Exhibit 10.2


 


REGISTRATION RIGHTS AGREEMENT


 


                This
Registration Rights Agreement (this “Agreement”) is made and entered
into as of September 25, 2007, between ImageWare Systems, Inc., a Delaware
corporation (the “Company”) and each of the several purchasers signatory
hereto (each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).


 


                This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of
the date hereof, between the Company and each Purchaser (the “Purchase
Agreement”).


 


                The
Company and each Purchaser hereby agrees as follows:


 


                1.
            Definitions


 


                Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:


 


                “Advice” shall have the meaning set forth in
Section 6(d).


 


“Effectiveness
Date” means, with respect to the Initial Registration Statement required to
be filed hereunder, the 90th calendar day following the date hereof
(or, in the event of a “full review” by the Commission, the 135th
calendar day following the date hereof) and with respect to any additional
Registration Statements which may be required pursuant to Section 3(c), the 90th
calendar day following the date on which an additional Registration Statement
is required to be filed hereunder; provided, however, that in the
event the Company is notified by the Commission that one or more of the above
Registration Statements will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Date as to such Registration Statement
shall be the fifth (5th) Trading Day following the date on which the Company is
so notified if such date precedes the dates otherwise required above.


 


“Effectiveness
Period” shall have the meaning set forth in Section 2(a).


 


“Event”
shall have the meaning set forth in Section 2(b).


 


“Event
Date” shall have the meaning set forth in Section 2(b).


 


“Filing
Date” means, with respect to the Initial Registration Statement required
hereunder, the 45th calendar day following the date hereof and, with
respect to any additional Registration Statements which may be required
pursuant to Section 3(c), the earliest practical date on which the Company is
permitted by SEC Guidance to file such additional Registration Statement
related to the Registrable Securities.


 


“Holder”
or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.


 


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“Indemnified
Party” shall have the meaning set forth in Section 5(c).


 


“Indemnifying
Party” shall have the meaning set forth in Section 5(c).


 


“Initial
Registration Statement” means the initial Registration Statement filed
pursuant to this Agreement.


 


“Initial
Shares” means a number of Registrable Securities equal to the lesser of (i)
the total number of Registrable Securities and (ii) one-third of the number of
issued and outstanding shares of Common Stock that are held by non-affiliates
of the Company on the day immediately prior to the filing date of the Initial
Registration Statement.


 


“Losses”
shall have the meaning set forth in Section 5(a).


 


“Plan
of Distribution” shall have the meaning set forth in Section 2(a).


 


“Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated by the Commission pursuant to the Securities Act),
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.


 


“Registrable
Securities” means (i) all Shares, (ii) all Warrant Shares (assuming on the
date of determination the Warrants are exercised in full without regard to any
exercise limitations therein), (iii) any additional shares of Common Stock
issuable in connection with any anti-dilution provisions in the Warrants (in
each case, without giving effect to any limitations on exercise set forth in
the Warrant) and (iv) any securities issued or issuable upon any stock split,
dividend or other distribution, 
recapitalization or similar event with respect to the foregoing;
provided, however, that Registrable Securities shall not include those
securities that (a) have been effectively registered under Section 5 of the
Securities Act and disposed of pursuant to a registration statement or (b) have
been transferred pursuant to Rule 144 promulgated under the Securities Act or
any successor rule.


 


“Registration
Statement” means the registration statement required to be filed hereunder
and any additional registration statements contemplated by Section 3(c),
including (in each case) the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.


 


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 “Rule 415” means Rule 415 promulgated
by the Commission pursuant to the Securities Act, as such Rule may be amended
or interpreted from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same purpose and effect as
such Rule.


 


“Rule
424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.


 


“SEC
Guidance” means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the Commission staff and (ii) the
Securities Act.


 


“Selling
Shareholder Questionnaire” shall have the meaning set forth in Section
3(a).


 


                2.             Shelf Registration


 


(a)           On or prior to each Filing Date, the Company shall use
commercially reasonable efforts to prepare and file with the Commission a
Registration Statement covering the resale of all or such maximum portion of
the Registrable Securities as permitted by SEC Guidance (provided that the
Company shall use commercially reasonable efforts to advocate with the Commission
for the registration of all of the Registrable Securities in accordance with
the SEC Guidance, including without limitation, the Manual of Publicly
Available Telephone Interpretations D.29) that are not then registered on an
effective Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415.  The
Registration Statement shall be on Form S-3 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3, in
which case such registration shall be on another appropriate form in accordance
herewith) and shall contain (unless otherwise directed by at least a 67%
majority in interest of the Holders) substantially the “Plan of Distribution”
attached hereto as Annex A; provided that such Plan of Distribution
section of the Registration Statement shall be amended to the extent required
to respond to comments received by the Company from the Commission.  Subject to the terms of this Agreement, the
Company shall use its commercially reasonable efforts to cause a Registration
Statement filed pursuant to this Section 2(a) to be declared effective under
the Securities Act as promptly as possible after the filing thereof, but in any
event prior to the applicable Effectiveness Date, and shall use its
commercially reasonable efforts to keep such Registration Statement
continuously effective under the Securities Act until the earlier of (i) the
2nd anniversary of the Effective Date, or (ii) the date when all Registrable
Securities covered by such Registration Statement have been sold, or may be
sold without volume limitations pursuant to Rule 144(k) (the “Effectiveness
Period”).  The Company shall
telephonically request effectiveness of a Registration Statement as of 5:00
p.m. New York City time on a Trading Day.  
The Company shall immediately notify the Holders via facsimile or by
e-mail of the effectiveness of a Registration Statement on the same Trading Day
that the Company telephonically confirms effectiveness with the 


 


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Commission, which shall be the date requested
for effectiveness of such Registration Statement.  The Company shall on the Trading Day after the effective
date of such Registration Statement, file a final Prospectus with the Commission
as required by Rule 424.  Failure to so
notify the Holder within two (2) Trading Days of such notification of
effectiveness or failure to file a final Prospectus as foresaid shall be deemed
an Event under Section 2(b). 
Notwithstanding any other provision of this Agreement and subject to the
payment of liquidated damages pursuant to Section 2(b), if any SEC Guidance
sets forth a limitation on the number of Registrable Securities permitted to be
registered on a particular Registration Statement (and notwithstanding that the
Company used commercially reasonable efforts to advocate with the Commission
for the registration of all or a greater portion of Registrable Securities),
unless otherwise directed in writing by a Holder as to its Registrable Securities,
the number of Registrable Securities to be registered on such Registration
Statement will first be reduced by Registrable Securities represented by
Warrant Shares (applied, in the case that some Warrant Shares may be
registered, to the Holders on a pro rata basis based on the total number of
unregistered Warrant Shares held by such Holders), and second by Registrable
Securities represented by Shares (applied, in the case that some shares may be
registered, to the Holders on a pro rata basis based on the total number of
unregistered Registrable Securities held by such Holders); provided, however,
that, prior to any reduction in the number of Registrable Securities included
in a Registration Statement as set forth in this sentence, the number of shares
of Common Stock set forth on Schedule 6(b) hereto which shall have been
included on such Registration Statement shall be reduced by up to 100%.


 


(b)           If: (i) the Initial Registration Statement is not filed on
or prior to its Filing Date (if the Company files the Initial Registration
Statement without affording the Holders the opportunity to review and comment
on the same as required by Section 3(a) herein, the Company shall be deemed to
have not satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration of a Registration Statement in accordance
with Rule 461 promulgated by the Commission pursuant to the Securities Act,
within five Trading Days of the date that the Company is notified (orally or in
writing, whichever is earlier) by the Commission that such Registration
Statement will not be “reviewed” or will not be subject to further review, or
(iii) prior to the effective date of a Registration Statement, the Company
fails to file a pre-effective amendment and otherwise respond in writing to
comments made by the Commission in respect of such Registration Statement
within fifteen (15) Trading Days after the receipt of comments by or notice
from the Commission that such amendment is required in order for such Registration
Statement to be declared effective, or (iv) a Registration Statement filed or
required to be filed hereunder is not declared effective by the Commission by
its Effectiveness Date, or (v) after the effective date of a Registration
Statement, such Registration Statement ceases for any reason to remain
continuously effective as to all Registrable Securities included in such
Registration Statement, or the Holders are otherwise not permitted to utilize
the Prospectus therein to resell such Registrable Securities, for more than ten
(10) consecutive Trading Days or more than an aggregate of twenty (20) calendar
days (which need not be consecutive calendar days) during any twelve (12)-month
period (any such failure or breach being referred to as an “Event”, and for purposes of
clause (i), and (iv) the date on which such Event occurs, and for purpose 


 


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of clause (ii) the date on which such five
Trading Day period is exceeded, and for purpose of clause (iii) the date which
such ten (10) Trading Day period is exceeded, and for purpose of clause (v) the
date on which such ten (10) or twenty (20) Trading Day period, as applicable,
is exceeded being referred to as “Event
Date”), then, in addition to any other rights the Holders may have
hereunder or under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date (if the applicable Event shall not have
been cured by such date) until the applicable Event is cured, the Company shall
pay to each Holder an amount in cash, as partial liquidated damages and not as
a penalty, equal to 1.0% of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for any issued and outstanding unregistered
Registrable Securities then held by such Holder.  The parties agree that (1) the Company shall
not be liable for liquidated damages under this Agreement with respect to any
Warrants or Warrant Shares, and (2) the maximum aggregate liquidated damages
payable to a Holder unexercised under this Agreement shall be twelve percent
(12%) of the aggregate Subscription Amount paid by such Holder pursuant to the
Purchase Agreement.  If the Company fails
to pay any partial liquidated damages pursuant to this Section in full within
seven (7) Trading Days after the date payable, the Company will pay interest
thereon at a rate of twelve percent (12%) per annum (or such lesser maximum
amount that is permitted to be paid by applicable law) to the Holder, accruing
daily from the date such partial liquidated damages are due until such amounts,
plus all such interest thereon, are paid in full. The partial liquidated
damages pursuant to the terms hereof shall apply on a daily pro rata basis for
any portion of a month prior to the cure of an Event; provided that it shall
not be deemed an Event if the Company fails to file a Registration Statement or
prior to its Filing Date following notification of an objection with respect
thereto from the Holders pursuant to Section 3(a) hereof provided that such Registration
Statement is filed not later than five (5) Trading Days after receipt by the
Company of written notice of the withdrawal of such objection.


 


3.             Registration Procedures.


 


                In
connection with the Company’s registration obligations hereunder, the Company
shall:


 


(a)           Not less than five
(5) Trading Days prior to the initial filing of each Registration Statement and
not less than one (1) Trading Day prior to the filing of any related Prospectus
or any pre- or post-amendment or supplement thereto or to such Registration
Statement (including, upon request of any Holder, any document that would be
incorporated or deemed to be incorporated therein by reference, provided that
if such request is not made prior to such five (5) or two (2) Trading Day
period, as applicable, then the Company’s obligation shall only be to provide
such document promptly within a reasonable period of time following such
request), the Company shall (i) furnish to each Holder copies of all such
documents substantially in the form proposed to be filed (which may be
delivered by email or facsimile), which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject to the
review of such Holders(provided, however, as to any related Prospectus, amendment
or supplement thereto proposed to be filed, the Company shall only be required
to provide the Holders 


 


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with
copies of such documents prior to the filing thereof to the extent there are
changes to the Selling Stockholder table or Plan of Distribution contained
therein from such sections included in the initial Registration Statement filed
hereunder) and (ii) cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to each Holder, to
conduct a reasonable investigation within the meaning of the Securities Act.
The Company shall not file a Registration Statement or any such Prospectus or
any amendments or supplements thereto relating to the Registrable Securities to
which the Holders of a majority of the Registrable Securities shall reasonably
object in good faith, provided that the Company is notified of such objection
in writing no later than five (5) Trading Days after the Holders have been so
furnished copies of an initial Registration Statement or one (1) Trading Day
after the Holders have been so furnished copies of any related Prospectus or
pre- or post-effective amendments or supplements thereto or to such
Registration Statement. Each Holder agrees to furnish to the Company a
completed questionnaire in the form attached to this Agreement as Annex B
(a “Selling Shareholder Questionnaire”) not less than three Trading Days
prior to the Filing Date or by the end of the fourth (4th) Trading Day
following the date on which such Holder receives draft materials in accordance
with this Section.


 


(b)           (i) Prepare and file
with the Commission such amendments, including post-effective amendments, to a
Registration Statement and the Prospectus used in connection therewith as may
be necessary to keep a Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement (subject to the terms of this Agreement), and, as so
supplemented or amended, to be filed pursuant to Rule 424; (iii) respond as
promptly as reasonably possible to any comments received from the Commission
with respect to a Registration Statement or any amendment thereto and provide
as promptly as reasonably possible to any Holder upon request true and complete
copies of all correspondence from and to the Commission relating to a
Registration Statement (provided that the Company may excise any information contained
therein which would constitute material non-public information as to any Holder
which has not executed a confidentiality agreement with the Company); and (iv)
comply in all material respects with the provisions of the Securities Act and
the Exchange Act applicable to the Company with respect to the disposition of
all Registrable Securities covered by a Registration Statement during the
applicable period in accordance (subject to the terms of this Agreement) with
the intended methods of disposition by the Holders thereof set forth in such
Registration Statement as so amended or in such Prospectus as so supplemented.


 


(c)           [INTENTIONALLY
DELETED]


 


(d)           Notify the Holders
of Registrable Securities to be sold (which notice shall, pursuant to clauses
(iii) through (vi) hereof, be accompanied by an instruction to suspend the use
of the Prospectus until the requisite changes have been made) as promptly as 


 


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reasonably
possible (and, in the case of (i)(A) below, not less than one (1) Trading Day
prior to such filing) and (if requested by any such Person) confirm such notice
in writing no later than one (1) Trading Day following the day (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to a
Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a “review” of such Registration
Statement and, upon request of any Holder, whenever the Commission comments in
writing on such Registration Statement; and (C) with respect to a Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other federal or state
governmental authority for amendments or supplements to a Registration
Statement or Prospectus or for additional information; (iii) of the issuance by
the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of a Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; (v) of the occurrence of any
event or passage of time that makes the financial statements included in a
Registration Statement ineligible for inclusion therein or any statement made
in a Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any 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 (vi) of the occurrence or existence of any
pending corporate development with respect to the Company that the Company
believes may be material and that, in the determination of the Company, makes
it not in the best interest of the Company to allow continued availability of a
Registration Statement or Prospectus, provided that any and all of such
information shall remain confidential to each Holder until such information
otherwise becomes public, unless disclosure by a Holder is required by law; provided,
further, that notwithstanding each Holder’s agreement to keep such
information confidential, each such Holder makes no acknowledgement that any
such information is material, non-public information.


 


(e)           Use its commercially
reasonable efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order stopping or suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.


 


(f)            Furnish to each
Holder (which may be delivered via email or facsimile), without charge, at
least one (1) conformed copy of each such Registration Statement and each
amendment thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such
Person (including those 


 


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previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that any such item which is available
on the EDGAR system need not be furnished in physical form.


 


(g)           Subject to the terms
of this Agreement, the Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Holders in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto, except after the
giving of any notice pursuant to Section 3(d).


 


(h)            The Company shall
cooperate with any registered broker-dealer which is effecting resales of
Registrable Securities in effecting any filing with the National Association of
Securities Dealers, Inc. (“NASD”) Corporate Financing Department
pursuant to NASD Rule 2710 and pay the filing fee required in connection with
the first such filing.


 


(i)            Prior to any resale
of Registrable Securities by a Holder, use its commercially reasonable efforts
to register or qualify or cooperate with the selling Holders in connection with
the registration or qualification (or exemption from the Registration or
qualification) of such Registrable Securities for the resale by the Holder
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Holder reasonably requests in writing, to keep each registration
or qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things reasonably necessary to
enable the disposition in such jurisdictions of the Registrable Securities covered
by each Registration Statement; provided, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is
not then so qualified, subject the Company to any material tax in any such
jurisdiction where it is not then so subject or file a general consent to
service of process in any such jurisdiction.


 


(j)            If requested by a
Holder, cooperate with such Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be delivered to
a transferee pursuant to a Registration Statement, which certificates shall be
free, to the extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holder may request.


 


(k)           Upon the occurrence
of any event contemplated by Section 3(d), as promptly as reasonably possible
under the circumstances taking into account the Company’s good faith assessment
of any adverse consequences to the Company and its stockholders of the
premature disclosure of such event, prepare a supplement or amendment,
including a post-effective amendment, to a Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated 


 


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therein
or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.  If the Company
notifies the Holders in accordance with clauses (iii) through (vi) of Section
3(d) above to suspend the use of any Prospectus until the requisite changes to
such Prospectus have been made, then the Holders shall suspend use of such
Prospectus.  The Company will use its
commercially reasonable efforts to ensure that the use of the Prospectus may be
resumed as promptly as is practicable. 
The Company shall be entitled to exercise its right under this Section
3(k) to suspend the availability of a Registration Statement and Prospectus,
subject to the payment of partial liquidated damages otherwise required
pursuant to Section 2(b), for a period not to exceed sixty (60) calendar days
(which need not be consecutive days) in any twelve (12) month period.


 


(l)            Comply with all
applicable rules and regulations of the Commission that are applicable to the
Company.


 


(m)          The Company may
require each selling Holder and each Holder hereby agrees, to furnish to the
Company a certified statement as to the number of Registrable Securities
beneficially owned by such Holder, other information relating to such Holder,
the Registrable Securities it intends to sell and its plan of distribution (to
the extent required for a Registration Statement), and, if required by the
Commission, the natural persons thereof that have voting and dispositive
control over the Registrable Securities. During any periods that the Company is
unable to meet its obligations hereunder with respect to the registration of
the Registrable Securities solely because any Holder fails to furnish such
information within three (3) Trading Days of the Company’s request, any
liquidated damages that are accruing at such time as to such Holder only shall
be tolled and any Event that may otherwise occur solely because of such delay
shall be suspended as to such Holder only, until such information is delivered
to the Company; provided, further, that the Holders agree and acknowledge that
the Company will not delay the filing of a Registration Statement (or amendment
or supplement to a Registration Statement) due to the failure of any Holder to
deliver the information required hereby in accordance with the terms hereof.


 


(n)   Each Holder agrees not to
take any action with respect to any distribution deemed to be made pursuant to
such registration statement which would constitute a violation of Regulation M
under the Exchange Act or any other applicable rule, regulation or law.


 


 


                4.             Registration Expenses. All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses of the Company’s counsel and auditors) (A) with
respect to filings made with the Commission, (B) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, (C) in compliance with applicable state securities or Blue
Sky laws reasonably agreed to 


 


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by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection
with Blue Sky qualifications or exemptions of the Registrable Securities) and
(D) if not previously paid by the Company in connection with an Issuer Filing,
with respect to any filing that may be required to be made by any broker
through which a Holder intends to make sales of Registrable Securities with the
NASD pursuant to NASD Rule 2710, so long as the broker is receiving no more
than a customary brokerage commission in connection with such sale, (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company, (v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement.  In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder.  In no event shall the Company be responsible
for any broker or similar commissions of any Holder or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the
Holders.


 


                5.             Indemnification.


 


(a)           Indemnification by the Company.
The Company shall, notwithstanding any termination of this Agreement, indemnify
and hold harmless each Holder, the officers, directors, members, partners,
agents, brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin call
of Common Stock), investment advisors and employees (and any other Persons with
a functionally equivalent role of a Person holding such titles, notwithstanding
a lack of such title or any other title) of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, members,
shareholders, partners, agents and employees (and any other Persons with a
functionally equivalent role of a Person holding such titles, notwithstanding a
lack of such title or any other title) of each such controlling Person, to the
fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
reasonable attorneys’ fees) and expenses (collectively, “Losses”), as
incurred arising out of or relating to (1) any untrue or alleged untrue
statement of a material fact contained in a Registration Statement, any
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading or (2)
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act or any state securities law, or any rule or regulation thereunder,
in connection with the performance of its obligations under this Agreement,
except to the extent, but only to the extent, that (i) such untrue statements
or omissions are based solely upon information


 


 


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regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein,
or to the extent that such information relates to such Holder or such Holder’s
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved Annex A hereto for
this purpose), (ii) in the case of an occurrence of an event of the type
specified in Section 3(d)(iii)-(vi), the use by such Holder of a suspended, an
outdated or a defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of the Advice contemplated in Section 6(d) or (iii) such
Holder engaged in willful misconduct. 
The Company shall notify the Holders promptly of the institution, threat
or assertion of any Proceeding arising from or in connection with the
transactions contemplated by this Agreement of which the Company is aware.


 


(b)           Indemnification by Holders. Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who
controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, to the extent arising
out of or based upon: (x) such Holder’s failure to comply with the prospectus
delivery requirements of the Securities Act or (y) any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company specifically for inclusion
in such Registration Statement or such Prospectus or (ii) to the extent that
such information relates to such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus
or in any amendment or supplement thereto or (iii) in the case of an occurrence
of an event of the type specified in Section 3(d)(iii)-(vi), the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior
to the receipt by such Holder of the Advice contemplated in Section 6(d). In no
event shall the liability of any selling Holder hereunder be greater in amount
than the dollar amount of the proceeds received by such Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation.


 


(c)           Conduct of Indemnification Proceedings.
If any Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an “Indemnified Party”), such Indemnified Party
shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to
assume the defense thereof, including the employment of counsel reasonably


 


 


11

















 


satisfactory
to the Indemnified Party and the payment of all reasonable and documented fees
and expenses incurred in connection with defense thereof; provided, that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have prejudiced the
Indemnifying Party.


 


An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless:  (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying
Party shall have failed promptly to assume the defense of such Proceeding and
to employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and counsel to the Indemnified Party shall reasonably believe that a
material conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if
such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of no more than one (1) separate counsel shall
be at the expense of the Indemnifying Party). 
The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not
be unreasonably withheld or delayed.  No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.


 


Subject to the terms of this Agreement, all reasonable fees and
expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid
to the Indemnified Party, as incurred, within ten Trading Days of written
notice thereof to the Indemnifying Party; provided, that the Indemnified Party
shall promptly reimburse the Indemnifying Party for that portion of such fees
and expenses applicable to such actions for which such Indemnified Party is
judicially determined to be not entitled to indemnification hereunder.


 


(d)           Contribution. If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party
or insufficient to hold an Indemnified Party harmless for any Losses, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified


 


12

















 


Party
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission of a material fact, has been taken or made by,
or relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission.  The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations set
forth in this Agreement, any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.


 


The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this
Section 5(d), no Holder shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the proceeds actually received by such
Holder from the sale of the Registrable Securities subject or giving rise to
the Proceeding exceeds the amount of any damages that such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, except in the case of fraud by such Holder.


 


The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.


 


6.                Miscellaneous.


 


(a)           Remedies.  In the event of a breach by the Company or by
a Holder of any of their respective obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including recovery
of damages, shall be entitled to specific performance of its rights under this
Agreement.  The Company and each Holder
agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall not assert or shall
waive the defense that a remedy at law would be adequate.


 


(b)           No Piggyback on Registrations; Prohibition on Filing Other Registration
Statements. Except as set forth on Schedule 6(b) attached
hereto, neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of the Company
in any Registration Statements other than the Registrable Securities.  The Company shall not file any other
registration statements (other than on Form S-8 or Form S-4) until all
Registrable Securities are registered pursuant to a Registration Statement that
is declared effective by the Commission, provided that this Section 6(b) shall
not prohibit the


 


13

















 


Company from filing
amendments to registration statements filed prior to the date of this
Agreement.


 


(c)           Compliance. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
a Registration Statement.


 


(d)           Discontinued Disposition. 
By its acquisition of Registrable Securities, each Holder agrees that,
upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(d)(iii) through (vi), such Holder will forthwith
discontinue disposition of such Registrable Securities under a Registration
Statement until it is advised in writing (the “Advice”) by the Company
that the use of the applicable Prospectus (as it may have been supplemented or
amended) may be resumed.  The Company
will use its commercially reasonable efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable.  The Company agrees and acknowledges that any
periods during which the Holder is required to discontinue the disposition of
the Registrable Securities hereunder shall be subject to the provisions of
Section 2(b).


 


(e)           Piggy-Back Registrations. If, at any time during the
Effectiveness Period, there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare
and file with the Commission a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of
its equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with the Company’s
stock option or other employee benefit plans, then the Company shall deliver to
each Holder a written notice of such determination and, if within fifteen (15)
days after the date of the delivery of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement all
or any part of such Registrable Securities such Holder requests to be
registered; provided, however, that the Company shall not be
required to register any Registrable Securities pursuant to this Section 6(e)
that are eligible for resale pursuant to Rule 144(k) promulgated by the
Commission pursuant to the Securities Act or that are the subject of a then
effective Registration Statement.


 


(f)            Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of a majority of the then outstanding Registrable Securities
(including, for this purpose any Registrable Securities issuable upon exercise
or conversion of any Security).  If a
Registration Statement does not register all of the Registrable Securities
pursuant to a waiver or amendment done in compliance with the previous
sentence, then the number of Registrable Securities to be registered for each
Holder shall be reduced pro rata among all Holders and each Holder shall have
the right to designate which of its Registrable Securities shall be omitted
from such Registration Statement. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of a Holder or some Holders and that does not
directly or


 


14

















 


indirectly affect the rights
of other Holders may be given by such Holder or Holders of all of the
Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
first  sentence of this Section 6(f).


 


(g)           Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement.


 


(h)           Successors
and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The right to cause the Company to
register Registrable Securities granted to the Holders by the Company under
this Agreement may be assigned in full by a Holder in connection with a
transfer by such Holder of its Registrable Securities, but only if: (i) such transfer may otherwise be
effected in accordance with applicable securities laws; (ii) such Holder gives
written notice of the proposed transfer to the Company including the name and
address of such transferee and a copy of the transfer documents and agreements;
and (iii) such transfer is otherwise in compliance with this Agreement. Except
as specifically permitted by this Section 6(h), the rights of a Holder with
respect to Registrable Securities as set out herein shall not be transferable
to any other Person, the Company may impose stop transfer orders with respect
to any such transfer or attempted transfer, and any such transfer or attempted
transfer shall be null and void.


 


(i)            No Inconsistent Agreements. Except as set forth in the SEC
Reports, neither the Company nor any of its Subsidiaries has entered, as of the
date hereof, nor shall the Company or any of its Subsidiaries, on or after the
date of this Agreement, enter into any agreement with respect to its
securities, that would directly conflict with the provisions hereof.  Except as set forth on Schedule 6(i),
neither the Company nor any of its Subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its
securities to any Person that have not been satisfied in full.


 


(j)            Execution and Counterparts. This Agreement may be executed
in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered
by facsimile transmission or by e-mail delivery of a “.pdf” or “.tif” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” or “.tif”signature page were an
original thereof.


 


(k)           Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.


 


(l)            Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any other remedies provided by law.


 


15

















 


(m)          Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their commercially reasonable efforts to find and
employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.


 


(n)           Headings. The headings in this Agreement are for convenience
only, do not constitute a part of the Agreement and shall not be deemed to
limit or affect any of the provisions hereof.


 


(o)           Independent Nature of Holders’ Obligations and Rights. The
obligations of each Holder hereunder are several and not joint with the obligations
of any other Holder hereunder, and no Holder shall be responsible in any way
for the performance of the obligations of any other Holder hereunder. Nothing
contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.


 


********************


 


16

















 


IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.


 


	
   

  	
  IMAGEWARE SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wayne G. Wetherell

  
	
   

  	
   

  	
  Name: Wayne G. Wetherell

  
	
   

  	
   

  	
  Title:SVP & CFO, Secretary

  



 


 


 


[SIGNATURE
PAGE OF HOLDERS FOLLOWS]


 


17

















 


[SIGNATURE
PAGE OF HOLDERS TO IW RRA]


 


 


Name of Holder:                                                      


 


Signature of Authorized Signatory
of Holder:                                                      


 


Name of Authorized Signatory:                                                      


 


Title of Authorized Signatory:                                                      


 


 


 


[SIGNATURE
PAGES CONTINUE]


 


18
















Annex A


 


Plan
of Distribution


 


Each Selling Stockholder (the “Selling Stockholders”)
of the common stock and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on the American Stock Exchange or any other stock exchange,
market or trading facility on which the shares are traded or in private
transactions.  These sales may be at
fixed or negotiated prices.  A Selling
Stockholder may use any one (1) or more of the following methods when selling
shares:


•                  ordinary brokerage transactions and
transactions in which the broker-dealer solicits purchasers;


•                  block trades in which the broker-dealer
will attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;


•                  purchases by a broker-dealer as
principal and resale by the broker-dealer for its account;


•                  an exchange distribution in accordance
with the rules of the applicable exchange;


•                  privately negotiated transactions;


•                  settlement of short sales entered into
after the effective date of the registration statement of which this prospectus
is a part;


•                  broker-dealers may agree with the
Selling Stockholders to sell a specified number of such shares at a stipulated
price per share;


•                  through the writing or settlement of
options or other hedging transactions, whether through an options exchange or
otherwise;


•                  a combination of any such methods of
sale; or


•                  any other method permitted pursuant to
applicable law.


The Selling Stockholders may also sell shares under
Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”),
if available, rather than under this prospectus.


Broker-dealers engaged by the Selling
Stockholders may arrange for other brokers-dealers to participate in
sales.  Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage


 


19

















 


commission in compliance
with FINRA NASD Rule 2440; and in the case of a principal transaction a markup
or markdown in compliance with NASD IM-2440.


In connection with the sale of the common stock or
interests therein, the Selling Stockholders may enter into hedging transactions
with broker-dealers or other financial institutions, which may in turn engage
in short sales of the common stock in the course of hedging the positions they
assume.  The Selling Stockholders may
also sell shares of the common stock short and deliver these securities to
close out their short positions, or loan or pledge the common stock to
broker-dealers that in turn may sell these securities.  The Selling Stockholders may also enter into
option or other transactions with broker-dealers or other financial
institutions or the creation of one (1) or more derivative securities which
require the delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented
or amended to reflect such transaction).


The Selling Stockholders and any broker-dealers or
agents that are involved in selling the shares may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales.  In such event, any commissions received by
such broker-dealers or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.  Each Selling
Stockholder has informed the Company that it does not have any written or oral
agreement or understanding, directly or indirectly, with any person to
distribute the Common Stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent (8%).


The Company is required to pay certain fees and
expenses incurred by the Company incident to the registration of the
shares.  The Company has agreed to
indemnify the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.


Because Selling Stockholders may be deemed to be “underwriters”
within the meaning of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act including Rule 172
thereunder.  In addition, any securities
covered by this prospectus which qualify for sale pursuant to Rule 144 under
the Securities Act may be sold under Rule 144 rather than under this
prospectus.  There is no underwriter or
coordinating broker acting in connection with the proposed sale of the resale
shares by the Selling Stockholders.


We agreed to keep this prospectus effective until the
earlier of (i) the date on which the shares may be resold by the Selling
Stockholders without registration and without regard to any volume limitations
by reason of Rule 144(k) under the Securities Act or any other rule of similar
effect or (ii) all of the shares have been sold pursuant to this prospectus or
Rule 144 under the Securities Act or any other rule of similar effect.  The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.


 


20

















 


Under applicable rules
and regulations under the Exchange Act, any person engaged in the distribution
of the resale shares may not simultaneously engage in market making activities
with respect to the common stock for the applicable restricted period, as
defined in Regulation M, prior to the commencement of the distribution.  In addition, the Selling Stockholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including Regulation M, which may limit the timing of
purchases and sales of shares of the common stock by the Selling Stockholders
or any other person.  We will make copies
of this prospectus available to the Selling Stockholders and have informed them
of the need to deliver a copy of this prospectus to each purchaser at or prior
to the time of the sale (including by compliance with Rule 172 under the
Securities Act).


 


21

















Annex B


IMAGEWARE SYSTEMS, INC.


Selling Securityholder Notice and Questionnaire


The
undersigned beneficial owner of common stock (the “Registrable Securities”)
of ImageWare Systems, Inc., a Delaware corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a registration statement (the
“Registration Statement”) for the registration and resale under Rule 415
of the Securities Act of 1933, as amended (the “Securities Act”), of the
Registrable Securities, in accordance with the terms of the Registration Rights
Agreement (the “Registration Rights Agreement”) to which this document
is annexed.  A copy of the Registration
Rights Agreement is available from the Company upon request at the address set
forth below.  All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the
Registration Rights Agreement.


Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus.  Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel
regarding the consequences of being named or not being named as a selling
securityholder in the Registration Statement and the related prospectus.


NOTICE


The
undersigned beneficial owner (the “Selling Securityholder”) of
Registrable Securities hereby elects to include the Registrable Securities
owned by it in the Registration Statement.


 


22

















 


The undersigned hereby
provides the following information to the Company and represents and warrants
that such information is accurate:


QUESTIONNAIRE


	
  1.

  	
   

  	
  Name.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Full Legal Name of Selling Securityholder

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Full Legal Name of Registered Holder (if
  not the same as (a) above) through which Registrable Securities are held:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Full Legal Name of Natural Control Person
  (which means a natural person who directly or indirectly alone or with others
  has power to vote or dispose of the securities covered by this
  Questionnaire):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


	
  2.

  	
   

  	
  Address for
  Notices to Selling Securityholder:

  



 


 


	
   

  
	
   

  
	
   

  
	
  Telephone:

  
	
  Fax:

  
	
  Contact Person:

  



 


	
  3.

  	
   

  	
  Broker-Dealer
  Status:

  



 


	
   

  	
   

  	
  (a)

  	
   

  	
  Are you a broker-dealer?

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Yes   o              No   o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  If “yes” to Section 3(a), did you receive
  your Registrable Securities as compensation for investment banking services
  to the Company?

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Yes   o              No   o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Note:

  	
   

  	
  If “no” to Section 3(b), the Commission’s
  staff has indicated that you should be identified as an underwriter in the
  Registration Statement.

  



 


23

















 


	
   

  	
   

  	
  (c)

  	
   

  	
  Are you an affiliate of a broker-dealer?

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Yes   o              No   o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
   

  	
  If you are an affiliate of a broker-dealer,
  do you certify that you purchased the Registrable Securities in the ordinary
  course of business, and at the time of the purchase of the Registrable
  Securities to be resold, you had no agreements or understandings, directly or
  indirectly, with any person to distribute the Registrable Securities?

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Yes   o              No   o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Note:

  	
   

  	
  If “no” to Section 3(d), the Commission’s
  staff has indicated that you should be identified as an underwriter in the
  Registration Statement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Beneficial
  Ownership of Securities of the Company Owned by the Selling Securityholder.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except
  as set forth below in this Item 4, the undersigned is not the beneficial or
  registered owner of any securities of the Company other than the securities
  issuable pursuant to the Purchase Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Type and Amount of other securities
  beneficially owned by the Selling Securityholder:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


24

















 


	
  5.

  	
  Relationships
  with the Company:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except
  as set forth below, neither the undersigned nor any of its affiliates,
  officers, directors or principal equity holders (owners of 5% of more of the
  equity securities of the undersigned) has held any position or office or has
  had any other material relationship with the Company (or its predecessors or
  affiliates) during the past three years.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State any exceptions here:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


The
undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective.


By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items one (1) through five (5) and the
inclusion of such information in the Registration Statement and the related
prospectus and any amendments or supplements thereto.  The undersigned understands that such
information will be relied upon by the Company in connection with the preparation
or amendment of the Registration Statement and the related prospectus.


IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by
its duly authorized agent.


	
  Date:

  	
   

  	
  Beneficial Owner:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


PLEASE FAX
A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE
ORIGINAL BY OVERNIGHT MAIL, TO:


 


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