Exhibit 10.6
THE SECURITIES EVIDENCED BY THIS WARRANT CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE SOLD, TRANSFERRED, OR ASSIGNED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF SUCH SECURITIES REASONABLY SATISFACTORY TO
THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
No.:
2003-1
WARRANT
TO PURCHASE COMMON STOCK
OF
IMAGEWARE SYSTEMS, INC.
(void after June 13, 2009)
1.
ISSUANCE OF WARRANT.
FOR VALUE RECEIVED, ON AND AFTER THE DATE OF
ISSUANCE OF THIS WARRANT, AND SUBJECT TO THE TERMS AND CONDITIONS HEREIN SET
FORTH, THE HOLDER (AS DEFINED BELOW) IS ENTITLED TO PURCHASE FROM IMAGEWARE
SYSTEMS, INC., A CALIFORNIA CORPORATION (THE "COMPANY"), AT ANY TIME BEFORE 5:00
P.M. NEW YORK TIME ON JUNE 13, 2009 (THE "TERMINATION DATE"), AT A PRICE PER
SHARE EQUAL TO THE WARRANT PRICE (AS DEFINED BELOW AND SUBJECT TO ADJUSTMENT AS
DESCRIBED BELOW), THE WARRANT STOCK (AS DEFINED BELOW AND SUBJECT TO ADJUSTMENT
AS DESCRIBED BELOW) UPON EXERCISE OF THIS WARRANT (THIS "WARRANT") PURSUANT TO
SECTION 6 HEREOF.
2.
DEFINITIONS.
AS USED IN THIS WARRANT, THE FOLLOWING TERMS HAVE THE
DEFINITIONS ASCRIBED TO THEM BELOW:
(A)
"BUSINESS DAY" MEANS ANY DAY OTHER THAN A SATURDAY, SUNDAY OR
OTHER DAY ON WHICH THE NATIONAL OR STATE BANKS LOCATED IN THE STATE OF NEW YORK
OR THE STATE OF CALIFORNIA OR THE DISTRICT OF COLUMBIA ARE AUTHORIZED TO BE
CLOSED.
(B)
"COMMON STOCK" MEANS THE COMMON STOCK, PAR VALUE $0.01 PER SHARE,
OF THE COMPANY.
(C)
"HOLDER" MEANS LAURUS MASTER FUND, LTD., OR ITS ASSIGNS.
(D)
"PURCHASE AGREEMENT" MEANS THE NOTE AND WARRANT PURCHASE AGREEMENT
DATED AS OF MAY 22, 2002 BY AND BETWEEN THE COMPANY AND PERSEUS 2000,L.L.C., AS
AMENDED.
(E)
"COMPANY NOTES" MEANS ALL NOTES ISSUED TO L.F. GLOBAL HOLDINGS,
LLC ("LF"), AND LAURUS MASTER FUND, LTD. ("LAURUS"), PURSUANT TO THE CONSENT TO
ASSIGNMENT AND
Amendment Agreement by and among LF, Laurus and the Company dated June 13, 2003
(the "Consent Agreement").
(F)
"WARRANT PRICE" MEANS $2.11 PER SHARE, SUBJECT TO ADJUSTMENT AS
DESCRIBED IN SECTION 3 BELOW.
(G)
"WARRANT STOCK" MEANS THE SHARES OF COMMON STOCK (OR OTHER
SECURITIES) PURCHASABLE UPON EXERCISE OF THIS WARRANT OR ISSUABLE UPON
CONVERSION OF THIS WARRANT.
THE TOTAL NUMBER OF SHARES TO BE ISSUED UPON THE
EXERCISE OF THIS WARRANT SHALL BE 578,313, SUBJECT TO ADJUSTMENT AS DESCRIBED IN
SECTION 3 BELOW.
3.
ADJUSTMENTS AND NOTICES.
THE WARRANT PRICE AND THE NUMBER OF
SHARES OF WARRANT STOCK SHALL BE SUBJECT TO ADJUSTMENT FROM TIME TO TIME IN
ACCORDANCE WITH THIS SECTION 3.
(A)
SUBDIVISION, STOCK DIVIDENDS OR COMBINATIONS.
IN CASE THE COMPANY
SHALL AT ANY TIME SUBDIVIDE THE OUTSTANDING SHARES OF COMMON STOCK OR SHALL
ISSUE A STOCK DIVIDEND WITH RESPECT