RELEASE AGREEMENT
THIS RELEASE AGREEMENT (this "Agreement") is made and entered into as
of December 4, 2000, by and between SENSAR CORPORATION, a Nevada corporation
("Sensar"), and NET2WIRELESS CORPORATION (formerly Net2Wireless, Inc.)
("Net2Wireless"), based on the following:
Recitals
A. Sensar and Net2Wireless are parties to an Agreement dated December
8, 1999, as amended, a copy of which is attached hereto as Exhibit "A" (the
"Original Agreement").
B. As required by the terms of the Original Agreement, Sensar filed,
and obtained the effectiveness of, a registration statement on Form S-4 that
contained a Joint Proxy Statement/Prospectus with respect to the merger
contemplated by the Original Agreement. The Joint Proxy Statement/Prospectus was
mailed to the shareholders of Sensar and Net2Wireless on or about November 2,
2000.
C. On November 20, 2000, Sensar was contacted by Nasdaq and informed
that if Sensar proceeded with the merger, Nasdaq would commence delisting
proceedings to remove the stock of the combined company from Nasdaq. Nasdaq's
action was based on prior regulatory proceedings against an entity and two
individuals associated with principal stockholders of Net2Wireless. Subsequent
to November 20, 2000, the market price of Sensar stock declined below the level
necessary for the stock of the combined company to be listed on Nasdaq.
D. Representatives of Sensar and Net2Wireless met with Nasdaq on
November 28, 2000, to present proposals addressing Nasdaq's concerns. Nasdaq
rejected the proposals and indicated its intent to proceed with a delisting
action in the event that the merger proceeded.
E. Despite management's best efforts, Sensar may be unable to obtain
the necessary proxies to approve the proposed merger.
F. Based on the changed circumstances, the uncertainty surrounding the
transaction, and the lack of shareholder support, the parties have agreed to the
following, based on the terms and conditions set forth below.
Agreement
NOW, THEREFORE, based on the foregoing recitals, and for and in
consideration of the mutual covenants and agreements hereinafter set forth and
the mutual benefit to the parties to be derived herefrom, it is hereby agreed as
follows:
1. Incorporation of Recitals. The recitals set forth above are hereby
incorporated by this reference.
2. Termination. The Original Agreement shall be deemed terminated as of
the date of this Agreement and shall be of no further force and effect.
3. Costs. Both parties shall bear their own costs and expenses incurred
in connection with the transaction contemplated by the Original Agreement.
4. Delivery by Net2Wireless. On the date of termination, Net2Wireless
shall deliver to Sensar a certificate representing 2,000,000 shares of fully
paid and non-assessable common stock of Net2Wireless and, on payment of
$1,500,000 to Net2Wireless by Sensar (by wire transfer to Net2Wireless within
five business days) an additional 1,000,000 shares of fully paid and
non-assessable common stock. In addition, Net2Wireless shall deliver to Sensar
warrants to purchase an additional 1,000,000 shares of common stock of
Net2Wireless at any time prior to December 31, 2003, at an exercise price of $10
per share. The certificate(s) representing such stock and warrants shall bear a
144 legend reflecting the restricted nature of the securities. Sensar shall
deliver to Net2Wireless a standard investment letter with respect to such stock.
Net2Wireless agrees that Sensar will be given the same right to participate in
any future registration, pari passu, as is given to directors and management of
Net2Wireless, and will agree to sign and be bound by any lock up agreement with
underwriters on the same terms as directors of Net2Wireless.
5. Cancellation of Obligation. On the date of termination, and subject
to the delivery of the stock and warrants as set forth in paragraph 4,
Net2Wireless' obligation under the promissory note dated February 2, 2000, shall
be cancelled and Net2Wireless shall not owe any further amounts to Sensar,
either principal or interest, with respect to such note.
6. Mutual Release. Each party hereto, for itself and its respective
officers, directors, successors, assigns, and the affiliates of all or any of
the foregoing, hereby releases, discharges, and acquits each other party, its
officers, directors, agents, employees, stockholders, attorneys, accountants,
successors, or assigns, or any affiliates of all or any of the foregoing, from
and against any rights or obligation of the parties under the Original Agreement
and any claim, demand, action, or cause of action of any kind or nature, whether
known or unknown, which the parties now have or claim to have, or any time
heretofore have claimed to have, or which may hereafter accrue, arising from,
out of, or in any way connected with all prior agreements, arrangements, or
transactions between the parties, except for any claim based on the rights and
obligations set forth in this Agreement. Notwithstanding the other provisions of
this Agreement, including the release set forth in this paragraph, the
obligations and rights of the parties under the provisions of Sections 4.03(b)
and (c) of the Original Agreement shall remain in full force and effect and
nothing contained in this Agreement shall affect any right the parties may have
to contribution or indemnification from the other party under such section with
respect to actions brought by third parties.
7. Confidentiality. Both parties agree that they shall prepare a
mutually agreeable press release to be jointly issued. Notwithstanding the
forgoing, any party shall have the right to make disclosure that is required by
state or federal securities laws.
8. Succession. This Agreement and the rights and obligations hereunder
shall be binding upon and inure to the benefit of the parties hereto and their
transferees and successors.
9. Notices. All notices provided for by this Agreement shall be made in
writing, (a) either by actual delivery of the notice into the hands of the
parties entitled to notice, or (b) by the mailing of the notice in the United
States mail to the address set forth below, certified or registered mail,
postage prepaid, return receipt requested, or (c) by Federal Express, UPS, or
other overnight carrier. The notice shall be deemed to be received in case (a)
on the date of its actual receipt by the parties entitled thereto, in case (b)
three (3) days after the date of deposit in the United States mail, and in case
(c) one day after delivery to the overnight courier. Any party hereto may, at
any time by giving notice to the other party in the manner prescribed above,
designate any other address in substitution of the address set forth below to
which such notice shall be given.
If to Sensar, to: Xxxxxx X. Xxxxx
Chairman of the Board and CEO
Sensar Corporation
00 Xxxx Xxxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
With a copy to: Xxxxx X. Xxxx, Esq.
Xxxx Xxxxxxxx Xxxxx Xxx & Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
If to Net2Wireless, to: Xxxxxxxx Xxxxxxxx
Chief Executive Officer
Net2Wireless Corporation
00 Xx'xxxx Xxxxxx
Xxxx Xxxx, Xxxx Xx'xxxx
Xxxxxx 00000
Facsimile: 011-972-3-915-8991
Confirmation: 011-972-3-915-8989
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx, Phleger & Xxxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
10. Entire Agreement. This Agreement contains the entire Agreement
between the parties hereto with respect to the subject matter contained herein.
No change, addition, or amendment shall be made, except by written agreement
signed by the parties hereto.
11. Waiver of Breach. The waiver by either party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by any party.
12. Governing Law. The laws of the state of Delaware shall govern the
validity, construction, enforcement, and interpretation of this Agreement.
13. Attorneys' Fees. In the event that any party institutes any action
or suit to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the breaching party shall reimburse the non-reaching party for
all costs, including reasonable attorneys' fees, incurred in connection
therewith and in enforcing or collecting any judgment rendered therein,
including such costs which are incurred in any bankruptcy or appellate
proceeding.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officers as of the date first above written.
Sensar:
SENSAR CORPORATION
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Xxxxxx X. Xxxxx
Chairman of the Board and CEO
Net2Wireless:
NET2WIRELESS CORPORATION
By /s/ Xxxxx Xxxxxx
-------------------------------
Xxxxx Xxxxxx
Chairman of the Board
