EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of this 5th day of October, 2001 by and among Visionics
Corporation, formerly known as Digital Biometrics, Inc., a Delaware corporation
(the "Company"), and the "Investors" named in that certain Purchase Agreement of
even date herewith by and between the Company and the Investors (the "Purchase
Agreement").
The parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" means, with respect to any person, any other
person which directly or indirectly controls, is controlled by, or is under
common control with, such person.
"Common Stock" shall mean the Company's common stock, par
value $.01 per share.
"Investors" shall mean the purchasers identified in the
Purchase Agreement and any Affiliate or permitted transferee of any Investor who
is a subsequent holder of any Warrants or Registrable Securities.
"Penalty Warrants" has the meaning set forth in SECTION 8
below.
"Penalty Warrant Shares" means shares of Common Stock issued
pursuant to the exercise of Penalty Warrants.
"Person" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, government (or an agency or political
subdivision thereof) or other entity of any kind, and shall include any
successor (by merger or otherwise) of such entity.
"Primary Shares" means the shares of Common Stock acquired by
Investors pursuant to the Purchase Agreement on the Closing Date (as defined in
the Purchase Agreement).
"Prospectus" shall mean the prospectus included in any
Registration Statement, as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Register," "registered" and "registration" refer to a
registration made by preparing and filing a Registration Statement or similar
document in compliance with the 1933
Act (as defined below), and the declaration or ordering of effectiveness of such
Registration Statement or document.
"Registrable Securities" shall mean the shares of Common Stock
issued and issuable to the Investors pursuant to the Purchase Agreement and
issuable upon the exercise of any Penalty Warrants, and any other securities
issued or issuable with respect to or in exchange for Registrable Securities.
"Registration Statement" shall mean any registration statement
of the Company filed under the 1933 Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement, amendments
and supplements to such Registration Statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such
Registration Statement.
"SEC" means the U.S. Securities and Exchange Commission.
"1933 Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2. REGISTRATION.
(a) Registration Statements. Promptly following the closing of
the purchase and sale of Common Stock contemplated by the Purchase Agreement
(the "Closing Date") (but no later than thirty (30) days after the Closing
Date), the Company shall prepare and file with the SEC one Registration
Statement on Form S-3 (or, if Form S-3 is not then available to the Company, on
such form of registration statement as is then available to effect a
registration for resale of the Registrable Securities, subject to the Investors'
consent), covering the resale of the Registrable Securities in an amount equal
to the number of shares of Common Stock issued to the Investors on the Closing
Date plus the number of shares of Common Stock necessary to permit the exercise
in full of the Penalty Warrants outstanding or issuable on the date of filing.
At the time the Registration Statement is declared effective, the Registration
Statement shall include all shares of Common Stock exercisable under all Penalty
Warrants outstanding or issuable at such time, if any. Such Registration
Statement also shall cover, to the extent allowable under the 1933 Act and the
rules promulgated thereunder (including Rule 416), such indeterminate number of
additional shares of Common Stock resulting from stock splits, stock dividends
or similar transactions with respect to the Registrable Securities. The Company
shall use its commercially reasonable efforts to obtain from each person who now
has piggyback registration rights a waiver of those rights with respect to the
Registration Statement. No securities held by a third party shall be included in
such Registration Statement without the consent of each Investor. The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided in
accordance with Section 3(c) hereof to the Investors and their counsel prior to
its filing or other submission. If a Registration Statement covering the
Registrable Securities is not filed with the
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SEC within thirty (30) days of the Closing Date (the "Registration Date"),
except as excused pursuant to Section 2(d) below, for each 30-day period (or pro
rata for any portion thereof) following the Registration Date during which no
Registration Statement is filed with respect to the Registrable Securities, the
Company will issue Penalty Warrants as set forth in SECTION 8 below in respect
of any Primary Shares still held by each Investor; provided, however, that no
Penalty Warrants shall be issuable to any Investor who no longer holds
Registrable Securities at the time any Penalty Warrants are to be issued.
(b) Expenses. The Company will pay all expenses associated
with each registration, including the Investors' reasonable expenses in
connection with the registration but excluding discounts, commissions, fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals.
(c) Effectiveness. The Company shall use its best efforts to
have each Registration Statement declared effective as soon as practicable. If
(A) a Registration Statement covering Registrable Securities is not declared
effective by the SEC within ninety (90) days after the Closing Date (one hundred
twenty (120) days if the Registration Statement is subject to full review by the
SEC staff (which shall not include a "plain English" review), (B) after a
Registration Statement has been declared effective by the SEC, sales cannot be
made pursuant to such Registration Statement during the Registration Period (as
defined in Section 3(a)) for any reason (including without limitation by reason
of a stop order, or the Company's failure to update the Registration Statement),
but except as excused pursuant to Section 2(d) below, or (C) the Common Stock
generally or the Registrable Securities specifically are not listed or included
for quotation on the Nasdaq National Market System, the Nasdaq Small Cap Market,
the New York Stock Exchange or the American Stock Exchange during the
Registration Period, then the Company will issue Penalty Warrants as set forth
in SECTION 8 below in respect of any Primary Shares still held by such Investor
for any 30-day period or pro rata for any portion thereof following the date by
which such a Registration Statement should have been effective as described in
(A) or (B) or (C) above (the "Blackout Period"). The issuance of such Penalty
Warrants shall be the Investors' exclusive remedy for such events. The Blackout
Period shall terminate upon (x) the effectiveness of the applicable Registration
Statement in the case of (A) and (B) above; (y) listing or inclusion of the
Common Stock on the Nasdaq National Market System, the Nasdaq Small Cap Market,
the New York Stock Exchange or the American Stock Exchange in the case of (C)
above; and (z) the earlier termination of the Registration Period (as defined in
Section 3(a) below). The obligation of the Company to issue Penalty Warrants
hereunder shall cease when an Investor no longer holds Registrable Securities.
(d) Allowed Delay. For not more than twenty (20) consecutive
trading days or for a total of not more than thirty (30) trading days in any
twelve (12) month period, the Company may delay the disclosure of material
non-public information concerning the Company, by electing not to file the
Registration Statement by the Registration Date or terminating or suspending
effectiveness of any registration contemplated by this Section containing such
information, the disclosure of which at the time is not, in the good faith
opinion of the Company, in the best interests of the Company (an "Allowed
Delay"); provided, that the Company shall promptly (i) notify the Investors in
writing of the existence of (but in no event, without the prior written consent
of an Investor, shall the Company disclose to such Investor any of the facts or
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circumstances regarding) material non-public information giving rise to an
Allowed Delay, and (ii) if the Registration Statement has already been filed and
declared effective, advise the Investors in writing to cease all sales under the
Registration Statement until the end of the Allowed Delay.
(e) Underwritten Offering. If any offering pursuant to a
Registration Statement pursuant to Section 2(a) hereof involves an underwritten
offering, the Company shall have the right to select an investment banker and
manager to administer the offering, which investment banker or manager shall be
reasonably satisfactory to the Investors.
3. COMPANY OBLIGATIONS. The Company will use its best efforts to effect
the registration of the Registrable Securities in accordance with the terms
hereof, and pursuant thereto the Company will, as expeditiously as possible:
(a) use its best efforts to cause such Registration Statement
to become effective and to remain continuously effective for a period that will
terminate upon the earlier of (i) the date on which all Registrable Securities,
covered by such Registration Statement, as amended from time to time, have been
sold, and (ii) the date on which all Registrable Securities may be sold pursuant
to Rule 144(k) (the "Registration Period");
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement and the Prospectus as
may be necessary to keep the Registration Statement effective for the period
specified in Section 3(a) and to comply with the provisions of the 1933 Act and
the 1934 Act with respect to the distribution of all Registrable Securities;
(c) provide copies to and permit counsel designated by the
Investors to review each Registration Statement and all amendments and
supplements thereto no fewer than seven (7) days prior to their filing with the
SEC and not file any document to which such counsel reasonably objects;
(d) furnish to the Investors and their legal counsel (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company (but not later than 2 business days after the
filing date, receipt date or sending date, as the case may be), at least 5
copies of any Registration Statement and any amendment thereto, each preliminary
prospectus and Prospectus and each amendment or supplement thereto, and each
letter written by or on behalf of the Company to the SEC or the staff of the
SEC, and each item of correspondence from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as each Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;
(e) in the event the Company selects an underwriter for the
offering, the Company shall enter into and perform its reasonable obligations
under an underwriting
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agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the underwriter of such
offering;
(f) if required by the underwriter, or if any Investor is
described in the Registration Statement as an underwriter, the Company shall
furnish, on the effective date of the Registration Statement, on the date that
Registrable Securities are delivered to an underwriter, if any, for sale in
connection with the Registration Statement and at periodic intervals thereafter
from time to time on request, (i) an opinion, dated as of such date, from
independent legal counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the underwriter and the Investors
and (ii) a letter, dated such date, from the Company's independent certified
public accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriter and the Investors;
(g) make effort to prevent the issuance of any stop order or
other suspension of effectiveness and, if such order is issued, obtain the
withdrawal of any such order at the earliest possible moment;
(h) prior to any public offering of Registrable Securities,
use its reasonable best efforts to register or qualify or cooperate with the
Investors and their counsel in connection with the registration or qualification
of such Registrable Securities for offer and sale under the securities or blue
sky laws of such jurisdictions requested by the Investor and do any and all
other reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement;
(i) cause all Registrable Securities covered by a Registration
Statement to be listed on each securities exchange, interdealer quotation system
or other market on which similar securities issued by the Company are then
listed;
(j) immediately notify the Investors, at any time when a
Prospectus relating to the Registrable Securities is required to be delivered
under the 1933 Act, upon discovery that, or upon the happening of any event as a
result of which, the Prospectus included in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and at the
request of any such holder, promptly prepare and furnish to such holder a
reasonable number of copies of a supplement to or an amendment of such
Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and
(k) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act,
take such other actions as may be reasonably necessary to facilitate the
registration of the Registrable Securities hereunder.
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4. DUE DILIGENCE REVIEW; INFORMATION. The Company shall make available,
during normal business hours, for inspection and review by the Investors,
advisors to and representatives of the Investors (who may or may not be
affiliated with the Investors and who are reasonably acceptable to the Company)
(each, an "Inspector"), any underwriter participating in any disposition of
Common Stock on behalf of the Investors pursuant to a Registration Statement or
amendments or supplements thereto or any blue sky, NASD or other filing, all
financial and other records, all SEC Documents (as defined in the Purchase
Agreement) and other filings with the SEC, and all other corporate documents and
properties of the Company as may be reasonably necessary for the purpose of such
review (collectively, the "Records"), and cause the Company's officers,
directors and employees, within a reasonable time period, to supply all such
information reasonably requested by the Investors or any such representative,
advisor or underwriter in connection with such Registration Statement
(including, without limitation, in response to all questions and other inquiries
reasonably made or submitted by any of them), prior to and from time to time
after the filing and effectiveness of the Registration Statement for the sole
purpose of enabling the Investors and such representatives, advisors and
underwriters and their respective accountants and attorneys to conduct initial
and ongoing due diligence with respect to the Company and the accuracy of such
Registration Statement. Records that the Company determines, in good faith, to
be confidential and which it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors (and the Inspectors shall confirm their agreement
in writing in advance to the Company if the Company shall so request) unless (x)
the release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction after exhaustion of all appeals
therefrom, or is otherwise required by applicable law, or (y) the information in
such Records was known to the Inspectors on a non-confidential basis prior to
its disclosure by the Company, or has been made generally available to the
public. Each seller of Registrable Securities agrees that it shall, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
The Company shall not disclose material nonpublic information
to the Investors, or to advisors to or representatives of the Investors, unless
prior to disclosure of such information the Company identifies such information
as being material nonpublic information and provides the Investors, such
advisors and representatives with the opportunity to accept or refuse to accept
such material nonpublic information for review.
5. OBLIGATIONS OF THE INVESTORS.
(a) Each Investor shall furnish in writing to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it, as
shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request. At least fifteen (15) business days prior
to the first anticipated filing date of any Registration Statement, the Company
shall notify each Investor of the information the Company requires from such
Investor. An Investor shall provide such information to the Company at least
five (5) business days prior to the first anticipated filing date of such
Registration Statement.
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(b) Each Investor, by its acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of a Registration
Statement hereunder, unless such Investor has notified the Company in writing of
its election to exclude all of its Registrable Securities from such Registration
Statement.
(c) In the event the Company, at the request of the Investors,
determines to engage the services of an underwriter, such Investor agrees to
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such offering and
take such other actions as are reasonably required in order to expedite or
facilitate the dispositions of the Registrable Securities.
(d) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event rendering a Registration Statement no
longer effective, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities, until the Investor's receipt of the copies of the
supplemented or amended prospectus filed with the SEC and declared effective
and, if so directed by the Company, the Investor shall deliver to the Company
(at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Investor's possession of the
Prospectus covering the Registrable Securities current at the time of receipt of
such notice.
(e) No Investor may participate in any third party
underwritten registration hereunder unless it (i) agrees to sell the Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions. Notwithstanding the foregoing, no Investor shall be
required to make any representations to such underwriter, other than those with
respect to itself and the Registrable Securities owned by it, including its
right to sell the Registrable Securities, and any indemnification in favor of
the underwriter by the Investors shall be several and not joint and limited in
the case of any Investor, to the proceeds received by such Investor from the
sale of its Registrable Securities. The scope of any such indemnification in
favor of an underwriter shall be limited to the same extent as the indemnity
provided in Section 6(b) hereof.
6. INDEMNIFICATION.
(a) Indemnification by the Company. The Company will indemnify
and hold harmless each Investor and their respective officers, directors,
members, employees and agents, successors and assigns, and each other person, if
any, who controls such Investor within the meaning of the 1933 Act, against any
losses, claims, damages or liabilities, joint or several, to which such seller,
officer, director, member, or controlling person may become subject under the
1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of
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any material fact contained in any Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof; (ii) any blue sky application or other document executed by the Company
specifically for that purpose or based upon written information furnished by the
Company filed in any state or other jurisdiction in order to qualify any or all
of the Registrable Securities under the securities laws thereof (any such
application, document or information herein called a "Blue Sky Application");
(iii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
or (iv) any violation by the Company or its agents of any rule or regulation
promulgated under the 1933 Act applicable to the Company or its agents and
relating to action or inaction required of the Company in connection with such
registration; and will reimburse such Investor, and each such officer, director
or member and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by such Investor or any such controlling
person in writing specifically for use in such Registration Statement or
Prospectus.
(b) Indemnification by the Investors. In connection with any
registration pursuant to the terms of this Agreement, each Investor will furnish
to the Company in writing such information as the Company reasonably requests
concerning the holders of Registrable Securities or the proposed manner of
distribution for use in connection with any Registration Statement or Prospectus
and agrees, severally but not jointly, to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its directors, officers,
employees, stockholders and each person who controls the Company (within the
meaning of the 1933 Act) against any losses, claims, damages, liabilities and
expense (including reasonable attorney fees) resulting from any untrue statement
of a material fact or any omission of a material fact required to be stated in
the Registration Statement or Prospectus or preliminary prospectus or amendment
or supplement thereto or necessary to make the statements therein not
misleading, to the extent, but only to the extent that such untrue statement or
omission is contained in any information furnished in writing by such Investor
to the Company specifically for inclusion in such Registration Statement or
Prospectus or amendment or supplement thereto and that such information was
substantially relied upon by the Company in preparation of the Registration
Statement or Prospectus or any amendment or supplement thereto. In no event
shall the liability of an Investor be greater in amount than the dollar amount
of the proceeds (net of all expense paid by such Investor and the amount of any
damages such holder has otherwise been required to pay by reason of such untrue
statement or omission) received by such Investor upon the sale of the
Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided that any
Person entitled to indemnification hereunder shall have the right to employ
separate
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counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such Person unless (a) the
indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such Person or (c) in the reasonable
judgment of any such Person, based upon written advice of its counsel, a
conflict of interest exists between such Person and the indemnifying party with
respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such Person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such Person); and
provided, further, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall
materially adversely affect the indemnifying party in the defense of any such
claim or litigation. It is understood that the indemnifying party shall not, in
connection with any proceeding in the same jurisdiction, be liable for fees or
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release of such indemnified
party from all liability in respect of such claim or litigation.
(d) Contribution. If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless, other than as expressly
specified therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect the relative fault
of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations. No person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be
entitled to contribution from any person not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a holder of
Registrable Securities be greater in amount than the dollar amount of the
proceeds (net of all expenses paid by such holder and the amount of any damages
such holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission) received by it upon
the sale of the Registrable Securities giving rise to such contribution
obligation.
7. MISCELLANEOUS.
(a) Amendments and Waivers. This Agreement may be amended only
by a writing signed by the Company and Investors (or their permitted assigns)
holding Registrable Securities representing at least a majority of the
Registrable Securities. The Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of each Investor.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase
Agreement.
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(c) Assignments and Transfers by Investors. The provisions of
this Agreement shall be binding upon and inure to the benefit of the Investors
and their respective successors and assigns. An Investor may transfer or assign,
in whole or from time to time in part, to one or more persons its rights
hereunder in connection with the transfer of shares of Registrable Securities by
such Investor to such person, provided that such Investor complies with the
provisions of all applicable laws thereto and provides written notice of
assignment to the Company promptly after such assignment is effected.
(d) Assignments and Transfers by the Company. This Agreement
may not be assigned by the Company without the prior written consent of each
Investor, except that without the prior written consent of the Investors, but
after notice duly given, the Company shall assign its rights and delegate its
duties hereunder to any successor-in-interest corporation, and such
successor-in-interest shall assume such rights and duties, in the event of a
merger or consolidation of the Company with or into another corporation or the
sale of all or substantially all of the Company's assets.
(e) Benefits of the Agreement. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
(f) Counterparts; Faxes. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile, which shall be deemed an original.
(g) Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(h) Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.
(i) Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
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(j) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(k) Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of law.
8. Failure to Effect Registration. If the Company shall fail file the
Registration Statement with respect to the Primary Shares within the time period
described in SECTION 2(A) or obtain or maintain the effectiveness thereof or
maintain the listing of the Common Stock (as described in SECTION 2(C)) within
the time periods described in SECTION 2(C), then, with respect to each 30-day
period (or pro rata for any portion thereof) after such date for which such
Registration Statement contemplated thereby shall not have been filed or made
effective, the Company will issue to each Investor warrants to purchase Common
Stock equal to five percent (5%) of the number of Primary Shares owned by such
Investor (the "Penalty Warrants"), such warrants having the terms and conditions
substantially as set forth in the Form of Warrant attached hereto as Exhibit A.
The Company shall issue and to deliver to the Purchasers any Penalty Warrants
within 10 days after the end of each such 30-day period (or portion thereof).
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.
The Company:
VISIONICS CORPORATION
By: /s/ Robert F. Gallagher
------------------------------------
Name: Robert F. Gallagher
Title: Chief Financial Officer
12
INVESTOR:
Tonga Partners LP
By: /s/ Carlo Cannell
---------------------------
Name: Carlo Cannell
Title: Managing Member
Aggregate Purchase Price: $1,536,684
Number of Shares of Common Stock: 138,440
Address for Notice:
Cannell Capital, LLC - Tonga Partners LP
150 California Street
San Francisco, CA 94111
with a copy to:
Goldman Sachs - Prime Brokerage, 48th Fl.
1 New York Plaza
New York, NY 10004
13
INVESTOR:
The Cuttyhunk Fund Ltd.
By: /s/ Geoffrey M. Lewis
---------------------------
Name: Geoffrey M. Lewis
Title: Director
Aggregate Purchase Price: $1,132,200
Number of Shares of Common Stock: 102,000
Address for Notice:
73 Front Street
Hamilton HM 12
BERMUDA
with a copy to:
1285 6th Avenue
18th Floor
New York, NY 10019
14
INVESTOR:
Clarion Capital Corporation
By: /s/ Morton Cohen
---------------------------
Name: Morton Cohen
Title: Chairman
Aggregate Purchase Price: $435,675
Number of Shares of Common Stock: 39,250
Address for Notice:
1801 East 9th St.
Suite 1120
Cleveland, Ohio 44114
15
INVESTOR:
Clarion Partners, L.P.
By: /s/ Morton Cohen
---------------------------
Name: Morton Cohen
Title: General Partner
Aggregate Purchase Price: $217,837.50
Number of Shares of Common Stock: 19,625
Address for Notice:
1801 East 9th Street
Suite 1120
Cleveland, Ohio 44114
16
INVESTOR:
Clarion Offshore Fund Ltd.
By: /s/ Morton Cohen
---------------------------
Name: Morton Cohen
Title: Investment Manager
Aggregate Purchase Price: $217,837.50
Number of Shares of Common Stock: 19,625
Address for Notice:
1801 East 9th Street
Suite 1120
Cleveland, Ohio 44114
17
INVESTOR:
Deephaven Private Placement Trading Ltd.
By: /s/ Bruce Lieberman
---------------------------
Name: Bruce Lieberman
Title: Director Private Placement
Funding
Aggregate Purchase Price: $1,999,998
Number of Shares of Common Stock: 180,180
Address for Notice:
Deephaven Capital Management
c/o Bruce Lieberman
130 Cheshire Lane
Minnetonka, MN 55305
18
INVESTOR:
Franklin Street Trust Company
By: /s/ Carol E. Manzon
---------------------------
Name: Carol E. Manzon
Title: Secretary/Treasurer
Aggregate Purchase Price: $2,220,000
Number of Shares of Common Stock: 200,000
Address for Notice:
Franklin Street Trust Co.
Attn: Carol Manzon
1450 Raleigh Road, Ste. 300
Chapel Hill, NC 27514
19
INVESTOR:
Edward O. Thorp & Associates, LP
By: /s/ Jeffrey Thorp
---------------------------
Name: Jeffrey Thorp
Title: Attorney in Fact
Aggregate Purchase Price: $2,220,000
Number of Shares of Common Stock: 200,000
Address for Notice:
c/o Langley Capital LLC
535 Madison Ave., 15th Floor
New York, NY 10022
with copy to:
Edward O. Thorp & Associates, LP
Attn: Ellen Neal
610 Newport Center Drive, Suite 1240
Newport Beach, CA 92660
20
INVESTOR:
Daughters of Charity - Fund P
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $126,540
Number of Shares of Common Stock: 11,400
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
21
INVESTOR:
Alfred I. Dupont Testamentary Trust
Mazama Capital Trust
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $77,700
Number of Shares of Common Stock: 7,000
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
22
INVESTOR:
East Bay Municipal Utility District
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $59,940
Number of Shares of Common Stock: 5,400
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
23
INVESTOR:
GSAM GEMS Small Cap LLC
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $84,360
Number of Shares of Common Stock: 7,600
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
24
INVESTOR:
Marin County Employee Retirement
Association
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $112,110
Number of Shares of Common Stock: 10,100
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
25
INVESTOR:
Memorial Hospital of South Bend, Inc.
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $36,630
Number of Shares of Common Stock: 3,300
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
26
INVESTOR:
Nemows Foundation Mazama Capital
Management
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $18,870
Number of Shares of Common Stock: 1,700
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
27
INVESTOR:
PGH Pension Mazama Cap Mgmt.
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $26,640
Number of Shares of Common Stock: 2,400
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
28
INVESTOR:
Les Schwab P/S Retirement Trust Mazama
Capital Management
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $69,930
Number of Shares of Common Stock: 6,300
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
29
INVESTOR:
SIIT Small Cap FD/Mazama Cap Mgmt.
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $589,410
Number of Shares of Common Stock: 53,100
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
30
INVESTOR:
SIMT Small Cap GR/Mazama Cap Mgmt.
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $791,430
Number of Shares of Common Stock: 71,300
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
31
INVESTOR:
Undiscovered Managers Small Cap Growth
Fund
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $118,770
Number of Shares of Common Stock: 10,700
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
32
INVESTOR:
Vision Small Cap Stock Fund
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $101,010
Number of Shares of Common Stock: 9,100
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
33
INVESTOR:
Wilshire U.S. Equity Fund
By: /s/ Brian Alfrey
---------------------------
Name: Brian Alfrey
Title:
Aggregate Purchase Price: $6,660
Number of Shares of Common Stock: 600
Address for Notice:
Brian Alfrey
Mazama Capital Management
One SW Columbia, Suite 1860
Portland, OR 97258
34
INVESTOR:
Radyr Investments Ltd.
By: /s/ David Sims
---------------------------
Name: David Sims
Title: Director
Aggregate Purchase Price: $249,750
Number of Shares of Common Stock: 22,500
Address for Notice:
c/o Beacon Capital Management
PO Box 972
Roadtown, Tortola, BVI
with copy to:
Thomas Badian
Rhino Advisors Inc.
130 Wet 29th Street
5th Floor
New York, NY 10001
(212) 594-6555
(212) 594-7181 FAX
35
INVESTOR:
Belmont Park Investments
By: /s/ David Sims
---------------------------
Name: David Sims
Title: Director
Aggregate Purchase Price: $1,999,998
Number of Shares of Common Stock: 180,180
Address for Notice:
c/o Beacon Capital Management
PO Box 972
Roadtown, Tortola, BV1
with copy to:
Mr. Alan Flatt
Trinity Capital Advisors, Inc.
601 Montgomery Street, Suite 1060
San Francisco, CA 94111
(415) 217-7070
(415) 217-7072 FAX
36
INVESTOR:
FIRSTAR BANK N.A., CUSTODIAN FOR FIRST
AMERICAN MICROCAP FUND U/A
DATED 01/01/98
By: /s/ Joseph A. Frohna
---------------------------
Name: Joseph A. Frohna
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $4,679,760
Number of Shares of Common Stock: 421,600
37
INVESTOR:
FIRSTAR BANK N.A., TRUSTEE FOR
WILLIAM M. CHESTER CHILDRENS SMALL
CAP U/A DATED 11/30/2000
By: /s/ Joseph A. Frohna
---------------------------
Name: Joseph A. Frohna
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $9,990
Number of Shares of Common Stock: 900
38
INVESTOR:
FIRSTAR BANK N.A., TRUSTEE FOR
EDWARD S. TALMAGE RESIDUARY TRUST
(2) U/A DATED 2/27/84
By: /s/ Joseph A. Frohna
---------------------------
Name: Joseph A. Frohna
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $12,210
Number of Shares of Common Stock: 1,100
39
INVESTOR:
FIRSTAR BANK N.A., TRUSTEE FOR
MILWAUKEE FOUNDATION FIRSTAR
MICROCAP FUND U/A DATED 01/21/00
By: /s/ Joseph A. Frohna
---------------------------
Name: Joseph A. Frohna
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $87,690
Number of Shares of Common Stock: 7,900
40
INVESTOR:
FIRSTAR BANK N.A., TRUSTEE FOR JANE B.
PETTIT MICROCAP FUND U/A DATED 7/27/01
By: /s/ Joseph A. Frohna
---------------------------
Name: Joseph A. Frohna
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $11,100
Number of Shares of Common Stock: 1,000
41
INVESTOR:
FIRSTAR BANK N.A., AGENT FOR JOHN T.
FRAUTSCHI LIFE TRUST MICROCAP FUND
U/A DATED 12/17/92
By: /s/ Joseph A. Frohna
---------------------------
Name: Joseph A. Frohna
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $253,080
Number of Shares of Common Stock: 22,800
42
INVESTOR:
FIRSTAR BANK N.A., AGENT FOR
LYNDHURST ASSOCIATES MICROCAP FUND
U/A DATED 4/20/95
By: /s/ Joseph A. Frohna
---------------------------
Name: Joseph A. Frohna
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $296,370
Number of Shares of Common Stock: 26,700
43
INVESTOR:
FIRSTAR BANK N.A., AGENT FOR POSNER
PARTNERS MICROCAP FUND U/A DATED
05/17/96
By: /s/ Joseph A. Frohna
---------------------------
Name: Joseph A. Frohna
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $125,430
Number of Shares of Common Stock: 11,300
44
INVESTOR:
MARSHALL AND ISLELY TRUST COMPANY
CUSTODIAN FOR THE MILWAUKEE JEWISH
FEDERATION
By: /s/ Joseph A. Frohna
---------------------------
Name: Joseph A. Frohna
Title: Sr. Portfolio Manager
Aggregate Purchase Price: $74,370
Number of Shares of Common Stock: 6,700
45