VOID AFTER 5:00 P.M. PACIFIC TIME ON __________, 2005
WARRANTS TO PURCHASE COMMON STOCK
W-_____ _________Warrants
IMAGEWARE SYSTEMS, INC.
CUSIP ______________
THIS CERTIFIES THAT
or registered assigns, is the registered holder of the number of Warrants (the
"Warrants") set forth above. Each Warrant entitles the holder thereof to
purchase from ImageWare Systems, Inc., a corporation incorporated under the laws
of the State of California (the "Company"), subject to the terms and conditions
set forth hereinafter and in the Warrant Agreement hereinafter more fully
described (the "Warrant Agreement"), at any time on or before the close of
business on __________, 2005 or, if such Warrant is redeemed as provided in the
Warrant Agreement, at any time prior to the effective time of such redemption
(the "Expiration Date"), one fully paid and non-assessable share of Common Stock
of the Company (the "Common Stock") upon presentation and surrender of this
Warrant Certificate, with the instructions for the registration and delivery of
Common Stock filled in, at the stock transfer office in Denver, Colorado, of
American Stock Transfer & Trust Company, Warrant Agent of the Company (the
"Warrant Agent") or of its successor warrant agent or, if there be no successor
warrant agent, at the corporate offices of the Company, and upon payment of the
Exercise Price (as defined in the Warrant Agreement) and any applicable taxes
paid either in cash, or by certified or official bank check, payable in lawful
money of the United States of America to the order of the Company. Each Warrant
initially entitles the holder to purchase one share of Common Stock initially
for $[120% of the initial public offering price of the Units]. The Exercise
Price shall be adjusted on the first anniversary of the closing of the Company's
initial public offering to 150% of the initial public offering price of the
Units. The number and kind of securities or other property for which the
Warrants are exercisable are subject to further adjustment in certain events,
such as mergers, splits, stock dividends, recapitalizations and the like, to
prevent dilution. After six months following the closing of the Company's
initial public offering, the Company may redeem any or all outstanding and
unexercised Warrants at any time if the Daily Price has exceeded $_____ for ten
consecutive trading days immediately preceding the date of notice of such
redemption, upon 30 days notice, at a price equal to $0.25 per Warrant. For the
purpose of the foregoing sentence, the term "Daily Price" shall mean, for any
relevant day, the closing bid price on that day as reported by the principal
exchange or quotation system on which prices for the Common Stock are reported.
All Warrants not theretofore exercised or redeemed will expire on _________,
2005.
This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, dated as of ____________, 2000 (the
"Warrant Agreement"), between the Company and the Warrant Agent, to all of which
terms, provisions and conditions the registered holder of this Warrant
Certificate consents by acceptance hereof. The Warrant Agreement is
incorporated herein by reference and made a part hereof and reference is made to
the Warrant Agreement for a full description of the rights, limitations of
rights, obligations, duties and immunities of the Warrant Agent, the Company and
the holders of the Warrant Certificates. Copies of the Warrant Agreement are
available for inspection at the stock transfer office of the Warrant Agent or
may be obtained upon written request addressed to the Company at 10833 Thornmint
Road, San Diego, CA 92127, Attention: Chief Financial Officer.
The Company shall not be required upon the exercise of the Warrants
evidenced by this Warrant Certificate to issue fractions of Warrants, Common
Stock or other securities, but shall make adjustment therefor in cash on the
basis of the current market value of any fractional interest as provided in the
Warrant Agreement.
In certain cases, the sale of securities by the Company upon exercise of
Warrants would violate the securities laws of the United States, certain states
thereof or other jurisdictions. The Company has agreed to use all commercially
reasonable efforts to cause a registration statement to continue to be effective
during the term of the Warrants with respect to such sales under the Securities
Act of 1933, as amended, and to take such action under the laws of various
states as may be required to cause the sale of securities upon exercise to be
lawful. However, the Company will not be required to honor the exercise of
Warrants if, in the opinion of the Board of Directors, upon advice of counsel,
the sale of securities upon such exercise would be unlawful. In certain cases,
the Company may, but is not required to, purchase Warrants submitted for
exercise for a cash price equal to the difference between the market price of
the securities obtainable upon such exercise and the exercise price of such
Warrants.
This Warrant Certificate, with or without other Warrant Certificates, upon
surrender to the Warrant Agent, any successor warrant agent or, in the absence
of any successor warrant agent, at the corporate offices of the Company, may be
exchanged for another Warrant Certificate or Certificates evidencing in the
aggregate the same number of Warrants as the Warrant Certificate or Certificates
so surrendered. If the Warrants evidenced by this Warrant Certificate shall be
exercised in part, the holder hereof shall be entitled to receive upon surrender
hereof another Warrant Certificate or Certificates evidencing the number of
Warrants not so exercised.
No holder of this Warrant Certificate, as such, shall be entitled to vote,
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose whatever, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder of this Warrant
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof or give or withhold consent to any corporate
action (whether upon any matter submitted to stockholders at any meeting
thereof, or give or withhold consent to any merger,
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, conveyance or
otherwise) or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Warrant Agreement) or to receive
dividends or subscription rights or otherwise until the Warrants evidenced by
this Warrant Certificate shall have been exercised and the Common Stock
purchasable upon the exercise thereof shall have become deliverable as
provided in the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Company's Common Stock or other
class of stock purchasable upon the exercise of the Warrants evidenced by this
Warrant Certificate are closed for any purpose, the Company shall not be
required to make delivery of certificates for shares purchasable upon such
transfer until the date of the reopening of said transfer books.
Every holder of this Warrant Certificate by accepting the same consents and
agrees with the Company, the Warrant Agent, and with every other holder of a
Warrant Certificate that:
(a) This Warrant Certificate is transferable on the registry books of the
Warrant Agent only upon the terms and conditions set forth in the Warrant
Agreement; and
(b) The Company and the Warrant Agent may deem and treat the person in
whose name this Warrant Certificate is registered as the absolute owner hereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone other than the Company or the Warrant Agent) for all purposes whatever
and neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
The Company shall not be required to issue or deliver any certificate for
shares of Common Stock or other securities upon the exercise of Warrants
evidenced by this Warrant Certificate until any tax which may be payable in
respect thereof by the holder of this Warrant Certificate pursuant to the
Warrant Agreement shall have been paid, such tax being payable by the holder of
this Warrant Certificate at the time of surrender.
This Warrant Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Warrant Agent.
WITNESS the facsimile signatures of the proper officers of the Company and
its corporate seal.
Dated:
IMAGEWARE SYSTEMS, INC.
By:
----------------------------
Chief Executive Officer
Attest:
-----------------------
Secretary
Countersigned
American Stock Transfer & Trust
Company
By:
----------------------------
Authorized Officer
FORM OF ELECTION TO PURCHASE
(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO EXERCISE THE WARRANTS IN
WHOLE OR IN PART)
To: IMAGEWARE SYSTEMS, INC.
The undersigned Registered Holder ( )
- -------------------------------------
(Please insert Social Security or other
identification number of Registered Holder)
hereby irrevocably elects to exercise the right of purchase represented by the
within this Warrant Certificate for, and to purchase thereunder, _______________
shares of Common Stock provided for therein and tenders payment herewith to the
order of IMAGEWARE SYSTEMS, INC. in the amount of $________________.
The undersigned requests that certificates for such shares of Common Stock be
issued as follows:
Name:________________________________________________________________________
Address:______________________________________________________________________
Deliver to:___________________________________________________________________
Address:______________________________________________________________________
and if said number of Warrants being exercised shall not be all the Warrants
evidenced by this Warrant Certificate, that a new Certificate for the balance of
such Warrants as well as the shares of Common Stock represented by this Warrant
Certificate be registered in the name of, and delivered to, the Registered
Holder at the address stated below:
Address:_____________________________________________________________________
Dated:_____________, _______
Signature
- ------------------------------------------
(Signature must conform in all respects to
the name of Registered Holder as specified
in the case of this Warrant Certificate in
every particular, without alteration or any
change whatever.)
Signature Guaranteed:
- ------------------------------------------
The signature should be guaranteed by an eligible institution (Banks,
Stockbrokers, Savings and Loan Association and Credit Union with membership in
an approved signature Medallion Program), pursuant to S.E.C. Rule 17Ad-15.
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY UPON ASSIGNMENT)
FOR VALUE RECEIVED, the undersigned Registered Holder ( )
- ------------------------
(Please insert
Social Security or other
identification number of
Registered Holder)
hereby sells, assigns and transfers unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please Print Name and Address including Zip Code)
Warrants evidenced by the within Warrant Certificate, and irrevocably
constitutes
and appoints
______________________________________________________________________Attorney
to transfer this Warrant Certificate on the books of ImageWare Systems, Inc.
with the full power of substitution in the premises.
Dated:__________________, ________
Signature:
__________________________________
(Signature must conform in all respects to
the name of Registered Holder as specified
on the face of this Unit Certificate in
every particular, without alteration or any
change whatsoever, and the signature must be
guaranteed in the usual manner.)
Signature Guaranteed:
__________________________________
The signature should be guaranteed by an eligible institution (Banks,
Stockbrokers, Savings and Loan Association and Credit Union with membership in
an approved signature Medallion Program), pursuant to S.E.C. Rule 17Ad-15.