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Exhibit 10.12

PERCEPTRONICS, INC.
SECURITIES PURCHASE AGREEMENT
APRIL 5, 2001

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PERCEPTRONICS, INC.
SECURITIES PURCHASE AGREEMENT

    This Securities Purchase Agreement (the "Agreement") is made and entered
into as of April 5, 2001, by and between Perceptronics, Inc., a Delaware
corporation (the "Company"), and Global Alpha Corporation, a British Virgin
Islands company ("Purchaser").

Recitals

    Whereas, the Company has authorized the issuance and sale of 14,616,444
shares of its common stock, par value of $0.001 per share (the "Common Stock");

    Whereas, the Company desires to issue and sell such shares to Purchaser on
the terms and conditions set forth herein; and

    Whereas, Purchaser desires to purchase such shares on the terms and
conditions set forth herein.

Agreement

    Now, Therefore, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

1.  Agreement To Sell And Purchase.

    1.1 Sale and Purchase of Shares. Subject to the terms and conditions set
forth herein, upon execution of this Agreement and receipt of the consideration
set forth in Sections 1.2 and 1.3 hereof, the Company hereby agrees to issue and
sell to Purchaser at the Closing (as defined in Section 2.1 hereof) 14,616,444
shares of its Common Stock, which shall consist of (i) 500,000 shares of the
Company's Common Stock to be issued at the Closing (the "Initial Shares"), and
(ii) 14,116,444 shares of the Company's Common Stock issuable upon exercise of
five (5) warrants, the terms of which are set forth in Section 1.3 below (each,
a "Warrant" and, collectively, the "Warrants"). The Warrants are attached hereto
as Exhibit A. The Initial Shares and the shares of the Company's Common Stock
issuable upon exercise of the Warrants shall be referred to herein collectively
as the "Shares."

    1.2 Issuance and Sale of Initial Shares. At the Closing, (i) Purchaser shall
deliver to the Company the sum of One Hundred Thousand Dollars ($100,000), and
(ii) the Company shall issue and deliver to Purchaser a stock certificate
representing Five Hundred Thousand (500,000) shares of the Company's Common
Stock. Upon receipt of the foregoing consideration, the Initial Shares shall be
validly issued, fully paid and non-assessable.

    1.3 Sale and Issuance of Warrants. At the Closing, the Company shall deliver
to Purchaser the Warrants as follows:

    (a) First Warrant. The Company shall execute and deliver to Purchaser a
warrant to purchase Five Hundred Thousand (500,000) shares of the Company's
Common Stock (the "First Warrant"). The exercise price for the First Warrant
shall be Twenty Cents ($0.20) per share. Subject to the terms and conditions of
the First Warrant, the term of the First Warrant shall be thirty (30) days from
the date of grant.

    (b) Second Warrant. The Company shall execute and deliver to Purchaser a
warrant to purchase Seven Hundred Fifty Thousand (750,000) shares of the
Company's Common Stock (the "Second Warrant"). The exercise price for the Second
Warrant shall be Twenty Cents ($0.20) per share. Subject to the terms and
conditions of the Second Warrant, the term of the Second Warrant shall be sixty
(60) days from the date of grant.

    (c) Third Warrant. The Company shall execute and deliver to Purchaser a
warrant to purchase Seven Hundred Fifty Thousand (750,000) shares of the
Company's Common Stock (the

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"Third Warrant"). The exercise price for the Third Warrant shall be Twenty Cents
($0.20) per share. Subject to the terms and conditions of the Third Warrant, the
term of the Third Warrant shall be ninety (90) days from the date of grant.

    (d) Fourth Warrant. The Company shall execute and deliver to Purchaser a
warrant to purchase Six Million Fifty-Eight Thousand Two Hundred Twenty-Two
(6,058,222) shares of the Company's Common Stock (the "Fourth Warrant"). The
exercise price for the Fourth Warrant shall be Twenty-Two Cents ($0.22) per
share. Subject to the terms and conditions of the Fourth Warrant, the term of
the Fourth Warrant shall be one hundred twenty (120) days from the date of
grant.

    (e) Fifth Warrant. The Company shall execute and deliver to Purchaser a
warrant to purchase Six Million Fifty-Eight Thousand Two Hundred Twenty-Two
(6,058,222) shares of the Company's Common Stock (the "Fifth Warrant"). The
exercise price for the Fifth Warrant shall be Twenty-Three Cents ($0.23) per
share. Subject to the terms and conditions of the Fifth Warrant, the term of the
Fifth Warrant shall be one hundred eighty (180) days from the date of grant.

2.  Closing, Delivery And Payment.

    2.1 Closing. The closing of the sale and purchase of the Shares and the
Warrants under this Agreement (the "Closing") shall take place at 1:00 p.m. on
the date hereof, at the offices of Paul, Hastings, Janofsky & Walker LLP at 695
Town Center Drive, Seventeenth Floor, Costa Mesa, California 92626, or at such
other time or place as the parties may mutually agree (such date is hereinafter
referred to as the "Closing Date").

    2.2 Delivery. At the Closing, subject to the terms and conditions hereof,
(i) the Company will deliver to Purchaser each of the Warrants, and a stock
certificate representing the Initial Shares and (ii) Purchaser shall deliver to
the Company payment of the purchase price for the Initial Shares by check or
wire transfer.

3.  Representations And Warranties Of The Company.

    The Company hereby represents and warrants to Purchaser the following:

    3.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Warrants, the Registration Rights Agreement attached as
Exhibit B (the "Registration Rights Agreement"), and the Right of First Refusal
Agreement attached as Exhibit C (the "Right of First Refusal Agreement," and
collectively with the Warrants and the Registration Rights Agreement, the
"Related Agreements"), to issue and sell the Shares, and to carry out the
provisions of this Agreement and the Related Agreements, and to carry on its
business as presently conducted and as presently proposed to be conducted. The
Company is duly qualified and is authorized to do business and is in good
standing as a foreign corporation in all jurisdictions in which the nature of
its activities or its properties (both owned and leased) makes such
qualification necessary, except for those jurisdictions in which failure to do
so would not have a material adverse effect on the Company or its business.

    3.2 Subsidiaries. Except as set forth on Schedule 3.2 attached hereto, the
Company does not own or control any equity security or other interest of any
other corporation, limited partnership or other business entity. Except as set
forth on Schedule 3.2 attached hereto, the Company is not a participant in any
joint venture, partnership or similar arrangement.

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    3.3 Capitalization; Voting Rights.

    (a) The authorized capital stock of the Company, immediately prior to the
Closing, consists of (i) Thirty Million (30,000,000) shares of Common Stock,
9,381,260 shares of which are issued and outstanding, and (ii) Two Million
(2,000,000) shares of Preferred Stock, $0.001 par value, none of which are
issued and outstanding.

    (b) The Company currently has reserved (i) an aggregate of 1,483,300 shares
of its Common Stock for issuance upon exercise of options granted pursuant to
its 1992 Stock Option Plan, 1999 Stock Option Plan, and 1999 Stock Option Plan
for Non-Employee Directors, each as amended (collectively, the "Option Plans"),
(ii) an aggregate of 168,215 shares of its Common Stock for issuance to
consultants pursuant to the 1999 Stock Compensation Plan for Consultants (the
"Compensation Plan"), (iii) 3,397,005 shares of its Common Stock for issuance
upon exercise of outstanding warrants, and (iv) 186,664 shares of its Common
Stock for issuance upon conversion of certain convertible promissory notes, all
as more fully described on Schedule 3.3(b) attached hereto.

    (c) Other than the options, warrants and convertible promissory notes which
are listed as outstanding as of the date hereof on Schedule 3.3(b) hereto, and
except as may be granted pursuant to this Agreement and the Related Agreements,
there are no outstanding options, warrants, rights (including conversion or
preemptive rights and rights of first refusal), preferred or other stock, stock
purchase agreements, subscription agreements, convertible debt instruments,
contracts or any other instruments or securities of any kind which can be
converted into or exercised to obtain or which otherwise provide for the grant,
sale or issuance of any shares of capital stock of the Company or other
securities of the Company, and there are no proxy or stockholder agreements. All
outstanding options to purchase securities of the Company have been duly
authorized by all necessary corporate and shareholder action.

    (d) All issued and outstanding shares of the Company's Common Stock (i) have
been duly authorized and validly issued, and are fully paid and nonassessable,
and (ii) were issued in compliance with all applicable state and federal laws
concerning the issuance of securities.

    (e) The shares issuable upon exercise of the Warrants (the "Warrant Shares")
have been duly and validly reserved for issuance. When issued in compliance with
the provisions contained in this Agreement and in the Warrants, the Initial
Shares and the Warrant Shares will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances; provided, however,
that the Initial Shares and the Warrant Shares may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein or as
otherwise required by such laws at the time a transfer is proposed.

    (f)  Except as set forth on Schedule 3.3(f) hereto, no stock plan, stock
purchase plan, stock option or other agreement or understanding between the
Company and any holder of any equity securities or rights to purchase equity
securities provides for acceleration or other changes in the vesting provisions
or other terms of such agreement or understanding as the result of any merger,
consolidated sale of stock or assets, change in control or any other
transaction(s) by the Company, including the transactions contemplated in this
Agreement and the Related Agreements.

    3.4 Authorization; Binding Obligations. All corporate action on the part of
the Company, its officers, directors and stockholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and
thereto has been taken. This Agreement and the Related Agreements, when executed
and delivered, will be valid and binding obligations of the Company enforceable
in accordance with their terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general

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application affecting enforcement of creditors' rights, and (b) general
principles of equity that restrict the availability of equitable remedies. The
sale of the Initial Shares and the subsequent issuance of the Warrant Shares are
not and will not be subject to any preemptive rights or rights of first refusal
that have not been properly waived or complied with.

    3.5 Financial Statements. The Company has made available to Purchaser
(i) its audited balance sheet as of March 31, 2000 and audited statements of
income and cash flows for the twelve months ending March 31, 2000, and (ii) its
unaudited balance sheet as of December 31, 2000 (the "Statement Date") and
unaudited consolidated statements of income and cash flows for the nine-month
period ending on December 31, 2000 (collectively, the "Financial Statements"),
copies of which are attached as Schedule 3.5 hereto. The Financial Statements,
together with the notes thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated, except as disclosed therein, and present fairly the financial
condition and position of the Company as of March 31, 2000 and the Statement
Date; provided, however, that the unaudited financial statements are subject to
normal recurring year-end audit adjustments (which are not expected to be
material), and do not contain all footnotes required under generally accepted
accounting principles.

    3.6 Liabilities. The Company has no material liabilities and the Company is
not aware of any contingent liabilities of the Company which are not disclosed
in the Financial Statements, except current liabilities incurred in the ordinary
course of business subsequent to the Statement Date which have not been, either
in any individual case or in the aggregate, materially adverse.

    3.7 Agreements; Action.

    (a) Except as set forth on Schedule 3.7 hereto, there are no agreements,
understandings or proposed transactions between the Company and any of its
officers, directors, affiliates or any affiliate thereof.

    (b) Except as set forth on Schedule 3.7 hereto, there are no agreements,
understandings, instruments, contracts, proposed transactions, judgments,
orders, writs or decrees to which the Company is a party or, to the knowledge of
the Company by which it is bound which may involve (i) obligations (contingent
or otherwise) of, or payments to, the Company in excess of $200,000 (other than
obligations of, or payments to, the Company arising from purchase or sale
agreements entered into in the ordinary course of business), or (ii) the
transfer or license of any patent, copyright, trade secret or other proprietary
right to or from the Company (other than licenses arising from the purchase of
"off the shelf" or other standard products), or (iii) provisions restricting the
development, manufacture or distribution of the Company's products or services,
(iv) obligations extending beyond one (1) year, or (v) indemnification by the
Company with respect to infringements of proprietary rights (other than
indemnification obligations arising from purchase or sale agreements entered
into in the ordinary course of business).

    (c) Except as set forth on Schedule 3.7 hereto, the Company has not
(i) declared or paid any dividends, or authorized or made any distribution upon
or with respect to any class or series of its capital stock, (ii) incurred any
indebtedness for money borrowed or any other liabilities (other than with
respect to dividend obligations, distributions, indebtedness and other
obligations incurred in the ordinary course of business or as disclosed in the
Financial Statements) individually in excess of $50,000 or, in the case of
indebtedness and/or liabilities individually less than $50,000, in excess of
$200,000 in the aggregate, (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.

    (d) For the purposes of subsections (b) and (c) above, all indebtedness,
liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same

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person or entity (including persons or entities the Company has reason to
believe are affiliated therewith) shall be aggregated for the purpose of meeting
the individual minimum dollar amounts of such subsections.

    (e) Except as set forth on Schedule 3.7 hereto, the Company has not engaged
in the past three (3) months in any discussion (i) with any representative of
any corporation or corporations regarding the consolidation or merger of the
Company with or into any such corporation or corporations, (ii) with any
corporation, partnership, association or other business entity or any individual
regarding the sale, conveyance or disposition of all or substantially all of the
assets of the Company, or a transaction or series of related transactions in
which more than fifty percent (50%) of the voting power of the Company is
disposed of, or (iii) regarding any other form of acquisition, liquidation,
dissolution or winding up, of the Company.

    3.8 Obligations to Related Parties. There are no obligations of the Company
to officers, directors, stockholders, or employees of the Company other than
(a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company). None of the officers, directors or, to the best
knowledge of the Company, key employees or stockholders of the Company or any
members of their immediate families, are indebted to the Company or have any
direct or indirect ownership interest in any firm or corporation with which the
Company is affiliated or with which the Company has a business relationship, or
any firm or corporation which competes with the Company, other than passive
investments in publicly traded companies (representing less than 1% of such
company) which may compete with the Company. Except as may be disclosed in the
Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.

    3.9 Changes. Since the Statement Date, there has not been to the knowledge
of the Company:

    (a) Any change in the assets, liabilities, financial condition, prospects or
operations of the Company from that reflected in the Financial Statements, other
than changes in the ordinary course of business, none of which individually or
in the aggregate has had or is reasonably expected to have a material adverse
effect on such assets, liabilities, financial condition, prospects or operations
of the Company;

    (b) Any resignation or termination of any officer, key employee or group of
employees of the Company; and the Company has no knowledge of the impending
resignation or termination of employment of any such officer, key employee or
group of employees;

    (c) Any material change, except in the ordinary course of business, in the
contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty or otherwise;

    (d) Any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the properties, business or prospects or
financial condition of the Company;

    (e) Any waiver by the Company of a valuable right or of a material debt owed
to it;

    (f)  Any direct or indirect loans made by the Company to any stockholder,
employee, officer or director of the Company, other than advances made in the
ordinary course of business;

    (g) Any material change in any compensation arrangement or agreement with
any employee, officer, director or stockholder;

    (h) Any declaration or payment of any dividend or other distribution of the
assets of the Company;

    (i)  Any labor organization activity related to the Company;

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    (j)  Any debt, obligation or liability incurred, assumed or guaranteed by
the Company, except those for immaterial amounts and for current liabilities
incurred in the ordinary course of business;

    (k) Any sale, assignment or transfer of any patents, trademarks, copyrights,
trade secrets or other intangible assets;

    (l)  Any change in any material agreement to which the Company is a party or
by which it is bound which materially and adversely affects the business,
assets, liabilities, financial condition, operations or prospects of the
Company;

    (m) Any other event or condition of any character that, either individually
or cumulatively, has materially and adversely affected the business, assets,
liabilities, financial condition, prospects or operations of the Company; or

    (n) Any arrangement or commitment by the Company to do any of the acts
described in subsection (a) through (m) above.

    3.10 Intellectual Property.

    (a) The Company owns or possesses sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes necessary for its
business as now conducted and as presently proposed to be conducted, without any
known infringement of the rights of others. Except as set forth on Schedule 3.10
hereto, there are no outstanding options, licenses or agreements of any kind
relating to the foregoing proprietary rights, nor is the Company bound by or a
party to any options, licenses or agreements of any kind with respect to the
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes of any other
person or entity other than such licenses or agreements arising from the
purchase of "off the shelf" or standard products.

    (b) The Company has not received any communications alleging that the
Company has violated or, by conducting its business as presently proposed to be
conducted, would violate, any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity, nor is the Company aware of any basis therefor.

    (c) The Company is not aware that any of its employees is obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with their duties to the Company or
that would conflict with the Company's business as presently proposed to be
conducted. Each former employee, officer and consultant of the Company who
worked for the Company at any time after April 1, 1999, and each current
employee, officer and consultant of the Company, has executed and delivered to
the Company a proprietary information and inventions agreement. No such former
or current employee, officer or consultant of the Company has excluded works or
inventions made prior to his or her employment with the Company from his or her
assignment of inventions pursuant to such employee, officer or consultant's
proprietary information and inventions agreement. The Company does not believe
it is or will be necessary to utilize any inventions, trade secrets or
proprietary information of any of its employees made prior to their employment
by the Company, except for inventions, trade secrets or proprietary information
that have been assigned to the Company.

    3.11 Compliance with Other Instruments. The Company is not in violation or
default of any term of its Certificate of Incorporation or Bylaws, or, except to
the extent that any violation or default would not result in a material adverse
effect on the Company, of any provision of any mortgage, indenture, contract,
agreement, instrument or contract to which it is party or by which it is bound
or of any judgment, decree, order, or writ. The execution, delivery, and
performance of and compliance with this

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Agreement, and the Related Agreements, and the issuance and sale of the Shares
pursuant hereto will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.

    3.12 Litigation. There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Company, currently threatened against the
Company that questions the validity of this Agreement, or the Related Agreements
or the right of the Company to enter into any of such agreements, or to
consummate the transactions contemplated hereby or thereby, or which might
result, either individually or in the aggregate, in any material adverse change
in the assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor is
the Company aware that there is any basis for any of the foregoing. The
foregoing includes, without limitation, actions pending or, to the knowledge of
the Company, threatened or any basis therefor known by the Company involving the
prior employment of any of the Company's employees, their use in connection with
the Company's business of any information or techniques allegedly proprietary to
any of their former employers, or their obligations under any agreements with
prior employers.

    3.13 Tax Returns and Payments. Except as set forth on Schedule 3.13 hereto,
the Company has filed all tax returns (federal, state and local) required to be
filed by it, and all taxes shown to be due and payable on such returns, any
assessments imposed, and to the knowledge of the Company, all other taxes due
and payable by the Company on or before the Closing, have been paid or will be
paid prior to the time they become delinquent. The Company has not been advised
(a) that any of its returns, federal, state or other, have been or are being
audited as of the date hereof, or (b) of any deficiency in assessment or
proposed judgment to its federal, state or other taxes. The Company has no
knowledge of any liability of any tax to be imposed upon its properties or
assets as of the date of this Agreement that is not adequately provided for.

    3.14 Obligations of Management. Each officer and key employee of the Company
is currently devoting substantially all of his or her business time to the
conduct of the business of the Company. No officer or key employee is currently
working or, to the knowledge of the Company, plans to work for a competitive
enterprise, whether or not such officer or key employee is or will be
compensated by such enterprise.

    3.15 Registration Rights and Voting Rights. Except as set forth on
Schedule 3.15 hereto and except as required pursuant to the Registration Rights
Agreement attached as Exhibit B hereto, the Company is presently not under any
obligation, and has not granted any rights, to register any of the Company's
presently outstanding securities or any of its securities that may hereafter be
issued. To the knowledge of the Company, no stockholder of the Company has
entered into any agreement with respect to the voting of equity securities of
the Company.

    3.16 Compliance with Laws; Permits. To the best knowledge of the Company and
its officers and directors, the Company is not in violation of any applicable
statute, rule, regulation, order or restriction of any domestic or foreign
government or any instrumentality or agency thereof in respect of the conduct of
its business or the ownership of its properties which violation would materially
and adversely affect the business, assets, liabilities, financial condition,
operations or prospects of the Company. No governmental orders, permissions,
consents, approvals or authorizations are required to be obtained and no
registrations or declarations are required to be filed in connection with the
execution and delivery of this Agreement and the issuance of the Shares, except
such as has been duly and validly obtained or filed, or with respect to any
filings that must be made after the Closing, as will be filed in a timely
manner. The Company has all franchises, permits, licenses and any similar
authority necessary

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for the conduct of its business as now being conducted by it, the lack of which
could materially and adversely affect the business, properties, prospects or
financial condition of the Company and believes it can obtain, without undue
burden or expense, any similar authority for the conduct of its business as
planned to be conducted.

    3.17 Brokers' Fees. The Company (i) has not, directly or indirectly, dealt
with any broker or finder in connection with this transaction and (ii) has not
incurred or will not incur any obligation for any broker's or finder's fee or
commission in connection with the transactions provided for in this Agreement or
the Related Agreements.

    3.18 Offering Valid. Assuming the accuracy of the representations and
warranties of Purchaser contained in Section 4.2 hereof, the offer, sale and
issuance of the Initial Shares and the Warrant Shares will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws. Neither the
Company nor any agent on its behalf has solicited or will solicit any offers to
sell or has offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such Shares by the Company
within the registration provisions of the Securities Act or any state securities
laws.

    3.19 SEC Filings. The Company has filed all required reports, schedules,
forms, statements and other documents required to be filed by it with the
Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and the Securities Act since
March 31, 1999 (collectively, including all exhibits thereto, the "SEC
Filings"). The SEC Filings, as of their respective dates (and, if amended or
superseded by a filing prior to the date of this Agreement or the Closing Date,
then on the date of such filing), (i) did not contain any 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
which they were made, not misleading, and (ii) complied in all material respects
with the Exchange Act and the Securities Act, as the case may be, and the rules
and regulations thereunder.

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4.  Representations And Warranties Of Purchaser.

    Purchaser hereby represents and warrants to the Company as follows:

    4.1 Requisite Power and Authority. Purchaser has all necessary power and
authority under all applicable provisions of law to execute and deliver this
Agreement and the Related Agreements and to carry out the provisions hereof and
thereof. All corporate action on Purchaser's part necessary for the
authorization, execution and delivery of this Agreement and the Related
Agreements have been taken. Upon their execution and delivery, this Agreement
and the Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, and (b) as limited by
general principles of equity that restrict the availability of equitable
remedies.

    4.2 Investment Representations. Purchaser understands that the Shares have
not been registered under the Securities Act. Purchaser also understands that
the Shares are being offered and sold pursuant to an exemption from registration
contained in the Securities Act based in part upon Purchaser's representations
contained in the Agreement. Purchaser hereby represents and warrants as follows:

    (a) Purchaser Bears Economic Risk. Purchaser has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. Purchaser must bear the economic risk of this investment
indefinitely unless and until the Shares are registered pursuant to the
Securities Act, or an exemption from registration is available.

    (b) Acquisition for Own Account. Purchaser is acquiring the Shares for
Purchaser's own account for investment only, and not with a view towards their
distribution.

    (c) Purchaser Can Protect Its Interest. Purchaser represents that by reason
of its, or of its management's, business or financial experience, Purchaser has
the capacity to protect its own interests in connection with the transactions
contemplated in this Agreement, and the Related Agreements. Further, Purchaser
is aware of no publication of any advertisement in connection with the
transactions contemplated in the Agreement.

    (d) Accredited Investor. Purchaser represents that it is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act.

    (e) Company Information. Purchaser has received and read the Financial
Statements and has had an opportunity to discuss the Company's business,
management and financial affairs with directors, officers and management of the
Company and has had the opportunity to review the Company's operations and
facilities. Purchaser has also had the opportunity to ask questions of and
receive answers from, the Company and its management regarding the terms and
conditions of this investment.

    (f)  Rule 144. Purchaser acknowledges and agrees that the Shares must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Purchaser has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act as in effect from time to time, which permits limited resale of
shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain current
public information about the Company, the resale occurring following the
required holding period under Rule 144 and the number of shares being sold
during any three-month period not exceeding specified limitations.

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5.  Purchaser Rights.

    The Company hereby agrees to provide to Purchaser the following rights for
so long as any of the Warrants shall remain outstanding:

    5.1 Board Observation Rights. The Company shall provide Purchaser at least
seven (7) days', or if seven (7) days is not reasonably practicable then such
advance notice as is reasonably practicable, but under no circumstances shall
such notice be less than forty-eight (48) hours', prior written notice of all
meetings of the Company's board of directors and shall permit Purchaser's
representatives to attend all such meetings.

    5.2 Information Rights. The Company shall deliver to Purchaser annual
audited and quarterly unaudited financial reports which shall be provided to
Purchaser within ninety (90) days of the Company's fiscal year-end and
forty-five (45) days of the end of each of the first, second and third quarters
of each fiscal year of the Company.

    5.3 Inspection Rights. Purchaser shall have the right to visit the Company's
facilities during normal business hours and to inspect the Company's properties,
including its corporate and financial records, and to discuss the Company's
business and finances with the officers and directors of the Company as often as
Purchaser shall reasonably request.

    5.4 Approval Rights. The Company shall not, without the prior written
approval of Purchaser:

(i)amend or repeal any provision of, or add any provision to, the Company'
Certificate of Incorporation or Bylaws;

(ii)create any new series or class of shares having a preference or priority as
to dividends or assets superior to that of the Company's Common Stock;

(iii)create any bonds, notes or other obligations convertible into, exchangeable
for or having option rights to purchase shares of stock with any preference or
priority as to dividends or assets superior to that of the Company's Common
Stock;

(iv)reclassify any class or series of the Company's Common Stock into shares
with a preference or priority as to dividends or assets superior to that of the
Company's Common Stock;

(v)issue any shares of the capital stock of the Company other than in connection
with the exercise or conversion of options, warrants or convertible promissory
notes, which are listed as outstanding as of the date hereof on Schedule 3.3(b)
hereto, or pursuant to exercise of the Warrants;

(vi)issue, grant or sell any securities of the Company except in accordance with
subsection (v) above;

(vii)agree to any merger, sale or consolidation of the Company with another
entity;

(viii)agree to any sale of the Company or the sale or license of any assets of
the Company, including any software in part or whole, except in the normal
course of the Company's IC3D products and services business on a basis
consistent with the Company's activities over the previous one year period;

(ix)liquidate or wind-up the Company;

(x)commit the Company to borrow in excess of Two Hundred Thousand Dollars
($200,000), on an individual or an aggregate basis;

(xi)enter into any contract requiring the payment by the Company of more than
One Hundred Thousand Dollars ($100,000), the delivery of assets or services with
a fair market value in

-10-

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excess of One Hundred Thousand Dollars ($100,000), or the performance of
services by the Company for a period in excess of six (6) months;

(xii)declare or pay a dividend on the capital stock of the Company;

(xiii)authorize any agreement between the Company and any officer, director,
stockholder or other related party of the Company; or

(xiv)enter into any transaction outside of the ordinary scope of the Company's
business.

6.  Closing Conditions and Deliveries.

    6.1 Representations and Warranties True; Performance of Obligations. The
representations and warranties made by the Company in Section 3 hereof shall be
true and correct as of the Closing Date, and the Company shall have performed
all obligations and conditions herein required to be performed or observed by it
on or prior to the Closing.

    6.2 Secretary's Certificate. Purchaser shall have received from the
Company's Secretary, a certificate having attached thereto (i) the Company's
Certificate of Incorporation as in effect at the time of the Closing, (ii) the
Company's Bylaws as in effect at the time of the Closing, (iii) resolutions
approved by the Board of Directors of the Company authorizing the transactions
contemplated hereby, and (iv) good standing certificates (including tax good
standing) with respect to the Company from the applicable authorities in
Delaware, California and any other jurisdiction in which the Company is
qualified to do business, dated no more than seven (7) days prior to the
Closing.

    6.3 Stock Certificates. The stock certificates representing the Initial
Shares shall have been delivered to the Purchaser.

    6.4 Warrants. The Warrants, each in the form attached as Exhibit A hereto,
shall have been executed and delivered to Purchaser.

    6.5 Registration Rights Agreement. The Registration Rights Agreement in the
form attached as Exhibit B hereto shall have been executed and delivered by the
parties thereto.

    6.6 Right of First Refusal Agreement. The Right of First Refusal Agreement
in the form attached as Exhibit C hereto shall have been executed and delivered
by the parties thereto, and stock certificates representing all of the shares
subject to the Right of First Refusal Agreement shall have been delivered to the
Secretary of the Company and shall have had appropriate legends placed upon them
to reflect the restrictions on transfer set forth in the Right of First Refusal
Agreement.

    6.7 Representations and Warranties True. The representations and warranties
made by Purchaser in Section 4 shall be true and correct at the date of the
Closing, and the Purchaser shall have performed all obligations and conditions
herein required to be performed or observed by it on or prior to the Closing.

7.  Miscellaneous.

    7.1 Governing Law. This Agreement shall be governed by, construed in
accordance with, and enforced under, the laws of the state of California,
without regard to the principles of conflicts of law of such state.

    7.2 Survival. The representations, warranties, covenants and agreements made
herein shall survive any investigation made by any Purchaser and the Closing.
All statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument.

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    7.3 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of the Shares from time to time.

    7.4 Entire Agreement. This Agreement, the exhibits and schedules hereto, the
Related Agreements and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.

    7.5 Severability. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

    7.6 Amendment and Waiver.

    (a) This Agreement may be amended or modified only upon the written consent
of both parties.

    (b) The obligations of the Company and the rights of the holders of the
Shares under the Agreement may be waived only with the written consent of
Purchaser.

    7.7 Publicity. All press releases, announcements or other publicity
pertaining to the transactions contemplated hereby must be approved by Purchaser
and the Company prior to release, provided that such approvals may not be
unreasonably withheld. Each of Purchaser and the Company understand and agree
that the Company will be required to file copies of this Agreement and the
Related Agreements with the SEC in connection with filing a Form 8-K immediately
after the execution of such agreements.

    7.8 Delays or Omissions. It is agreed that no delay or omission to exercise
any right, power or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement or the Related Agreements,
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on any Purchaser's part of any breach, default or
noncompliance under this Agreement or the Related Agreements or any waiver on
such party's part of any provisions or conditions of the Agreement or the
Related Agreements must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or the Related Agreements, by law, or otherwise afforded to any party,
shall be cumulative and not alternative.

    7.9 Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (a) upon personal delivery to the party
to be notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
or (c) two (2) business days after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Company or Purchaser at the
address as set forth on the signature page hereof, or at such other address as
the Company or Purchaser may designate by ten (10) days advance written notice
to the other party hereto.

    7.10 Expenses. Each party shall pay all costs and expenses incurred by it
with respect to the negotiation, execution, delivery and performance of the
Agreement.

    7.11 Attorneys' Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this

-12-

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Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

    7.12 Titles and Subtitles. The titles of the sections and subsections of the
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

    7.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

    7.14 Confidentiality. Each party hereto agrees that, except with the prior
written consent of the other party, it shall at all times keep confidential and
not divulge, furnish or make accessible to anyone any confidential information,
knowledge or data concerning or relating to the business or financial affairs of
the other parties to which such party has been or shall become privy by reason
of this Agreement or the Related Agreements, discussions or negotiations
relating to this Agreement or the Related Agreements, the performance of its
obligations hereunder or the ownership of the Shares purchased hereunder. The
provisions of this Section 7.14 shall be in addition to, and not in substitution
for, the provisions of any separate nondisclosure agreement executed by the
parties hereto.

    7.15 Pronouns. All pronouns contained herein, and any variations thereof,
shall be deemed to refer to the masculine, feminine or neutral, singular or
plural, as to the identity of the parties hereto may require.

    7.16 Further Assurances. At any time and from time to time after the Closing
Date, each party will execute such additional instruments and take such actions
as may be reasonably requested by the other party to carry out the intent and
purposes of this Agreement.

[SIGNATURE PAGE FOLLOWS ON NEXT PAGE]

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[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

    In Witness Whereof, the parties hereto have executed the this Securities
Purchase Agreement as of the date set forth in the first paragraph hereof.

"COMPANY"
 
PERCEPTRONICS, INC.,
a Delaware corporation
 
 
By:
 
/s/ RICHARD MOSKOWITZ           

--------------------------------------------------------------------------------

    Name: Richard Moskowitz
Title: Chairman and Chief Executive Officer
 
 
Address:
405 South Beverly Drive, Fourth Floor
Beverly Hills, California 90212
Facsimile No.: (310) 552-4765
"PURCHASER"
 
GLOBAL ALPHA CORPORATION,
a British Virgin Islands company
 
 
By:
 
/s/ BARRY DIDATO           

--------------------------------------------------------------------------------

        Barry Didato
Authorised Signatory
 
 
Address:
Craigmuir Chambers
P.O. Box 71
Road Town
Tortola, British Virgin Islands

-14-

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Exhibit A
Warrants

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THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED EXCEPT IN COMPLIANCE WITH THE ACT AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.

Warrant to Purchase Common Stock
of
PERCEPTRONICS, INC.

No. WC-1   Date of Issuance—April 5, 2001

Void after May 5, 2001

    Perceptronics, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for value received, Global Alpha Corporation, a British Virgin
Islands company (including any successors and assigns, "Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company (including
any corporation which shall succeed to or assume the obligations of the Company
hereunder) at any time or from time to time before 5:00 PM Pacific time, on
May 5, 2001 (the "Expiration Date") five hundred thousand (500,000) fully paid
and nonassessable shares of common stock, par value $0.001 per share ("Common
Stock"), of the Company. The purchase price per share of such Common Stock upon
exercise of this Warrant shall be Twenty Cents ($0.20), subject to adjustment as
provided in Section 7 hereof (the "Purchase Price").

    1.  Series of Warrants. This Warrant is one of a series of warrants issued
pursuant to a Securities Purchase Agreement of even date herewith (the
"Securities Purchase Agreement") between the Company and the Holder. The term
"Stock Warrants," as used herein, shall refer to this Warrant and the other
warrants issued pursuant to the Securities Purchase Agreement.

    2.  Initial Exercise Date; Expiration. This Warrant may be exercised by the
Holder, in full or in part, at any time or from time to time before 5:00 PM,
Pacific time, on May 5, 2001 (the "Exercise Period").

    3.  Exercise of Warrant; Partial Exercise. This Warrant may be exercised in
full or in part by the Holder by surrender of this Warrant, together with the
form of subscription attached hereto as Schedule 1, duly executed by the Holder,
to the Company at its principal office, accompanied by payment, in cash or by
certified or official bank check payable to the order of the Company or by wire
transfer, of the Purchase Price for the shares of Common Stock to be purchased
hereunder. For any partial exercise hereof, the Holder shall designate in a
subscription in the form of Schedule 1 attached hereto delivered to the Company
the number of shares of Common Stock that it wishes to purchase. On any such
partial exercise, the Company, at its expense, shall forthwith issue and deliver
to the Holder a new warrant of like tenor, in the name of the Holder, which
shall be exercisable for such number of shares of Common Stock represented by
this Warrant which have not been purchased upon such exercise.

    4.  Termination of Warrant. In the event that any Stock Warrant is not
exercised in full prior to its expiration, then immediately following the
expiration of such Stock Warrant, this Warrant shall be terminated.

    5.  When Exercise Effective. The exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on the business
day on which this Warrant is surrendered to the Company as provided in Section 3
and, at such time, the person in whose name any certificate for shares of Common
Stock shall be issuable upon such exercise shall be deemed to be the record
holder of such Common Stock for all purposes.

    6.  Delivery on Exercise. As soon as practicable after the exercise of this
Warrant in full or in part, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, or as the Holder may direct, a certificate or
certificates for the number of fully paid and nonassessable full shares of
Common Stock to which the

--------------------------------------------------------------------------------

Holder shall be entitled on such exercise (rounded up to the next nearest whole
number in the case of fractional shares).

    7.  Adjustment of Purchase Price and Number of Shares. The Purchase Price
and the number of shares purchasable upon the exercise of this Warrant shall be
subject to adjustment from time to time upon the occurrence of certain events
described in this Section 7. Upon each adjustment of the Purchase Price, the
Holder of this Warrant shall thereafter be entitled to purchase, at the Purchase
Price resulting from such adjustment, the number of shares obtained by
multiplying the Purchase Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Purchase Price resulting
from such adjustment.

    7.1 Subdivision or Combination of Stock. In case the Company shall at any
time subdivide its outstanding shares of Common Stock into a greater number of
shares, the Purchase Price in effect immediately prior to such subdivision shall
be proportionately reduced, and conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the Purchase Price in effect immediately prior to such combination shall be
proportionately increased.

    7.2 Dividends in Common Stock, Other Stock, Property, Reclassification. If
at any time or from time to time the holders of Common Stock (or any shares of
stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor,

    (A) Common Stock or any shares of stock or other securities which are at any
time directly or indirectly convertible into or exchangeable for Common Stock,
or any rights or options to subscribe for, purchase or otherwise acquire any of
the foregoing by way of dividend or other distribution,

    (B) any cash paid or payable otherwise than as a cash dividend, or

    (C) Common Stock or additional stock or other securities or property
(including cash) by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement, (other than (i) shares of Common
Stock issued as a stock split, adjustments in respect of which shall be covered
by the terms of Section 7.1 above or (ii) an event for which adjustment is
otherwise made pursuant to Section 7.3 below), then and in each such case, the
Holder hereof shall, upon the exercise of this Warrant, be entitled to receive,
in addition to the number of shares of Common Stock receivable thereupon, and
without payment of any additional consideration therefor, the amount of stock
and other securities and property (including cash in the cases referred to in
clauses (B) and (C) above) which such Holder would hold on the date of such
exercise had he been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such shares
or all other additional stock and other securities and property.

    7.3 Reorganization, Reclassification, Consolidation, Merger or Sale. If any
capital reorganization of the capital stock of the Company, or any consolidation
or merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be effected in such
a way that holders of Common Stock shall be entitled to receive stock,
securities, or other assets or property, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby the holder hereof shall thereafter
have the right to purchase and receive (in lieu of the shares of the Common
Stock of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby) such shares of stock, securities or
other assets or property as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such Common Stock equal to the
number of shares of such stock immediately

2

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theretofore purchasable and receivable upon the exercise of the rights
represented hereby. In any reorganization described above, appropriate provision
shall be made with respect to the rights and interests of the Holder of this
Warrant to the end that the provisions hereof (including, without limitation,
provisions for adjustments of the Purchase Price and of the number of shares
purchasable and receivable upon the exercise of this Warrant) shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof. The
Company will not effect any such consolidation, merger or sale unless, prior to
the consummation thereof, the successor corporation (if other than the Company)
resulting from such consolidation or the corporation purchasing such assets
shall assume by written instrument, executed and mailed or delivered to the
registered Holder hereof at the last address of such Holder appearing on the
books of the Company, the obligation to deliver to such Holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such Holder may be entitled to purchase.

    7.4 Notice of Adjustment. Upon any adjustment of the Purchase Price or any
increase or decrease in the number of shares purchasable upon the exercise of
this Warrant, the Company shall give written notice thereof to the registered
Holder of this Warrant. The notice shall be signed by the Company's chief
financial officer and shall state the Purchase Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.

    7.5 Other Notices. If at any time:

    (A) the Company shall declare any cash dividend upon its Common Stock;

    (B) the Company shall declare any dividend upon its Common Stock payable in
stock or make any special dividend or other distribution to the holders of its
Common Stock;

    (C) the Company shall offer for subscription pro rata to the holders of its
Common Stock any additional shares of stock of any class or other rights;

    (D) there shall be any capital reorganization or reclassification of the
capital stock of the Company; or consolidation or merger of the Company; or
consolidation or merger of the Company with, or sale of all or substantially all
of its assets to, another corporation; or

    (E) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company;

then, in any one or more of said cases, the Company shall give (a) at least
thirty (30) days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, at least thirty (30) days' prior written notice of the date when the
same shall take place. Any notice given in accordance with the foregoing
clause (a) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto. Any notice given in accordance with the foregoing clause (b)
shall also specify the date on which the holders of Common Stock shall been
entitled to exchange their Common Stock for securities or to other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, winding-up or conversion, as the case may be.

    7.6 Certain Events. If any change in the outstanding Common Stock of the
Company or any other event occurs as to which the other provisions of this
Section 7 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder of the Warrant in accordance with such
provisions, then the Board of Directors of the Company shall make an

3

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adjustment in the number and class of shares available under the Warrant, the
Purchase Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the
Holder of the Warrant upon exercise for the same aggregate Purchase Price the
total number, class and kind of shares as he would have owned had the Warrant
been exercised prior to the event and had he continued to hold such shares until
after the event requiring adjustment.

    8.  Replacement of Warrants. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver to the Holder, in lieu thereof, a new Warrant
of like tenor.

    9.  No Rights or Liability as a Shareholder. This Warrant does not entitle
the Holder hereof to any voting rights or other rights as a shareholder of the
Company. No provisions hereof, in the absence of affirmative action by the
Holder to purchase Common Stock, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder as a
shareholder of the Company.

    10. Miscellaneous.

    10.1 Transfer of Warrant. This Warrant is transferable and assignable, in
whole or in part, by Holder provided that any such assignment or transfer is
made in compliance with applicable federal or state securities laws. All
covenants, agreements and undertakings in this Warrant by or on behalf of any of
the parties shall bind and inure to the benefit of the respective successors and
assigns of the parties whether so expressed or not.

    10.2 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, or (c) two (2) business days after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Company at the address as set
forth on the signature page hereof, to the Holder at Craigmuir Chambers,
P.O. Box 71, Road Town, Tortola, British Virgin Islands, or at such other
address as the Company or Holder may designate by ten (10) days advance written
notice to the other party hereto.

    10.3 Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and disbursements in addition to
any other relief to which such party may be entitled.

    10.4 Amendments and Waivers. This Warrant may be amended or modified only
upon the written consent of both Holder and the Company. This Warrant and any
provision hereof may be waived only by an instrument in writing signed by the
party against which enforcement of the same is sought.

    10.5 Severability. If one or more provisions of this Warrant are held to be
unenforceable under applicable law, such provision shall be excluded from this
Warrant and the balance of the Warrant shall be interpreted as if such provision
were so excluded and shall be enforceable in accordance with its terms.

    10.6 Governing Law. This Warrant shall be governed by and construed and
enforced in accordance with the laws of the State of California, without giving
effect to its conflicts of laws principles.

4

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    IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officers thereunto duly authorized.

Dated: April 5, 2001

 

PERCEPTRONICS, INC.,
a Delaware corporation

 

 

By:

 

 
 
 
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

Richard Moskowitz, Chairman and Chief Executive Officer
 
 
Address:
405 South Beverly Drive
4th Floor
Beverly Hills, California 90212
Facsimile No.:

ATTEST:

 

 

 

 

--------------------------------------------------------------------------------

Dr. Gershon Weltman, Secretary

 

 

 

 

5

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SCHEDULE 1
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)

To:  PERCEPTRONICS, INC.

    The undersigned, the holder of the Warrant attached hereto, hereby
irrevocably elects to exercise the purchase rights represented by such Warrant
for, and to purchase thereunder,       * shares of common stock of
Perceptronics, Inc., and herewith makes payment of $               therefor, and
requests that the certificates for such shares be issued in the name of, and
delivered to            , whose address is            .

 
 
 
 
         

--------------------------------------------------------------------------------

(Signature must conform in all respects to name of the Holder as specified on
the face of the Warrant)
 
 
 
 

--------------------------------------------------------------------------------

(Print Name)
 
 
 
 
By:
 
             

--------------------------------------------------------------------------------

        Title:                

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Dated:
 
 
 
 
 
     

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*Insert here the number of shares as to which the Warrant is being exercised.

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Exhibit B
Registration Rights Agreement

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PERCEPTRONICS, INC.
REGISTRATION RIGHTS AGREEMENT
April 5, 2001

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PERCEPTRONICS, INC.
REGISTRATION RIGHTS AGREEMENT

    This Registration Rights Agreement (the "Agreement") is entered into as of
the 5th day of April, 2001, by and among Perceptronics, Inc., a Delaware
corporation (the "Company"),and Global Alpha Corporation, a British Virgin
Islands company ("GAC").

Recitals

    Whereas, GAC is purchasing shares of the Company's Common Stock (the "Common
Stock") pursuant to that certain Securities Purchase Agreement (the "Securities
Purchase Agreement") of even date herewith;

    Whereas, in connection with the consummation of the transactions
contemplated by the Securities Purchase Agreement, the parties desire to enter
into this Agreement in order to grant certain rights to the Holders (as defined
below); and

    Whereas, the obligations in the Securities Purchase Agreement are
conditioned upon the execution and delivery of this Agreement,

    Now, Therefore, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree hereto as follows:

SECTION 1. GENERAL.

    1.1 Definitions. As used in this Agreement the following terms shall have
the following respective meanings:

    "Exchange Act" means the Securities Exchange Act of 1934, as amended.

    "Form S-3" means such form under the Securities Act as in effect on the date
hereof or any successor or similar registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.

    "Holder" means any person owning of record Registrable Securities that have
not been sold to the public or any assignee of record of such Registrable
Securities in accordance with Section 2.10 hereof.

    "Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.

    "Registrable Securities" means (a) Common Stock of the Company acquired by
any Holder pursuant to the Securities Purchase Agreement and related agreements
and documents, including but not limited to, shares of Common Stock of the
Company issued or issuable upon exercise of the Warrants and shares of Common
Stock acquired pursuant to the Right of First Refusal Agreement; and (b) any
Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
such above-described securities. Notwithstanding the foregoing, Registrable
Securities shall not include any securities sold by a person to the public
either pursuant to a registration statement or Rule 144 of the Securities Act or
sold in a private transaction in which the transferor's rights under Section 2
of this Agreement are not assigned.

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    "Registrable Securities then outstanding" shall be the number of shares
determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (a) are then issued and
outstanding or (b) are issuable pursuant to then exercisable or convertible
securities.

    "Registration Expenses" shall mean all expenses incurred by the Company in
complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements of a single special
counsel for the Holders, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding
Selling Expenses).

    "Right of First Refusal Agreement" means that certain Right of First Refusal
Agreement of even date herewith among the Company, GAC and the stockholders
named therein.

    "SEC" or "Commission" means the U.S. Securities and Exchange Commission.

    "Securities Act" shall mean the Securities Act of 1933, as amended.

    "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale.

    "Special Registration Statement" shall mean a registration statement
relating to any employee benefit plan or with respect to any corporate
reorganization or other transaction under Rule 145 of the Securities Act.

    "Warrants" shall mean those certain Warrants to Purchase Common Stock
originally granted on April 5, 2001 by the Company and all amendments,
assignments, modifications and derivatives thereof.

SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.

    2.1 Restrictions on Transfer. Each certificate representing Registrable
Securities shall (unless otherwise permitted by the provisions of the Agreement)
be stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IN COMPLIANCE WITH THE ACT AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER.

    2.2 Demand Registration.

    (a) Subject to the conditions of this Section 2.2, if the Company shall
receive a written request from any Holder (the "Initiating Holder") that the
Company file a registration statement under the Securities Act covering the
registration of Registrable Securities then outstanding, and if the anticipated
aggregate offering price for such securities, prior to underwriting discounts
and commissions, would exceed Five Hundred Thousand Dollars ($500,000), then the
Company shall, within thirty (30) days of the receipt thereof give notice to all
Holders, and subject to the limitations of this Section 2.2, effect, as
expeditiously as reasonably possible, the registration under the Securities Act
of all Registrable Securities that the Initiating Holder requests to be
registered.

    (b) If an Initiating Holder intends to distribute the Registrable Securities
covered by its request by means of an underwriting, it shall so advise the
Company as a part of its request made pursuant to this Section 2.2 or any
request pursuant to Section 2.4 and the Company shall include such information
in the written notice referred to in Section 2.2(a) or Section 2.4(a), as
applicable.

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    2.3 Piggyback Registrations. The Company shall notify all Holders in writing
at least thirty (30) days prior to the filing of any registration statement
under the Securities Act for purposes of a public offering of securities of the
Company (including, but not limited to, registration statements relating to
secondary offerings of securities of the Company, but excluding Special
Registration Statements) and will afford Holders an opportunity to include in
such registration statement all or part of such Registrable Securities held
thereby. If Holder desires to include in any such registration statement all or
any part of the Registrable Securities held by it shall, within twenty (20) days
after the above- described notice from the Company, so notify the Company in
writing. Such notice shall state the intended method of disposition of the
Registrable Securities by such Holder. If a Holder decides not to include all of
its Registrable Securities in any registration statement thereafter filed by the
Company, such Holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.

    (a) Underwriting. If the registration statement under which the Company
gives notice under this Section 2.3 is for an underwritten offering, the Company
shall so advise Holders. In such event, the right of any Holder to be included
in a registration pursuant to this Section 2.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of Holder's
Registrable Securities in the underwriting to the extent provided herein. If any
Holder proposes to distribute its Registrable Securities through such
underwriting it shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of the Agreement, if the
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, the number of shares that may be
included in the underwriting shall be allocated, first, to the Company; second,
to the Holders on a pro rata basis based on the total number of Registrable
Securities held by the Holders; and third, to any shareholder of the Company
(other than a Holder) on a pro rata basis. No such reduction shall reduce the
amount of securities of the selling Holders included in the registration below
twenty-five percent (25%) of the total amount of securities included in such
registration. In no event will shares of any other selling shareholder be
included in such registration which would reduce the number of shares which may
be included by Holders without the written consent of Holders of not less than a
majority of the Registrable Securities proposed to be sold in the offering. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least ten (10) business days prior to the effective
date of the registration statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration. For any Holder which is a partnership, limited liability company
or corporation, the partners, retired partners, members and shareholders of such
Holder, or the estates and family members of any such partners, retired partners
and members and any trusts for the benefit of any of the foregoing person shall
be deemed to be a single "Holder," and any pro rata reduction with respect to
such "Holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"Holder," as defined in this sentence and such amounts shall be allocated by the
Holder in its discretion.

    (b) Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 2.3
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration. The Registration Expenses of
such withdrawn registration shall be borne by the Company in accordance with
Section 2.5 hereof.

    2.4 Form S-3 Registration. In case the Company shall receive from any Holder
or Holders of Registrable Securities a written request or requests that the
Company effect a registration on Form S-3

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(or any successor to Form S-3) or any similar short-form registration statement
and any related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company will:

    (a) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders of Registrable
Securities; and

    (b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4:

    (i)  if Form S-3 is not available for such offering by the Holders, or

    (ii) if the Holders, together with the holders of any other securities of
the Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at an aggregate price
to the public of less than Five Hundred Thousand Dollars ($500,000), or

    (iii) if within thirty (30) days of receipt of a written request from any
Holder or Holders pursuant to this Section 2.4, the Company gives notice to such
Holder or Holders of the Company's intention to make a public offering within
ninety (90) days, other than pursuant to a Special Registration Statement; or

    (iv) if the Company shall furnish to the Holders a certificate signed by the
Chairman of the Board of Directors of the Company stating that in the good faith
judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such Form S-3 registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more
than ninety (90) days after receipt of the request of the Holder or Holders
under this Section 2.4; provided, that such right to delay a request shall be
exercised by the Company not more than once in any twelve (12) month period.

    (c) Subject to the foregoing, the Company shall file a Form S-3 registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Holders. Registrations effected pursuant to this Section 2.4 shall not be
counted as demands for registration or registrations effected pursuant to
Sections 2.2 or 2.3, respectively.

    2.5 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Section 2.2 or any registration under Section 2.3 or Section 2.4 herein shall be
borne by the Company. All Selling Expenses incurred in connection with any
registrations hereunder, shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.

    2.6 Obligations of the Company. Whenever required to effect the registration
of any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:

    (a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use all reasonable efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for at least one hundred twenty (120) days or,
if earlier, until the Holder or Holders have completed the distribution related
thereto.

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    (b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement for the period set forth in paragraph (a) above.

    (c) Furnish to all Holders such number of copies of a prospectus, including
a preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.

    (d) Use its reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders.

    (e) In the event of any underwritten public offering, enter into and perform
its obligations under an underwriting agreement, in usual and customary form,
with the managing underwriter(s) of such offering. Each Holder participating in
such underwriting shall also enter into and perform its obligations under such
an agreement.

    (f)  Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing. The Company will use reasonable efforts to amend or supplement such
prospectus in order to cause such prospectus not to include any 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 not misleading in the light
of the circumstances then existing.

    (g) Use its reasonable efforts to furnish, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and (ii) a letter dated as of
such date, from the independent certified public accountants of the Company, in
form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering addressed to the
underwriters.

    2.7 Termination of Registration Rights. A Holder's registration rights shall
expire if such Holder (together with its affiliates, partners and former
partners) holds less than 1% of the Company's outstanding Common Stock and such
Holder is able to sell such Registrable Securities under Rule 144 of the
Securities Act or such Holder is able to sell all Registrable Securities held by
it pursuant to Rule 144(k) of the Securities Act.

    2.8 Delay of Registration; Furnishing Information.

    (a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.

    (b) It shall be a condition precedent to the obligations of the Company to
take any action pursuant to Section 2.2, 2.3 or 2.4 that the selling Holders
shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.

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    (c) The Company shall have no obligation with respect to any registration
requested pursuant to Section 2.2 or Section 2.4 if, due to the operation of
subsection 2.3(a), the number of shares or the anticipated aggregate offering
price of the Registrable Securities to be included in the registration does not
equal or exceed the number of shares or the anticipated aggregate offering price
required to originally trigger the Company's obligation to initiate such
registration as specified in Section 2.2 or Section 2.4, whichever is
applicable.

    2.9 Indemnification. In the event any Registrable Securities are included in
a registration statement under Sections 2.2, 2.3 or 2.4:

    (a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, the partners, officers and directors of each Holder, any
underwriter (as defined in the Securities Act) for such Holder and each person,
if any, who controls such Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions or violations
(collectively a "Violation") by the Company: (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company will pay as incurred to
each such Holder, partner, officer, director, underwriter or controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided however, that the indemnity agreement contained in this Section 2.9(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any such loss, claim, damage, liability or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by such Holder, partner, officer,
director, underwriter or controlling person of such Holder.

    (b) To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration qualifications or compliance is being effected, indemnify and hold
harmless the Company, each of its directors, its officers and each person, if
any, who controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder's partners, directors or officers or any
person who controls such Holder, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, or partner,
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will pay any legal or
other expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, or partner, officer, director
or controlling person

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of such other Holder in connection with investigating or defending any such
loss, claim, damage, liability or action if it is judicially determined that
there was such a Violation; provided, however, that the indemnity agreement
contained in this Section 2.9(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall not be
unreasonably withheld; provided further, that in no event shall any indemnity
under this Section 2.9 exceed the net proceeds from the offering received by
such Holder.

    (c) Promptly after receipt by an indemnified party under this Section 2.9 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 2.9, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 2.9, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.9.

    (d) If the indemnification provided for in this Section 2.9 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the Violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by a court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, that in no event shall any contribution by a Holder hereunder exceed
the net proceeds from the offering received by such Holder.

    (e) The obligations of the Company and Holders under this Section 2.9 shall
survive completion of any offering of Registrable Securities in a registration
statement and the termination of this agreement. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.

    2.10 Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Section 2 may be assigned by
any Holder to a transferee or assignee of Registrable Securities. Following any
such transfer, the tranferor or transferee shall furnish to the

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Company written notice of the name and address of such transferee and the
securities with respect to which such registration rights are being assigned.

    2.11 Amendment of Registration Rights. Any provision of this Section 2 may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 2.11 shall be binding upon each Holder and the
Company. By acceptance of any benefits under this Section 2, Holders of
Registrable Securities hereby agree to be bound by the provisions hereunder.

    2.12 Limitation on Subsequent Registration Rights. The Company shall not,
without the prior written consent of the Holders of at least a majority of the
Registrable Securities then outstanding, enter into any agreement with any
holder or prospective holder of any securities of the Company that would grant
such holder registration rights pari passu or senior to those granted to the
Holders hereunder.

    2.13 Rule 144 Reporting. With a view to making available to the Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to use its best efforts to:

    (a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;

    (b) File with the SEC, in a timely manner, all reports and other documents
required of the Company under the Exchange Act; and

    (c) So long as a Holder owns any Registrable Securities, furnish to such
Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act, and of the Exchange Act (at any time after it has become subject to such
reporting requirements); a copy of the most recent annual or quarterly report of
the Company; and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.

SECTION 3. COVENANTS OF THE COMPANY.

    3.1 Basic Financial Information and Reporting.

    (a) The Company will maintain true books and records of account in which
full and correct entries will be made of all its business transactions pursuant
to a system of accounting established and administered in accordance with
generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.

    (b) The Company shall deliver to each Holder, for so long as such Holder
owns any of the Registrable Securities, each of the financial statements and
other reports described below:

    (i)  As soon as practicable after the end of each fiscal year of the
Company, and in any event within ninety (90) days thereafter, the Company will
furnish each Holder a balance sheet of the Company, as at the end of such fiscal
year, and a statement of income and a statement of cash flows of the Company,
for such year, all prepared in accordance with generally accepted accounting
principles consistently applied and setting forth in each case in

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comparative form the figures for the previous fiscal year, all in reasonable
detail. Such financial statements shall be accompanied by a report and opinion
thereon by independent public accountants of national standing selected by the
Company's Board of Directors.

    (ii) The Company will furnish each Holder, as soon as practicable after the
end of the first, second and third quarterly accounting periods in each fiscal
year of the Company, and in any event within forty-five (45) days thereafter, a
balance sheet of the Company as of the end of each such quarterly period, and a
statement of income and a statement of cash flows of the Company for such period
and for the current fiscal year to date, prepared in accordance with generally
accepted accounting principles, with the exception that no notes need be
attached to such statements and year-end audit adjustments may not have been
made.

    (c) Accountants' Reports. Promptly upon receipt thereof, the Company shall
deliver to each Holder copies of all significant reports submitted by the
Company's firm of certified public accountants in connection with each annual,
interim or special audit or review of any type of the financial statements or
related internal control systems of the Company and its subsidiaries (if any)
made by such accountants, including any comment letter submitted by such
accountants to management in connection with their services.

    3.2 Reservation of Common Stock. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the exercise of the
Warrants, all Common Stock issuable from time to time upon such exercise.

SECTION 4. MISCELLANEOUS.

    4.1 Governing Law. This Agreement, and the rights of the parties hereto,
shall be governed by, construed in accordance with and enforced under the laws
of the State of California without regard to the principles of conflicts of law
of such state.

    4.2 Survival. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.

    4.3 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of Registrable Securities from time to time; provided, however, that
prior to the receipt by the Company of adequate written notice of the transfer
of any Registrable Securities specifying the full name and address of the
transferee, the Company may deem and treat the person listed as the holder of
such shares in its records as the absolute owner and holder of such shares for
all purposes, including the payment of dividends or any redemption price.

    4.4 Entire Agreement. This Agreement, the Securities Purchase Agreement and
the other documents delivered pursuant thereto, including but not limited to the
Right of First Refusal Agreement and each of the Warrants, constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and no party shall be liable or bound to any other in any manner
by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.

    4.5 Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or

10

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unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.

    4.6 Amendment and Waiver.

    (a) Except as otherwise expressly provided, this Agreement may be amended or
modified only upon the written consent of the Company and the holders of at
least a majority of the Registrable Securities.

    (b) Except as otherwise expressly provided, the obligations of the Company
and the rights of the Holders under this Agreement may be waived only with the
written consent of the holders of at least a majority of the Registrable
Securities.

    (c) For the purposes of determining the number and identity of all Holders
entitled to vote or exercise any rights hereunder, the Company shall be entitled
to rely solely on the list of record holders of its stock as maintained by or on
behalf of the Company.

    4.7 Delays or Omissions. It is agreed that no delay or omission to exercise
any right, power, or remedy accruing to any Holder, upon any breach, default or
noncompliance of the Company under this Agreement shall impair any such right,
power, or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent, or approval of any kind or character on any Holder's
part of any breach, default or noncompliance under the Agreement or any waiver
on such Holder's part of any provisions or conditions of this Agreement must be
in writing and shall be effective only to the extent specifically set forth in
such writing. All remedies, either under this Agreement, by law, or otherwise
afforded to Holders, shall be cumulative and not alternative.

    4.8 Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (a) upon personal delivery to the party
to be notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient; if not, then on the next business day,
or (c) two (2) business days after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the party to be notified at the
address as set forth on the signature page hereto or at such other address as
such party may designate by ten (10) days advance written notice to the other
parties hereto.

    4.9 Attorneys' Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

    4.10 Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

    4.11 Further Assurances. At any time and from time to time after the date
hereof, each party will execute such additional instruments and take such
actions as may be reasonably requested by any other party hereto to carry out
the intent and purposes of this Agreement.

    4.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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    IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date set forth in the first paragraph hereof.

"COMPANY"
 
PERCEPTRONICS, INC.,
a Delaware corporation
 
 
By:
 
         

--------------------------------------------------------------------------------

    Name: Richard Moskowitz
Title: Chairman and Chief Executive Officer
 
 
Address:
405 South Beverly Drive, Fourth Floor
Beverly Hills, California 90212
Facsimile No.:
"GAC"
 
GLOBAL ALPHA CORPORATION,
a British Virgin Islands company
 
 
By:
 
         

--------------------------------------------------------------------------------

        Barry Didato
Authorised Signatory
 
 
Address:
Craigmuir Chambers
P.O. Box 71
Road Town
Tortola, British Virgin Islands

12

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Exhibit C
Right of First Refusal Agreement

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RIGHT OF FIRST REFUSAL AGREEMENT

    This Right Of First Refusal Agreement (this "Agreement") is made and entered
into as of April 5, 2001 by and among Perceptronics, Inc., a Delaware
corporation (the "Company"), Global Alpha Corporation, a British Virgin Islands
company ("Purchaser"), and those certain stockholders of the Company whose names
appear on the signature page hereto (each, hereinafter individually referred to
as a "Stockholder" and collectively referred to as the "Stockholders").

Recitals

    A. WHEREAS, the Company and Purchaser are parties to that certain Securities
Purchase Agreement of even date herewith (the "Securities Purchase Agreement"),
pursuant to which the Company agreed to issue and sell to Purchaser and
Purchaser agreed to purchase up to an aggregate of 14,616,444 shares of the
Company's common stock (the "Common Stock") on the terms and conditions set
forth in the Securities Purchase Agreement;

    B. WHEREAS, it is a condition to the closing of the transactions
contemplated by the Securities Purchase Agreement that the Stockholders, each of
which is a director and/or executive officer of the Company, grant Purchaser a
right of first refusal to acquire the Common Stock held by such Stockholders;

    C. WHEREAS, each of the Stockholders currently owns that number of shares of
the Company's Common Stock indicated on Exhibit A hereto; and

    D. WHEREAS, the Company, the Stockholders and Purchaser desire to enter into
this Agreement to grant Purchaser the rights set forth herein.

    Now, Therefore, in consideration of the foregoing recitals and the mutual
promises made herein, the parties hereto agree as follows:

    1.  Certain Definitions. For purposes of this Agreement, the following terms
have the following meanings:

    1.1 "Stock" means and includes all shares of Common Stock of the Company
that are issued and outstanding at the relevant time plus (a) all shares of
Common Stock that may be issued upon exercise of any options, warrants and other
rights of any kind that are then exercisable, and (b) all shares of Common Stock
that may be issued upon conversion of (i) any convertible securities, including,
without limitation, preferred stock and debt securities then outstanding which
are, by their terms, then convertible into or exchangeable for Common Stock or
(ii) any such convertible securities issuable upon exercise of outstanding
options, warrants or other rights that are then exercisable.

    1.2 "Offered Stock" means all Stock proposed to be Transferred by a
Stockholder pursuant hereto.

    1.3 "Transfer" and "Transferred" mean and include any sale, assignment,
encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by
bequest, devise or descent, or other transfer or disposition of any kind,
including but not limited to transfers to receivers, levying creditors, trustees
or receivers in bankruptcy proceedings or general assignees for the benefit of
creditors, whether voluntary or by operation of law, directly or indirectly,
except for:

    (a) any bona fide pledge if the pledgee executes a counterpart copy of this
Agreement and becomes bound thereby as if such pledgee were a Stockholder.

    (b) any transfer of Stock by any Stockholder made (i) pursuant to a
statutory merger or statutory consolidation of the Company with or into another
corporation or corporations; or (ii) pursuant to the winding up and dissolution
of the Company.

1

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    (c) any transfer of Stock by any Stockholder made: to any Stockholder's
immediate family or to any custodian or trustee for the account of such
Stockholder or such Stockholder's immediate family; in each case provided that
the transferee or other recipient shall receive and hold such Stock subject to
the provisions of this Agreement, and there shall be no further transfer of such
Stock except in accord with this Agreement.

    2.  Right Of First Refusal.

    2.1 Notice Of Proposed Transfer. Before any Stockholder may effect any
Transfer of any Stock, such Stockholder (when acting in such capacity, the
"Transferor") must give to the Company and Purchaser, a written notice signed by
the Transferor (the "Transferor's Notice") stating (a) the Transferor's bona
fide intention to transfer such Stockholder's Offered Stock; and (b) the number
of shares of Offered Stock proposed to be transferred.

    2.2 Exercise Of Right of First Refusal. Upon receipt of a Transferor's
Notice, Purchaser may exercise a right of first refusal (the "Right of First
Refusal") to purchase all or any part of the Offered Stock by delivering to the
Transferor written notice of the number of shares of Offered Stock which
Purchaser intends to purchase which notice must be delivered to the Transferor
within the five (5) business day period following Purchaser's receipt of a
Transferor's Notice (the "Election Period").

    2.3 Purchase Price. The purchase price for the shares of the Offered Stock
to be purchased by Purchaser upon exercise of its Right of First Refusal shall
be equal to the product of the number of shares of Offered Stock being purchased
by the Purchaser and the per share closing trading price for the Company's
Common Stock as of the date the Transferor's Notice is received by Purchaser,
and shall be payable as set forth in Section 2.4 hereof.

    2.4 Payment. Payment of the purchase price for the shares of the Offered
Stock being purchased by Purchaser by exercising its Right of First Refusal will
be made on or before the fifth (5th) business day following the later of (a) the
day immediately following the last day of the Election Period, or (b) the date
of the delivery to Purchaser of share certificates representing the shares of
the Offered Stock being purchased by Purchaser, which certificates must be duly
executed by Transferor for Transfer to Purchaser or accompanied by stock powers
duly executed by Transferor in favor of Purchaser.

    2.5 Rights Of Transferor. Upon the date that payment is made for the shares
of the Offered Stock being purchased by Purchaser pursuant to the Right of First
Refusal hereunder, the Transferor will have no further rights as a holder of
such shares of the Offered Stock.

    2.6 Transferor's Right To Transfer. If Purchaser has not elected to exercise
its Right of First Refusal with respect to all of the shares of the Offered
Stock within the Election Period, then the Transferor may transfer that portion
of the shares of the Offered Stock not purchased by Purchaser, provided that
such transfer (a) is consummated within ten (10) days after the expiration of
the Election Period and (b) is in accordance with the terms and conditions of
this Agreement. Transferees who acquire shares of the Offered Stock transferred
in accordance with the terms and conditions of this Section 2.6 will thereafter
hold such shares of the Offered Stock free of the Rights of First Refusal and
all other restrictions imposed by this Agreement; provided that nothing herein
will release any such transferee from any obligations or restrictions that may
be imposed on such transferee under any other agreement with the Company or by
law or by the Company's Certificate of Incorporation or Bylaws. If shares of the
Offered Stock are not transferred during such ten (10) day period, then the
Transferor may not transfer any shares of such Offered Stock without complying
again in full with the provisions of this Agreement.

    3.  Refusal To Transfer. Any attempt by a Stockholder to transfer any Stock
in violation of any provision of this Agreement will be void. The Company will
not (a) transfer on its books any Stock that

2

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has been sold, gifted or otherwise transferred in violation of this Agreement,
or (b) treat as owner of such Stock, or accord the right to vote to or pay
dividends to any purchaser, donee or other transferee to whom such Stock may
have been so transferred.

    4.  Restrictive Legend And Stop-Transfer Orders.

    4.1 Legend. Purchaser understands and agrees that the Company will cause the
legend set forth below, or a legend substantially equivalent thereto, to be
placed upon any certificate(s) or other documents or instruments evidencing
ownership of Stock by such Purchaser:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RIGHTS OF
FIRST REFUSAL AS SET FORTH IN A RIGHT OF FIRST REFUSAL AGREEMENT, AS AMENDED
FROM TIME TO TIME, ENTERED INTO BY PERCEPTRONICS, INC. (THE "COMPANY"), ALPHA
GLOBAL CORPORATION AND CERTAIN STOCKHOLDERS OF THE COMPANY. A COPY OF SUCH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.

    4.2 Stop Transfer Instructions. Each Stockholder and Purchaser agrees, to
ensure compliance with the restrictions referred to herein, that the Company may
issue appropriate "stop transfer" certificates or instructions and that, if the
Company transfers its own securities, it may make appropriate notations to the
same effect in its records.

    5.  Termination and Purchaser's Rights.

    5.1 Termination. Following the 180-day period beginning on the date of
execution of this Agreement, this Agreement and the Rights of First Refusal
provided for herein will terminate at any time that the Purchaser and its
affiliates do not own shares of Common Stock, warrants or other securities of
the Company which on an as-converted or as-exercised basis (as applicable) in
the aggregate represent more than ten percent (10%) of the number of shares of
Common Stock of the Company outstanding at such time.

    5.2 Purchase Rights. The Purchaser has the absolute right to exercise or
refrain from exercising any right or rights that such party may have by reason
of this Agreement, including without limitation the right to purchase shares of
the Offered Stock. The Purchaser will not incur any liability to any other party
hereto with respect to exercising or refraining from exercising any such right
or rights. Any waiver by a party of its rights hereunder will be effective only
if evidenced by a written instrument executed by such party or its authorized
representative.

    6.  Miscellaneous Provisions.

    6.1 Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (a) upon personal delivery to the party
to be notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
or (c) two (2) business days after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the parties hereto at the
respective addresses as set forth on the signature page hereof, or at such other
address as any party hereto may designate by ten (10) days' advance written
notice to the other parties hereto.

    6.2 Binding On Successors And Assigns; Inclusion Within Certain Definitions.
This Agreement and the rights and obligations hereunder may be freely assigned
or transferred by Purchaser. This Agreement, and the rights and obligations of
the parties hereunder, will inure to the benefit of, and be binding upon, their
respective successors, assigns, heirs, executors, administrators and legal
representatives and any transferee of the Stock. Any permitted transferee of a
Stockholder who is required to become a party hereto will be considered a
Stockholder for

3

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purposes of this Agreement without the need for any consent, approval or
signature of any party hereto.

    6.3 Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.

    6.4 Governing Law. This Agreement, and the rights of the parties hereto,
shall be governed by, construed in accordance with and enforced under the laws
of the State of California without regard to the principles of conflicts of law
of such state.

    6.5 Obligation Of Company; Binding Nature Of Exercise. The Company agrees to
use its best efforts to enforce the terms of this Agreement, to inform Purchaser
of any breach hereof (to the extent the Company has knowledge thereof) and to
assist each Stockholder in the performance of Stockholder's obligations
hereunder.

    6.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same agreement.

    6.7 Entire Agreement. This Agreement, including all Exhibits hereto, each of
which is incorporated herein by reference, constitutes the entire agreement of
the parties with respect to the specific subject matter hereof and supersedes in
their entirety all other agreements or understandings between or among the
parties hereto with respect to such specific subject matter.

    6.8 Conflict. In the event of any conflict between the terms of this
Agreement and the Company's Certificate of Incorporation or its Bylaws, the
terms of the Certificate of Incorporation or Bylaws, as the case may be, will
control. In the event of any conflict between the terms of this Agreement and
any other agreement to which an Purchaser or the Company is a party or by which
a Stockholder is bound, the terms of this Agreement will control. In the event
of any conflict between the Company's books and records and this Agreement or
any notice delivered hereunder, the Company's books and records will control
absent fraud or error.

    6.9 Headings. The captions and headings of this Agreement are included for
ease of reference only and will be disregarded in interpreting or construing
this Agreement. Unless otherwise stated, all references herein to Sections and
Exhibits will refer to Sections of and Exhibits to this Agreement.

    6.10 Further Assurances. At any time and from time to time after the date
hereof, each party will execute such additional instruments and take such
actions as may be reasonably requested by any other party hereto to carry out
the intent and purposes of this Agreement.

[Signature page follows]

4

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[Signature page to Right of First Refusal Agreement]

    IN WITNESS WHEREOF, the undersigned parties hereto have executed this Right
of First Refusal Agreement as of the date first written above.

"COMPANY"
 
PERCEPTRONICS, INC.,
a Delaware corporation
 
 
By:
 
         

--------------------------------------------------------------------------------

        Name: Richard Moskowitz
Title: Chairman and Chief Executive Officer
 
 
Address:
405 South Beverly Drive, 4th Floor
Beverly Hills, California 90212
Facsimile No.:
"PURCHASER"

 
GLOBAL ALPHA CORPORATION,
a British Virgin Islands company
 
 
By:
 
         

--------------------------------------------------------------------------------

        Barry Didato
Authorised Signatory
 
 
Address:
Craigmuir Chambers
P.O. Box 71
Road Town
Tortola, British Virgin Islands
"STOCKHOLDERS"
 
 
 
     

--------------------------------------------------------------------------------

Richard Moskowitz
 
 

--------------------------------------------------------------------------------

Dr. Gershon Weltman

5

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[Signature Page to Right of First Refusal Agreement]

 

 

--------------------------------------------------------------------------------

Dr. John Lyman
 
 

--------------------------------------------------------------------------------

Stanley Schneider
 
 

--------------------------------------------------------------------------------

Robert Parker
 
 

--------------------------------------------------------------------------------

Dr. Amos Freedy
 
 
 
 
 

6

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STOCKHOLDERS

Name

--------------------------------------------------------------------------------

  Common Stock
Owned by Stockholder

--------------------------------------------------------------------------------

  Options Owned
By Stockholder

--------------------------------------------------------------------------------

  Warrants Owned
By Stockholder

--------------------------------------------------------------------------------

 
 
 
 
 
 
 
Richard Moskowitz
 
1,075,500
 
505,000
 
700,000
Dr. Gershon Weltman
 
475,510
 
175,833
 
—
Dr. John Lyman
 
190,911
 
44,333
 
—
Stanley Schneider
 
131,111
 
44,333
 
—
Robert Parker
 
4,500
 
44,333
 
—
Dr. Amos Freedy
 
265,363
 
50,333
 
55,556

7

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QuickLinks

Exhibit 10.12 PERCEPTRONICS, INC. SECURITIES PURCHASE AGREEMENT
Exhibit A Warrants
Exhibit B Registration Rights Agreement
Exhibit C Right of First Refusal Agreement