Exhibit 10.29
Strong River Investments, Inc.
c/o Xxxxxxxx-Xxxx & Xxxxxx (BVI) Limited
Wickhams Cay I, Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxx Xxxx, Xxxxxxxx. X.X.X.
Xxxxx 00, 0000
Xxxxxxx Technology, Inc.
00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
Re: Viisage Technology, Inc. (the "Company").
Gentlemen:
Reference is made to the Securities Purchase Agreement (the "Purchase
Agreement"), of even date hereof, between the Company and the undersigned (the
"Purchasers"), pursuant to which the Company will issue and sell to the
Purchasers (i) an aggregate of 391,917 shares of Common Stock (the "Initial
Shares"), (ii) Common Stock purchase warrants, each in the form of Exhibit A to
the Purchase Agreement, pursuant to which the holder thereof shall have the
right, under certain circumstances described therein, to acquire shares of
Common Stock upon the terms set forth therein (the "Initial Adjustable Warrant")
and (iii) Common Stock purchase warrants, each in the form of Exhibit D to the
Purchase Agreement, pursuant to which the holder thereof shall have the right,
under certain circumstances described therein, to acquire shares of Common Stock
upon the terms set forth therein (the "Initial Closing Warrants" and together
with the Initial Adjustable Warrants, the "Initial Warrants"), for an aggregate
purchase price of $4,000,000. Capitalized terms used and not otherwise defined
in this letter that are defined in the Purchase Agreement shall have the
meanings set forth in the Purchase Agreement. The Initial Warrants and the
Initial Shares are sometimes collectively referred to herein as the "Initial
Securities."
The Purchasers shall, severally and not jointly, commit, subject to and
upon the terms and conditions hereof, to purchase from the Company, and the
Company shall sell to the Purchasers (A) on the First Additional Closing Date
(as defined herein): (i) up to [ ] shares of
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(1) The number which equals $3,000,000 divided by 115% of the average of the
Per Share Market Values for the ten Trading Days preceding the First
Additional Closing Date.
Common Stock (the "First Additional Shares"), (ii) additional Initial Adjustable
Warrants (the "First Additional Adjustable Warrants") and (iii) additional
Initial Closing Warrants pursuant to which the holders thereof shall have the
right at any time and from time to time thereafter through the fifth anniversary
of the First Additional Closing (as defined herein) to acquire an aggregate of
up to [ ] shares of Common Stock (the "First Additional Closing Warrants"), for
an aggregate purchase price of up to $3,000,000 (the "First Additional Purchase
Price"), provided, that the First Additional Purchase Price shall not exceed 5%
of the market capitalization of the Common Stock on the First Additional Closing
Date and (B) on the Second Additional Closing Date (as defined herein): (i) up
to [ ] shares of Common Stock (the "Second Additional Shares"), (ii) additional
Initial Adjustable Warrants (the "Second Additional Adjustable Warrants" and
together with the First Additional Adjustable Warrants, the "Additional
Adjustable Warrants") and (iii) additional Initial Closing Warrants pursuant to
which the holders thereof shall have the right at any time and from time to time
thereafter through the fifth anniversary of the Second Additional Closing (as
defined herein) to acquire an aggregate of up to [ ] shares of Common Stock (the
"Second Additional Closing Warrants" and together with the First Additional
Closing Warrants, the "Additional Closing Warrants"), for an aggregate purchase
price of up to $3,000,000 (the "Second Additional Purchase Price"), provided,
that the Second Additional Purchase Price shall not exceed 5% of the market
capitalization of the Common Stock on the Second Additional Closing Date.
The commitment of the Purchasers set forth in this letter is subject to the
terms, conditions and qualifications set forth below:
1. Form of Additional Adjustable Warrants. The Additional Adjustable
Warrants shall be identical to the Initial Adjustable Warrants except that (A)
for purposes of the First Additional Adjustable Warrants, the Purchase Price (as
defined in the Initial Adjustable Warrants) shall equal 115% of the average of
the Per Share Market Values for the ten Trading Days preceding the First
Additional Closing Date and (B) for purposes of the Second Additional Adjustable
Warrants, the Purchase Price shall equal 115% of the average of the Per Share
Market Values for the ten Trading Days preceding the Second Additional Closing
Date.
2. Form of Additional Closing Warrants. The Additional Closing Warrants
shall be identical to the Initial Closing Warrants except that the Exercise
Price (as defined in the Initial Closing Warrants) applicable to (i) the First
Additional Closing Warrants shall be equal to 125% of
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(2) The number which equals 25% of $3,000,000 divided by 115% of the average of
the Per Share Market Values for the ten Trading Days preceding the First
Additional Closing Date.
(3) The number which equals $3,000,000 divided by 115% of the average of the
Per Share Market Values for the ten Trading Days preceding the Second
Additional Closing Date
(4) The number which equals 25% of $3,000,000 divided by 115% of the average of
the Per Share Market Values for the ten Trading Days preceding the Second
Additional Closing Date.
the average of the closing bid prices of the Common Stock for the five (5)
Trading Days immediately preceding the First Additional Closing Date and (ii)
the Second Additional Closing Warrants shall be equal to 125% of the average of
the closing bid prices of the Common Stock for the five (5) Trading Days
immediately preceding the Second Additional Closing Date.
3. First Additional Documentation. In order to effectuate a purchase and
sale of the First Additional Shares, the First Additional Adjustable Warrants
and the First Additional Closing Warrants (collectively, the "First Additional
Securities"), prior to their issuance, the Company and the Purchasers shall
enter into the following agreements: (a) a securities purchase agreement
identical to the Purchase Agreement, mutatis mutandis and shall include updated
Schedules (the "First Additional Purchase Agreement") and (b) a registration
rights agreement identical to the Registration Rights Agreement, mutatis
mutandis and shall include updated Schedules (the "First Additional Registration
Rights Agreement", and together with the First Additional Purchase Agreement,
the First Additional Adjustable Warrants and the First Additional Closing
Warrants, collectively the "First Additional Transaction Documents"). The
Purchasers shall prepare the First Additional Transaction Documents.
4. Second Additional Documentation. In order to effectuate a purchase and
sale of the Second Additional Shares, the Second Additional Adjustable Warrants
and the Second Additional Closing Warrants (collectively, the "Second Additional
Securities"), prior to their issuance, the Company and the Purchasers shall
enter into the following agreements: (a) a securities purchase agreement
identical to the Purchase Agreement, mutatis mutandis and shall include updated
Schedules (the "Second Additional Purchase Agreement") and (b) a registration
rights agreement identical to the Registration Rights Agreement, mutatis
mutandis and shall include updated Schedules (the "Second Additional
Registration Rights Agreement", and together with the Second Additional Purchase
Agreement, the Second Additional Adjustable Warrants and the Second Additional
Closing Warrants, collectively the "Second Additional Transaction Documents").
The Purchasers shall prepare the Second Additional Transaction Documents.
5. The First Additional Closing. (i) The Purchasers and the Company shall
each have the right to deliver a written notice to the other (the "First
Additional Financing Notice") requiring such other party to either sell or buy
(severally and not jointly), as the case may be, the First Additional Securities
for the First Additional Purchase Price, provided, that the Company may, in its
sole discretion, elect not to sell the First Additional Securities if the number
which equals 115% of the average of the Per Share Market Values for the ten
Trading Days preceding the First Additional Closing Date is lower than $10.2063.
The First Additional Financing Notice may be delivered no earlier than {150} 182
days following the Closing Date and no later than {170} 212 days following the
Closing Date, or as otherwise agreed to by the parties hereto. At the First
Additional Closing each Purchaser shall (subject to the terms and conditions
herein) purchase such portion of the First Additional Securities as equals such
Purchaser's pro-rata portion of the Initial Securities issued and sold at the
Closing. The closing of the purchase and sale of the First Additional Securities
(the "First Additional Closing") shall take place at the offices of Xxxxxxxx
Xxxxxxxxx,1290 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx 00000, on the fifth
(5th) Business Day after the First Additional Financing Notice is received by
the Purchasers or the Company, as
the case may be, or on such other date as otherwise agreed to by the parties
hereto, provided, that in no case shall the First Additional Closing take place
unless and until all of the conditions listed in Section 7 of this letter shall
have been satisfied by the Company or waived by the Purchasers. The date of the
First Additional Closing is hereinafter referred to as the "First Additional
Closing Date." Notwithstanding anything to the contrary contained in this
letter, each Purchaser may, prior to the First Additional Closing Date,
designate an Affiliate thereof to acquire all or any portion of the First
Additional Securities.
(ii) At the First Additional Closing, the parties shall deliver or shall cause
to be delivered the following: (a) the Company shall deliver to (x) each
Purchaser or its designated Affiliate: (1) the number of First Additional Shares
equal to such Purchaser's pro rata portion of the Initial Shares issued and sold
at the Closing, registered in the name of such Purchaser or its designated
Affiliate, (2) a First Additional Adjustable Warrant registered in the name of
such Purchaser or its designated Affiliate, (3) a First Additional Closing
Warrant registered in the name of such Purchaser or its designated Affiliate,
entitling the holder thereof to purchase such number of shares of Common Stock
as equals such Purchaser's pro-rata portion of the shares of Common Stock
underlying the Initial Closing Warrants issued and sold at the Closing, (4) a
legal opinion in form and substance acceptable to the Purchasers and (5)
executed First Additional Transaction Documents and the Transfer Agent
Instructions relating to the First Additional Securities, and (y) Xxxxxxxx
Xxxxxxxxx, up to $25,000 for the legal fees and expenses incurred by the
Purchasers to prepare the First Additional Transaction Documents, which amount
shall be deducted by the Purchasers from the First Additional Purchase Price and
shall be paid directly to Xxxxxxxx Xxxxxxxxx and (b) each Purchaser shall
deliver to the Company (1) its pro rata portion of the First Additional Purchase
Price, in United States dollars in immediately available funds by wire transfer
to an account designated in writing by the Company for such purpose prior to the
First Additional Closing Date and (2) the executed First Additional Transaction
Documents.
6. The Second Additional Closing. (i) The Purchasers and the Company shall
each have the right to deliver a written notice to the other (the "Second
Additional Financing Notice") requiring such other party to either sell or buy
(severally and not jointly), as the case may be, the Second Additional
Securities for the Second Additional Purchase Price provided, that the Company
may, in its sole discretion, elect not to sell the Second Additional Securities.
The Second Additional Financing Notice may be delivered no earlier than 120 days
following the First Additional Closing Date and no later than 140 days following
the First Additional Closing Date, or as otherwise agreed to by the parties
hereto. At the Second Additional Closing (as defined herein) each Purchaser
shall (subject to the terms and conditions herein) purchase such portion of the
Second Additional Securities as equals such Purchaser's pro-rata portion of the
Initial Securities issued and sold at the Closing. The closing of the purchase
and sale of the Second Additional Securities (the "Second Additional Closing")
shall take place at the offices of Xxxxxxxx Xxxxxxxxx,1290 Avenue of the
Americas, Xxx Xxxx, Xxx Xxxx 00000, on the fifth (5th) Business Day after the
Second Additional Financing Notice is received by the Purchasers or the Company,
as the case may be, or on such other date as otherwise agreed to by the parties
hereto, provided, that in no case shall the Second Additional Closing take place
unless and until all of the conditions listed in Section 8 of this letter shall
have been satisfied by the Company or waived by the Purchasers. The date of the
Second
Additional Closing is hereinafter referred to as the "Second Additional Closing
Date." Notwithstanding anything to the contrary contained in this letter, each
Purchaser may, prior to the Second Additional Closing Date, designate an
Affiliate thereof to acquire all or any portion of the Second Additional
Securities.
(ii) At the Second Additional Closing, the parties shall deliver or shall cause
to be delivered the following: (a) the Company shall deliver to (x) each
Purchaser or its designated Affiliate, (1) the number of Second Additional
Shares equal to such Purchaser's pro rata portion of the Initial Shares issued
and sold at the Closing, registered in the name of such Purchaser or its
designated Affiliate, (2) a Second Additional Adjustable Warrant registered in
the name of such Purchaser or its designated Affiliate, (3) a Second Additional
Closing Warrant registered in the name of such Purchaser or its designated
Affiliate, entitling the holder thereof to purchase such number of shares of
Common Stock as equals such Purchaser's pro-rata portion of the shares of Common
Stock underlying the Initial Closing Warrants issued and sold at the Closing,
(4) a legal opinion in form and substance acceptable to the Purchasers, and (5)
executed Second Additional Transaction Documents and the Transfer Agent
Instructions relating to the Second Additional Securities, and (y) Xxxxxxxx
Xxxxxxxxx, up to $25,000 for the legal fees and expenses incurred by the
Purchasers to prepare the Second Additional Transaction Documents, which amount
shall be deducted by the Purchasers from the Second Additional Purchase Price
and shall be paid directly to Xxxxxxxx Xxxxxxxxx and (b) each Purchaser shall
deliver to the Company (1) its pro rata portion of the Second Additional
Purchase Price, in United States dollars in immediately available funds by wire
transfer to an account designated in writing by the Company for such purpose
prior to the Second Additional Closing Date and (2) the executed Second
Additional Transaction Documents.
7. Conditions precedent to the First Additional Closing. Notwithstanding
anything to the contrary contained in this letter, the commitment of a Purchaser
to purchase acquire the First Additional Securities is subject to the
satisfaction or waiver by the Purchasers of each of the following conditions:
(a) Closing of Initial Shares and Initial Warrants. The Closing shall have
occurred;
(b) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company contained in the Purchase
Agreement shall be true and correct as of the date when made and as of the First
Additional Closing Date as though made on and as of the First Additional Closing
Date (other than representations and warranties which relate to a specific date
(which shall not include representations and warranties relating to the "date
hereof") which representations and warranties shall be true as of such specific
date), as evidenced by an Officer's certificate attesting to such effect to be
delivered by the Company to the Purchasers at the First Additional Closing;
(c) Performance by the Company. The Company shall have performed, satisfied
and complied with all covenants, agreements and conditions required by the
Transaction
Documents to be performed, satisfied or complied with by the Company between the
Closing Date and the First Additional Closing Date and no Event (as defined in
the Registration Rights Agreement ) shall have occurred which has not been cured
to the satisfaction of the Purchasers;
(d) Underlying Shares Registration Statement. The Underlying Shares
Registration Statement shall have been declared effective under the Securities
Act by the Commission and shall have remained effective at all times, not
subject to any actual or threatened stop order or subject to any actual or
threatened suspension at any time prior to the First Additional Closing Date;
(e) No Injunction. Since the Closing Date, no statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated, amended, modified or endorsed by any court of governmental
authority of competent jurisdiction or governmental authority, stock market or
trading facility which prohibits the consummation of any of the transactions
contemplated by the First Additional Transaction Documents or makes
impracticable the transactions contemplated thereby;
(f) Adverse Changes. Since the Closing Date, no event or series of events
which reasonably would be expected to have or result in a Material Adverse
Effect shall have occurred;
(g) No Suspensions of Trading in Common Stock. The trading in the Common
Stock shall not have been suspended by the Commission or on the NASDAQ at any
time since the Closing Date;
(h) Listing of Common Stock. The Common Stock shall have been at all times
since the Closing Date listed for trading on the NASDAQ;
(i) Shares of Common Stock. The Company shall have duly reserved the number
of shares of Common Stock as required by the First Additional Transaction
Documents to be reserved for issuance upon exercise of the First Additional
Adjustable Warrants and the First Additional Closing Warrants;
(j) Performance of Exercise Obligations. The Company shall have timely
complied with its exercise and delivery requirements under the Initial Warrants;
(k) Closing Threshold. For the ten (10) Trading Days immediately preceding
the date of the First Additional Financing Notice, the average daily trading
volume of the Common Stock on the NASDAQ shall be at least 100,000 shares and
the average of the Per Share Market Value for such ten (10) Trading Day period
shall be greater than $6.00 (subject to equitable adjustments for stock splits,
recombinations and similar events);
(l) Shareholder Approval. No approval of the shareholders of the Company
shall be required under the rules of the Nasdaq Stock Market or such other
exchange or trading facility or which the Common Stock is the traded or listed
for trading in order to issue a minimum of 200% of the shares of Common Stock
issuable upon exercise of the First Additional Adjustable Warrants (assuming
such exercise occurred on the First Additional Closing Date); and
(m) Deliveries pursuant to First Additional Transaction Documents. At the
First Additional Closing, the Company shall deliver the First Additional
Securities and executed First Additional Transaction Documents and Transfer
Agent Instructions relating to the First Additional Securities in the forms
contemplated by this letter.
8. Conditions precedent to the Second Additional Closing. Notwithstanding
anything to the contrary contained in this letter, the commitment of a Purchaser
to purchase acquire the Second Additional Securities is subject to the
satisfaction or waiver by the Purchasers of each of the following conditions:
(a) Closing of the First Additional Securities. The First Additional
Closing shall have occurred;
(b) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company contained in the Purchase
Agreement shall be true and correct as of the date when made and as of the
Second Additional Closing Date as though made on and as of the Second Additional
Closing Date (other than representations and warranties which relate to a
specific date (which shall not include representations and warranties relating
to the "date hereof") which representations and warranties shall be true as of
such specific date), as evidenced by an Officer's certificate attesting to such
effect to be delivered by the Company to the Purchasers at the Second Additional
Closing;
(c) Performance by the Company. The Company shall have performed, satisfied
and complied with all covenants, agreements and conditions required by the
Transaction Documents and the First Additional Transaction Documents to be
performed, satisfied or complied with by the Company between the Closing Date
and the Second Additional Closing Date and no Event shall have occurred which
has not been cured to the satisfaction of the Purchasers;
(d) Second Underlying Shares Registration Statement. The registration
statement filed pursuant to the First Additional Registration Rights Agreement
shall have been declared effective under the Securities Act by the Commission
and shall have remained effective at all times, not subject to any actual or
threatened stop order or subject to any actual or threatened suspension at any
time prior to the Second Additional Closing Date;
(e) No Injunction. Since the Closing Date, no statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated, amended, modified or endorsed by any court of governmental
authority of competent jurisdiction
or governmental authority, stock market or trading facility which prohibits the
consummation of any of the transactions contemplated by the Second Additional
Transaction Documents or makes impracticable the transactions contemplated
thereby;
(f) Adverse Changes. Since the Closing Date, no event or series of events
which, in the sole opinion of the Purchasers, could have or result in a Material
Adverse Effect shall have occurred;
(g) No Suspensions of Trading in Common Stock. The trading in the Common
Stock shall not have been suspended by the Commission or on the NASDAQ at any
time since the Closing Date;
(h) Listing of Common Stock. The Common Stock shall have been at all times
since the Closing Date listed for trading on the NASDAQ;
(i) Shares of Common Stock. The Company shall have duly reserved the number
of shares of Common Stock as required by the Second Additional Transaction
Documents to be reserved for issuance upon exercise of the Second Additional
Adjustable Warrants and the Second Additional Closing Warrants;
(j) Performance of Exercise Obligations. The Company shall have timely
complied with its exercise and delivery requirements under the First Additional
Adjustable Warrants and the First Additional Closing Warrants;
(k) Closing Threshold. For the ten (10) Trading Days immediately preceding
the date of the Second Additional Financing Notice, the average daily trading
volume of the Common Stock on the NASDAQ shall be at least 100,000 shares and
the average of the Per Share Market Value for such ten (10) Trading Day period
shall be greater than $6.00 (subject to equitable adjustments for stock splits,
recombinations and similar events);
(l) Shareholder Approval. No approval of the shareholders of the Company
shall be required under the rules of the Nasdaq Stock Market or such other
exchange or trading facility or which the Common Stock is the traded or listed
for trading in order to issue a minimum of 200% of the shares of Common Stock
issuable upon exercise of the Second Additional Adjustable Warrants (assuming
such exercise occurred on the Second Additional Closing Date); and
(m) Deliveries pursuant to Second Additional Transaction Documents. At the
Second Additional Closing, the Company shall deliver the Second Additional
Securities and executed Second Additional Transaction Documents and Transfer
Agent Instructions relating to the Second Additional Securities in the forms
contemplated by this letter.
9. Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder is several and not joint with the
obligations of any other Purchaser hereunder, and neither Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including,
without limitation, the rights arising out of this letter or out of the either
the First Additional Transaction Documents or the Second Additional Transaction
Documents, if any, and it shall not be necessary for any other Purchaser to be
joined as an additional party in any proceeding for such purpose.
10. Governing Law. This letter shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof.
11. Execution. This letter may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
Please indicate your agreement with the foregoing by executing a
countersigned copy of this letter and returning the same to our attention,
whereupon effective immediately thereafter this letter shall become a legally
valid and binding agreement between the Purchasers and the Company.
We look forward to our continuing relationship.
Sincerely,
Strong River Investments, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx, Esq.
Title: Attorney In Fact
Agreed and accepted
Xxxxx 00, 0000
Xxxxxxx Technology, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
