THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Corporation: IMAGEWARE SOFTWARE, INC. A CALIFORNIA CORPORATION
Number of Shares: 17,500
Class of Stock: COMMON
Initial Exercise Price: $4.00 PER SHARE
Issue Date: JANUARY 15, 1998
Expiration Date: JANUARY 15, 2003 (SUBJECT TO ARTICLE 4.1)
THIS WARRANT CERTIFIES THAT, in consideration of the payment of $1.00
and for other good and valuable consideration, IMPERIAL BANK or registered
assignee ("Holder") is entitled to purchase the number of fully paid and
nonassessable shares of the class of securities (the "Shares") of the
corporation (the "Company") at the initial exercise price per Share (the
"Warrant Price") all as set forth above and as adjusted pursuant to Article 2
of this Warrant, subject to the provisions and upon the terms and conditions
set forth of this Warrant.
ARTICLE 1. EXERCISE
1.1 METHOD OF EXERCISE. Holder may exercise this Warrant by delivering
this Warrant and a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 to the principal office of the Company. Unless Holder
is exercising the conversion right set forth in Section 1.2, Holder shall
also deliver to the Company a check for the aggregate Warrant Price for the
Shares being purchased.
1.2 CONVERSION RIGHT. In lieu of exercising this Warrant as specified
in Section 1.1, Holder may from time to time convert this Warrant, in whole
or in part, into a number of Shares determined by dividing (a) the aggregate
fair market value of the Shares or other securities otherwise issuable upon
exercise of this Warrant minus the aggregate Warrant Price of such Shares by
(b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant to Section 1.5.
1.3 ALTERNATIVE STOCK APPRECIATION RIGHT. At Holder's option, the
Company shall pay Holder the fair market value of the Shares issuable upon
conversion of this Warrant pursuant to Section 1.2 in cash in lieu of such
Shares.
1.4 RIGHT TO PUT WARRANT. At Holder's option, in lieu of exercising its
rights as set forth in Sections 1.1, 1.2, or 1.3, Holder shall have the right
to require the Company to purchase the Warrant under the circumstances set
forth on Exhibit A.
1.5 FAIR MARKET VALUE. If the Shares are traded regularly in a public
market, the fair market value of the Shares shall be the closing price of the
shares (or the closing price of the Company's stock into which the Shares are
convertible) reported for the business day immediately before Holder delivers
its Notice of Exercise to the Company. If the Shares are not regularly traded
in a public market, the Board of Directors of the Company shall determine
fair market value in its reasonable good faith judgment. The foregoing
notwithstanding, if Holder advises the Board of Directors in writing that
Holder disagrees with such determination, then the Company and Holder shall
promptly agree upon a reputable investment banking firm to undertake such
valuation. If the valuation of such investment banking firm is greater than
that determined by the Board of Directors, then all fees and expenses of such
investment banking firm shall be paid by the Company. In all other
circumstances, such fees and expenses shall be paid by Holder.
1.6 DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.7 REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of
an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, or surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor.
1.8 REPURCHASE ON SALE, MERGER, OR CONSOLIDATION OF THE COMPANY.
1.8.1. "ACQUISITION". For the purpose of this Warrant,
"Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets (including intellectual property) of the
Company, or any reorganization, consolidation, or merger of the Company where
the holders of the Company's securities before the transaction beneficially
own less than 50% of the outstanding voting securities of the surviving
entity after the transaction.
1.8.2. ASSUMPTION OF WARRANT. If upon the closing of any
Acquisition the successor entity assumes the obligations of this Warrant,
then this Warrant shall be exercisable for the same securities, cash, and
property as would be payable for the Shares issuable upon exercise of the
unexercised portion of this Warrant as if such Shares were outstanding on the
record date for the Acquisition and subsequent closing. The Warrant Price
shall be adjusted accordingly. The Company shall use reasonable efforts to
cause the surviving corporation to assume the obligations of this Warrant.
1.8.3. NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and Holder
has not otherwise exercised this Warrant in full, then the unexercised
portion of this Warrant shall be deemed to have been automatically converted
pursuant to Section 1.2 and thereafter Holder shall participate in the
Acquisition on the same terms as other holders of the same class of
securities of the Company.
1.8.4. PURCHASE RIGHT. Notwithstanding the foregoing, at the
election of Holder, the Company shall purchase the unexercised portion of
this Warrant for cash upon the closing of any Acquisition for an amount equal
to (a) the fair market value of any consideration that would have been
received by Holder in consideration of the Shares had Holder exercised the
unexercised portion of this Warrant immediately before the record date for
determining the shareholders entitled to participate in the proceeds of the
Acquisition, less (b) the aggregate Warrant Price of the Shares, but in no
event less than zero.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 STOCK DIVIDENDS, SPLITS, ETC. If the Company declares or pays a
dividend on its common stock payable in common stock, or other securities,
subdivides the outstanding common stock into a greater amount of common
stock, then upon exercise of this Warrant, for each Share acquired, Holder
shall receive, without cost to Holder, the total number and kind of
securities to which Holder would have been entitled had Holder owned the
Shares of record as of the date the dividend or subdivision occurred.
2.2 RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon
exercise or conversion of this Warrant, the number and kind of securities and
property that Holder would have received for the Shares if this Warrant had
been exercised immediately before such reclassification, exchange,
substitution, or other event. Such an event shall include any automatic
conversion of the outstanding or issuable securities of the Company of the
same class or series as the Shares to common stock pursuant to the terms of
the Company's Articles of Incorporation upon the closing of a registered
public offering of the Company's common stock. The Company or its successor
shall promptly issue to Holder a new Warrant for such new securities or other
property. The new Warrant shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Article 2 including, without limitation, adjustments to the Warrant
Price and to the number of securities or property issuable upon exercise of
the new Warrant. The provisions of this Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 ADJUSTMENTS FOR COMBINATIONS, ETC. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser
number of shares, the Warrant Price shall be proportionately increased.
2.4 ADJUSTMENTS FOR DILUTING ISSUANCES. The Warrant Price and the
number of Shares issuable upon exercise of this Warrant shall be subject to
adjustment, from time to time, in the manner set forth on Exhibit B, if
attached, in the event of Diluting Issuances (as defined on Exhibit B).
2.5 NO IMPAIRMENT. The Company shall not, by amendment of its Articles
of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed under this Warrant by the Company,
but shall at all times in good faith assist in carrying out all the
provisions of this Article 2 and in taking all such action as may be
necessary or appropriate to protect Holder's rights under this Article
against impairment. If the Company takes any action affecting the Shares or
its common stock other than as described above that adversely affects
Holder's rights
under this Warrant, the Warrant Price shall be adjusted downward and the
number of Shares issuable upon exercise of this Warrant shall be adjusted
upward in such a manner that the aggregate Warrant Price of this Warrant is
unchanged.
2.6 CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting
forth such adjustment and the facts upon which such adjustment is based. The
Company shall, upon written request, furnish Holder a certificate setting
forth the Warrant Price in effect upon the date thereof and the series of
adjustments leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Holder as follows:
(a) The initial Warrant Price referenced on the first page of
this Warrant is not greater than the fair market value of the Shares as of
the date of this Warrant.
(b) All Shares which may be issued upon the exercise of the
purchase right represented by this Warrant, and all securities, if any,
issuable upon conversion of the Shares, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any
liens and encumbrances except for restrictions on transfer provided for
herein or under applicable federal and state securities laws.
3.2 NOTICE OF CERTAIN EVENTS. If the Company proposes at any time (a)
to declare any dividend or distribution upon its common stock, whether in
cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class
or series of its stock any additional shares of stock of any class or series
or other rights; (c) to effect any reclassification or recapitalization of
common stock; (d) to merge or consolidate with or into any other corporation,
or sell, lease, license, or convey all or substantially all of its assets, or
to liquidate, dissolve or wind up; or (e) offer holders of registration
rights the opportunity to participate in an underwritten public offering of
the company's securities for cash, then, in connection with each such event,
the Company shall give Holder (1) at least 20 days prior written notice of
the date on which a record will be taken for such dividend, distribution, or
subscription rights (and specifying the date on which the holders of common
stock will be entitled thereto) or for determining rights to vote, if any, in
respect of the matters referred to in (c) and (d) above; (2) in the case of
the matters referred to in (c) and (d) above at least 20 days prior written
notice of the date when the same will take place (and specifying the date on
which the holders of common stock will be entitled to exchange their common
stock for securities or other property deliverable upon the occurrence of
such event); and (3) in the case of the matter referred to in (e) above, the
same notice as is given to the holders of such registration rights.
3.3 INFORMATION RIGHTS. So long as the Holder holds this Warrant and/or
any of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all communiques to the shareholders of the Company, (b)
within ninety (90) days after the end of each fiscal year of the Company, the
annual audited financial statements of the Company certified by independent
public accountants of
recognized standing and (c) within forty-five (45) days after the end of each
of the first three quarters of each fiscal year, the Company's quarterly,
unaudited financial statements.
3.4 REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED. The Company
agrees that the Shares shall be subject to the registration rights set forth
on Exhibit C.
ARTICLE 4. MISCELLANEOUS.
4.1 TERM: NOTICE OF EXPIRATION. This Warrant is exercisable, in whole
or in part, at any time and from time to time on or before the Expiration
Date set forth above. The Company shall give Holder written notice of
Holder's right to exercise this Warrant in the form attached as Appendix 2
not more than 90 days and not less than 30 days before the Expiration Date.
If the notice is not so given, the Expiration Date shall automatically be
extended until 30 days after the date the Company delivers the notice to
Holder.
4.2 LEGENDS. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO
RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 COMPLIANCE WITH SECURITIES LAWS ON TRANSFER. This Warrant and the
Shares issuable upon exercise this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with
applicable federal and state securities laws by the transferor and the
transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company). The Company shall not require Holder to provide an opinion of
counsel if the transfer is to an affiliate of Holder or if there is no
material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has complied with Rule 144(d) and
(e) in reasonable detail, the selling broker represents that it has complied
with Rule 144(f), and the Company is provided with a copy of Holder's notice
of proposed sale.
4.4 TRANSFER PROCEDURE. Subject to the provisions of Section 4.2,
Holder may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) by giving the Company notice of the
portion of the Warrant being transferred setting forth the name, address and
taxpayer identification number of the transferee and surrendering this
Warrant to the Company for reissuance to the transferee(s) (and Holder, if
applicable). Unless the Company is filing financial information with the SEC
pursuant to the Securities Exchange Act of 1934, the Company shall have the
right to refuse to transfer any portion of this Warrant to any person who
directly competes with the Company.
4.5 NOTICES. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or
certified mail, postage prepaid, at such address as may have been furnished
to the Company or the Holder, as the case may be, in writing by the Company
or such Holder from time to time.
4.6 WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
IMAGEWARE SOFTWARE, INC.
By: /s/ S. Xxxxx Xxxxxx, Jr.
--------------------------------
Name: S. Xxxxx Xxxxxx, Jr.
--------------------------------
Title: Chairman & CEO
--------------------------------
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase __________ shares of
Common Stock of ImageWare Software, Inc. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
1. The undersigned hereby elects to convert the attached Warrant in to
Shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised with respect to __________ of the Shares covered by
the Warrant
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:
Chief Financial Officer
Controllers Department
Imperial Bank
X.X. Xxx 00000
Xxx Xxxxxxx, XX 00000
3. The undersigned represents it is acquiring the shares solely for
its own account and not as a nominee for any other party and not with a view
toward the resale or distribution thereof except in compliance with
applicable securities laws.
IMPERIAL BANK
------------------------------
(Signature)
------------------------------
(Date)
APPENDIX 2
NOTICE THAT WARRANT IS ABOUT TO EXPIRE
________________, _____
Chief Financial Officer
Controllers Department
Imperial Bank
X.X. Xxx 00000
Xxx Xxxxxxx, XX 00000
Gentleperson:
This is to advise you that the Warrant issued to you described below
will expire on January 15, 2003.
Issuer:
Issue Date: January 15, 1998
Class of Security Issuable: Common
Exercise Price Per Share: $4.00
Number of Shares Issuable: 17,500
Procedure for Exercise:
Please contact Xxxxx Xxxxxxxxx at (000) 000-0000 with any questions you
may have concerning exercise of the Warrant. This is your only notice of
pending expiration.
IMAGEWARE SOFTWARE, INC.
By:
--------------------------
Its:
--------------------------
EXHIBIT A
PUT RIGHT
Subject to the succeeding sentence, upon written notice to the Company,
Holder shall have the right (the "Put Right") to require that the Company
purchase the Warrant from Holder in consideration of the Company's payment to
Holder (due seven days after receipt of Holders's written notice) of $35,000.
The foregoing notwithstanding, Holder may only exercise the Put Right during
the first to occur of the following periods:
1. On or after January 15, 2001; or
2. The six-month period ending on the Expiration Date; or
3. The 20 day period ending on the closing of the merger,
consolidation or sale of assets of the Company; or
4. The 20 day period ending on the liquidation, dissolution or winding
up of the Company.
EXHIBIT B
IMPERIAL BANK
ANTIDILUTION AGREEMENT
This Antidilution Agreement is entered into as of January 15, 1998, by
and between Imperial Bank or Imperial Bancorp, at their option, ("Purchaser")
and ImageWare Software, Inc. ("the Company").
RECITALS
A. Concurrently with the execution of this Antidilution Agreement, the
Purchaser is purchasing from the Company a Warrant to Purchase Stock (the
"Warrant") pursuant to which Purchaser has the right to acquire from the
Company the Shares (as defined in the Warrant).
B. By this Antidilution Agreement, the Purchaser and the Company
desire to set forth the adjustment in the number of Shares issuable upon
exercise of the Warrant as a result of a Diluting Issuance (as defined in
Exhibit A to the Warrant).
C. Capitalized terms used herein shall have the same meaning as set
forth in the Warrant.
NOW, THEREFORE, in consideration of the mutual promises, covenants
and conditions hereinafter set forth, the parties hereto mutually agree as
follows:
1. DEFINITIONS. As used in this Antidilution Agreement, the
following terms have the following respective meanings:
(a) "Option" means any right, option or warrant to subscribe for,
purchase or otherwise acquire common stock or Convertible Securities.
(b) "Convertible Securities" means any evidences of indebtedness,
shares of stock or other securities directly or indirectly convertible into
or exchangeable for common stock.
(c) "Issue" means to grant, issue, sell, assume or fix a record date
for determining persons entitled to receive any security (including Options),
whichever of the foregoing is the first to occur.
(d) "Additional Common Shares" means all common stock (including
reissued shares) Issued (or deemed to be issued pursuant to Section 2) after
the date of the Warrant. Additional Common Shares does not include, however,
any common stock Issued in a transaction described in Sections 2.1 and 2.2 of
the Warrant; any common stock Issued upon conversion of preferred stock
outstanding on the date of the Warrant; the Shares; or common stock Issued as
incentive or in a nonfinancing transaction to employees, officers, directors
or consultants to the Company.
(e) The shares of common stock ultimately Issuable upon exercise of an
Option (including the shares of common stock ultimately Issuable upon
conversion or exercise of a Convertible Security Issuable pursuant to an
Option) are deemed to be Issued when the Option is Issued. The shares of
common stock ultimately Issuable upon conversion or exercise of a Convertible
Security (other than a Convertible Security Issued pursuant to an Option)
shall be deemed Issued upon Issuance of the Convertible Security.
2. DEEMED ISSUANCE OF ADDITIONAL COMMON SHARES. The shares of common
stock ultimately Issuable upon exercise of an Option (including the shares of
common stock ultimately Issuable upon conversion or exercise of a Convertible
Security Issuable pursuant to an Option) are deemed to be Issued when the
Option is Issued. The shares of common stock ultimately Issuable upon
conversion or exercise of a Convertible Security (other than a Convertible
Security Issued pursuant to an Option) shall be deemed Issued upon Issuance
of the Convertible Security. The maximum amount of common stock Issuable is
determined without regard to any future adjustments permitted under the
instrument creating the Options or Convertible Securities.
3. ADJUSTMENT OF WARRANT PRICE FOR DILUTING ISSUANCES.
3.1 RATCHET ADJUSTMENT. If the Company issues Additional Common
Shares after the date of the Warrant and the consideration per Additional
Common Share (determined pursuant to Section 9) is less than the Warrant
Price in effect immediately before such Issue (a "Diluting Issuance"), the
Warrant Price shall be reduced to the lesser of:
(a) the amount of such consideration per Additional Common Share;
or
(b) if the Company's common stock is traded on a national
securities exchange or the National Association of Securities Dealers
Automated Quotation System, the last reported bid or sale price of the
Company's common stock on the first trading day following a public
announcement of the Issuance.
3.2 ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of the
Warrant Price, the number of Shares Issuable upon exercise of the Warrant
shall be increased to equal the quotient obtained by dividing (a) the product
resulting from multiplying (i) the number of Shares Issuable upon exercise of
the Warrant and (ii) the Warrant Price, in each case as in effect immediately
before such adjustment, by (b) the adjusted Warrant Price.
3.3 SECURITIES DEEMED OUTSTANDING. For the purpose of this
Section 3, all securities Issuable upon exercise of any outstanding
Convertible Securities or Options, Warrants, or other rights to acquire
securities of the Company shall be deemed to be outstanding.
4. NO ADJUSTMENT FOR ISSUANCES FOLLOWING DEEMED ISSUANCES. No
adjustment to the Warrant Price shall be made upon the exercise of Options or
conversion of Convertible Securities.
5. ADJUSTMENT FOLLOWING CHANGES IN TERMS OF OPTIONS OR CONVERTIBLE
SECURITIES. If the consideration payable to, or the amount of common stock
Issuable by, the Company increases or decreases, respectively, pursuant to
the terms of any outstanding Options or Convertible Securities, the Warrant
Price shall be recomputed to reflect such increase or decrease. The
recomputation shall be made as of the time of the Issuance of the Options or
Convertible Securities. Any changes in the Warrant Price that occurred after
such Issuance because other Additional Common Shares were Issued or deemed
Issued shall also be recomputed.
6. RECOMPUTATION UPON EXPIRATION OF OPTIONS OR CONVERTIBLE SECURITIES.
The Warrant Price computed upon the original Issue of any Options or
Convertible Securities, and any subsequent adjustments based thereon, shall
be recomputed when any Options or rights of conversion under Convertible
Securities expire without having been exercised. In the case of Convertible
Securities or Options for common stock, the Warrant Price shall be recomputed
as if the only Additional Common Shares Issued were the shares of common
stock actually Issued upon the exercise of such securities, if any, and as if
the only consideration received therefor was the consideration actually
received upon the Issue, exercise or conversion of the Options or Convertible
Securities. In the case of Options for Convertible Securities, the Warrant
Price shall be recomputed as if the only Convertible Securities Issued were
the Convertible Securities actually Issued upon the exercise thereof, if any,
and as if the only consideration received therefor was the consideration
actually received by the Company (determined pursuant to Section 9), if any,
upon the Issue of the Options for the Convertible Securities.
7. LIMIT ON READJUSTMENTS. No readjustment of the Warrant Price
pursuant to Sections 5 or 6 shall increase the Warrant Price more than the
amount of any decrease made in respect of the Issue of any Options or
Convertible Securities.
8. 30 DAY OPTIONS. In the case of any Options that expire by their
terms not more than 30 days after the date of Issue thereof, no adjustment of
the Warrant Price shall be made until the expiration or exercise of all such
Options.
9. COMPUTATION OF CONSIDERATION. The consideration received by the
Company for the Issue of any Additional Common Shares shall be computed as
follows:
(a) CASH shall be valued at the amount of cash received by the
Corporation, excluding amounts paid or payable for accrued interest or
accrued dividends.
(b) PROPERTY. Property, other than cash, shall be computed at the fair
market value thereof at the time of the Issue as determined in good faith by
the Board of Directors of the Company.
(c) MIXED CONSIDERATION. The consideration for Additional Common
Shares Issued together with other property of the Company for consideration
that covers both shall be determined in good faith by the Board of Directors.
(d) OPTIONS AND CONVERTIBLE SECURITIES. The consideration per
Additional Common Share for Options and Convertible Securities shall be
determined by dividing:
(i) the total amount, if any, received or receivable by the
Company for the Issue of the Options or Convertible Securities, plus the
minimum amount of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to the Company upon
exercise of the Options or conversion of the Convertible Securities, by
(ii) the maximum amount of common stock (as set forth in the
instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such number) ultimately Issuable upon
the exercise of such Options or the conversion of such Convertible Securities.
10. GENERAL.
10.1 GOVERNING LAW. This Antidilution Agreement shall be governed
in all respects by the laws of the State of California as such laws are
applied to agreements between California residents entered into and to be
performed entirely within California.
10.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
10.3 ENTIRE AGREEMENT. Except as set forth below, this
Antidilution Agreement and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.
10.4 NOTICES, ETC. All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by first class
mail, postage prepaid, certified or registered mail, return receipt
requested, addressed (a) if to the Purchaser at Purchaser's address as set
forth below, or at such other address as Purchaser shall have furnished to
the Company in writing, or (b) if to the Company, at the Company's address
set forth below, or at such address as the Company shall have furnished to
the Purchaser in writing.
10.5 SEVERABILITY. In case any provision of this Antidilution
Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions of this Antidilution Agreement
shall not in any way be affected or impaired thereby.
10.6 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Antidilution Agreement.
10.7 COUNTERPARTS. This Antidilution Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
PURCHASER ISSUER
IMPERIAL BANK or IMPERIAL BANCORP IMAGEWARE SOFTWARE, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ S. Xxxxx Xxxxxx, Jr.
-------------------------- --------------------------
Name: Xxxxxxx X. Xxxxxx Name: S. Xxxxx Xxxxxx, Jr.
-------------------------- --------------------------
Title: Senior Vice Pres. Title: Chairman & CEO
-------------------------- --------------------------
EXHIBIT C
REGISTRATION RIGHTS
The Shares shall be deemed "registrable securities" or otherwise
entitled to "piggy back" registration rights in accordance with the terms of
the following agreement (the "Agreement") between the Company and its
investor(s):
APRIL 10, 1995 PRIVATE PLACEMENT OF IMAGEWARE SOFTWARE, INC.
SERIES B PREFERRED STOCK AND COMMON STOCK PURCHASE WARRANTS
The Company agrees that no amendments will be made to the Agreement
which would have an adverse impact on Holder's registration thereunder
without the consent of Holder. By acceptance of the Warrant to which this
Exhibit C is attached, Holder shall not be deemed to be a party to the
Agreement, but solely entitled to the registration rights created thereby.
