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Exhibit 4.6
WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES LAWS AND, UNLESS SO
REGISTERED, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
Warrant to purchase up to 100,000 shares of
the $0.01 par value common
stock of SAFLINK Corporation
(subject to adjustment)
WARRANT TO PURCHASE COMMON STOCK
OF
SAFLINK CORPORATION
This certifies that, for value received, Anovea, Inc. (the "Holder"), is
entitled, subject to the terms set forth below, to purchase from SAFLINK
Corporation (the "Company") up to 100,000 shares of the $0.01 par value common
stock of the Company, at any time or from time to time and after the date
hereof and for a period of five (5) years from the date hereof ("Exercise
Period"), upon surrender of this certificate at 18650 N.E. 67th Court, Suite
210, Redmond, WA 98052, or such other place as the Company may designate in
writing to the Holder, and the simultaneous payment therefor in lawful money
of the United States of America of the Exercise Price (as hereinafter
defined). The number, character and Exercise Price of such shares are subject
to adjustment as provided herein. The term "Warrant" as used herein shall
include this certificate, the securities represented by this certificate and
any warrants delivered in substitution or exchange for this certificate as
provided herein.
This Warrant is issued in connection with that certain Development and
Distribution Agreement by and among the Holder and the Company dated as of
September 18, 2000 (the "Licensing Agreement").
1. Exercise Price. The price at which the Holder may exercise this Warrant
(the "Exercise Price") shall be at a fixed price of $2.00, which price is
equal to the closing price of the Company's common stock on the Effective Date
of the Licensing Agreement.
2. Exercise of the Warrant. The purchase rights represented by this Warrant
are exercisable by the Holder, in whole or in part, at any time, and from time
to time during the Exercise Period, by the Holder's surrender of this Warrant
at 18650 N.E. 67th Court, Suite 210, Redmond, WA 98052, or such other place as
the Company may designate in writing to Holder, and the simultaneous payment
therefor in lawful money of the United States of America of the Exercise Price
in immediately available funds. This Warrant shall be deemed exercised on the
date immediately prior thereto, and the Holder shall be entitled to receive
the shares of common stock of the Company and be treated for all purposes as
the holder of record of such shares as of the close of business on such date.
As promptly as practicable, but in no event later than 10 business days
thereafter, the Company shall issue and deliver, at its sole cost and expense,
to the person or persons entitled to receive the same a certificate or
certificates for the number of shares issuable upon such exercise. In the
event that this Warrant is exercised in part, the Company, at its sole cost
and expense, shall execute and deliver a new warrant of like tenor as this
Warrant, exercisable for the remaining number of shares for which this Warrant
may then be exercised, and shall cancel this Warrant only upon issuance of
such new warrant.
3. Rights as a Stockholder. The Holder shall not be entitled to vote,
receive dividends or be deemed to be the owner of record of the shares of
common stock of the Company to which this Warrant relates unless and until the
Holder exercises this Warrant, and then the Holder shall enjoy such rights
only to the extent of such exercise.
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4. Non-Transfer of Warrant.
(a) Warrant Register. The Company will maintain a register (the "Warrant
Register") maintaining the names and addresses of the Holder or Holders.
Any Holder of this Warrant or any portion thereof may change his/her
address as shown on the Warrant Register by written notice to the Company
requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by mail to
such Holder as shown on the Warrant Register and at the address shown on
the Warrant Register.
(b) Warrant Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register
referred to in Section 4(a) above, issuing the common stock or other
securities then issuable upon the exercise of this Warrant, exchanging this
Warrant, replacing this Warrant, or any or all of the foregoing.
Thereafter, any such registration, issuance, exchange, or replacement, as
the case may be, shall be made at the office of such agent.
(c) Transferability of Warrant. This Warrant may not be transferred or
assigned.
(d) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant and the shares of common stock to be issued upon
exercise hereof are being acquired solely for the Holder's own account
(and not as a nominee for any other party), and for investment (except
to the extent that a distribution may be effected pursuant to the
registration rights granted hereunder), and that the Holder will not
offer, sell or otherwise dispose of this Warrant or any shares of the
common stock to be issued upon exercise hereof except under
circumstances that will not result in a violation of the Act or any
state securities laws. Upon exercise of this Warrant, the Holder shall,
if requested by the Company, confirm in writing, in a form satisfactory
to the Company, that the shares of common stock so purchased are being
acquired solely for the Holder's own account and not as a nominee for
any other party, for investment, and not with a view toward
distribution or resale (except to the extent that a distribution may be
effected pursuant to the registration rights granted hereunder).
(ii) This Warrant and all shares of common stock issued upon exercise
hereof or conversion thereof shall be stamped or imprinted with a
legend in substantially the following form (in addition to any legend
required by state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND, UNLESS SO
REGISTERED, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS.
5. Reservation of Stock. The Company covenants that during the Exercise
Period, the Company will reserve from its authorized and unissued shares of
common stock a sufficient number of shares to provide for the issuance of
common stock upon the exercise of the Warrant and, from time to time, will take
all steps necessary to amend its certificate of incorporation (the
"Certificate") to provide sufficient authorized reserved shares of common stock
issuable upon exercise of the Warrant. The Company further covenants that all
shares that may be issued upon exercise of the rights represented by this
Warrant and payment of the Exercise Price, all as set forth herein, will be
free from all taxes, liens and charges in respect of the issue hereof (other
than taxes in respect of any transfer occurring contemporaneously or otherwise
specified herein). The Company agrees that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates
for shares of common stock upon the exercise of this Warrant.
6. Merger, Sale of Assets and other Fundamental Corporate Changes. If at any
time during the Exercise Period there shall be a sale of all or substantially
all of the Company's assets, or a merger, consolidation or reorganization of
the Company in which the Company is not the surviving entity, or other
transaction in which
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the shares of the Company are converted into shares of another entity (a
"Corporate Change Event"), the Company shall provide the Holder with written
notice of such Corporate Change Event at least ten (10) business days prior to
the date on which a record will be taken of stockholders of the Company with
respect to such event (or, if the Company notifies its stockholders of such
record date less than ten (10) business days prior to such record date, then
the Company shall provide Holder such notice at the same time that it provides
its stockholders with such notice), or if no such record date is required to be
set (as in the event of a tender offer or certain mergers), then the Company
shall provide Holder with written notice of the Corporate Change Event at the
same time that the Company's stockholders or the general public is notified of
the event, or at least ten (10) business days prior to the effective date of
the Corporate Change Event, whichever occurs earlier.
7. No Impairment. The Company shall not, by amendment of its charter, through
a reorganization, transfer of assets, consolidation, merger, dissolution,
issuance or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms required to be observed
by the Company pursuant to this Warrant, and shall assist in carrying out all
of the provisions of this Warrant that may be necessary or appropriate to
protect Holder's rights hereunder against impairment.
8. Adjustments. The number of securities purchasable hereunder is subject to
adjustment from time to time during the Exercise Period in order to preserve
the value of this Warrant as follows:
(a) If the Company at any time during the Exercise Period splits,
subdivides or combines the securities as to which purchase rights under
this Warrant exist into a different number of securities of the same class,
the Holder shall be entitled to acquire a proportionate number of
securities of the same class at a price per share that is also adjusted
proportionately.
(b) If the Company at any time during the Exercise Period changes any of
the securities as to which purchase rights under this Warrant exist into
another class of securities of the Company, this Warrant shall thereafter
represent the right, but not the obligation, with respect to the securities
that were subject to the purchase rights under this Warrant immediately
prior to such change, to acquire such number of securities of such other
class as would have been issuable as a result of such change had the Holder
exercised this Warrant immediately prior to such change.
(c) If at any time during the Exercise Period, the holders of the common
stock of the Company become entitled to receive, without consideration
therefor, other or additional stock or other securities or property (other
than cash) of the Company, then this Warrant shall represent the right, but
not the obligation, to acquire, in addition to the number of shares of the
security receivable upon exercise of this Warrant that the Holder is
otherwise entitled to acquire, and without payment of additional
consideration for the right to acquire such additional property, the amount
of such other or additional stock or other securities or property (other
than cash) of the Company that such holder would have been entitled to
receive had it been the holder of record of the security to which purchase
rights under this Warrant relate at the time the holders of the Company's
common stock became entitled to receive such property.
9. Miscellaneous.
(a) Governing Law. This Warrant shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be
construed in accordance with the laws of said State.
(b) Attorneys Fees in the Event of a Dispute. In the event of any action
at law, suit in equity or arbitration proceeding in relation to this
Warrant or any common stock issued or to be issued hereunder, the
prevailing party or parties shall be paid by the other party or parties a
reasonable sum for attorneys fees and expenses of such prevailing party or
parties.
(c) Saturdays, Sundays, Holidays. If the last or appointed day for the
taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday in the
State of Delaware, then such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal
holiday.
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(d) Amendment. This Warrant and any term hereof may not be changed, waived,
discharged or amended except by an instrument in writing signed by the party
against whom enforcement of such change, waiver, discharge or amendment is
sought.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer.
Dated September 18, 2000
SAFLINK Corporation
/s/ James W. Shepperd
By: _________________________________
Name: James W. Shepperd
Title: Chief Financial Officer
HOLDER:
Anovea Inc.
/s/ Thomas Holton
By: _________________________________
Name: Thomas Holton
Title: Chief Scientist
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SCHEDULE A
REPRESENTATIONS AND WARRANTIES AND REGISTRATION RIGHTS
RELATING TO THE WARRANT AGREEMENT AND BUY-OUT SHARES
Capitalized terms used in this Schedule A that are not otherwise defined
herein shall have the respective meanings set forth in the Development and
Distribution Agreement between SAFLINK and ANOVEA (the "Agreement").
1. Representations and Warranties of SAFLINK. As of the date hereof, SAFLINK
hereby represents and warrants to, and covenants with, ANOVEA, as follows:
a. Organization. SAFLINK is duly incorporated and validly existing and in
good standing under the laws of the jurisdiction of its organization.
SAFLINK has full power and authority to own, operate and occupy its
properties and to conduct its business as presently conducted and as
described in the Exchange Act Documents (as defined below) and is
registered or qualified to do business and in good standing in each
jurisdiction in which it owns or leases property or transacts business and
where the failure to be so qualified would have a material adverse effect
upon the business, financial condition, properties or operations of
SAFLINK, and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail,
such power and authority or qualification.
b. Due Authorization. SAFLINK has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement, and this
Agreement has been duly authorized and validly executed and delivered by
SAFLINK and constitutes a legal, valid and binding agreement of SAFLINK
enforceable against SAFLINK in accordance with its terms, except as rights
to indemnity and contribution may be limited by state or federal securities
laws or the public policy underlying such laws, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' and contracting parties'
rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
c. Validly Authorized Warrant. The execution and delivery of the Warrant
(as defined in Exhibit D) by SAFLINK have been duly authorized by all
necessary corporate action on the part of SAFLINK and neither the execution
and delivery of this Agreement nor fulfillment of or compliance with the
terms and provisions hereof will conflict with or result in a breach of any
governmental requirement or of any agreement or instrument binding upon
SAFLINK or conflict with or result in a breach of any provision of the
constituent documents of SAFLINK.
d. Validly Issued Shares. Any and all shares delivered on the exercise of
the Warrant and payment of the applicable exercise price (the "Shares"), at
the time of such delivery, and any and all Buy-Out Shares delivered on the
exercise of SAFLINK's Buy-Out Right will be duly authorized, validly
issued, fully paid, and nonassessable. Neither the Shares nor the Buy-Out
Shares will be issued in violation of any pre-emptive or similar rights of
any person.
e. Reporting Status. SAFLINK has filed in a timely manner all documents
that SAFLINK was required to file under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), during the 12 months preceding the
date of this Agreement. SAFLINK shall use its best efforts to continue to
comply with the reporting requirements of the Exchange Act and, upon
request by ANOVEA shall provide ANOVEA with a written statement, if true,
that SAFLINK has complied with such reporting requirements for at least the
12 months preceding the date of ANOVEA's request. The following documents
(collectively, the "Exchange Act Documents") complied in all material
respects with the SEC's requirements as of their respective filing dates,
and the information contained therein as of the date thereof did not
contain 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 in light of the circumstances under where they were made not
misleading:
(i) Quarterly Report on Form 10-Q for the Quarter Ended June 30,
2000, filed with the Securities and Exchange Commission (the "SEC") on
August 14, 2000;
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(ii) Quarterly Report on Form 10-Q for the Quarter ended March 31,
2000, filed with the Securities and Exchange Commission on May 15,
2000;
(iii) Definitive Proxy Statement, filed with the SEC on April 10,
2000;
(iv) Annual Report on Form 10-K for the Year Ended December 31, 1999,
filed with the SEC on March 22, 2000;
(v) Quarterly Report on Form 10-Q for the Quarter Ended March 31,
1999, filed with the SEC on May 11, 1999;
(vi) Definitive Information Statement, filed with the SEC on January
19, 2000;
(vii) Quarterly Report on Form 10-Q for the Quarter Ended September
30, 1999, filed with the SEC on November 12, 1999;
(viii) Quarterly Report on Form 10-Q for the Quarter Ended June 30,
1999, filed with the SEC on August 13, 1999;
(ix) Definitive Proxy Statement, filed with the SEC on April 6, 1999;
(x) Annual Report on Form 10-K for the Year Ended December 31, 1998,
filed with the SEC on March 31, 1999; and
(xi) All other documents, if any, filed by SAFLINK with the SEC since
December 31, 1998 pursuant to the reporting requirements of the
Exchange Act.
2. Representations and Warranties of ANOVEA. ANOVEA hereby represents and
warrants to, and covenants with SAFLINK, as follows:
a. ANOVEA has not received any information concerning SAFLINK from
SAFLINK, whether oral or written, including, without limitation, any
solicitation or general advertisement concerning SAFLINK other than the
Exchange Act Documents. The only information that ANOVEA has had access to
in respect of SAFLINK is the public information set forth in the Exchange
Act Documents.
b. ANOVEA has the ability to bear the economic investment in the Warrant,
the Shares, and the Buy-Out Shares and can afford a complete loss of its
investment.
c. ANOVEA, either by itself or together with its purchaser
representative, has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of
its investment in the Warrant, the Shares, and the Buy-Out Shares.
d. ANOVEA is purchasing the Warrant and will purchase the Shares and, if
applicable, will purchase the Buy-Out Shares for investment purposes only,
for ANOVEA's own account and not with a view to, or for sale in connection
with, the distribution thereof (except to the extent that a distribution
may be effected pursuant to the registration rights granted hereunder).
e. ANOVEA understands that the Warrant has no liquid market, and that
there are no securities exchanges, inter-dealer quotations systems or other
organized markets of sale and exchange for the Warrant anywhere in the
world, as of the date of the Warrant.
f. ANOVEA is familiar with the nature of, and risks attending,
investments in securities of the type contemplated herein and has
determined that the purchase of the Warrant, the Shares, and, if
applicable, the Buy-Out Shares is consistent with ANOVEA's investment
objectives.
g. ANOVEA has been advised and understands that an investment in the
Warrant, the Shares, and the Buy-Out Shares is speculative and involves a
high degree of risk.
h. This Agreement, when accepted by SAFLINK, if at all, will be the
legal, valid and binding obligation of ANOVEA in full force and effect and
enforceable in accordance with its terms, except for the effect of
applicable laws regarding bankruptcy or insolvency.
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i. Neither the execution and delivery of this Agreement nor fulfillment
of or compliance with the terms and provisions hereof or thereof will
conflict with or result in a breach of any governmental requirement or of
any agreement or instrument binding upon ANOVEA or conflict with or result
in a breach of any provision of the constituent documents of ANOVEA.
j. ANOVEA is aware of and understands the following:
(i) The business of SAFLINK and the risks inherent in that business;
(ii) That no federal or state agency has made a finding or
determination as to the advisability or fairness of an investment in
the Warrant, the Shares, or the Buy-Out Shares or any recommendation or
endorsement of the Warrant, such Shares, or such Buy-Out Shares;
(iii) That there are substantial restrictions on the transferability
of the Warrant, the Shares, and the Buy-Out Shares; ANOVEA will not be
able to avail itself of the provisions of Rule 144 adopted by the
Securities and Exchange Commission under the Securities Act, unless all
of the conditions of Rule 144 are met, and accordingly, ANOVEA may have
to hold the Warrant, the Shares, and the Buy-Out Shares and bear the
economic risk of this investment for an indefinite period.
k. ANOVEA understands and agrees that, until registered under all
applicable securities laws, all certificates evidencing the Warrant or any
of the Shares or the Buy-Out Shares, whether upon initial issuance or any
transfer thereof, shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER
SECURITIES LAWS, AND THEREFORE CANNOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR ASSIGNED UNLESS THEY ARE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND UNDER ALL OTHER APPLICABLE
SECURITIES LAWS, OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE.
l. If in the future ANOVEA desires to offer or dispose of the Warrant or
any of the Shares or the Buy-Out Shares or any interest therein, it will do
so only pursuant to a registration statement or in any other way that is in
compliance with applicable securities laws and this Agreement.
3. Registration Rights
a. Piggy-Back Registration.
(i) Registration Initiated by SAFLINK. If SAFLINK at any time
proposes to register an offering of its securities of the same class as
the Shares or the Buy-Out Shares under the Securities Act, either for
its own account or for the account of or at the request of one or more
persons holding securities of SAFLINK, SAFLINK will:
(A) give written notice thereof to ANOVEA (which shall include a
list of the jurisdictions in which SAFLINK intends to attempt to
qualify such securities under the applicable blue sky or other state
securities laws) within 10 business days of its receipt of a request
from one or more persons holding securities of SAFLINK to register
securities, or from its decision to effect a registration of
securities for its own account, whichever first occurs; and
(B) use its commercially reasonable efforts to include in such
registration (and any related qualification under blue sky laws or
other compliance), and in any underwriting involved therein, all the
Registrable Shares specified in a written request by ANOVEA made
within 30 days after receipt of such written notice from SAFLINK,
except as set forth in Sections (a)(ii) and (a)(iii) below;
provided, however, that if at any time after giving written notice
to ANOVEA of its intention to register SAFLINK securities under the
Securities Act, SAFLINK shall determine not to register any such
securities, SAFLINK may, at its election, give written notice of
such determination to ANOVEA and, thereupon, shall be relieved of
its obligation to register such Shares or Buy-Out Shares pursuant to
this Section (a) in connection with such registration, without
prejudice,
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however, to any rights of ANOVEA to request that such registration
be effected as a registration under other provisions of this
Agreement, and provided further that if at any time after giving
written notice to ANOVEA of its intention to register Company
securities under the Securities Act, SAFLINK shall determine to
delay the registration of such securities, SAFLINK shall be
permitted to delay the registration of such Shares or Buy-Out Shares
for the same period as the delay in registering the securities to be
registered by SAFLINK for its own account or for others.
For purposes of this Schedule A, "Registrable Shares" means (i) the
Shares, (ii) Buy-Out Shares, if applicable, and (iii) any shares of
common stock issued as a dividend or other distribution with respect
to, or in exchange for or in replacement of, the Shares or Buy-Out
Shares; provided, however, that any shares previously sold to the
public pursuant to a registered public offering or pursuant to Rule 144
or Rule 145 under the Securities Act, and any shares otherwise sold or
transferred in a transaction in which the transferor's rights under
this Agreement are not assigned in accordance with this Agreement,
shall cease to be Registrable Shares.
(ii) Amount to be Included. In the event that any Registrable Shares
are requested to be included in any registration initiated pursuant to
Section (a)(i) that contemplates an underwritten public offering, and
if, in the good faith judgment of the managing underwriter of such
public offering, the inclusion of all of the Registrable Shares
originally covered by a request for registration, together with the
number or amount of securities that were intended to be offered by
other persons holding securities of SAFLINK who hold registration
rights, would interfere with the successful marketing of such
securities, then, such managing underwriter may limit the number or
amount of securities to be included in the registration such that all
persons holding securities of SAFLINK (including ANOVEA) who hold
registration rights and who have requested registration (collectively,
the "Security Holders") shall participate in the underwritten public
offering pro rata based upon the total number or amount of securities
requested to be offered by each Security Holder (including the number
or amount of securities which each such Security Holder may then be
entitled to receive upon the exercise of any option or warrant, or the
exchange or conversion of any security, held by such Security Holder).
If any such Security Holder would thus be entitled to include more
securities than such Security Holder requested to be registered, the
excess shall be allocated among the other Security Holders pro rata in
a manner similar to that described in the previous sentence.
(iii) Underwriting. If the registration of which SAFLINK gives notice
is for a registered public offering involving an underwriting, SAFLINK
shall so advise ANOVEA as a part of the written notice given pursuant
to Section (a)(i). In such event, the right of each Security Holder to
registration pursuant to this Section (a) shall be conditioned upon its
participation in such underwriting and the inclusion of the Registrable
Shares in the underwriting to the extent provided herein. ANOVEA shall
(together with SAFLINK and the other Security Holders, if any) enter
into an underwriting agreement in customary form with the underwriter
or underwriters selected for such underwriting by SAFLINK (including,
without limitation, customary lock-up provisions as required by the
underwriter). If ANOVEA disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to
SAFLINK and the underwriter. Any Registrable Shares excluded or
withdrawn from such underwriting shall be withdrawn from such
registration.
(iv) Withdrawal from Registration. ANOVEA may, at any time prior to
the effective date of the registration statement relating to such
registration, revoke such request under this Section (a) by delivering
written notice of such revocation to SAFLINK.
(v) Expenses of Registration. SAFLINK shall bear all expenses
incurred in connection with each registration pursuant to this Section
(a); provided, however, that ANOVEA and not SAFLINK shall be
responsible for any underwriting discounts, brokerage commissions, or
similar expenses relating to the sale of any shares on behalf of
ANOVEA.
(vi) Maintaining an Effective Registration Statement. SAFLINK shall
keep such registration statement described in Section (a) effective
until such time when ANOVEA shall have completed the
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offering and sale of the common stock described in such registration
statement, provided such period of time shall not exceed 60 days.
b. Demand Registration.
ANOVEA shall be entitled to a one-time request that SAFLINK effect a
registration under the Securities Act with respect to the Registrable
Shares held by them upon the following terms and conditions (i) if after
six months from the date of this Agreement, SAFLINK does not register the
Shares pursuant to Section 3(a) above ("Demand Registration Right"), or
(ii) if after six months from the date of ANOVEA's receipt of the Buy-Out
Shares SAFLINK does not register the Buy-Out Shares pursuant to Section
3(a) above and ANOVEA has not exercised its Demand Registration Right with
respect to the Shares:
(i) Request for Registration of Registrable Shares. In the event that
SAFLINK shall receive from ANOVEA a written request ("Notice of
Registration") that SAFLINK effect a registration under the Securities
Act with respect to all of the Registrable Shares held by ANOVEA,
SAFLINK shall use its commercially reasonable efforts to effect, at the
earliest practicable date, such registration (and any related
qualification under applicable blue sky laws or other compliance) as
would permit or facilitate the sale and distribution of all of such
Registrable Shares; provided that SAFLINK shall not be obligated to
take any action to effect any such registration pursuant to this
Section (b)(i) during the period starting with the date of SAFLINK's
filing of, and ending on the date one hundred and eighty (180) days
immediately following the effective date of, any registration statement
pertaining to a public offering of securities of SAFLINK; provided
further, that if (i) in the good faith judgment of the Board of
Directors of SAFLINK, such registration would be seriously detrimental
(excluding any consideration of market price fluctuation due to the
sale of the Registrable Shares) to SAFLINK and the Board of Directors
of SAFLINK concludes, as a result, that it is essential to defer the
filing of such registration statement at such time, and (ii) SAFLINK
shall furnish to ANOVEA a certificate signed by the Chief Executive
Officer of SAFLINK stating that in the good faith judgment of the Board
of Directors of SAFLINK, it would be seriously detrimental (excluding
any consideration of market price fluctuation due to the sale of the
Registrable Shares) to SAFLINK for such registration statement to be
filed in the near future and that it is, therefore, essential to defer
the filing of such registration statement, then SAFLINK shall have the
right to defer such filing for the period during which such disclosure
would be seriously detrimental.
If ANOVEA informs SAFLINK by written notice that it is withdrawing
its Notice of Registration made pursuant to Section (b)(i) above, then
the registration statement need not be filed and all efforts pursuant
to such notice will count as a registration (or an exercise of rights)
under this Section (b), provided, however, that if ANOVEA pays all of
the expenses incurred by SAFLINK through the date of the withdrawal in
connection with such registration, then all efforts pursuant to such
Notice of Registration will not so count; provided, further, that
SAFLINK may in any event proceed with the registration on its own
behalf, or on behalf of any other persons holding securities of
SAFLINK.
Subject to the foregoing, SAFLINK shall file a registration statement
covering the Registrable Shares so requested to be registered as soon
as practicable, but in no event later than 30 days, after receipt of
ANOVEA's request, and SAFLINK shall use its best efforts to cause such
registration statement to become effective under the Securities Act as
soon as practicable thereafter. ANOVEA shall not be required to
exercise the Warrant into SAFLINK's Common Stock prior to exercising
its demand registration rights hereunder with respect to such shares of
SAFLINK's Common Stock.
(ii) Expenses of Requested Registration. SAFLINK shall bear all
expenses incurred in connection with each registration pursuant to this
Section (b); provided, however, that ANOVEA and not SAFLINK shall be
responsible for any underwriting discounts, brokerage commissions or
similar expenses relating to the sale of any shares on behalf of
ANOVEA.
(iii) Maintaining an Effective Registration Statement. SAFLINK shall
keep any registration statement filed pursuant to this Section (b)
effective for at least 180 continuous days from the date it is first
declared effective.
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