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EXHIBIT 2.1
EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT (this "Agreement") is made as of the 20th day
of June, 2001, between Security Biometrics, Inc., a Nevada corporation
("Biometrics"), and NetFace LLC, a Connecticut limited liability company which
has elected to be classified for tax purposes as an association taxable as a
corporation ("NetFace"), and each of the members of NetFace listed on the
signature page hereto (each individually, a "NetFace Member" and collectively,
the "NetFace Members").
W I T N E S S E T H:
WHEREAS, Biometrics desires to acquire NetFace by issuing shares of its
common stock, par value $.001 per share ("Biometrics Common Stock"), in exchange
for all of the issued and outstanding membership interests of NetFace (the
"NetFace Membership Interests") (the exchange of shares of Biometrics Common
Stock for NetFace Membership Interests being referred to herein as the
"Exchange"), in an acquisition that constitutes a tax-free transaction meeting
the requirements of Section 368 (a)(1)(B) of the U.S. Internal Revenue Code of
1986, as amended (the "Code"), and will result in NetFace becoming a wholly
owned subsidiary of Biometrics, upon the terms and subject to the conditions set
forth herein; and
WHEREAS, the NetFace Members own all of the outstanding NetFace
Membership Interests and desire to transfer and assign their NetFace Membership
Interests to Biometrics solely in exchange for shares of Biometrics Common
Stock.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and certain other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto covenant and
agree as follows:
ARTICLE 1.
ACQUISITION OF NETFACE MEMBERSHIP INTERESTS
1.1. EXCHANGE. Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing provided for in Section 1.2 hereof, each NetFace
Member shall sell, assign, transfer, convey and deliver to Biometrics, and
Biometrics shall purchase, all right, title and interest in and to all of such
NetFace Member's NetFace Membership Interest free and clear of all liens,
security interests, charges, encumbrances and rights of others. In consideration
for the NetFace Membership Interest so acquired by Biometrics, Biometrics shall
issue and deliver 200,000 shares of Biometrics Common Stock (an aggregate of
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20,000,000 shares of Biometrics Common Stock), in exchange for each 1% NetFace
Membership Interest transferred to Biometrics pursuant to this Agreement, as
soon as practicable following the satisfaction or permissible waiver of the
conditions set forth in Articles 6 and 7.
1.2. CLOSING. Consummation of the transactions contemplated by this Agreement
(the "Closing"), shall take place at the offices of Snow Xxxxxx Xxxxxx P.C., 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, commencing at 10:00 a.m., local time, as
soon as practicable after the last to be fulfilled or waived of the conditions
set forth in Articles 6 and 7, or at such other place, time and date as shall be
fixed by mutual agreement among Biometrics, NetFace and the NetFace Members. The
day on which the Closing shall occur shall be referred to herein as the "Closing
Date." Each party will use its reasonable best efforts to cause to be prepared,
executed and delivered the documents to be delivered pursuant to Articles 6 and
7 and all other appropriate and customary documents as any party or its counsel
may reasonably request for the purpose of consummating the transactions
contemplated by this Agreement. All actions taken at the Closing shall be deemed
to have been taken simultaneously at the time the last of any such actions is
taken or completed.
1.3. TAX CONSEQUENCES. It is the intention of the parties hereto that no taxable
income or gain shall be recognized by the NetFace Members, and that the Exchange
be deemed as a tax free exchange pursuant to the Code.
ARTICLE 2.
EXCHANGE
Immediately after the satisfaction or permissible waiver of the
conditions set forth in Articles 6 and 7 at the Closing, each 1% NetFace
Membership Interest that is assigned and transferred to Biometrics pursuant to
this Agreement shall be exchanged for 200,000 shares of Biometrics Common Stock
as detailed in Section 3.1.6 of the NetFace Disclosure Schedule.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF NETFACE
AND THE NETFACE MEMBERS
3.1 NETFACE. NetFace hereby represents and warrants to Biometrics that, except
as otherwise set forth on the NetFace Disclosure Schedule (herein so called)
attached hereto:
3.1.1 ORGANIZATION AND GOOD STANDING. NetFace is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Connecticut. NetFace does not own any equity, profit sharing,
participation or other ownership interest
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(including any general partnership interest) in any corporation, partnership,
limited partnership or other entity.
3.1.2. FOREIGN QUALIFICATION. NetFace is not, and the nature of the business
conducted or property owned by it does not require NetFace to be, qualified or
licensed to do business as a foreign limited liability company in any
jurisdiction.
3.1.3. POWER AND AUTHORITY. NetFace has the power and authority to own, lease
and operate its properties and assets and to carry on its business as currently
being conducted. NetFace has the power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement. The execution,
delivery and performance by NetFace of this Agreement has been duly authorized
by all necessary action.
3.1.4. BINDING EFFECT. This Agreement has been duly executed and delivered by
NetFace and is the legal, valid and binding obligation of NetFace enforceable in
accordance with its terms, except that:
(a) enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights;
(b) the availability of equitable remedies may be limited by
equitable principles of general applicability; and
(c) rights to indemnification may be limited by considerations of
public policy.
3.1.5. ABSENCE OF RESTRICTIONS AND CONFLICTS. The execution, delivery and
performance of this Agreement and the consummation of the Exchange and the
fulfillment of and compliance with the terms and conditions of this Agreement do
not and will not, with the passing of time or the giving of notice or both,
violate or conflict with, constitute a breach of or default under, result in the
loss of any material benefit under, or permit the acceleration of any obligation
under, (i) any term or provision of the Articles of Organization of NetFace,
(ii) any NetFace Material Contract (as defined in Section 3.1.10), (iii) any
judgment, decree or order of any court or governmental authority or agency to
which NetFace or by which NetFace or any of its respective properties is bound,
or (iv) any statute, law, regulation or rule applicable to NetFace. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any governmental agency or public or regulatory unit, agency, body or
authority with respect to NetFace is required in connection with the execution,
delivery or performance of this Agreement by NetFace.
3.1.6. CAPITALIZATION OF NETFACE
(a) As of the date hereof, the NetFace Members own the number of
NetFace Membership Interests set forth opposite their
respective names on Section 3.1.6 of the NetFace Disclosure
Schedule.
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(b) All of the outstanding NetFace Membership Interests have been
duly authorized and validly issued and are fully paid and free
of preemptive rights.
(c) To NetFace's knowledge, there are no voting trusts, member
agreements or other voting arrangements, charges, liens or
encumbrances on Membership Interests issued by NetFace that
have been granted by the NetFace Members.
(d) There is no outstanding subscription, contract or other rights
obligating NetFace to issue, sell, exchange, or otherwise
dispose of, or to purchase, redeem or otherwise acquire,
NetFace Membership Interests.
3.1.7. ABSENCE OF CERTAIN CHANGES. NetFace has not, except as otherwise set
forth on Section 3.1.7. of the NetFace Disclosure Schedule:
(a) suffered any adverse change in its business, operations,
assets, or financial condition, except as reflected on the
balance sheet of NetFace as of March 31, 2001 appended hereto
as Exhibit 3.1.7 (the "NetFace Balance Sheet");
(b) suffered any material damage or destruction to or loss of the
assets of NetFace, whether or not covered by insurance, which
property or assets are material to the operations or business
of NetFace taken as a whole;
(c) settled, forgiven, compromised, canceled, released, waived or
permitted to lapse any material rights or claims other than in
the ordinary course of business;
(d) entered into or terminated any material agreement, commitment
or transaction, or agreed to or made any changes in material
leases or agreements, other than renewals or extensions
thereof and leases, agreements, transactions and commitments
entered into or terminated in the ordinary course of business;
(e) written up, written down or written off the book value of any
material amount of assets other than in the ordinary course of
business;
(f) declared, paid or set aside for payment any distribution with
respect to NetFace Membership Interests;
(g) redeemed, purchased or otherwise acquired, or sold, granted or
otherwise disposed of, directly or indirectly, any NetFace
Membership Interests or securities or any rights to acquire
such capital stock or securities, or agreed to changes in the
terms and conditions of any such rights outstanding as of the
date of this Agreement;
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(h) increased the compensation of or paid any bonuses to any
employees or contributed to any employee benefit plan or
pension scheme, other than in the ordinary course of business
and consistent with established policies, practices or
requirements;
(i) entered into any employment, consulting or compensation
agreement with any person or group;
(j) entered into any collective bargaining agreement or trade
union recognition agreement with any person or group;
(k) entered into, adopted or amended any employee benefit plan or
share option scheme or agreement; or
(l) entered into any agreement to do any of the foregoing.
3.1.8. NO MATERIAL UNDISCLOSED LIABILITIES. There are no liabilities or
obligations of NetFace of any nature, whether absolute, accrued, contingent, or
otherwise, other than liabilities and obligations:
(a) in the aggregate adequately provided for in the NetFace
Balance Sheet;
(b) incurred in the ordinary course of business;
(c) incurred since March 31, 2001, in the ordinary course of
business; or
(d) incurred in connection with this Agreement.
3.1.9. TAX RETURNS: TAXES. NetFace (a) has duly filed all U.S. federal and
material state, county, local and foreign tax returns and reports required to be
filed by it, including those with respect to income, payroll, property,
withholding, social security, unemployment, franchise, excise and sales taxes
and all such returns and reports are correct in all material respects; (b) has
either paid in full all taxes that have become due as reflected on any return or
report and any interest and penalties with respect thereto or have fully accrued
on its books or have established adequate reserves for all taxes payable but not
yet due; and (c) has made cash deposits with appropriate governmental
authorities representing estimated payments of taxes, including income taxes and
employee withholding tax obligations. No extension or waiver of any statute of
limitations or time within which to file any return has been granted to or
requested by NetFace with respect to any tax. No unsatisfied deficiency,
delinquency or default for any tax, assessment or governmental charge has been
claimed, proposed or assessed against NetFace, nor has NetFace received notice
of any such deficiency, delinquency or default. NetFace has no material tax
liabilities other than those arising in the ordinary course of business since
the date hereof. NetFace has filed a Form 8832 with the Internal Revenue Service
electing to be classified as an association taxable as a corporation.
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3.1.10. MATERIAL CONTRACTS. NetFace has furnished or made available to
Biometrics accurate and complete copies of the NetFace Material Contracts
applicable to NetFace. Except as set forth on Section 3.1.10 of the NetFace
Disclosure Schedule, there is not under any of the NetFace Material Contracts
any existing breach, default or event of default by NetFace nor event that with
notice or lapse of time or both would constitute a breach, default or event of
default by NetFace, nor does NetFace know of, and NetFace has not received
notice of, or made a claim with respect to, any breach or default by any other
party thereto. As used herein, the term "NetFace Material Contracts" shall mean
all contracts, licenses, leases and instruments to which NetFace is a party.
3.1.11. LITIGATION AND GOVERNMENT CLAIMS. There is no pending suit, claim,
action or litigation, or administrative, arbitration or other proceeding or
governmental investigation or inquiry against NetFace to which its businesses or
assets is subject, and to the knowledge of NetFace, there are no such
proceedings threatened or contemplated. NetFace is not subject to any judgment,
decree, injunction, rule or order of any court, or, to the knowledge of NetFace,
any governmental restriction applicable to NetFace that is reasonably likely to
cause a material limitation on Biometrics' ability to own and operate the
business of NetFace (as it is currently operated) after the Closing.
3.1.12. COMPLIANCE WITH LAWS. NetFace has all material authorizations,
approvals, licenses and orders to carry on its business as it is now being
conducted, to own or hold under lease the properties and assets it owns or holds
under lease and to perform all of its obligations under the agreements to which
it is a party. NetFace has been and is, to the knowledge of NetFace, in
compliance with all applicable laws, regulations and administrative orders of
any country, state or municipality or of any subdivision of any thereof to which
its business, ownership of assets and its employment of labor or its use or
occupancy of properties or any part thereof are subject.
3.1.13. EMPLOYEE BENEFITS PLANS. In connection with Section 3.1.14 below,
NetFace does not currently have in effect any employee pension or profit sharing
plans.
3.1.14. INTELLECTUAL PROPERTY. Except for the right to use DSI Datotech Systems
Inc.'s gesture recognition technology for the uses/purposes stated therein under
a license that it may acquire upon exercise of an option, NetFace does not own
or have the right to use any patents, trademarks, trade names, service marks,
service names, copyrights, or applications therefor.
3.1.15. TITLE TO PROPERTIES AND RELATED MATTERS. NetFace has good and marketable
title to or valid license or leasehold interests in its properties (other than
personal properties sold or otherwise disposed of in the ordinary course of
business), and all of such properties and all assets purchased by NetFace are
free and clear of any lien, claim or encumbrance, except for:
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(a) liens for taxes, assessments or other governmental charges not
yet due and payable or the validity of which are being
contested in good faith by appropriate proceedings;
(b) statutory liens incurred in the ordinary course of business
that are not yet due and payable or the validity of which is
being contested in good faith by appropriate proceedings;
(c) landlord liens contained in leases entered into in the
ordinary course of business; and
(d) other liens, claims or encumbrances that, in the aggregate, do
not materially subtract from the value of, or materially
interfere with, the present use of any real property owned or
used by NetFace.
All properties and assets material to the present operations of NetFace are
owned or leased by NetFace in the manner and to the extent required by
applicable law.
3.2. NETFACE MEMBERS. Each NetFace Member hereby severally represents and
warrants that:
3.2.1. OWNERSHIP. Such NetFace Member has good and valid title to the NetFace
Membership Interest described on the NetFace Member Disclosure Schedule to be
transferred and assigned to Biometrics by such NetFace Member hereunder on the
Closing Date, free and clear of all liens, encumbrances, equities or claims, and
upon delivery of such Membership Interest in exchange for Biometrics Common
Stock as contemplated by this Agreement, good and valid title to such Membership
Interests will pass to Biometrics free and clear of all liens, encumbrances,
equities or claims of any nature whatsoever.
3.2.2. AUTHORITY. Such NetFace Member has full right, power and authority to
enter into this Agreement.
3.2.3. CONFLICTS. The execution, delivery and performance of this Agreement by
such NetFace Member and the consummation by such NetFace Member of the
transactions contemplated hereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which such NetFace Member is a party or by which such NetFace
Member is bound or to which any of the property or assets of such NetFace Member
is subject, nor will such actions result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over such NetFace Member or the property or assets of such NetFace
Member.
3.2.4 CONSENTS. No consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body having jurisdiction
over such NetFace Member or the property or assets of such NetFace Member is
required for the execution,
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delivery and performance of this Agreement by such NetFace Member and the
consummation by such NetFace Member of the transactions contemplated hereby.
3.2.5 NETFACE REPRESENTATIONS. Based upon such NetFace Member's actual knowledge
without having conducted an independent inquiry, such NetFace Member has no
reason to believe that the representations and warranties of NetFace contained
in Section 3.1 hereof are not materially true and correct and has no knowledge
of any material fact, condition or information not disclosed herein that has
adversely affected or may adversely affect the business of NetFace.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF BIOMETRICS
Biometrics hereby represents and warrants that, except as otherwise
set forth in the Biometrics Disclosure Schedule (herein so called) attached
hereto:
4.1. ORGANIZATION AND GOOD STANDING. Biometrics is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada.
Except for Biometrics Security, Biometrics has no subsidiaries and no equity,
profit sharing, participation or other ownership interest (including any general
partnership interest) in any corporation, partnership, limited partnership or
other entity.
4.2. FOREIGN QUALIFICATION. Biometrics is not, and the nature of the business
conducted or property owned by it does not require Biometrics to be, qualified
or licensed to do business as a foreign corporation in any jurisdiction.
4.3. CORPORATE POWER AND AUTHORITY. Biometrics has the corporate power and
authority and all material licenses and permits to own, lease and operate its
properties and assets and to carry on its business as currently being conducted.
Biometrics has the corporate power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement and to consummate
the Exchange. The execution, delivery and performance by Biometrics of this
Agreement has been duly authorized by all necessary corporate action.
4.4. BINDING EFFECT. This Agreement has been duly executed and delivered by
Biometrics and is the legal, valid and binding obligation of Biometrics,
enforceable in accordance with its terms, except that:
(a) enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights;
(b) the availability of equitable remedies may be limited by
equitable principles of general applicability; and
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(c) rights to indemnification may be limited by considerations of
public policy.
4.5. ABSENCE OF RESTRICTIONS AND CONFLICTS. The execution, delivery and
performance of this Agreement and the consummation of the Exchange and the
fulfillment of and compliance with the terms and conditions of this Agreement do
not and will not, with the passing of time or the giving of notice or both,
violate or conflict with, constitute a breach of or default under, result in the
loss of any material benefit under, or permit the acceleration of any obligation
under, (i) any term or provision of the Certificate of Incorporation or By-Laws
of Biometrics, (ii) any Biometrics Material Contract (as defined in Section 4.11
below), (iii) any judgment, decree or order of any court or governmental
authority or agency to which Biometrics is a party or by which Biometrics or any
of its properties is bound, or (iv) any statute, law, regulation or rule
applicable to Biometrics. Except for compliance with the applicable requirements
of the Securities Act of 1933, the Securities Exchange Act of 1934 and
applicable state securities laws, no consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental agency or
public or regulatory unit, agency, body or authority with respect to Biometrics
is required in connection with the execution, delivery or performance of this
Agreement by Biometrics or the consummation of the transactions contemplated
hereby.
4.6. CAPITALIZATION OF BIOMETRICS.
(a) The authorized capital stock of Biometrics consists of
100,000,000 shares of Biometrics Common Stock. As of the date
hereof, there are 50,757,675 shares of Biometrics Common Stock
outstanding.
(b) All of the issued and outstanding shares of Biometrics Common
Stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights.
(c) To Biometrics's knowledge, there are no voting trusts,
stockholder agreements or other voting arrangements that have
been entered into among the Stockholders of Biometrics.
(d) There is no outstanding subscription, contract, convertible or
exchangeable security, option, warrant, call or other right
obligating Biometrics to issue, sell, exchange, or otherwise
dispose of, or to purchase, redeem or otherwise acquire,
shares of, or securities convertible into or exchangeable for,
capital stock of Biometrics, except as set forth in Section
4(d) of the Biometrics Disclosure Schedule.
4.7 SEC DOCUMENTS; PARENT FINANCIAL STATEMENTS.
Biometrics has filed with the Securities and Exchange Commission (the
"SEC") all forms, statements, reports and documents (including all exhibits,
amendments and supplements thereto) required to be filed by it under each of the
Securities Act and the Exchange Act, and the respective rules and regulations
thereunder, all of which complied
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in all material respects with all applicable requirements of the appropriate act
and rules and regulations thereunder. Biometrics has furnished or made available
or will make available to NetFace and the NetFace Members, true and correct
copies of Biometric's registration statement on Form 10-SB/A-6 and Quarterly
Reports on Form 10 - QSB for the quarters ended December 31, 2000 and March 31,
2001 (collectively, the "Biometrics SEC Documents"). As of their respective
filing dates, the Biometrics SEC Documents complied in all material respects
with the requirements of the Securities Act and the Exchange Act, and the
applicable rules and regulations of the SEC thereunder, as the case may be, and
none of the Biometrics SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
in which they were made, not misleading. The financial statements of Biometrics,
including the notes thereto, included in the Biometrics SEC Documents (the
"Biometrics Financial Statements") comply as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the Commission with respect thereto, were prepared in accordance
with generally accepted accounting principles applied on a basis consistent
throughout the periods indicated and consistent with each other (except as may
be indicated in the notes thereto or, in the case of unaudited statements, as
permitted by SEC rules for such form) and present fairly the consolidated
financial position of Biometrics at the dates thereof and of its operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal, recurring audit adjustments which will not be material in
amount or significance) and do not include or omit to state any fact which
renders Biometrics Financial Statements hereunder misleading. There has been no
change in Biometrics accounting policies, except as described in the notes to
Biometrics Financial Statements.
4.8. ABSENCE OF CERTAIN CHANGES. Biometrics has not, except as otherwise set
forth in Section 4.8 of the Biometrics Disclosure Schedule:
(a) suffered any adverse change in its business, operations,
assets, or financial condition, except as reflected on the
Biometrics Financial Statements;
(b) suffered any material damage or destruction to or loss of the
assets of Biometrics, whether or not covered by insurance,
which property or assets are material to the operations or
business of Biometrics taken as a whole;
(c) settled, forgiven, compromised, canceled, released, waived or
permitted to lapse any material rights or claims other than in
the ordinary course of business;
(d) entered into or terminated any material agreement, commitment
or transaction, or agreed to or made any changes in material
leases or agreements, other than renewals or extensions
thereof and leases, agreements, transactions and commitments
entered into or terminated in the ordinary course of business;
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(e) written up, written down or written off the book value of any
material amount of assets other than in the ordinary course of
business;
(f) declared, paid or set aside for payment any dividend or
distribution with respect to Biometrics's capital stock;
(g) redeemed, purchased or otherwise acquired, or sold, granted or
otherwise disposed of, directly or indirectly, any of
Biometrics's capital stock or securities or any rights to
acquire such capital stock or securities, or agreed to changes
in the terms and conditions of any such rights outstanding as
of the date of this Agreement;
(h) increased the compensation of or paid any bonuses to any
employees or contributed to any employee benefit plan, other
than in the ordinary course of business and consistent with
established policies, practices or requirements;
(i) entered into any employment, consulting or compensation
agreement with any person or group;
(j) entered into any collective bargaining agreement or trade
union recognition agreement with any person or group;
(k) entered into, adopted or amended any employee benefit plan or
share option scheme or agreement; or
(1) entered into any agreement to do any of the foregoing.
4.9. NO MATERIAL UNDISCLOSED LIABILITIES. There are no liabilities or
obligations of Biometrics of any nature, whether absolute, accrued, contingent,
or otherwise, other than:
(a) in the aggregate adequately provided for in the balance sheet
of Biometrics (including any related notes thereto) as of
March 31, 2001, as set forth in Biometrics's Quarterly Report
on Form 10-QSB for the Quarter Ended March 31, 2001 (the
"March 31, 2001 Biometrics Balance Sheet");
(b) incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected
on the March 31 2001 Biometrics Balance Sheet;
(c) incurred since March 31, 2001, in the ordinary course of
business; or
(d) incurred in connection with this Agreement.
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4.10. TAX RETURNS; TAXES. Biometrics (a) has duly filed all U.S. federal and
material state, county, local and foreign tax returns and reports required to be
filed by it, including those with respect to income, payroll, property,
withholding, social security, unemployment, franchise, excise and sales taxes
and all such returns and reports are correct in all material respects; (b) has
either paid in full all taxes that have become due as reflected on any return or
report and any interest and penalties with respect thereto or have fully accrued
on its books or have established adequate reserves for all taxes payable but not
yet due; and (c) has made cash deposits with appropriate governmental
authorities representing estimated payments of taxes, including income taxes and
employee withholding tax obligations. No extension or waiver of any statute of
limitations or time within which to file any return has been granted to or
requested by Biometrics with respect to any tax. No unsatisfied deficiency,
delinquency or default for any tax, assessment or governmental charge has been
claimed, proposed or assessed against Biometrics, nor has Biometrics received
notice of any such deficiency, delinquency or default. Biometrics has no
material tax liabilities other than those arising in the ordinary course of
business since the date hereof.
4.11. MATERIAL CONTRACTS. Biometrics has furnished or made available to NetFace
accurate and complete copies of the Biometrics Material Contracts applicable to
Biometrics. Except as set forth in Section 4.11 of the Biometrics Disclosure
Schedule, there is not under any of the Biometrics Material Contracts any
existing breach, default or event of default by Biometrics nor event that with
notice or lapse of time or both would constitute a breach, default or event of
default by Biometrics, nor does Biometrics know of, and Biometrics has not
received notice of, or made a claim with respect to, any breach or default by
any other party thereto. As used herein, the term "Biometrics Material
Contracts" shall mean all contracts, licenses, leases and instruments to which
Biometrics or its Biometric Security, Inc. subsidiary is a party.
4.12. LITIGATION AND GOVERNMENT CLAIMS. There is no pending suit, claim, action
or litigation, or administrative, arbitration or other proceeding or
governmental investigation or inquiry against Biometrics to which its businesses
or assets are subject, and to the knowledge of Biometrics, there are no such
proceedings threatened or contemplated. Biometrics is not subject to any
judgment, decree, injunction, rule or order of any court, or, to the knowledge
of Biometrics, any governmental restriction applicable to Biometrics.
4.13. COMPLIANCE WITH LAWS. Biometrics has all material authorizations
approvals, licenses and orders to carry on its businesses as it is now being
conducted, to own or hold under lease the properties or assets it owns or holds
under lease and to perform all of its obligations under the agreements to which
it is a party. Biometrics has been and is, to the knowledge of Biometrics, in
compliance with all applicable laws, regulations and administrative orders of
any country, state or municipality or any subdivision of any thereof to which
its businesses, ownership of assets and its employment of labor or its use or
occupancy of properties or any part thereof are subject.
4.14 EMPLOYEE BENEFITS PLANS. In connection with Section 4.15 below, Biometrics
does not
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currently have in effect any employee pension or profit sharing plans.
4.15. INTELLECTUAL PROPERTY. Except for the right to use DSI Datotech Systems
gesture recognition technology for banking and financial transactions under a
license that it may acquire upon exercise of an option, Biometrics does not own
or have any right to use any patents, trademarks, trade names, service marks,
service names, copyrights, or applications therefor.
4.16. TITLE TO PROPERTIES AND RELATED MATTERS. Biometrics has good and
marketable title to or valid leasehold interests in its properties (other than
personal properties sold or otherwise disposed of in the ordinary course of
business), and all of such properties and all assets purchased by Biometrics are
free and clear of any lien, claim or encumbrance and except for:
(a) liens for taxes, assessments or other governmental charges not
yet due and payable or the validity of which are being
contested in good faith by appropriate proceedings;
(b) statutory liens incurred in the ordinary course of business
that are not yet due and payable or the validity of which are
being contested in good faith by appropriate proceedings;
(c) landlord liens contained in leases entered in the ordinary
course of business; and
(d) other liens, claims or encumbrances that, in the aggregate, do
not materially subtract from the value of, or materially
interfere with, the present use of, any real property owned or
used by Biometrics
All properties and assets material to the present operations of Biometrics are
owned or leased by Biometrics in the manner and to the extent required by
applicable law and GAAP.
ARTICLE 5.
CERTAIN COVENANTS AND AGREEMENTS
5.1. CONDUCT OF BUSINESS BY NETFACE From the date hereof to the Closing Date,
NetFace will, except as required in connection with the Exchange and the other
transactions contemplated by this Agreement and except as otherwise disclosed on
the NetFace Disclosure Schedule or consented to in writing by Biometrics:
(a) carry on its business in the ordinary and regular course in
substantially the same manner as heretofore conducted and not
engage in any new line of business or enter into any material
agreement, transaction or activity or make any material
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commitment except those in the ordinary and regular course of
business and not otherwise prohibited under this Section 5.1;
(b) neither change nor amend its Articles of Organization;
(c) not issue or sell or register the transfer of NetFace
Membership Interests or issue, sell or grant rights to
purchase or subscribe to, or enter into any arrangement or
contract with respect to the issuance or sale of any NetFace
Membership Interests, except as set forth in Section 3.1.6(d)
of the NetFace Disclosure Schedule;
(d) not declare, pay or set aside for payment any distribution in
respect of the NetFace Membership Interests and not redeem,
purchase or otherwise acquire any NetFace Membership
Interests;
(e) not acquire or enter into any agreement to acquire, by merger,
consolidation or purchase of securities or assets, any
business or entity or any material part of the same;
(f) use its reasonable efforts to preserve intact the corporate
existence, goodwill and business organization of NetFace, to
keep the officers and employees of NetFace available to
NetFace and to preserve the relationships of NetFace with
suppliers, customers and others having business relations with
any of them;
(g) not (i) create, incur or assume any debt or create, incur or
assume any short-term debt for borrowed money, (ii) assume,
guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the
obligations of any other person, (iii) make any loans or
advances to any other person, or (iv) make any capital
contributions to, or investments in, any person;
(h) not (i) enter into, modify or extend in any manner the terms
of any employment, severance or similar agreements with
officers and directors, (ii) grant any increase in the
compensation of officers or directors, whether now or
hereafter payable or (iii) grant any increase in the
compensation of any other employees except for compensation
increases in the ordinary course of business and consistent
with past practice (it being understood by the parties hereto
that for the purposes of (ii) and (iii) above increases in
compensation shall include any increase pursuant to any
option, bonus, stock purchase, pension, profit-sharing,
deferred compensation, retirement or other plan, arrangement,
contract or commitment);
(i) not make or incur (other than in the ordinary course of
business) any individual capital expenditure in excess of
$5,000 or capital expenditures in the aggregate in excess of
$20,000 without the prior approval of Biometrics (as used
herein, "capital expenditure" shall mean all payments in
respect of the cost of any fixed asset or improvement or
replacement, substitution or addition thereto that has a
useful life of more than one year, including those costs
arising in connection with the
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acquisition of such assets by way of increased product or
service charges or offset items or in connection with capital
leases);
(j) perform when due all of its obligations under all NetFace
Material Contracts (except those being contested in good
faith) and not enter into, assume or amend any contract or
commitment that would be an NetFace Material Contract other
than contracts to provide services entered into in the
ordinary course of business; and
(k) prepare and file all returns for taxes and other tax reports,
filings and amendments thereto required to be filed by it, and
allow Biometrics, at its request, to review all such returns,
reports, filings and amendments at NetFace's offices prior to
the filing thereof, which review shall not interfere with the
timely filing of such returns.
5.2. CONDUCT OF BUSINESS BY BIOMETRICS From the date hereof to the Closing Date,
Biometrics will, except as required in connection with the Exchange and the
other transactions contemplated by this Agreement and except as otherwise
disclosed in the Biometrics Disclosure Schedule or as consented to in writing by
NetFace:
(a) carry on its businesses in the ordinary and regular course in
substantially the same manner as heretofore conducted and not
engage in any new line of business or enter into any
agreement, transaction or activity or make any commitment
except in the ordinary and regular course of business and not
otherwise prohibited under this Section 5.2;
(b) neither change nor amend its Articles of Incorporation or
By-Laws;
(c) not issue or sell any securities of Biometrics or issue, sell
or grant options, warrants or rights to purchase or subscribe
to, or enter into any arrangement or contract with respect to
the issuance or sale of any of the securities of Biometrics or
rights or obligations convertible into or exchangeable for any
securities of Biometrics and not alter the terms of any
warrants or options, or make any changes (by split-up,
combination, reorganization or otherwise) in the capital
structure of Biometrics, except as set forth in Section 4.6(d)
of the Biometrics Disclosure Schedule;
(d) not declare, pay or set aside for payment any dividend or
other distribution in respect of the capital stock or other
equity securities of Biometrics and not redeem, purchase or
otherwise acquire any shares of the capital stock or other
securities, or rights or obligations convertible into or
exchangeable for any shares of the capital stock or other
securities of Biometrics or obligations convertible into such,
or any options, warrants or other rights to purchase or
subscribe to any of the foregoing;
(e) not acquire or enter into any agreement to acquire, by merger,
consolidation or purchase of securities or assets, any
business or entity or any material part thereof;
(f) use its reasonable efforts to preserve intact the corporate
existence, goodwill and business organization of Biometrics,
to keep the officers and employees of
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Biometrics available to Biometrics and to preserve the
relationships of Biometrics with suppliers, customers and
others having business relations with any of them;
(g) not (i) create, incur or assume any debt or create, incur or
assume any short-term debt for borrowed money, (ii) assume,
guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the
obligations of any other person, or (iii) make any loans or
advances to any other person;
(h) not (i) enter into, modify or extend in any manner the terms
of any employment, severance or similar agreements with
officers and directors, (ii) grant any increase in the
compensation of officers or directors, whether now or
hereafter payable or (iii) grant any increase in the
compensation of any other employees except for compensation
increases in the ordinary course of business and consistent
with past practice (it being understood by the parties hereto
that for the purposes of (ii) and (iii) above increases in
compensation shall include any increase pursuant to any
option, bonus, stock purchase, pension, profit-sharing,
deferred compensation, retirement or other plan, arrangement,
contract or commitment);
(i) not make or incur (other than in the ordinary course of
business) any individual capital expenditure in excess of
$5,000 or capital expenditures in the aggregate in excess of
$20,000 without the prior approval of NetFace (as used herein,
"capital expenditure" shall mean all payments in respect of
the cost of any fixed asset or improvement or replacement,
substitution or addition thereto which has a useful life of
more than one year, including those costs arising in
connection with the acquisition of such assets by way of
increased product or service charges or offset items or in
connection with capital leases);
(j) perform all of its obligations under all Biometrics Material
Contracts (except those being contested in good faith) and not
enter into, assume or amend any contract or commitment that
would be a Biometrics Material Contract other than contracts
to provide services entered into in the ordinary course of
business; and
(k) prepare and file all federal, state, local and foreign returns
for taxes and other tax reports, filings and amendments
thereto required to be filed by it, and allow NetFace, at its
request, to review all such returns, reports, filings and
amendments at Biometrics's offices prior to the filing
thereof, which review shall not interfere with the timely
filing of such returns.
5.3 NETFACE MEMBER COVENANTS. From the date hereof to the Closing Date, each
NetFace Member covenants and agrees that, except as required in connection with
the Exchange and the other transactions contemplated by this Agreement and
except as otherwise disclosed in the NetFace Member Disclosure Schedule or
consented to in writing by Biometrics, such NetFace Member will not sell,
assign, pledge, encumber, or otherwise transfer, or grant any other rights to
acquire, any of such NetFace Member's NetFace Membership Interests or agree to
do any of the foregoing.
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5.4. NOTICE OF ANY MATERIAL CHANGE. Each party shall, promptly after the first
notice or occurrence thereof but not later than the Closing Date, advise the
other parties in writing of any event or the existence of any state of facts
that (i) would make any of his, her or its representations and warranties in
this Agreement untrue in any material respect, or (ii) would constitute a breach
of any provisions of this Article 5.
5.5. REASONABLE EFFORTS; FURTHER ASSURANCES; COOPERATION. Subject to the other
provisions of this Agreement, the parties hereto shall use all reasonable
efforts to perform their obligations herein and to take, or cause to be taken,
or do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable law to obtain all regulatory approvals and satisfy all
conditions to the obligations of the parties under this Agreement and to cause
the Exchange and the other transactions contemplated herein to be carried out
promptly in accordance with the terms hereof and shall cooperate fully with each
other and their respective officers, directors, employees, agents, counsel,
accountants and other designees in connection with any steps required to be
taken as a part of their respective obligations under this Agreement, including
without limitation:
(a) Each of NetFace and Biometrics shall promptly take, or cause
to be taken, all actions and do, or cause to be done, all
things reasonably necessary, proper or advisable to obtain any
required approval of any federal, state or local governmental
agency or regulatory body with jurisdiction over the
transactions contemplated by this Agreement.
(b) In the event any claim, action, suit, investigation or other
proceeding by any governmental body or other person is
commenced that questions the validity or legality of the
Exchange or any of the other transactions contemplated hereby
or seeks damages in connection therewith, the parties agree to
cooperate and use all reasonable efforts to defend against
such claim, action, suit, investigation or other proceeding
and, if an injunction or other order is issued in any such
action, suit or other proceeding, to use all reasonable
efforts to have such injunction or other order lifted, and to
cooperate reasonably regarding any other impediment to the
consummation of the transactions contemplated by this
Agreement.
(c) Each party shall give prompt written notice to the other of
(i) the occurrence, or failure to occur, of any event that
occurrence or failure of which would be likely to cause any
representation or warranty of such party contained in this
Agreement to be untrue or inaccurate in any material respect
at any time from the date hereof to the Closing Date or that
will or may result in the failure to satisfy the conditions
specified in Article 6 or 7 and (ii) any failure of such party
to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder.
5.6. BOARD OF DIRECTORS. As long as the NetFace Members continue to own in the
aggregate not less than 15,000,000 shares of Biometric Common Stock, the Board
of Directors of Biometrics shall nominate a designee of the NetFace Members as a
member
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of the Biometrics Board of Directors. The initial designee of the NetFace
Members is Xxxxxx Xxxxxx.
ARTICLE 6.
CONDITIONS PRECEDENT TO OBLIGATIONS
OF THE NETFACE MEMBERS
Except as may be waived by a NetFace Member as to such NetFace Member
only, the obligations of each NetFace Member to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction on or before
the Closing Date of each of the following conditions:
6.1. COMPLIANCE. Biometrics shall have, or shall have caused to be, satisfied or
complied with and performed in all material respects all terms, covenants and
conditions of this Agreement to be complied with or performed by Biometrics on
or before the Closing Date.
6.2. REPRESENTATIONS AND WARRANTIES. All of the representations and warranties
made by Biometrics in this Agreement shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect as if such
representations and warranties had been made at and as of the Closing Date,
except for changes permitted or contemplated by this Agreement; provided,
however, that notwithstanding anything herein to the contrary, this Section 6.2
shall be deemed to have been satisfied even if such representations or
warranties are not true and correct, unless the failure of any of the
representations or warranties to be so true and correct would have or would be
reasonably likely to have a material adverse effect on the business, financial
condition or prospects of Biometrics ("Biometrics Material Adverse Change").
6.3. MATERIAL ADVERSE CHANGES. There shall not have occurred a Biometrics
Material Adverse Change.
6.4. OFFICER'S CERTIFICATE. Biometrics shall have delivered to each NetFace
Member a Certificate of the President of Biometrics, dated the Closing Date,
certifying that the conditions specified in Sections 6.1, 6.2 and 6.3 have been
satisfied.
6.5. SECRETARY'S CERTIFICATE. Biometrics shall have delivered to each NetFace
Member, a certificate of the Secretary of Biometrics certifying as to its
Articles of Incorporation, By-Laws, incumbency of officers, and the resolutions
attached thereto and any other corporate proceedings relating to the
authorization, execution and delivery of this Agreement and the transactions
contemplated hereby.
6.6. BIOMETRICS SHARE CERTIFICATES. Biometrics shall have delivered to each
NetFace Member one or more certificates representing the shares of Biometrics
Common Stock to be issued in exchange for the assignment and transfer of such
NetFace Member's NetFace Membership Interest to Biometrics.
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6.7. ASSIGNMENT AND TRANSFER OF NETFACE MEMBERSHIP INTERESTS BY OTHER MEMBERS.
Each of the other NetFace Members shall have assigned and transferred their
NetFace Membership Interests to Biometrics in exchange for shares of Biometrics
Common Stock as contemplated by this Agreement.
6.8 APPOINTMENT OF DESIGNEE OF NETFACE MEMBERS AS DIRECTOR OF NETFACE. [Xxxxxx
Xxxxxx] shall have become a member of the Board of Directors of Biometrics,
effective at the Closing.
6.9. PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be satisfactory to
the NetFace Members and their counsel, and the NetFace Members and their counsel
shall have received all such counterpart originals or certified or other copies
of such documents as they may reasonably request.
ARTICLE 7.
CONDITIONS PRECEDENT TO OBLIGATIONS OF BIOMETRICS
Except as may be waived by Biometrics, the obligations of Biometrics to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction, on or before the Closing Date, of each of the following
conditions:
7.1. COMPLIANCE. NetFace and each NetFace Member shall have, or shall have
caused to be, satisfied or complied with and performed in all material respects
all terms, covenants, and conditions of this Agreement to be complied with or
performed by him, her or it on or before the Closing Date.
7.2. REPRESENTATIONS AND WARRANTIES. All of the representations and warranties
made by NetFace and each NetFace Member in this Agreement shall be true and
correct in all material respects at and as of the Closing Date with the same
force and effect as if such representations and warranties had been made at and
as of the Closing Date, except for changes permitted or contemplated by this
Agreement; provided, however, that notwithstanding anything herein to the
contrary, this Section 7.2 shall be deemed to have been satisfied even if such
representations or warranties are not true and correct, unless the failure of
any of the representations or warranties to be so true and correct would have or
would be reasonably likely to have a material adverse effect on the business,
financial condition or prospects of NetFace ("NetFace Material Adverse Change").
7.3. MATERIAL ADVERSE CHANGES. Except as set forth in this Agreement or on the
schedules hereto, there shall not have occurred a NetFace Material Adverse
Change.
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7.4. NETFACE MANAGER'S CERTIFICATE. NetFace shall have delivered to Biometrics a
Certificate of the Manager of NetFace, dated the Closing Date, certifying that
the conditions specified in Sections 7.1, 7.2, 7.3, and 7.6 have been satisfied.
7.5. NETFACE MANAGER'S CERTIFICATE. NetFace shall have delivered to Biometrics a
certificate of the Manager of NetFace certifying as to its Articles of
Organization, incumbency, and certain resolutions attached thereto and any other
proceedings relating to the authorization, execution and delivery of this
Agreement and the transactions contemplated hereby.
7.6. ASSIGNMENT AND TRANSFER OF NETFACE MEMBERSHIP INTERESTS BY ALL NETFACE
MEMBERS. All of the NetFace Members shall have assigned and transferred their
NetFace Membership Interests to Biometrics in exchange for shares of Biometrics
Common Stock as contemplated by this Agreement and Biometrics shall have become
the sole Member of NetFace.
7.7. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to Biometrics and its
counsel, and Biometrics and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may reasonably
request.
ARTICLE 8.
MISCELLANEOUS
8.1. TERMINATION. Subject to Section 8.3, this Agreement and the transactions
contemplated hereby and the provisions herein may be terminated at any time on
or before the Closing Date:
(a) by mutual consent of NetFace, Biometrics and the NetFace
Members;
(b) by Biometrics, or NetFace if the transactions contemplated by
this Agreement have not been or are incapable of being
consummated by June 15, 2001, as extended (the "Termination
Date"), unless such failure of consummation is due to the
failure of the terminating party to perform or observe the
covenants, agreements, and conditions hereof to be performed
or observed by him, her or it at or before the Closing Date;
provided, that the non-breaching party's cause of action
resulting from such failure to perform or to observe the
covenants, agreements and conditions hereof shall not be
terminated; or
(c) by NetFace, Biometrics or any NetFace Member if the
transactions contemplated hereby violate any non-appealable
final order, decree, or judgment of any court or governmental
body or agency having competent jurisdiction.
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8.2. ENTIRE AGREEMENT. This Agreement and the exhibits hereto contain the
complete agreement among the parties with respect to the transactions
contemplated hereby and supersede all prior agreements and understandings among
the parties with respect to such transactions. Section and other headings are
for reference purposes only and shall not affect the interpretation or
construction of this Agreement. The parties hereto have not made any
representation or warranty except as expressly set forth in this Agreement or in
any certificate or schedule delivered pursuant hereto. The obligations of any
party under any agreement executed pursuant to this Agreement shall not be
affected by this section.
8.3. SURVIVAL OF PROVISIONS. The representations, warranties, covenants and
agreements of each party contained herein, or in any exhibit, certificate,
document or instrument delivered pursuant to this Agreement, shall survive the
Closing.
8.4. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, and
such counterparts together shall constitute only one original.
8.5. NOTICES. All notices, demands, requests, or other communications that may
be or are required to be given, served, or sent by any party to any other party
pursuant to this Agreement shall be in writing and shall be sent by facsimile
transmission, nationally recognized overnight courier, or mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid, or
transmitted by hand delivery, addressed as follows:
(i) If to NetFace or any NetFace Member:
NetFace, LLC
00 Xxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxx
with a copy to:
Xxxxx Xxxxx, Esquire
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone:(000) 000-0000
Fax: (000) 000-0000
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(ii) If to Biometrics:
Security Biometrics, Inc.
0000-0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx XX X0X 0X0
Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx, Chief Financial Officer
with a copy (which shall not constitute notice) to:
Snow Xxxxxx Xxxxxx P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxxxx, Esq.
Each party may designate by notice in writing a new address to which any notice,
demand, request, or communication may thereafter be so given, served, or sent.
Each notice, demand, request, or communication that is mailed, delivered, or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent, and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt or the affidavit of
messenger being deemed conclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
8.6. SUCCESSORS; ASSIGNMENTS. This Agreement and the rights, interests, and
obligations hereunder shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, by operation of law or otherwise, by any of the parties hereto without
the prior written consent of the other.
8.7. GOVERNING LAW. This Agreement shall be construed and enforced in accordance
with the laws of the State of New York (except the choice of law rules thereof).
8.8. WAIVER AND OTHER ACTION. This Agreement may be amended, modified, or
supplemented only by a written instrument executed by the parties against which
enforcement of the amendment, modification or supplement is sought.
8.9. SEVERABILITY. If any provision of this Agreement is held to be illegal,
invalid, or unenforceable, such provision shall be fully severable, and this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance; and in lieu of
such illegal, invalid, or unenforceable provision, there shall be added
automatically
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as part of this Agreement, a provision as similar in its terms to
such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
8.10 ENFORCEMENT. Each NetFace Member acknowledges that, due to the unique
nature of his NetFace Membership Interest, the breach of this Agreement by such
NetFace Member will cause Biometrics irreparable damage, and therefore,
Biometrics may enforce its rights under this Agreement by equitable relief,
including injunction and specific performance, in addition to other remedies it
may have at law or in equity.
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8.11 JURISDICTION; VENUE. The parties hereto hereby irrevocably consent to venue
and exclusive jurisdiction in the U.S. District Court for the Southern District
of New York or the State Supreme Court of the State of New York located in the
Borough of Manhattan, City of New York, with respect to any disputes, claims,
controversies or other actions or proceedings arising under this Agreement. The
parties hereto hereby waive any and all right to commence any action or
proceeding before any other court or judicial body or in any other venue with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SECURITY BIOMETRICS, INC. NETFACE, LLC
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
--------------------------- -------------------------------------
Xxxxx Xxxxxx Name:
Chief Financial Officer Title: Manager
MEMBERS OF NETFACE, LLC
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxx X. Hasdenteufel
-------------------------------------
Xxxx X. Hasdenteufel
/s/ Xxxxxx Xxxxx
-------------------------------------
Xxxxxx Xxxxx
LAG SA
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Power of Attorney
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SYNERGEX GROUP PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title:Managing Partner
XXXXX RABBACH & XXXXXXXXX, LLP
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title:Partner
/s/ Dominique Lahoussois
-------------------------------------
Dominique Lahoussois
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