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Exhibit 4.7
WARRANT
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.
Warrant to purchase up to 250,000 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, SOLTHREE SOFTWARE CORPORATION, or
its successors or assigns (the "Holder"), is entitled, subject to the terms
set forth below, to purchase from SAFLINK Corporation (the "Company") up to
250,000 shares of the $0.01 par value common stock of the Company, as the
Company is constituted on the 6th day of September, 2000 (the "Warrant Issue
Date"), 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 Software Development
Agreement by and among the Holder and the Company dated as of July 25, 2000
(the "Software Development Agreement").
1. Term of Warrant. Subject to the terms and conditions set forth herein,
this Warrant shall be exercisable, in whole or in part, during the period of
time (the "Exercise Period") commencing on the Warrant Issue Date and ending
at 5:00 p.m. on the last day of the sixtieth (60th) full calendar month after
the Commencement Date of the Software Development Agreement between the
Company and the Holder.
2. Exercise Price. Subject to Section 10(a), the price at which the Holder
may exercise this Warrant (the "Exercise Price") shall be at a fixed price of
$2.19 per share.
3. Vesting of Warrant. The Warrant shall vest monthly as follows: the number
of shares vesting shall be equal to the number of hours billed by Solthree
during the month times $143.75 divided by $1.47.
4. 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
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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. Immediately prior to the time this
Warrant (or any subsequent warrant, in the event of a partial exercise of this
Warrant) is exercised, provided that the Company has received reasonable prior
written notice of such intent to exercise the Warrant, the Company shall
confirm in writing to the Holder that the cumulative value of the shares sold
to the Holder pursuant to this Warrant (and any subsequent warrant issued in
connection therewith) represents less then 10% of the total asset value of the
Company, and that the cumulative number of shares sold to the Holder pursuant
to this Warrant (and any subsequent warrant issued in connection therewith)
represents less than 10% of the outstanding voting securities of the Company.
5. 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.
6. 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. Until this Warrant is transferred on the Warrant
Register of the Company, the Company may treat the Holder as shown on the
Warrant Register as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
(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 6(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 except (i) in its entirety and (ii) in compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including delivery of investment representation letters
reasonably satisfactory to the Company, if such are requested by the
Company), and then only against receipt of an agreement of the transferee
to comply with the provisions of this Section 6(c) with respect to any
resale or other disposition of this Warrant.
(d) Exchange of Warrant upon a Transfer. On surrender of this Warrant for
exchange, properly endorsed and subject to the provisions of this Warrant
with respect to compliance with the Securities Act of 1933, as amended and
with the limitations on assignments and transfers and contained in this
Section 6, the Company at its expense shall issue to or on the order of the
Holder a new Warrant or Warrants of like tenor, in the name of the Holder
or as the Holder (on payment by the Holder of any applicable transfer
taxes) may direct, for the number of shares issuable upon exercise hereof.
(e) 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 (NOTE: granted in the subscription, not "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 Securities Act of 1933, as amended, or any state securities
laws. Upon exercise of
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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.
7. 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.
8. 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 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).
9. 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.
10. 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
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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 receivable 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.
11. Miscellaneous.
(a) Successors. All the covenants and provisions hereof by or for the
benefit of the Company or the Holder shall bind and inure to the benefit of
their respective successors and assigns, without regard to the conflict of
laws provisions thereof.
(b) 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.
(c) 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.
(d) 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 legal holiday.
(e) 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 7, 2000
SAFLINK CORPORATION
By: /James W. Shepperd/
Name: James W. Shepperd
Title: Chief Financial Officer
HOLDER:
SOLTHREE SOFTWARE CORPORATION
By: /Robert G. Laws, Jr./
Name: Robert G. Laws, Jr.
Title: CEO
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