THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND ITS SALE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1993. NEITHER THIS WARRANT NOR THE
SECURITIES ISSUABLE UPON THE EXERCISE HEREOF NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM.
Void after June 30, 2000
STOCK PURCHASE WARRANT
This Stock Purchase Warrant ("Warrant") is issued, for good and valuable
consideration, receipt of which is hereby acknowledged, to _______________ (the
"Purchaser"), by ImageWare Software, Inc., a California
corporation (the "Company").
1. PURCHASE OF SHARES; PURCHASE PRICE. Subject to the terms and
conditions hereinafter set forth, the holder of this Warrant is entitled,
upon surrender of this Warrant at the office of the Company at 15373
Innovation Drive, San Diego, California 92128 (or at such other place as the
Company shall notify the holder hereof in writing), to purchase from the
Company 50,000 shares of Common Stock for $2.50 per share. The shares of
Common stock of the Company issuable upon exercise of this Warrant are
hereinafter referred to as the "Shares."
2. EXERCISE PERIOD. This Warrant is exercisable at any time from July
1, 1995 until 5 o'clock P.M., San Diego, California time on June 30, 2000, at
which time this Warrant shall expire.
3. METHOD OF EXERCISE. During the period this Warrant remains
outstanding and exercisable in accordance with Section 2 above, the holder
may exercise this Warrant, in whole or in part, by:
(a) surrendering this Warrant, together with a duly executed copy
of the form of Subscription attached hereto to the Secretary of the Company
at its principal offices; and
(b) paying to the Company an amount equal to the aggregate
Exercise Price of the number of Shares being purchased.
4. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number of
Shares purchasable upon exercise of this Warrant and the Exercise Price shall
be subject to adjustment from time to time only as follows:
(a) The Exercise Price of this Warrant and the number of Shares
issuable upon exercise of this Warrant shall be appropriately adjusted to
reflect any stock dividend, stock split, combination of shares of stock,
reclassification, recapitalization or other similar event affecting the
number of outstanding shares of Common Stock, as follows:
(i) The Exercise Price in effect at the time of such event
shall be adjusted so that it shall equal the price determined by multiplying
the Exercise Price by a fraction, the denominator of which shall be the
number of shares of Common Stock outstanding immediately after giving effect
to such event, and of which the numerator shall be the number of shares of
Common Stock outstanding immediately prior to such event. Such adjustment
shall be made successively whenever any event specified above shall occur.
(ii) Whenever the Exercise Price payable upon exercise of this
Warrant is adjusted pursuant to subparagraph (i) above, the number of Shares
purchasable upon exercise of this Warrant shall simultaneously be adjusted by
multiplying the number of Shares initially issuable upon exercise of this
Warrant by the initial Exercise Price in effect on the date hereof and
dividing the product so obtained by the Exercise Price, as adjusted.
(b) In case the Company shall make or issue, or shall fix a record
date for the determination of eligible holders entitled to receive, a
dividend or other distribution with respect to the shares payable in (i)
securities of the Company (other than Shares of Common Stock) or (ii) assets
(excluding cash dividends paid or payable solely out of retained earnings),
then in each case, the holder of this Warrant on exercise hereof at any time
after the consummation, effective date or record date of such event, shall
receive, in addition to the Shares issuable on such exercise prior to such
date, the securities or other assets of the Company to which such holder
would have been entitled upon such date if such holder had exercised this
Warrant immediately prior thereto (all subject to further adjustment as
provided in this Warrant).
(c) In case of any merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in
which the Company shall not be the continuing or surviving entity or such
reorganization or merger, or any sale of all or substantially all of the
assets of the Company (any such transaction being hereinafter referred to as
a "Reorganization"), then, in each case, (i) the holder of this Warrant shall
be provided with written notice of the proposed Reorganization at least
thirty (30) days prior to the proposed Reorganization date, and (ii) the
holder of this Warrant, on exercise hereof at any time after the consummation
or effective date of such Reorganization (the "Effective Date"), shall
receive, in lieu of the Shares issuable on such exercise prior to the
Effective Date, the stock and other securities and property (including cash)
to which such Holder would have been entitled upon the Effective Date if such
Holder has exercised this Warrant immediately prior thereto (all subject to
further adjustment as provided in this Warrant).
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(d) In case of any adjustment or readjustment in the price or kind
of securities issuable on the exercise of this Warrant, the Company will
promptly give written notice thereof to the holder of this Warrant in the
form of a certificate, certified and confirmed by the Board of Directors of
the Company, setting forth such adjustment or readjustment and showing in
reasonable detail the computation of such adjustment.
5. DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holder
of this Warrant against dilution or other impairment. Without limiting the
generality of the foregoing, the Company (a) will at all times reserve and
keep available a number of its authorized Shares of Common Stock, free from
all preemptive rights therein, which will be sufficient to permit the
exercise of this Warrant and (b) shall take all such action as may be
necessary or appropriate in order that all Shares as may be issued pursuant
to the exercise of this Warrant will, upon issuance, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof.
6. PRE-EXERCISE RIGHTS. Prior to the exercise of this Warrant, the
holder shall not be entitled to any rights of a shareholder with respect to
the Shares, including (without limitation) the right to vote such Shares,
receive dividends or other distributions thereon, exercise preemptive rights
or be notified of shareholder meetings, and such holder shall not be entitled
to any notice or other communication concerning the business or affairs of
the Company, except as set forth herein.
7. RESTRICTED SECURITIES. The holder understands that this Warrant
and the Shares purchasable hereunder constitute "restricted securities" under
the federal securities laws inasmuch as they have been, or will be, acquired
from the Company in transactions not involving a public offering and
accordingly may not, under such laws and applicable regulations, be resold or
transferred without registration under the Securities Act of 1933, as
amended, or an applicable exemption from registration. The holder further
acknowledges that the Shares and any other securities issued upon exercise of
this Warrant shall bear a legend substantially in the form of the legend
appearing on the face hereof.
8. CERTIFICATION OF INVESTMENT PURPOSE. Unless a current registration
statement under the Securities Act of 1933, as amended (the "Act"), shall be
in effect with respect to the offer and sale of the securities to be issued
upon exercise of this Warrant, the holder of this Warrant covenants and
agrees that, at the time of exercise hereof, such holder will deliver to the
Company a written certification that the securities acquired by the holder
upon exercise hereof are for the account of the holder, are being acquired
for investment purposes only and are not being acquired with a view to, or
for sale in connection with, any public distribution thereof.
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9. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
(a) The Holder agrees that prior to making any disposition of the
Warrants or the Shares, the Holder shall give written notice to the Company
describing briefly the manner in which any such proposed disposition is to be
made; and no such disposition shall be made if the Company has notified the
Holder that in the opinion of counsel reasonable satisfactory to the Holder a
registration statement or other notification or post-effective amendment
thereto (hereinafter collectively a "Registration Statement") under the Act
is required with respect to such disposition and no such Registration
Statement has been filed by the Company with, and declared effective, if
necessary.
10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Company shall, upon receipt of a
reasonable agreement to indemnify the Company, and, in the case of a
mutilated warrant, upon the surrender thereof, issue in the name requested a
new warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed.
11. SUCCESSORS AND ASSIGNS. The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the
holders hereof and their respective successors and permitted assigns.
12. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the substantive laws of the State of California without
regard to principles of conflicts of laws.
Dated: July 1, 1995 IMAGEWARE SOFTWARE, INC.
By: /s/ S. James Miller, Jr.
--------------------------------
S. James Miller, Jr., President
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SUBSCRIPTION
ImageWare Software, Inc.
Attention: Corporate Secretary
The undersigned hereby elects to purchase, pursuant to the provisions of
the Stock Purchase Warrant issued by ImageWare Software, Inc. and held by the
undersigned, _________ shares of Common Stock of ImageWare Software, Inc.
Payment of the purchase price per Share required under such Warrant
accompanies this Subscription.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for his own account, for investment purposes only and
not for resale or with a view to distribution of such Shares or any part
thereof.
Date:
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Signature:
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Address:
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Name in which Shares should be registered:
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