SEC Connect





  







Exhibit 10.2



 



EXCHANGE AGREEMENT


 


This
Exchange Agreement (this “Agreement”) is dated as of
December __, 2016, by and among ImageWare Systems, Inc., a Delaware
corporation (the “Company”), and each of the
signatories to this Agreement (each, a “Stockholder” and, collectively,
the “Stockholders”).







RECITALS


 


WHEREAS, the Stockholders previously
purchased shares of the Company’s Series E Convertible
Preferred Stock (“Series E
Preferred”) on or about January 29, 2015, and have
subsequently acquired shares of the Company’s common stock,
par value $0.01 per share (“Common Stock”), including shares
of Common Stock issued as payment of dividends accrued by shares of
Series E Preferred;


 


WHEREAS, the Stockholders are preparing
to purchase shares of the Company’s newly created Series G
Convertible Preferred Stock (“Series G Preferred”) in a private
placement transaction (the “Private Placement”);
and


 


WHEREAS, in connection with the Private
Placement, the Stockholders desire to cancel an aggregate total of
3,383,830 shares of the Company’s Common Stock currently held
by the Stockholders, in exchange for an aggregate total of
approximately 4,400 shares of Series G Preferred in accordance with
the terms and conditions set forth in this Agreement.


 


NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby
agreed and acknowledged, the parties hereby agree as
follows:



AGREEMENT


1. Securities
Exchange.

(a) In consideration of
and in express reliance upon the representations, warranties,
covenants, terms and conditions of this Agreement, each Stockholder
agrees to return to the Company that number of shares of the
Company’s Common Stock appearing on their respective
signature page to this Agreement (the “Exchange Shares”), in exchange
for that number of shares of Series G Preferred to each Stockholder
in the amounts indicated on their respective signature page to this
Agreement (the “Preferred
Shares”). In consideration for the foregoing, the
Company agrees to issue and deliver the Preferred Shares to each
Stockholder (the “Exchange”).

(b) The closing under
this Agreement (the “Closing”) shall take place upon
the satisfaction of each of the conditions set forth in Sections 4
and 5 hereof (the “Closing
Date”)

(c) Within five
business days after the Closing, the Company shall issue and
deliver to each Stockholder a certificate evidencing the Preferred
Shares.

2. Representations,
Warranties and Covenants of the Stockholders. The Stockholders, individually and not
jointly, hereby make the following representations and warranties
to the Company, and covenants for the benefit of the
Company:

(a) This Agreement has
been duly authorized, validly executed and delivered by each
Stockholder and is a valid and binding agreement and obligation of
each Stockholder enforceable against them in accordance with its
terms, subject to limitations on enforcement by general principles
of equity and by bankruptcy or other laws affecting the enforcement
of creditors’ rights generally, and each Stockholder has full
power and authority to execute and deliver the Agreement and the
other agreements and documents contemplated hereby and to perform
its obligations hereunder and thereunder.

(b) Each Stockholder
understands that the Preferred Shares are being offered and sold in
reliance on specific provisions of Federal and state securities
laws, and that the Company is relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and
understandings of each Stockholder set forth herein for purposes of
qualifying for exemptions from registration under the Securities
Act of 1933, as amended (the “Securities Act”) and applicable
state securities laws.

(c) Each Stockholder is
an “accredited investor” as defined under Rule 501 of
Regulation D, promulgated under the Securities Act.


(d) Each Stockholder
will be acquiring the Preferred Shares for their own account, for
investment purposes, and not with a view to any resale or
distribution in whole or in part, in violation of the Securities
Act or any applicable securities laws; provided, however, that notwithstanding
the foregoing, each Stockholder does not covenant to hold the
Preferred Shares for any minimum period of time.


 


 



 







 






 

(e) The offer and sale
of the Preferred Shares is intended to be exempt from registration
under the Securities Act, by virtue of Section 3(a)(9) and/or 4(2)
thereof. Each Stockholder understands that the Preferred Shares
purchased hereunder are “restricted securities,” as
that term is defined in the Securities Act and the rules
thereunder, have not been registered under the Securities Act, and
that none of the Preferred Shares can be sold or transferred unless
they are first registered under the Securities Act and such state
and other securities laws as may be applicable or the Company
receives an opinion of counsel reasonably acceptable to the Company
that an exemption from registration under the Securities Act is
available (and then the Preferred Shares may be sold or transferred
only in compliance with such exemption and all applicable state and
other securities laws).

(f) Each Stockholder
owns and holds, beneficially and of record, the entire right,
title, and interest in and to the Exchange Shares free and clear of
all rights and Encumbrances (as defined below), and each
Stockholder has full power and authority to transfer and dispose of
the Exchange Shares free and clear of any right or Encumbrance.
Other than the transactions contemplated by this Agreement, there
is no outstanding plan, pending proposal, or other right of any
person to acquire all or any of the Exchange Shares. Encumbrances shall mean any security or
other property interest or right, claim, lien, pledge, option,
charge, security interest, contingent or conditional sale, or other
title claim or retention agreement, interest or other right or
claim of third parties, whether perfected or not perfected,
voluntarily incurred or arising by operation of law, and including
any agreement (other than this Agreement) to grant or submit to any
of the foregoing in the future.

3. Representations,
Warranties and Covenants of the Company. The Company represents and warrants
the Stockholders, and covenants for the benefit of the
Stockholders, as follows:

(a) The Company has
been duly incorporated and is validly existing and in good standing
under the laws of the state of Delaware, with full corporate power
and authority to own, lease and operate its properties and to
conduct its business as currently conducted, and is duly registered
and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or
the conduct of its business requires such registration or
qualification, except where the failure to register or qualify
would not have a Material Adverse Effect. For purposes of this
Agreement, “Material Adverse
Effect” shall mean any material adverse effect on the
business, operations, properties, prospects, or financial condition
of the Company and its subsidiaries and/or any condition,
circumstance, or situation that would prohibit or otherwise
materially interfere with the ability of the Company to perform any
of its obligations under this Agreement in any material
respect.

(b) The Preferred
Shares have been duly authorized by all necessary corporate action
and, when paid for or issued in accordance with the terms hereof,
the Preferred Shares shall be validly issued and outstanding, fully
paid and nonassessable, free and clear of all liens, encumbrances
and rights of refusal of any kind.

(c) This Agreement has
been duly authorized, validly executed and delivered on behalf of
the Company and is a valid and binding agreement and obligation of
the Company enforceable against the Company in accordance with its
terms, subject to limitations on enforcement by general principles
of equity and by bankruptcy or other laws affecting the enforcement
of creditors’ rights generally, and the Company has full
power and authority to execute and deliver the Agreement and the
other agreements and documents contemplated hereby and to perform
its obligations hereunder and thereunder.

(d) The Company has
complied and will comply with all applicable federal and state
securities laws in connection with the offer, issuance and delivery
of the Preferred Shares hereunder.

4. Conditions
Precedent to the Obligation of the Company to Consummate the
Exchange. The obligation hereunder of the Company to issue
and deliver the Preferred Shares to each Stockholder and consummate
the Exchange is subject to the satisfaction or waiver, at or before
the Closing Date, of each of the conditions set forth below. These
conditions are for the Company’s sole benefit and may be
waived by the Company at any time in its sole
discretion.

(a) Each Stockholder
shall have executed and delivered this Agreement.

(b) Each Stockholder
shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by each
Stockholder at or prior to the Closing Date, including, but not
limited to delivering the Exchange Shares to the
Company.


(c) The representations
and warranties of each Stockholder shall be true and correct in all
material respects as of the date when made and as of the Closing
Date as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which
shall be true and correct in all material respects as of such
date.


 


 



 







 






 


5. Conditions
Precedent to the Obligation of the Stockholders to Consummate the
Exchange. The obligation hereunder of the Stockholders to
accept the Preferred Shares and consummate the Exchange is subject
to the satisfaction or waiver, at or before the Closing Date, of
each of the conditions set forth below. These conditions are for
each Stockholder’s sole benefit and may be waived by any
Stockholder at any time in their sole discretion.

(a) The Company shall
have executed and delivered this Agreement.

(b) The Company shall
have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the
Agreement to be performed, satisfied or complied with by the
Company at or prior to the Closing Date.

(c) Each of the
representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of
the Closing Date as though made at that time, except for
representations and warranties that speak as of a particular date,
which shall be true and correct in all material respects as of such
date.

6. Governing
Law; Consent to Jurisdiction. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of
California without giving effect conflicts of law principles that
would result in the application of the substantive laws of another
jurisdiction. Each of the Parties consents to the exclusive
jurisdiction of the Federal courts whose districts encompass any
part of the State of California in connection with any dispute
arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection
based on forum non
conveniens, to the bringing of any such proceeding in such
jurisdictions. Each Party waives its right to a trial by jury. Each
Party to this Agreement irrevocably consents to the service of
process in any such proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such Party at its
address set forth herein. Nothing herein shall affect the right of
any Party to serve process in any other manner permitted by
law.

7. Entire
Agreement. This
Agreement constitutes the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersedes
all prior and/or contemporaneous oral or written proposals or
agreements relating thereto all of which are merged herein. This
Agreement may not be amended or any provision hereof waived in
whole or in part, except by a written amendment signed by both of
the Parties.

8. Counterparts.
This Agreement may be executed by facsimile signature and in
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same
instrument.


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REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 




 








 






IN WITNESS WHEREOF, this Agreement was
duly executed on the date first written above.


 


	
 

	
 IMAGEWARE
SYSTEMS, INC


	
 

	
 By:______________________________________


	
 

	
 Name:


	
 

	
 Title:


	
 

	
 


	
 

	
 STOCKHOLDER:


	
 

	
 By:______________________________________


	
 

	
 Name:


	
 

	
 Title:


	
 

	
 


	
 

	
 No. of Exchange
Shares to be delivered to the Company: _______________


	
 

	
 


	
 

	
 No. of Preferred
Shares to be issued to the Stockholder:
_______________