Exhibit 10.1

 

CONFIDENTIAL

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is entered into and
effective simultaneously with the execution of this Agreement on this 3rd day of
April 2018, by and between BIO-key International, Inc., a Delaware corporation
(the “Company”), and Wong Kwok Fong (the “Purchaser”).

 

R E C I T A L S:

 

WHEREAS, subject to the terms and conditions of this Agreement and pursuant to
Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), Purchaser desires to purchase and the Company desires to sell securities
on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises hereof and the agreements set
forth herein below, the parties hereto hereby agree as follows:

 

1.          Sale and Purchase of Securities.

 

(a)     Purchase and Sale. Subject to the terms and conditions hereof, the
Company agrees to sell, and Purchaser agrees to purchase Ninety One Thousand
Eight Hundred Twenty (91,820) shares (the “Shares”) of the Company’s common
stock, $0.0001 par value per share (the “Common Stock”), at a purchase price of
$3.60 per Share for an aggregate purchase price of $330,552 (the “Purchase
Price”). The Purchase Price shall be paid by the conversion of a dividend
payable in the amount of $330,552 on the Company’s Series A-1 Convertible
Preferred Stock (the “Series A-1 Preferred”) presently due and payable to the
Purchaser. Within a reasonable time following the date hereof, the Company shall
deliver to the Purchaser, a certificate evidencing the Shares.

 

2.           Representations and Warranties of Purchaser. Purchaser represents
and warrants to the Company as follows:

 

(a)     Authority Validity and Effect of Agreement. The execution and delivery
of each of this Agreement by Purchaser and the performance by Purchaser of its
obligations hereunder have been duly authorized by all necessary organizational
proceedings on the part of the Purchaser. This Agreement has been duly and
validly executed and delivered by Purchaser and, assuming that it has been duly
authorized, executed and delivered by the Company, constitutes a legal, valid
and binding obligation of Purchaser, in accordance with its terms.

 

(b)     Acknowledgement Regarding Conversion of Dividend Payable. Purchaser
acknowledges that the accrued dividend payable on the Series A-1 Preferred due
and owing to Purchaser as of March 31, 2018 is $330,552 (the “Dividend Payable”)
and hereby releases and relinquishes any right, title and interest to the
Dividend Payable as consideration for the payment of the Shares.

 

 

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

 

 

(c)     Accredited Investor.  Purchaser is an “accredited investor” as that term
is defined in Rule 501(a) of Regulation D under the Securities Act.

 

(d)     Investment Intent. The Securities are being acquired for Purchaser’s own
account for investment purposes only, not as a nominee or agent and not with a
view to the resale or distribution of any part thereof, and Purchaser has no
present intention of selling, granting any participation in or otherwise
distributing the same.

 

(e)     Restrictions on Transfer. Purchaser understands that the Securities are
“restricted securities” as such term is defined in Rule 144 under the Securities
Act and have not been registered under the Securities Act or registered or
qualified under any state securities law, and may not be, directly or
indirectly, sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act and
registration or qualification under applicable state securities laws or the
availability of an exemption therefrom.

 

(f)     Short Sales. Purchaser has not directly or indirectly, nor has any
person acting on behalf of or pursuant to any understanding with Purchaser,
executed any disposition, including Short Sales (as such term is defined in Rule
200 of Regulation SHO under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), in the securities of the Company during the period commencing
from the time that Purchaser first received written or oral notice of the
transactions contemplated herby until the date hereof (“Discussion Time”).

 

(g)     No Disqualification Events. Purchaser is not subject to any of the "Bad
Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the
Securities Act (a "Disqualification Event"), except for a Disqualification Event
covered by Rule 506(d)(2) under the Securities Act.

 

3.          Representations and Warranties of the Company. The Company
represents and warrants to Purchaser as follows:

 

(a)     Authority Validity and Effect of Agreement. The execution and delivery
of each of this Agreement by the Company and the performance by the Company of
its obligations hereunder have been duly authorized by all necessary corporate
proceedings on the part of the Company. This Agreement has been duly and validly
executed and delivered by the Company and, assuming that it has been duly
authorized, executed and delivered by Purchaser, constitutes a legal, valid and
binding obligation of the Company, in accordance with its terms.

 

(b)     Issuance of the Securities. The Shares have been duly authorized and,
when issued and paid for in accordance with the terms of this Agreement, will be
duly and validly issued, fully paid and nonassessable, free and clear of all
liens, other than restrictions on transfer provided for in this Agreement or
imposed by applicable securities laws, and shall not be subject to preemptive or
similar rights of shareholders.

 

4.          Other Agreements of the Parties.

 

(a)     Legends. The certificates and agreements evidencing the Shares shall
have endorsed thereon a standard and customary legend respecting the Securities
Act and stop transfer instructions reflecting these restrictions on transfer
will be placed with the transfer agent of the Securities.

 

 

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

 

 

(b)     Notice of Disqualification Events. Purchaser will notify the Company in
writing, of (i) any Disqualification Event relating to Purchaser and (ii) any
event that would, with the passage of time, become a Disqualification Event
relating to Purchaser.

 

(c)     Standstill. Reference is hereby made to those certain Securities
Purchase Agreements dated October 29, 2015 and November 11, 2015 (collectively,
the “Series A-1 Agreements”) by and between the Company and the Purchaser,
pursuant to which the Purchaser purchased 90,000 shares of the Company’s Series
A-1 Convertible Preferred Stock. The Series A-1 Agreements contain standstill
provisions (the “Standstill Provisions”), which prevent the Purchaser, either
alone or together with any other person, from acquiring additional shares of the
Company’s Common Stock or any of the Company’s assets, soliciting proxies, or
seeking further representation on the Company’s board of directors. The
Purchaser hereby acknowledges and agrees that: (i) the Company is hereby waiving
the Standstill Provisions solely with respect to the Shares purchased hereby,
and (ii) that notwithstanding the foregoing the Standstill Provisions remain in
full force and effect.

 

5.          Non-Public Information. Purchaser acknowledges that certain
information concerning the matters that are the subject matter of this Agreement
constitute material non-public information under United States federal
securities laws, and that United States federal securities laws prohibit any
person who has received material non-public information relating to the Company
from purchasing or selling securities of the Company, or from communicating such
information to any person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell securities of the
Company. Accordingly, until such time as any such non-public information has
been adequately disseminated to the public, Purchaser shall not purchase or sell
any securities of the Company, or communicate such information to any other
person

 

6.          Entire Agreement. This Agreement contains the entire agreement
between the parties and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereto.

 

7.          Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without regard to the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof, except to the extent that the General Corporation Law of the State of
Delaware shall apply to the internal corporate governance of the Company.

 

8.          Arbitration. If a dispute arises as to the interpretation of this
Agreement, it shall be decided in an arbitration proceeding conforming to the
Rules of the American Arbitration Association applicable to commercial
arbitration then in effect at the time of the dispute. The arbitration shall
take place in the State of New Jersey. The decision of the arbitrators shall be
conclusively binding upon the parties and final and such decision shall be
enforceable as a judgment in any court of competent jurisdiction. The parties
shall share equally the costs of the arbitration.

 

 

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

 

 

9.          Counterparts. This Agreement may be executed and delivered by
facsimile in counterparts, each of which shall be deemed to be an original, and
both of which together shall constitute one and the same agreement.

 

WITNESS WHEREOF, intending to be legally bound, the parties hereto have caused
this Agreement to be executed as of the date set forth above.

 

 

 

PURCHASER

 

 

WONG KWOK FONG

 

 

By: /s/Wong Kwok Fong 

Name: Wong Kwok Fong 

                                 

BIO-KEY INTERNATIONAL, INC.

 

 

By: /s/ Michael W. DePasquale

Name: Michael W. DePasquale

      Title: Chief Executive Officer