOR:
Daughters of Charity- Fund P
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $126,540
Number of Shares of Common Stock: 11,400
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
24
INVESTOR:
Xxxxxx X. Xxxxxx Testamentary Trust
Mazama Capital Trust
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $77,700
Number of Shares of Common Stock: 7,000
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
25
INVESTOR:
East Bay Municipal Utility District
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $59,940
Number of Shares of Common Stock: 5,400
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
26
INVESTOR:
GSAM GEMS Small Cap LLC
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $84,360
Number of Shares of Common Stock: 7,600
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
27
INVESTOR:
Marin County Employee Retirement
Association
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $112,110
Number of Shares of Common Stock: 10,100
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
28
INVESTOR:
Memorial Hospital of South Bend, Inc.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $36,630
Number of Shares of Common Stock: 3,300
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
29
INVESTOR:
Nemows Foundation Mazama Capital
Management
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $18,870
Number of Shares of Common Stock: 1,700
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
30
INVESTOR:
PGH Pension Mazama Cap Mgmt.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $26,640
Number of Shares of Common Stock: 2,400
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
31
INVESTOR:
Xxx Xxxxxx P/S Retirement Trust Mazama
Capital Management
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $69,930
Number of Shares of Common Stock: 6,300
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
32
INVESTOR:
SIIT Small Cap FD/Mazama Cap Mgmt.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $589,410
Number of Shares of Common Stock: 53,100
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
33
INVESTOR:
SIMT Small Cap GR/Mazama Cap Mgmt.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $791,430
Number of Shares of Common Stock: 71,300
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
34
INVESTOR:
Undiscovered Managers Small Cap Growth
Fund
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $118,770
Number of Shares of Common Stock: 10,700
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
35
INVESTOR:
Vision Small Cap Stock Fund
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $101,010
Number of Shares of Common Stock: 9,100
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
36
INVESTOR:
Wilshire U.S. Equity Fund
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title:
Aggregate Purchase Price: $6,660
Number of Shares of Common Stock: 600
Address for Notice:
Xxxxx Xxxxxx
Mazama Capital Management
Xxx XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
37
INVESTOR:
Radyr Investments Ltd.
By: /s/ Xxxxx Xxxx
---------------------------
Name: Xxxxx Xxxx
Title: Director
Aggregate Purchase Price: $249,750
Number of Shares of Common Stock: 22,500
Address for Notice:
c/o Beacon Capital Management
XX Xxx 000
Xxxxxxxx, Xxxxxxx, BVI
with copy to:
Xxxxxx Xxxxxx
Rhino Advisors Inc.
000 Xxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
(000) 000-0000 FAX
38
INVESTOR:
Belmont Park Investments
By: /s/ Xxxxx Xxxx
---------------------------
Name: Xxxxx Xxxx
Title: Director
Aggregate Purchase Price: $1,999,998
Number of Shares of Common Stock: 180,180
Address for Notice:
c/o Beacon Capital Management
XX Xxx 000
Xxxxxxxx, Xxxxxxx, XX0
with copy to:
Xx. Xxxx Xxxxx
Trinity Capital Advisors, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 FAX
39
INVESTOR:
FIRSTAR BANK N.A., CUSTODIAN FOR FIRST
AMERICAN MICROCAP FUND U/A
DATED 01/01/98
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $4,679,760
Number of Shares of Common Stock: 421,600
40
INVESTOR:
FIRSTAR BANK N.A., TRUSTEE FOR
XXXXXXX X. XXXXXXX CHILDRENS SMALL
CAP U/A DATED 11/30/2000
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $9,990
Number of Shares of Common Stock: 900
41
INVESTOR:
FIRSTAR BANK N.A., TRUSTEE FOR
XXXXXX X. XXXXXXX RESIDUARY TRUST
(2) U/A DATED 2/27/84
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $12,210
Number of Shares of Common Stock: 1,100
42
INVESTOR:
FIRSTAR BANK N.A., TRUSTEE FOR
MILWAUKEE FOUNDATION FIRSTAR
MICROCAP FUND U/A DATED 01/21/00
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $87,690
Number of Shares of Common Stock: 7,900
43
INVESTOR:
FIRSTAR BANK N.A., TRUSTEE FOR XXXX X.
XXXXXX MICROCAP FUND U/A DATED 7/27/01
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $11,100
Number of Shares of Common Stock: 1,000
44
INVESTOR:
FIRSTAR BANK N.A., AGENT FOR XXXX X.
XXXXXXXXX LIFE TRUST MICROCAP FUND
U/A DATED 12/17/92
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $253,080
Number of Shares of Common Stock: 22,800
45
INVESTOR:
FIRSTAR BANK N.A., AGENT FOR
LYNDHURST ASSOCIATES MICROCAP FUND
U/A DATED 4/20/95
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $296,370
Number of Shares of Common Stock: 26,700
46
INVESTOR:
FIRSTAR BANK N.A., AGENT FOR
POSNER PARTNERS MICROCAP FUND
U/A DATED 05/17/96
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $125,430
Number of Shares of Common Stock: 11,300
47
INVESTOR:
XXXXXXXX AND ISLELY TRUST COMPANY
CUSTODIAN FOR THE MILWAUKEE JEWISH
FEDERATION
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $74,370
Number of Shares of Common Stock: 6,700
48
EXHIBIT A
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 UNDER 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.
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
2
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 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,
3
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 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
appraisor, 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.
4
(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)(l) 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);
"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)(l) 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):
(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
5
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 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.
(f)(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).
(f)(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)(l) hereof, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in subsections 8(f)(l) or 8(f)(2),
or the rate at which Convertible Securities referred to in subsections
8(f)(l) or 8(f)(2) are convertible into or exchangeable for Common
Stock shall change at any time (including,
6
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 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.
(f)(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.
(f)(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.
(f)(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 (ii) 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.
(f)(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
7
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).
(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 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.
8
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 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.
9
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
"Y" = the total number of shares of Common Stock covered by
this Warrant which the Warrantholder has surrendered at such time for cash-less
exercise
"A" = 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
10
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.
11
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
12
EXHIBIT A
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: ___________________, ____
Note: The signature must correspond with Signature:
the name of the registered holder as --------------------------
written on the first page of the Warrant
in every particular, without alteration
or enlargement or any change whatever,
unless the Warrant has been assigned. ------------------------------------
Name (please print)
------------------------------------
------------------------------------
Address
------------------------------------
Federal Identification or
Social Security No.:
---------------
APPENDIX "B"
Net Issue Election Notice
To: Visionics Corporation
Date:_________________________
The undersigned hereby elects under Section 18 of this Warrant to
surrender the right 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
