Document:

<PAGE>
                                                                  EXHIBIT: 10.49

                     PULITZER INC. STOCK OPTION CERTIFICATE

This Certificate represents an option ("Option") to purchase shares of common
stock of Pulitzer Inc. (the "Company") granted to you on 12/10/2003 under the
Pulitzer Inc. 2003 Incentive Plan (the "Plan"). The basic features of this
Option grant are indicated below (and are subject to correction by the Company
if and to the extent this Certificate does not accurately reflect the terms of
the Option grant). This Option is governed by the terms and conditions of the
official Plan document. To accept this Option and its terms, you must sign and
return one copy of this Certificate to Pulitzer Inc., 900 North Tucker
Boulevard, St. Louis, Missouri 63101, Attention: Mr. James V. Maloney. By
executing this certificate, you acknowledge receipt of the Plan document and the
Summary Description of the Plan.

        Name of Optionee:  Alan G. Silverglat

  Social Security Number:

              Grant Date:  December 10, 2003

        Number of Shares:  10,000

Exercise Price per Share:  $52.9200

        Vesting Schedule:  Subject to continuing employment or service with the
                           Company, 100% on December 31, 2009, unless and except
                           to the extent vesting is accelerated (a) in
                           accordance with the performance-based vesting
                           conditions described in Exhibit A (attached), as
                           construed and applied by the Compensation Committee
                           of the Board of Directors of the Company, or (b) upon
                           the occurrence of an event that would cause the
                           acceleration of vesting under the terms of the
                           Executive Transition Agreement dated as of January 1,
                           2002 between the Company and the Executive.

<TABLE>
<CAPTION>
                                 INCREMENTAL      AGGREGATE
                  DATE             VESTING         VESTING
                  ----           -----------      ---------
               <S>               <C>              <C>
               12/31/2009          10,000            10,000
</TABLE>

Termination of Employment: Death, disability, retirement after age 65 or with
                           Company consent--vesting accelerates; 3 years to
                           exercise

                           Other termination of employment-- forfeit non-vested
                           options; 60 days to exercise vested options

    Expiration of Option:  December 10, 2013--even if still employed or
                           post-termination exercise period (see above) is still
                           open

Accepted and Agreed to by:                      PULITZER INC.

Signature: /s/ ALAN G. SILVERGLAT                By: /s/ JAMES V. MALONEY
           ----------------------                   ----------------------------
           Alan G. Silverglat                       James V. Maloney, Secretary

<PAGE>
                                                               FORM OF EXHIBIT A

                  CRITERIA FOR VESTING PERFORMANCE BASED EQUITY

Objective Criteria*

1.       Grow newspaper advertising revenue minus employment revenue during the
         measurement period** at a rate equal to or in excess of the growth rate
         of the Advertising Revenue Benchmark (as hereinafter defined). The
         Advertising Revenue Benchmark is defined as the average annual
         percentage change in NAA newspaper advertising revenue minus employment
         revenue from year to year during the three years included in the
         measurement period.

2.       Improve consolidated operating profit margins*** from the percentage
         margin in fiscal 2003 to at least _______% [to be fixed by Compensation
         Committee] for the 2006 fiscal year.

Subjective Criteria

1.       Management of the Company's business and assets in a manner that
         enhances shareholder value, considering the Objective Criteria and such
         other factors and measurements as the Committee deems appropriate.

2.       Maintaining and enhancing the Company's reputation for journalistic
         excellence.

3.       Success in corporate governance, including an effective relationship
         with the Company's Board of Directors and shareholders.

4.       Building and retaining an effective management team to help ensure the
         Company's success.

         If both of the Objective Criteria are met, all options and restricted
share units subject to the application of the Performance Vesting Criteria will
automatically vest. If both of the Objective Criteria are not met, none of the
options or restricted share units will automatically vest, but the Committee in
its discretion may vest all, some or none of the options or units based on its
review of the executive's satisfaction of the Subjective Criteria.

         All options and/or units that do not vest based on performance during
the measurement period will vest on December 31, 2009, subject to the
executive's continuing employment and acceleration under the customary terms of
the executive's stock option and restricted stock unit award agreements.

----------

*        In determining whether the Objective Criteria have been satisfied
         appropriate adjustments will be made for any acquisitions or
         dispositions during the measurement period.

**       Measurement period is the three year period beginning January 1, 2004
         and ending December 31, 2006.

***      Operating profit to revenues with Pulitzer's share of Tucson results
         included in both operating profits and revenues.<PAGE>
                                                                  EXHIBIT: 10.50

                                  PULITZER INC.
                            STOCK OPTION CERTIFICATE

This Certificate represents an option ("Option") to purchase shares of common
stock of Pulitzer Inc. (the "Company") granted to you on 12/10/2003 under the
Pulitzer Inc. 2003 Incentive Plan (the "Plan"). The basic features of this
Option grant are indicated below (and are subject to correction by the Company
if and to the extent this Certificate does not accurately reflect the terms of
the Option grant). This Option is governed by the terms and conditions of the
official Plan document. To accept this Option and its terms, you must sign and
return one copy of this Certificate to Pulitzer Inc., 900 North Tucker
Boulevard, St. Louis, Missouri 63101, Attention: Mr. James V. Maloney. By
executing this certificate, you acknowledge receipt of the Plan document and the
Summary Description of the Plan.

        Name of Optionee:  Alan G. Silverglat

  Social Security Number:

              Grant Date:  December 10, 2003

        Number of Shares:  20,000

Exercise Price per Share:  $52.9200

        Vesting Schedule:  Annual 1/3 increments for each year of continuing
                           service from date of grant per table below.

<TABLE>
<CAPTION>
                                 INCREMENTAL      AGGREGATE
                  DATE             VESTING         VESTING
                  ----           -----------      ---------
               <S>               <C>              <C>
               12/10/2004          6,667              6,667
               12/10/2005          6,666             13,333
               12/10/2006          6,667             20,000
</TABLE>

Termination of Employment: Death, disability, retirement after age 65 or with
                           Company consent--vesting accelerates; 3 years to
                           exercise

                           Other termination of employment-- forfeit non-vested
                           options; 60 days to exercise vested options

    Expiration of Option:  December 10, 2013--even if still employed or
                           post-termination exercise period (see above) is still
                           open

Accepted and Agreed to by:                      PULITZER INC.

Signature:  /s/ Alan G. Silverglat              By: /s/ James V. Maloney
           ---------------------                   -----------------------------
           Alan G. Silverglat                       James V. Maloney, Secretaryexv4w1

 

EXHIBIT 4.1

REDACTED AND CONFORMED COPY

ASSET PURCHASE AGREEMENT

          THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is entered into as of
March 4, 2004 by and among Identix Incorporated, a Delaware corporation with a
principal address at 5600 Rowland Road, Minnetonka, MN 55343 USA (“Buyer”), on
the one hand, and Delean Vision Worldwide, Inc., a British Virgin Island
corporation with a principal address at Bison Court, P.O. Box 3460, Road Town,
Tortola, BVI (the “Seller”), Bruno Delean, an individual with a principal
address at    (“Mr. Delean”), and Nicolas Vandenberghe, an
individual with a principal address at    (“Mr. Vandenberghe”,
together with Mr. Delean, the “Representing Shareholders”), on the other hand.

          WHEREAS, Seller has developed and exclusively owns certain biometric
recognition software and related technology;

          WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell
to Buyer, all such biometric recognition software and related technology and
all intellectual property rights thereunder; and

          WHEREAS, it is the intention of the parties hereto, and the other
shareholders of the Seller, that subject to applicable law, the transactions
contemplated hereunder qualify as a “reorganization” for U.S. tax purposes
under Section 368(a)(1)(C) of the Code (as hereinafter defined), and Seller
plans to, as an integral part of the transactions contemplated hereunder,
distribute the consideration transferred to Seller by Buyer to the Representing
Shareholders and the other shareholders of the Seller in complete liquidation
of Seller.

          NOW, THEREFORE, in consideration of the promises and the representations,
warranties, covenants, and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

Artible 1

Certain Definitions

          As used in this Agreement, the following capitalized terms have the
following meanings:

          “Acquired Assets” means the Software and the Patent Applications and the
other assets described on Schedule 1, and the Intellectual Property Rights
arising under or included therein.

          “Action” means any action, suit, arbitration, inquiry, proceeding or
investigation by or before any court, governmental or other regulatory or
administrative agency, commission or tribunal.

          “Affiliate” means any party controlled by, controlling or under common
control with another party.

          “Agreement” means this Asst Purchase Agreement including all Schedules
attached hereto which are hereby incorporated by reference.

          “Apportioned Obligations” shall have the meaning set forth in Section
7.2(b).

          “Assignments” means (1) the general assignment and sale of all ownership
of, and rights title and interest to, the Acquired Assets to be executed by
Seller in favor of Buyer and to be delivered by Seller to Buyer at Closing, (2)
the assignment of all ownership of, and rights title and interest to, the
Patent Applications to be executed by Seller in favor of Buyer and to be
delivered by Seller to Buyer at Closing, and (3) the assignment of all rights
and benefits by Seller to Buyer under the DTN Contract, and the assumption of
all obligations and liabilities by Buyer under the DTN Contract, to be
executed by Seller and Buyer and delivered by each party to the other at
Closing.

 

 

          “Business” means the technology design, development and licensing business
conducted by Seller relating to the Acquired Assets, and of which the Acquired
Assets comprises all or substantially all of the assets used therefore. For
the avoidance of doubt, Buyer is acquiring only the Acquired Assets and, except
as otherwise expressly set forth in this Agreement, is not acquiring all of
the any other business, assets or liabilities of Seller.

          “Buyer Indemnified Parties” shall have the meaning set forth in Section
11.2.

          “Closing” means the consummation of the transactions contemplated by
Section 2.1.

          “Closing Date” means March 9, 2004 or if later, the date on which the
conditions set forth in Articles 8 and 9 shall be satisfied or duly waived in
writing by Buyer or Seller, as the case may be, or if Seller and Buyer mutually
agree on a different date for the Closing, the date upon which they have
mutually agreed in writing.

          “Closing Price” means the closing price of the Common Stock on Nasdaq on
the Closing Date.

          “Closing Tax Period” shall have the meaning set forth in Section 7.2(b).

          “Code” means the Internal Revenue Code of 1986, as amended, and any
successor thereto.

          “Common Stock: means shares of common stock of Identix Incorporated, par
value $0.01 per share.

          “Consulting Agreements” means those certain consulting agreements, in form
and substance satisfactory to Buyer, to be executed as of the Closing between
Buyer and each of Mr. Delean and Mr. Vandenberghe.

          “Contract” means any written note, bond, mortgage, indenture, lease,
contract, instrument, license, agreement, sales order, purchase order, open bid
or other written obligation or commitment and all rights therein.

          “Covered Liabilities” shall have the meaning set forth in Section 11.2.

          “DTN Contract” means that certain License And Distribution Agreement
entered into as of    by and between    having a principal place of
business at    , and    , a Delaware limited liability company,
having its principal place of business at    .

          “Entity” means any Person other than a natural Person.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “Excluded Assets” means all assets of Seller other than Acquired Assets.

          “Governmental Authority” means any nation or government, any state or
other political subdivision thereof, any federal, state, local or foreign
Entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including without
limitation any government authority, agency, department, board, commission, or
instrumentality of the United States or the European Union, any state of the
United States or the European Union or political subdivision thereof, and any
tribunal or arbitral authority of competent jurisdiction, and any
self-regulatory organization.

          “Identified Employees” means Mr. Delean and Mr.Vandenberghe.

          “Income Tax” means any federal, state, local, or foreign income tax,
including any interest, penalty, or addition thereto, whether disputed or not.

          “Income Tax Return” means any return, declaration, report, claim for
refund, or information return or statement relating to Income Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

2

 

          “Intellectual Property” means all ideas and inventions in written or other
tangible form, patents, patent applications (including the Patent
Applications), copyrights (including software), copyright applications,
trademarks, service marks, trade names, domain names, logos, slogans and
registrations and applications for registration thereof, trade secrets,
know-how, processes, data, goodwill and other proprietary or intellectual
property rights of any kind and all copies and tangible embodiments thereof, in
whatever form, relating to the Acquired Assets.

          “Laws” means statutes, regulations, ordinances, rules and other laws
promulgated by a Governmental Authority.

          “Licenses” means permits, registrations, filings, notices, approvals,
franchises or other authorizations issued by a Governmental Authority.

          “Lien” means a restriction on voting or transfer or pledge, lien,
mortgage, hypothecation, collateral assignment, charge, encumbrance, easement,
covenant, restriction, title defect, encroachment or security interest or other
adverse claim of any kind or description.

          “Non Compete Agreement” means that certain non-competition and
non-solicitation agreement, in form and substance satisfactory to Buyer, to be
executed by the Seller in favor of Buyer and delivered to Buyer at Closing.

          “Orders” means judgments, orders, injunctions, decrees, stipulations or
awards (whether rendered by a court, administrative agency, arbitrator or other
tribunal) and whether imposed or entered by consent.

          “Patent Applications” means the worldwide patent applications of Seller,
or any employee, associate or Affiliate thereof, in each case as identified on
Schedule 1, and all Intellectual Property Rights arising there under or
included therein.

          “Person” means an individual, a corporation, a limited liability company,
a partnership, a joint venture, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.

          “Post-Closing Tax Period” shall have the meaning set forth in Section
7.2(b).

          “Pre-Closing Tax Period” shall have the meaning set forth in Section
7.2(b).

          “Purchase Price Shares” means the 675,000 shares of the Common Stock
issued to Seller by Buyer at Closing in accordance with Article 2.

          “Requirements” means the technical and performance requirements attached
hereto as Schedule 2.

          “Retained Liabilities” means all liabilities of Seller arising before or
after the Closing, except as otherwise expressly set forth in this Agreement.

          “Returns” means returns, reports and forms required to be filed with any
Governmental Authority.

          “Schedule” means any Schedule hereto.

          “SEC” means the Securities and Exchange Commission.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Seller” means the Delean Vision Worldwide, Inc., a British Virgin Island
corporation with a principal address at Bison Court, P.O. Box 3460, Road Town,
Tortola, BVI.

3

 

          “Software” means Seller’s proprietary biometric recognition software and
related technology and information, including without limitation any and all
prior versions thereof, and work in progress, customer/client software
adapters, computer programs (in all formats) algorithms, source code, object
code and interfaces directly or indirectly relating thereto, in each case as
identified on Schedule 1, and any and all documentation directly or indirectly
relating thereto, and all Intellectual Property Rights arising there under or
included therein.

          “Tax Authority” means any authority, agency, department, board or
commission of any foreign, federal, state, provincial, county or local
government or subdivision thereof responsible for levying and collecting Taxes.

          “Taxes” means all taxes (whether federal, state, local or foreign) based
upon or measured by income and any other tax whatsoever, including but not
limited to, gross receipts, profits, sales, use, occupations, value added, ad
valorem, transfer, franchise, withholdings, payroll, employment, excise or
property taxes, together with any interest or penalties imposed with respect
thereto.

          “Third-Party Claim” means any Action by or before any Governmental
Authority asserted by a Person other than any party hereto or their respective
Affiliates which gives rise to a right of indemnification hereunder.

          “Transactional Documents” shall mean this Agreement, the Assignments, the
Warrant, the Consulting Agreements and the Non Compete Agreements.

          “Transfer Taxes” shall have the meaning set forth in Section 7.2(a).

          “Warrant” means that certain warrant substantially in the form of Schedule
2.2(c) hereto, to be issued by Buyer to Seller at Closing, providing for
contingent rights in favor of Seller to purchase up to 800,000 shares of Common
Stock at a per share exercise price equal to the Closing Price.

          “Warrant Shares” means the shares of Common Stock issuable upon valid
exercise of the Warrant.

Artible 2

Purchase of Assets

          2.1 Closing; Purchase and Sale of Acquired Assets.

               (a) Subject to the satisfaction (or waiver) of the conditions set forth in
Articles 8 and 9, the Closing shall take place at 4:00 p.m. Central Time on the
Closing Date. The Closing shall occur at the offices of the Buyer, or at such
other place as the parties may mutually agree. All transactions occurring at
the Closing shall be deemed to be effective as of the Closing.

               (b) On the basis of the representations, warranties, covenants and
agreements contained herein, at the Closing, the Buyer will purchase from
Seller and Seller will sell, convey, transfer, assign and deliver to Buyer,
free and clear of all Liens, all right, title and interest in, to and under the
Acquired Assets.

               (c) Seller shall retain all Retained Liabilities and all duties,
obligations and liabilities associated with the Business, except as expressly
provided in this Agreement. Without limiting the generality of the foregoing,
Buyer shall not assume any duties, obligations or liabilities, and the Seller
shall retain, any and all duties, obligations and liabilities, directly or
indirectly related to (1) any Contract of Seller (except for duties,
obligations and liabilities arising under the DTN Contract, which Buyer will
assume upon effectiveness of Closing), (2) any employee, agent, contractor or
representative of Seller or any employee benefit or other plan of Seller, (3)
any express or implied warranty, representation, agreement or guaranty made, or
claimed by any Person to have been made, by Seller to any customer, user,
licensee or purchaser made or claimed to have been made by Seller, whether
before or after the Closing Date, or arising out of or due to or asserted to be
arising out of or due to, operation of Laws, in connection with any product or
software designed, developed, manufactured, marketed or distributed by Seller,
whether arising before or after the Closing Date; (4) any and all liabilities
for Taxes of Seller or any of its Affiliates or employees and any and all
liabilities for Taxes in respect of or relating to the Business or the Acquired
Assets for any period on or before the Closing Date; (5) any direct or indirect
breach, violation, infringement, claim,

4

 

damage, liability, or threatened claim or liability allegation of the
same, against Seller or any Affiliate of the Seller arising at any time (other
than any such breaches, violations, claims, damages, liabilities, or threatened
claim or liability allegations relating to the Acquired Assets after the
Closing), and any direct or indirect breach, violation, infringement, claim,
damage, liability, or threatened claim or liability allegation of the same
relating to the Acquired Assets prior to the Closing Date , including without
limitation any claim or allegation that the Acquired Assets violate the
intellectual property rights of any third party prior to the Closing Date, and
(6) any direct or indirect breach, violation, or default by Seller or any
Affiliate of Seller under any Contract between Seller (or any Affiliate of
Seller) and any third party , whether arising before or after the Closing Date,
or any actual or threatened claim or allegation of the same.

          2.2 Closing Documents.

          At the Closing:

               (a) Seller shall duly assign and transfer to Buyer ownership of the
Acquired Assets by delivery of (i) the Assignments in substantially the form
attached hereto as Schedule 2.2(a)(i), duly executed by Seller and Buyer, and
(ii) the Acquired Asset deliverables identified on Schedule 2.2(a)(ii) hereof
(“Acquired Asset Deliverables”).

               (b) Buyer shall deliver to the seller 675,000 shares of Common Stock;
provided, however, that all of the Purchase Price Shares shall bear the
restrictive legend identified in Section 3(e)(i) and 400,000 of the Purchase
Price Shares shall bear the restrictive legend identified in Section 3(e)(ii).

               (c) Buyer shall issue and deliver to the Seller the Warrant.

               (d) The Seller shall duly execute and deliver to Buyer the Non Compete
Agreement.

               (e) The Consulting Agreements shall be duly executed and delivered by the
Buyer and Mr. Delean, and by Buyer and Mr. Vandenberghe.

               (f) Seller and Buyer shall deliver the certificates and other documents
required to be delivered under Articles 2, 8 and 9 hereof.

          2.3 Allocation of Asset Purchase Consideration. The parties agree that,
for all tax reporting purposes, the Purchase Price shall be allocated as
determined by Buyer in its reasonable judgment.

Artible 3

Representations and Warranties of Seller and Representing Shareholders

Seller and each of the Representing Shareholders, individually and
collectively, represents and warrants to Buyer that the statements contained in
this Article 3 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date as though then made and as
though the Closing Date were substituted for the date of this Agreement
throughout this Article 3:

          3.1 Receiving Securities for Own Account.

               (a) Seller is receiving the Purchase Price Shares and the Warrant, as well
as contingent rights to exercise the Warrant for the Warrant Shares (the
Purchase Price Shares, the Warrant and the Warrant Shares, together
hereinafter, the “Securities”) for the Seller’s own account and not with a
present view towards the distribution thereof, except that Seller may
distribute all or any portion of the Securities to the Representing
Shareholders and the other shareholders of the Seller pursuant to an applicable
exemption from registration under the Securities Act. Seller and Representing
Shareholders receiving Securities from Seller understand that the Seller and
Representing Shareholders must bear the economic risk of holding the Securities
indefinitely, and that neither Seller nor Representing Shareholders may
transfer or sell the Securities unless and until (i) such transfer or sale is
registered pursuant to the Securities Act and any applicable state securities
or blue sky laws or an exemption from

5

 

such registration is available, and (ii) with respect to the Lock Up
Shares (as defined in Section 10.5), the lock-up restrictions described in
Article 10 have been satisfied or lapsed.

               (b) Seller and Representing Shareholders have been furnished all
materials relating to the business, finances and operations of the Buyer and
its subsidiaries and materials relating to the issuance of the Securities that
have been requested by the Seller and Representing Shareholders. Seller and
Representing Shareholders have been afforded the opportunity to ask questions
of the Buyer’s management and have received satisfactory answers to any such
inquiries. Seller and Representing Shareholders have had access to
information concerning, the business, affairs and financial condition of Buyer
in order to verify the accuracy of the Buyer SEC Reports (as defined in Section
4.2).

               (c) Seller and Representing Shareholders understand that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.

               (d) Seller and Representing Shareholders understand that the Securities
have not been registered under the Securities Act or any state securities laws,
and except as otherwise expressly contemplated by Section 3.1(a) may not be
transferred or sold unless and until such time as such Securities are
registered under the Securities Act and, with respect to the Lock Up Shares (as
defined in Section 10.5), the lock up restrictions described in Article 10
have been satisfied or lapsed. Seller and Representing Shareholders agree
and acknowledge that neither Buyer nor any other Person is under any obligation
to register the Securities under the Securities Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder, in
each case, other than pursuant to Article 10 hereof.

               (e) (i)
Seller and Representing Shareholders understand that the certificates
for all of the Purchase Price Shares and the Warrant shall bear a restrictive
legend in substantially the following form:

The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, or the securities laws of any state of the
United States. The securities represented hereby may
not be offered or sold in the absence of an effective
registration statement for the securities under
applicable securities laws unless offered, sold or
transferred under an available exemption from the
registration requirements of those laws.

               (ii) Seller and Representing Shareholders understand that the
certificates for 400,000 of the Purchase Price Shares (which are also
Lock Up Shares as defined in Section 10.5) will also bear a restrictive
legend in substantially the following form:

The securities represented by this certificate are
subject to the transferability restrictions indicated
in Sections 10.2 and 10.5 of that certain Asset
Purchase Agreement dated as of March 4, 2004 by and
among Identix Incorporated, Delean Vision Worldwide,
Inc., Bruno Delean and Nicolas Vandenberghe, a copy of
which is maintained at the corporate offices of
Identix Incorporated (the “Asset Purchase Agreement”).
The securities represented hereby may not be
transferred except in compliance with Sections 10.2
and 10.5 of the Asset Purchase Agreement.

               (f) Seller and each of the Representing Shareholders is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act. Neither Seller nor any Representing Shareholder is
registered as a broker or dealer under Section 15(a) of the Exchange Act, or a
member of the National Association of Securities Dealers (“NASD”). Seller and
the Representing Shareholders have such knowledge and experience in financial
and business matters that Seller and Representing Shareholder are capable of
evaluating the merits and risks of the Securities.

6

 

               (g) Seller and the Representing Shareholders understand that the
Securities are being delivered to Seller from Buyer in reliance on specific
exemptions from the registration requirements of United States federal and
state securities laws and that Buyer is relying upon the truth and accuracy of,
and the compliance of Seller and Representing Shareholders with, the
representations, warranties, agreements, acknowledgments, and understandings of
the Seller and Representing Shareholders set forth in this Section 3.1.

               (h) Seller and Representing Shareholders acknowledge and agree that Buyer
and its advisors have not provided any advice to Seller or Representing
Shareholders regarding the federal, state, local or foreign tax implications of
the acquisition, ownership or disposition of the Securities and that it has
been advised to consult its own tax advisor with respect to such implications.

          3.2 Incorporation; Authorization; Etc.

               (a) The Seller is a corporation duly organized, validly existing and in
good standing under the laws of its organization and is duly qualified to
transact business in each jurisdiction in which the nature of property owned or
leased on behalf of the Seller or the conduct of the Seller requires it to be
so qualified, except where the lack of such qualification would not have an
adverse effect on the Acquired Assets or a material adverse effect on the
Business.

               (b) (1) Seller has all requisite corporate power and authority to own the
properties and assets employed by Seller, including the Acquired Assets, to
execute and deliver the Transactional Documents, to perform its obligations
hereunder and thereunder, and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of the Transactional Documents,
the performance of Seller’s obligations hereunder and thereunder, and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate proceedings on the part of
Seller and its Board of Directors (or similar body under the loans if its
jurisdiction) and no other proceedings or actions on the part of Seller, its
Board of Directors or stockholders are necessary therefore. The execution,
delivery, and performance of the Transactional Documents and the consummation
of the transactions contemplated hereby and thereby will not (i) violate any
provision of Seller’s or its Affiliate’s certificate of incorporation or bylaws
(or similar governing instruments with different names), (ii) violate any
provision of, or be an event that is (or with the passage of time or giving of
notice will result in) a violation of, or result in the acceleration of or
entitle any Person to accelerate (whether after the giving of notice or lapse
of time or both) any obligation under, or result in the imposition of any Lien
upon any of the Acquired Assets pursuant to, any Contract or Order to which
Seller or any of its Affiliates is a party or by which it is bound, (iii)
violate or conflict with any other material restriction of any kind or
character to which Seller or any of its Affiliates is subject, or (iv) violate
any Law applicable to Seller. This Agreement has been and the other
Transactional Documents to be executed by Seller as of the Closing Date will
be, duly executed and delivered by Seller and will constitute the legal, valid,
and binding obligations of Seller, enforceable against Seller in accordance
with their terms, except to the extent enforceability may be subject to
bankruptcy, insolvency, reorganization and similar laws of relating to or
affecting creditors’ rights generally, and except to the extent applicable laws
may limit the enforceability of the Non-Compete Agreement. (2) Each
Representing Shareholder represents and warrants to Buyer that this Agreement
has been, and the other Transactional Documents to be executed by such
Representing Shareholder as of the Closing Date, will be, duly executed and
delivered by each Representing Shareholder and will constitute the legal,
valid, and binding obligations of such Representing Shareholder, enforceable
against such Representing Shareholder in accordance with their terms, except to
the extent enforceability may be subject to bankruptcy, insolvency,
reorganization and similar laws of relating to or affecting creditors’ rights
generally, and except to the extent applicable laws may limit the
enforceability of the non-compete provisions in the Consulting Agreements.

               (c) Seller’s Affiliates. Attached hereto as Schedule 3.2(c) is a list of
all Affiliates of the Seller.

               (d) Shareholders. Attached hereto as Schedule 3.2(d) is a list of all
shareholders of Seller.

               (e) Employees with Access to the Source Code of the Software. Attached
hereto as Schedule 3.2(e) is a list of all employees of the Seller who have
ever been granted any access to, designed, developed, compiled, de-compiled,
copied, modified, or otherwise engineered in any manner whatsoever the source
code of the

7

 

Software or any component, string or module thereof. All such employees
have signed proprietary rights and inventions agreements pursuant to which such
employees are legally obligated to maintain, in strict confidence the Software
and pursuant to which such employees have assigned any and all right, title and
interest (including any and all moral rights) of their work product directly or
indirectly related to the Software to DVE (as defined in Section 3.3). DVE, in
turn, has properly and lawfully assigned to Seller all of its right, title, and
interest in and to the Software and all additional works of its employees that
are directly or indirectly related to the Software. No Person, other than the
employees identified on Schedule 3.2(e) and the Representing Shareholders, has
ever been granted access to, designed, developed, compiled, de-compiled,
copied, modified, or otherwise engineered in any manner whatsoever the source
code of the Software or any component, string or module thereof. At and after
the Closing, no Person, including without limitation, the Seller, any Affiliate
of the Seller, the Representing Shareholders, or any of the employees
identified on Schedule 3.2(e), will retain any copy or derivative of the source
code to the Software, or any component, string or module thereof, except for
the Buyer, who shall, as of the Closing, take the sole and exclusive
possession, ownership and control of the same.

          3.3 Title to Acquired Assets.

               (a) Seller has good, valid and marketable title to all Acquired Assets
free and clear of all Liens, and free and clear of any third party right,
license or interest, except for the limited, non- exclusive sub-license granted
by DV Europe SPRL, a Belgian corporation and a wholly owned subsidiary of
Seller (“DVE”) to DTN Energy Services, LLC, a Delaware limited liability
company (“DTN”) under the DTN Contract. DVE was granted by Seller the one-time,
limited right to sublicense one component of the Software (the machine
readable version of Seller’s Visual Skin Print SDK) to DTN under the DTN
Contract. Seller granted no such other rights, licenses or sublicenses to any
other Person, and other than the limited non exclusive license of the machine
readable version of the Visual Skin Print SDK granted by DVE to DTN under the
DTN Contract, neither Seller, any Affiliate of Seller (including DVE) nor any
other Person has granted any rights, licenses or sublicenses, or transferred or
otherwise conveyed to any other Person, the Software (or any component
thereof), other than as expressly set forth on Schedule 3.3. No Person other
than Seller has any license, right or interest in the Acquired Assets including
the right to grant any interests in the Acquired Assets to third parties.
Neither the algorithms nor the source code for Software has ever been escrowed
by Seller or any Affiliate of Seller and there are no obligations, on the part
of Seller or any Affiliate of Seller, to escrow such source code. Furthermore,
no third party has actual or constructive possession of such algorithms or
source code, or any right, express or implied, actual or alleged, to access or
take possession such algorithms or source code in the future. At the
Closing, Seller will deliver to Buyer good, valid and marketable title to the
Acquired Assets free and clear of all Liens, rights, licenses and interests.
At the Closing, Seller will fully and completely transfer exclusive ownership
of the Acquired Assets and the Acquired Software Deliverables to Buyer, and
shall not retain for itself or any other Person any copy the Software or any
portion thereof or any copies of the Acquired Assets or any portion thereof.

               (b) Seller and Representing Shareholders represent and warrant to Buyer
that other than the licensee under the DTN Contract, and except as expressly
set forth on Schedule 3.3 hereto, no Person has been granted, either directly
by Seller or indirectly through its Affiliates, distributors and resellers, any
right or license to copy, modify, create derivative works, distribute copies
of, transfer, or otherwise use or have access to the Software or the Patent
Applications. Seller and Representing Shareholders represent and warrant to
Buyer that any and all Software evaluation licenses granted by Seller or any
Affiliates of Seller have been for the limited purpose of evaluation of the
machine readable version of the Software only, and that all such evaluation
licenses have expired or been terminated and the licensees under such
evaluation licenses have no continuing rights to evaluate, use copy, modify or
transfer the Software. Within thirty (30) days after the Closing Date, Seller
shall inform all such third parties in writing that Buyer has acquired all
right, title and interest in and to the Software and that Buyer desires to have
commercial discussions with the third parties. For those third parties that
are either (i) unwilling to have commercial discussions with Buyer, or (ii) are
determined, in Buyer’s sole judgment, to not be reasonable prospects for
commercial discussions, upon Buyer’s direction to Seller, Seller shall cause
such third parties’ to return of the licensed Software to Seller in accordance
with the terms of each applicable evaluation license. Seller shall, in turn,
either forward the copies of the returned Software to Buyer or destroy the
returned copies and certify to Buyer in writing that such destruction has taken
place.

          3.4 Litigation; Orders. There are no Actions pending, or to the knowledge
of Seller and the Representing Shareholders, threatened against Seller or
Representing Shareholders (or either of them) relating

8

 

directly or indirectly to the Business or the Acquired Assets or any
Contracts of Seller or any Affiliate of Seller. As of the date hereof, there
are no Orders against Seller or Representing Shareholders (or either of them)
related to the Business or the Acquired Assets, and to the best knowledge of
Seller and the Representing Shareholders, there are no events, facts, or
circumstances that will result in an Action that would, individually or in the
aggregate, have an adverse effect on the Acquired Assets or a material adverse
effect on the Business.

          3.5 Contracts. Neither Seller nor any Representing Shareholder is party
to or bound by any written or oral Contract directly or indirectly related to
the Acquired Assets, other than the DTN Contract, and other than as expressly
set forth on Schedule 3.3.

          3.6 Consents, Approvals, Other Authorizations. No filing with, notice to
or authorization, consent or approval of, any Governmental Authority under any
Law applicable to Seller or any other Person is required to be made, filed,
given or obtained by Seller, Representing Shareholders, or any of its
Affiliates, in connection with the consummation of the transactions
contemplated by the Transactional Documents to which Seller is a party.

          3.7 Condition of Acquired Assets. The Acquired Assets constitute all the
material technology, software, algorithms, source and object code, tools,
designs, drawings, documentation, information and assets used by Seller to
design, develop, operate, install and otherwise exploit the Acquired Assets in
the 24 months immediately prior to the Closing Date and, immediately after the
Closing, necessary for Buyer to continue to do the same in all material
respects. The source code and algorithms for the Software meets or exceeds
(plus or minus 5%) all requirements described in the Requirements. All media
included in the Software is free from defects in material and workmanship. The
Software does not contain any malicious code, program or other internal
component (e.g., computer virus, computer worm, computer time bomb, booby trap
or “Trojan Horse” or similar component) that could damage, destroy or alter the
Software or which could, in any manner, reveal, damage, destroy or alter any
data or other information accessed through or processed by the Software in any
manner. There are no copy protections, hard or soft locks or similar
mechanisms within the Software.

          3.8 Brokers, Finders, Etc. Except as set forth in the next succeeding
sentence in this Section 3.8, neither Seller nor any Representing Shareholder
has employed, or is subject to any claim of, any broker, finder, consultant or
other intermediary in connection with the transactions contemplated by this
Agreement who might be entitled to a fee or commission in connection therewith
Mr. Delean has retained as his agent    . Mr. Delean agrees and
acknowledges that he is solely responsible for any and all fees, commissions or
other payments due to    arising out of or related to this Agreement or
the transactions contemplated hereby.

          3.9 Intellectual Property.

               (a) Seller owns all Intellectual Property, and to the best knowledge of
Seller and Representing Shareholders, such ownership is without any conflict
with, or infringement of, the rights of others. Each element and item of
Intellectual Property is owned exclusively by Seller and will be owned
exclusively by Buyer on identical terms and conditions immediately subsequent
to the Closing. Seller has taken all necessary action to maintain the
confidential and proprietary nature of Intellectual Property and protect each
and every element and item of Intellectual Property.

               (b) Seller developed the Software entirely through its own efforts for its
own account. All personnel, including employees, agents, consultants and
contractors, who contributed to or participated in the conception or
development of the Software either (i) have been a party to a work-for-hire
relationship with Seller that has accorded Seller full, effective and exclusive
original ownership of all tangible and intangible property thereby arising with
respect to the Software or (ii) have executed appropriate instruments of
assignment in favor of Seller as assignee that have conveyed to Seller full,
effective and exclusive original ownership of all tangible and intangible
property thereby arising with respect to the Software. The Acquired Assets
contain no software components in which any third party may claim superior or
joint ownership or interest. The algorithms and source code for the Software
were developed and have been maintained in strict confidence by Seller and all
Affiliates of Seller. .

               (c) To the best knowledge of Seller and Representing Shareholders, in the
operation of the Business, Seller has not interfered with, infringed upon,
misappropriated or otherwise come into conflict with any

9

 

intellectual property rights of third parties. None of the directors or
officers (or employees with responsibility for Intellectual Property matters)
of Seller has ever received any charge, compliant, claim, demand or notice
alleging any such interference, infringement, misappropriation or violation
with respect to the Business (including any claim that the Seller must license
or refrain from using any intellectual property rights of any third party). To
the best knowledge of Seller and Representing Shareholders, no third party has
interfered with, infringed upon, misappropriated or otherwise come into
conflict with any Intellectual Property.

               (d) Mr. Delean is the sole inventor of the inventions claimed in the
Patent Applications. Mr. Delean properly and lawfully assigned to Seller all
of his right, title, and interest in and to the Patent Applications and the
inventions claimed therein. There are no un-curable defects in Mr. Delean’s
assignment to Seller that may result in the invalidity of such assignment.
The Patent Applications are the only patent applications of Seller or any
Affiliate of Seller that directly or indirectly relate to the Software or that
are otherwise associated with image processing for biometric use. The
disclosures in the Patent Applications both enable and describe the best mode
for the practice of the inventions claimed in the Patent Applications. The
Patent Applications were timely filed before all potential bar dates. As of
the date of this letter, Seller and the Representing Shareholders are aware of
nothing that would anticipate or invalidate the claims in the Patent
Applications. Seller satisfies all of the requirements for small entity status
and all filing fees and all other patent office fees for the Patent
Applications have been timely and properly paid as of the Closing Date.

               (e) To the best knowledge of Seller and Representing Shareholders, at and
as of the Closing Date Buyer will not interfere with, infringe upon,
misappropriate or otherwise come into conflict with, any intellectual property
rights of third parties as a result of the purchase of the Acquired Assets or
the issuance and award of any claims under the Patent Applications.

          3.10 Tax Returns and Payments. Neither Seller nor either Representing
Shareholder has any knowledge of any unpaid Taxes or any actual or threatened
assessment of deficiency or additional Tax with respect to any of the Acquired
Assets or the Business. Seller has timely filed all Income Tax Returns
required to be filed by or on behalf of Seller for any period ending on or
before the date hereof, taking into account any extension of time to file that
has been granted to or obtained on behalf of Seller, and all such Income Tax
Returns are correct and complete in all material respects. Seller has paid
when due all Taxes shown as due in such Income Tax Returns and all other Taxes
that are due (or claimed by any Tax Authority to be due) in connection with the
Acquired Assets or the Business or that may become due in connection therewith
on or prior to the Closing Date.

          3.11 Revenue and Royalty Statements.

               (a) A true and complete copy of all license payments, fees, royalties and
revenues generated by Seller from the license, sublicense, distribution or
other transfer or commercialization of Software is attached hereto as Schedule
3.11. All such license payments, fees, royalties and revenues have arisen only
from bona fide transactions in the ordinary course of business and consistent
with past practice.

               (b) Seller does not have any liabilities or obligations of any nature,
whether known, unknown, absolute, accrued, contingent or otherwise and whether
due or to become due, which will individually or in the aggregate have an
adverse effect on the Acquired Assets.

          3.12 Absence of Certain Changes or Events.

               (a) Since November 1, 2003, there have been no adverse changes in the
condition, financial or otherwise, of the Acquired Assets;

               (b) Since July 16, 2003: (i) neither Seller, Representing Shareholders
nor any Affiliate of Seller has entered into any transaction directly or
indirectly related to the Acquired Assets other than as expressly set forth on
Schedule 3.3; (ii) there has been no adverse change to any of the Acquired
Assets; (iii) neither Seller nor any Affiliate of Seller has executed,
created, amended or terminated any Contract related to the Acquired Assets
other than as expressly set forth on Schedule 3.3; (iv) there has been no
disclosure, license, sale, assignment or transfer of any Intellectual Property
other than as expressly set forth on Schedule 3.3, nor has there been any

10

 

settlement regarding the breach or infringement of any Contract, license
or any Intellectual Property; and (vi) there has been no arrangement or
commitment by Seller to do any of the things described in this Section 3.12.

          3.13 Personnel. Seller has no union contracts or collective bargaining
agreements with, or any other obligations to, employee organizations or groups
relating to any employees, including without limitation the Identified
Employees. There is no pending or, to the best knowledge of Seller and the
Representing Shareholders, threatened labor dispute, strike or work stoppage
affecting the Acquired Assets.

          3.14 Compliance With Law; Permits. The Seller is not and has not been in
violation of or default under any Law of any Governmental Authority or any
Order applicable to the Acquired Assets and the Business is in compliance in
all material respects with all applicable Laws. The Seller has not received,
and to the best knowledge of Seller and the Representing Shareholders there
does not exist, any notice, action, suit, hearing, charge or investigation to
the effect that the Seller is or may be in violation of any Law or any Order
with respect to the Acquired Assets or the Business. The Seller is duly
licensed under all applicable Laws and possesses all Licenses necessary or
required to conduct the Business as presently conducted, except where the
failure to possess any such License would not adversely affect the Acquired
Assets or materially adversely affect the Business.

Artible 4

Representations and Warranties of Buyer

          Buyer hereby represents and warrants to Seller and each Representing Shareholder as follows:

          4.1 Incorporation, Organization, Authorization, etc.

               (a) Buyer is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. Buyer has all requisite
corporate power and authority to execute and deliver the Transactional
Documents, to perform its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby, including without
limitation the issuance of the Securities in accordance with the terms hereof.
The execution and delivery of the Transactional Documents, the performance of
Buyer’s obligations hereunder and thereunder, including the issuance of the
Securities in accordance with the terms hereof, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate proceedings on the part of Buyer and its
Board of Directors and no other proceedings or actions on the part of Buyer,
its Board of Directors or stockholders are necessary therefor.

               (b) The execution, delivery, and performance of the Transactional
Documents and the consummation of the transactions contemplated hereby and
thereby will not (i) violate any provision of the certificate of incorporation
or bylaws of Buyer or any of its Affiliates, (ii) violate any provision of, or
be an event that is (or with the passage of time will result in) a violation
of, or result in the acceleration of or entitle any party to accelerate
(whether after the giving of notice or lapse of time or both) any obligation
under, or result in the imposition of any Lien upon or the creation of a
security interest in any of Buyer’s or any of its Affiliates’ assets or
properties pursuant to, any Contract or Order to which Buyer or any of its
Affiliates is a party or by which Buyer or any of its Affiliates is bound, or
(iii) violate or conflict with any other material restriction of any kind or
character to which Buyer or any of its Affiliates is subject, that, in the case
of clauses (ii) and (iii), would, individually or in the aggregate, reasonably
be expected to have an material adverse effect on Buyer or Buyer and its
subsidiaries, taken as a whole. This Agreement has been and the other
Transactional Documents to which Buyer is a party on the Closing Date will be,
duly executed and delivered by Buyer, and, assuming the due execution hereof by
Seller, the Transactional Documents constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with their terms,
except to the extent enforceability may be subject to bankruptcy, insolvency,
reorganization and similar laws of relating to or affecting creditors’ rights
generally

          4.2 SEC Filings. Buyer has timely filed required reports to be filed by
Buyer since December 31, 2002 with the SEC (the “Buyer SEC Reports”). The
Buyer SEC Reports (i) at the time filed, complied in all material respects with
the applicable requirements of the Exchange Act and other applicable laws, and
(ii) did not, at the time they were filed (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing),
contain any untrue statement of a material fact or omit to state a material
fact required to be

11

 

stated in such Buyer SEC Reports, or necessary in order to make the
statements in such Buyer SEC Reports in light of the circumstances under which
they were made, not misleading.

          4.3 Brokers, Finders, Etc. Buyer has not employed, and is not subject to
the claim of, any broker, finder, consultant or other intermediary in
connection with the transactions contemplated by this Agreement who might be
entitled to a fee or commission in connection therewith.

          4.4 No General Solicitation. Neither the Buyer nor any Person
participating on the Buyer’s behalf in the transactions contemplated hereby has
conducted any “general solicitation” or “general advertising” as such terms are
used in Regulation D, with respect to any of the Securities.

          4.5 No Integrated Offering. Neither Buyer, nor any of its Affiliates, nor
any Person acting on its or their behalf, has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security
under circumstances that would require registration of the Securities under the
Securities Act or cause the issuance of the Securities to be integrated with
any prior offering of securities of the Buyer for purposes of the Securities
Act or any applicable stockholder approval provisions.

          4.6 Issuance of Securities. The Securities have been duly authorized for
issuance to Seller as contemplated by the terms of this Agreement, and upon the
closing of the transactions contemplated hereby and the delivery of the
certificates representing the Purchase Price Shares, the Purchase Price Shares
will validly issued, fully paid, and nonassessable (subject to offset rights of
Buyer identified in Section 11.7), and will be free of restrictions on transfer
other than restrictions on transfer under this Agreement and under applicable
state and federal securities laws. The Warrant Shares issuable upon exercise
of the Warrant, in the event Seller’s rights to exercise vest in accordance
with the terms thereof, will be, upon any such exercise, duly and validly
issued, fully paid, and nonassessable and will be free of restrictions on
transfer other than restrictions on transfer under this Agreement and under
applicable state and federal securities laws. All of the issued and
outstanding shares of capital stock of Buyer are duly authorized, validly
issued and non assessable. The issuance of the Securities is not subject to
any preemptive or other similar rights of stockholders.

Artible 5

Covenants

          5.1 Investigation by Buyer; Access to Properties, Records and Employees.

From the date first above written through a period of the earlier of six months
from and after the Closing Date or the date Seller dissolves or winds up its
Business, Seller shall afford to representatives of Buyer reasonable access to
Seller’s properties, employees, files, books and records related to the
Acquired Assets during normal business hours, in order that Buyer may have
reasonable opportunity to make such additional investigations as Buyer deems
appropriate for the satisfactory transfer and operation of the Acquired Assets;
provided, however, that such access shall not unreasonably interfere with the
normal operations of Seller or the Business and that Buyer complies with any
reasonable policies of Seller that are provided in writing by Seller to Buyer
with respect to on-site visits.

          5.2 Reasonable Commercial Efforts, Obtaining Consents.

               (a) Subject to the terms and conditions herein provided, each of Seller,
the Representing Shareholders and Buyer agrees to use reasonable commercial
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable, the transactions contemplated by this
Agreement.

               (b) In case at any time after the Closing any further action is necessary
or desirable to carry out the purposes of this Section 5.2, each of the
Representing Shareholders and the proper officers and/or directors of Buyer and
Seller shall take all such reasonably necessary action.

               (c) Each party hereto shall promptly inform the other of any material
communication from or any Governmental Authority (unless prohibited by Law or
the request of such Governmental Authority) regarding

12

 

any of the transactions contemplated hereby. If either party or any
Affiliate thereof receives a request for additional information or documentary
material from any such Governmental Authority with respect to the transactions
contemplated hereby, then such party will endeavor in good faith to make, or
cause to be made, as soon as reasonably practicable and after consultation with
the other party, an appropriate response in compliance with such request. Each
party will advise the other party promptly in respect of any understandings,
undertakings or agreements (oral or written) which such party proposes to make
or enter into with any Governmental Authority in connection with the
transactions contemplated hereby.

          5.3 Conduct of Business. From the date hereof through the Closing, Seller
and Representing Shareholders covenant and agree that:

               (a) Seller shall make use of the Acquired Assets in the ordinary and usual
course in accordance with past practices, and shall not enter into any new
Contract with respect to the Acquired Assets or amend any existing Contract
with respect to the Acquired Assets, except to the extent necessary or
appropriate to terminate such contract in furtherance of the transactions
contemplated by this Agreement and without any obligation or liability to Buyer
of any kind whatsoever;

               (b) Seller shall not compromise, waive or release any rights relating to
the Acquired Assets;

               (c) Seller shall not (i) sell, transfer, distribute as a dividend in kind
or otherwise dispose of any Acquired Assets, or (ii) create or permit to exist
any Lien on any Acquired Assets;

               (d) Seller and Buyer shall take such actions as are in their respective
business judgment reasonably necessary to facilitate a smooth transition of the
Acquired Assets from Seller to Buyer at the Closing.

               (e) Seller shall not take or agree to take any action which would make any
of its representations or warranties contained in this Agreement untrue or
incorrect or prevent it from performing or cause it not to perform its
covenants hereunder.

          5.4 Further Assurances. Seller and Buyer agree that, from time to time,
whether before, at or after the Closing Date, each of them will execute and
deliver all such other instruments of conveyance, assignment and transfer, and
such affidavits and other instruments, in each case in form and substance
satisfactory to Buyer, as shall be necessary or appropriate, in the reasonable
opinion of Buyer, to effectively transfer to Buyer the Acquired Assets and
carry out the purposes of this Agreement.

          5.5 Public Announcements; Confidentiality. Seller and Buyer will consult
with each other before issuing, or permitting any agent or Affiliate to issue,
any press releases or otherwise making or permitting any agent or Affiliate to
make, any public statements with respect to this Agreement and the transactions
contemplated hereby, and, except as may be required by applicable law or any
listing agreement with any securities exchange, will not issue any such press
release or make any such public statement, unless the text of such statement
shall have been agreed upon by the parties. No information, documents or
reports identified as “confidential” by the other party and concerning the
Acquired Assets shall be disclosed to any Person, except to the extent required
in carrying out the transactions contemplated by the Transactional Documents.
From and after the Closing Date, nothing contained, nothing in this Section 5.5
shall prohibit Buyer from communicating with current and prospective customers
and suppliers of Buyer for the purpose of informing such customers and
suppliers that Buyer has acquired the Acquired Assets.

          5.6 Non-Competition. In consideration of the issuance by Buyer to Seller
of the Purchase Price Shares and the Warrant hereunder, Seller agrees to
enter, and the cause the Identified Employees to enter, the Non Compete
Agreements. If any court determines that any of the restrictions contained in
the Non Compete Agreements are not reasonable or go beyond what is acceptable
by applicable law, the parties hereby give the court the right and power to
interpret, alter, amend or modify any or all of the terms contained in such
agreements to include as much of the scope, time period and geographic area as
will render such restrictions enforceable.

13

 

          5.7 Negotiations with Third Parties. From the date hereof until the
earlier of termination of this Agreement or consummation of transactions
contemplated hereby, Representing Shareholders will not, and Seller will not,
and Seller will not permit its officers, directors, employees, agents or
representatives to, solicit, encourage, initiate, enter into, continue or
participate in any negotiations or discussions with, or provide information to,
any Person concerning the possible acquisition of the Acquired Assets or any
other transaction that would be inconsistent with the transactions contemplated
hereby. Seller and Representing Shareholders shall immediately cease and cause
to be terminated any such contacts or negotiations with third parties and shall
immediately notify Buyer if Seller or Representing Shareholders learn of any
inquiry or proposal during such period concerning the possible acquisition of
the Acquired Assets.

          5.8 Reasonable Commercial Efforts, Prosecution of Patent Applications.
Immediately after the Closing, Seller shall instruct its patent counsel to
deliver all files, information, data, research, correspondence etc. related to
the Patent Applications to Buyer’s designated patent counsel. Buyer agrees to
use reasonable commercial efforts in the continuing prosecution of the Patent
Applications at its sole expense. If Buyer amends, modifies or changes the
claims in the Patent Applications, then Buyer and Seller agree to negotiate in
good faith respecting an appropriate amendment to the vesting schedules set
forth in Annex A to the Warrant in a manner as may be equitable under the
circumstances. Notwithstanding the forgoing, Seller agrees and acknowledges
that the consideration offered by Buyer to Seller as represented by the Warrant
and the Warrant Shares is tied specifically to the final award to Buyer of
certain claims identified in Annex A to the Warrant in a manner that does not
restrict such identified claims’ scope. Buyer may, in its reasonable good
faith judgment, based on correspondence or action from the USPTO throughout the
course of prosecution, determine that it is necessary or appropriate to make
certain amendments, modifications or changes to claims in the Patent
Applications that have the effect of restricting the scope of the claims
identified in Annex A to the Warrant in order to preserve the viability of the
identified claims in whole or in part, and if so, no equitable adjustment to
the vesting schedule may be appropriate.

          5.9 Other Tax Matters. Notwithstanding anything to the contrary herein,
the parties to this Agreement shall, if appropriate under applicable law and
regulations, report the transactions contemplated by this Agreement (including
without limitation the transfer of the Acquired Assets to Buyer and the
subsequent liquidation of Seller) for all Tax purposes as a reorganization
under Section 368(a)(1)(c) of the Code.

Artible 6

Employees, Employee Benefits and, Other Transitional Matters

          6.1 Buyer Assumes No Liabilities. Seller agrees and acknowledges that
Buyer shall have no liability or responsibility for any employee of Seller or
for the disposition of interests under any of Seller’s benefit or investment
plans.

          6.2 Employee Plans. Buyer is not assuming any of the employee plans of
Seller, and Buyer shall have no liability whatsoever to Seller or Seller’s
employees with respect to severance pay or any accrued or future benefits
under any such plans.

Artible 7

Tax Matters

          Seller covenants for the benefit of Buyer, and Buyer covenants for the benefit of Seller, as follows:

          7.1 Taxes and Refunds.

               (a) Seller shall be responsible for all Income Taxes arising with respect
to the use of the Acquired Assets and accruing on or before the Closing Date
and Seller shall be entitled to any refunds or credits of Income Taxes arising
with respect to the use of the Acquired Assets attributable to taxable periods
ending on or before the Closing Date.

               (b) Buyer shall be responsible for all Income Taxes accruing after the
Closing Date with respect to the use of the Acquired Assets and Buyer shall be
entitled to any refunds or credits of Income Taxes

14

 

attributable arising with respect to the use of the Acquired Assets to
taxable periods beginning on or after the Closing Date.

          7.2 Allocation of Transfer and Property Taxes.

               (a) All excise, sales, use, value added, registration stamp, recording,
documentary, conveyancing, franchise, property, transfer, gains and similar
taxes, levies, charges, and fees including any deficiencies, interest,
penalties, additions to tax or additional amounts excluding any Income Taxes
(collectively, “Transfer Taxes”) incurred in connection with the transactions
contemplated by this Agreement shall be borne by Buyer. Buyer and Seller
shall use reasonable efforts to minimize the amount of all Transfer Taxes and
shall cooperate in providing each other with any appropriate resale exemption
certifications and other similar documentation. The party that is required by
applicable law to make the filings, reports, or returns and to handle any
audits or controversies with respect to any applicable Transfer Taxes shall do
so, and the other party shall cooperate with respect thereto as necessary.

               (b) All personal property taxes, and similar ad valorem obligations levied
with respect to the Acquired Assets for a taxable period which includes (but
does not end on) the Closing Date (collectively, the “Apportioned Obligations”)
shall be apportioned between Seller and Buyer based on the number of days of
such taxable period which fall on or before the Closing Date (this and any
other tax period which includes one or more days falling on or before the
Closing Date, a “Pre-Closing Tax Period”) and the number of days of such
taxable period after the Closing Date (a “Post-Closing Tax Period”). Seller
shall be liable for the amount of such taxes that is attributable to the
Pre-Closing Tax Period, and Buyer shall be liable for the amount of such taxes
that is attributable to the Post-Closing Tax Period. Upon receipt of any bill
for personal property taxes relating to the Acquired Assets, each of Seller and
Buyer shall present a statement to the other setting forth the amount of
reimbursement to which each is entitled under this Section together with such
supporting evidence as is reasonably necessary to calculate the proration
amount. The proration amount shall be paid by the party owing it to the other
within thirty (30) days after delivery of such statement. In the event that
either Seller or Buyer shall make any payment for which it is entitled to
reimbursement under this Section, the other party shall make such reimbursement
promptly but in no event later than ten (10) days after the presentation of a
statement setting forth the amount or reimbursement to which the presenting
party is entitled along with such supporting evidence as is reasonably
necessary to calculate the amount of reimbursement.

          7.3 Cooperation. Buyer and Seller agree to furnish or cause to be
furnished to each other, upon written request, as promptly as practicable, such
information and assistance relating to the Acquired Assets (including, without
limitation, access to books and records) as is reasonably necessary for the
filing of all Tax Returns, the making of any election relating to Taxes, the
preparation for any audit by any taxing authority, and the prosecution or
defense of any claim, suit or proceeding relating to any Tax. Buyer and Seller
shall retain all books and records with respect to Taxes pertaining to the
Acquired Assets for a period of at least six (6) years following the Closing
Date. At the end of such period, each party shall provide the other with at
least thirty (30) days prior written notice before destroying any such books
and records, during which period the party receiving such notice can elect to
take possession, at its own expense, of such books and records. Seller and
Buyer shall cooperate with each other in the conduct of any audit or other
proceeding relating to Taxes involving the Acquired Assets. If either party
becomes aware of any pending or threatened assessment, official inquiry,
examination or proceeding that could result in an official determination with
respect to Taxes due or payable the responsibility for which rests with the
other party hereto, such party shall promptly so notify the other party in
writing.

Artible 8

Conditions of Buyer’s Obligation to Close

          Buyer’s obligations to consummate the purchase of the Acquired Assets
shall be subject to the satisfaction on or prior to the Closing Date of all of
the following conditions:

          8.1 Representations, Warranties and Covenants of Seller and Representing
Shareholders.

15

 

               (a) The representations and warranties of Seller and Representing
Shareholders contained in this Agreement shall be true and correct on and as of
the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date.

               (b) Seller and Representing Shareholders shall have performed each
obligation and agreement and shall have complied with each covenant to be
performed and complied with by it hereunder at or prior to the Closing, except
to the extent waived in writing by Buyer; and

               (c) Buyer shall receive at or prior to the Closing a certificate as to
the effect that the conditions set forth in paragraphs (a) and (b) have been
satisfied, dated as of the Closing Date, and validly executed by an authorized
officer of Seller and by the Representing Shareholders.

          8.2 Filings; Consents. All registrations, filings, applications, notices,
consents, approvals, orders, qualifications and waivers required to be obtained
or made as of the Closing Date shall have been filed, made or obtained, except
for such registrations, filings, notices, consents, approvals, orders,
qualifications and waivers the lack of which would not reasonably be expected
to have an adverse effect on the Acquired Assets.

          8.3 No Injunction. At the Closing Date, there shall be no Order of any
nature of any Governmental Authority of competent jurisdiction that is in
effect that restrains or prohibits the consummation of all or any portion of
the transactions contemplated by this Agreement, and no Law shall have been
enacted by any Governmental Authority which prevents consummation of the
transactions contemplated by this Agreement.

          8.4 This Section left blank intentionally.

          8.5 Review of Acquired Asset Deliverables. No less than three business
days prior to the Closing Date, Mr. Vandenberghe shall deliver to Buyer, at
Buyer’s R&D Center in Jersey City, NJ, a copy of the entire source code to the
Software, along with written copies of all relevant build procedures and
processes (if any). Buyer shall be able to fully compile the source code for
the Visual Skin Print Cross Comparison Software, the Visual Skin Print
Evaluation Kit, and the Visual Skin Print SDK (in each case as identified on
Schedule 1 hereto) prior to Closing in Buyer’s build environment and with
Buyer’s applications, and the compiled source code for the Visual Skin Print
Cross Comparison Software shall execute and perform to the requirements and
benchmarks described in the Requirements (plus or minus 5%). Additionally,
Buyer shall be able to verify, prior to Closing, the directory structure and
the existence of all main files for all Software. Mr. Vandenberghe or his
designee shall provide such assistance with these compilation and verification
exercises as may be reasonably requested by Buyer. Buyer agrees that it will
conduct the review and evaluation of the Software source described in this
Section 8.5 on a non-network computer in a secure room at Buyer’s facilities,
and that only those employees of Buyer who have a need to participate in the
review and evaluation shall have access to the room, and that such access will
be solely for the purposes of the compilations and verification exercises
described above.

          8.6 Transactional Agreements. Buyer shall receive at or prior to the
Closing, executed copies of the Transaction Documents to be executed by Seller
and Representing Shareholders.

          8.7 Proprietary Rights and Inventions Agreements. Buyer shall receive
from Seller, at or prior to the Closing, executed copies of the proprietary
rights and inventions agreements referred to in Section 3.2(e), in each case
duly executed by the employees of Seller identified on Schedule 3.2(e).

          8.8 Assignment from DVE to Seller. Buyer shall receive from Seller, at or
prior to the Closing, a copy of the written assignment from DVE to Seller
pursuant to which DVE assigned all of its rights, tile and interest in and to
the Software to Seller.

Artible 9

Conditions to Seller’s Obligation to Close

          Seller’s obligation to consummate the Asset Purchase is subject to the
satisfaction on or prior to the Closing Date of all of the following
conditions:

16

 

          9.1 Representations, Warranties and Covenants of Buyer.

               (a) The representations and warranties of Buyer contained in this
Agreement shall be true and correct on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date.

               (b) Buyer shall have performed each obligation and agreement and shall
have complied with each covenant to be performed and complied with by it
hereunder at or prior to the Closing except to the extent waived in writing by
Seller; and

               (c) Seller and the Representing Shareholders shall receive at or prior to
the Closing an officer’s certificate as to the effect that the conditions set
forth in paragraphs (a) and (b) have been satisfied, dated as of the Closing
Date, and validly executed by an authorized officer of Buyer.

               (d) All registrations, filings, applications, notices, consents,
approvals, orders, qualifications and waivers required to be obtained or made
as of the Closing Date shall have been filed, made or obtained, except for such
registrations, filings, notices, consents, approvals, orders, qualifications
and waivers the lack of which would not reasonably be expected to have an
adverse effect on the Acquired Assets.

               (e) At the Closing Date, there shall be no Order of any nature of any
Governmental Authority of competent jurisdiction that is in effect that
restrains or prohibits the consummation of all or any portion of the
transactions contemplated by this Agreement, and no Law shall have been enacted
by any Governmental Authority which prevents consummation of the transactions
contemplated by this Agreement.

               (f) Seller and the Representing Shareholders shall receive at or prior to
the Closing, executed copies of the Transaction Documents to be delivered by
Buyer.

Artible 10

Registration Rights and Lock Up Restrictions on Purchase Price Shares

          10.1 Registration Procedures and Expenses.

               (a) Following the Closing, the Buyer shall use reasonable commercial
efforts to prepare and file with the SEC, no later than 60 days after Closing,
a registration statements on Form S-3 in order to register with the SEC the
resale by the Seller, from time to time, of the Purchase Price Shares and the
Warrant Shares through Nasdaq or the facilities of any national securities
exchange on which the Common Stock is then traded (a “Registration Statement”).
Buyer shall use reasonable commercial efforts to cause such Registration
Statement to be declared effective as promptly as practicable after filing.

               (b) Buyer shall prepare and file with the SEC (i) such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith, (ii) such Buyer SEC Reports and (iii) such other filings required by
the SEC, in each case as may be necessary to keep the Registration Statement
continuously effective and not misleading until the earliest of (A) the tenth
anniversary date of the Closing, (B) such date as all of the Purchase Price
Shares and the Warrant Shares that are issuable under the Warrant have been
resold or (C) such time as all of the Purchase Price Shares and the Warrant
Shares that are issuable under the Warrant and capable of being exercised under
the Warrant can be sold within a given three-month period pursuant to Rule 144
under the Securities Act. Notwithstanding the foregoing, following the
effectiveness of the Registration Statement, Buyer may, at any time, but no
more than twice in any 12 month period, suspend the effectiveness of the
Registration Statement for up to no longer than 60 days as appropriate (a
“Suspension Period”), by giving notice to the Seller, if Buyer shall have
determined that Buyer may be required to disclose any material corporate
development. Buyer will use reasonable commercial efforts to minimize the
length of any Suspension Period. Seller agrees that, upon receipt of any
notice from the Buyer of a Suspension Period, Seller will not sell any Purchase
Price Shares or Warrant Shares pursuant to the Registration Statement until (i)
Seller is advised in writing by Buyer that the use of the applicable
prospectus may be resumed, (ii) Seller has received copies of any additional or
supplemental or amended prospectus, if applicable, and (iii) Seller has
received copies of any additional or supplemental filings

17

 

which are incorporated or deemed to be incorporated by reference in such
prospectus. If Buyer shall give notice to Seller with respect to a Suspension
Period, Buyer shall extend the period during which the Registration Statement
shall be maintained effective pursuant to this Section 10.1(b) by the number of
days during the period from the date of the giving of such notice to and
including the date when such Suspension Period shall have ended.

               (c) Buyer shall file any documents required of Buyer for normal blue sky
clearance in states specified in writing by Seller; provided, however, that
Buyer shall not be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or has not so
consented.

               (d) Other than fees and expenses, if any, of counsel, accountants or other
advisers to Seller, which fees and expenses shall be borne by Seller, the Buyer
shall bear all expenses (exclusive of any brokerage fees, underwriting
discounts and commissions) in connection with the procedures in Section 10.1,
paragraphs (a) through (d) of this Article 10.

          10.2 Transfer of Securities After Registration. Seller will not effect
any disposition of the Purchase Price Shares or Warrant Shares that would
constitute a sale within the meaning of the Securities Act, except: (a)
pursuant to the Registration Statement, in which case Seller shall submit the
certificates evidencing the Purchase Price Shares or Warrant Shares to the
Buyer’s transfer agent, accompanied by a separate “Certificate” to the effect
that (1) the applicable shares have been sold in accordance with the
Registration Statement and (2) the requirement of delivering a current
prospectus has been satisfied; or (b) in a transaction exempt from registration
under the Securities Act, in which case the Seller shall, prior to effecting
such disposition, submit to the Buyer an opinion of counsel in form and
substance reasonably satisfactory to the Buyer to the effect that the proposed
transaction is exempt from registration and in compliance with the Securities
Act; provided, however, that an opinion of counsel shall not be required if the
Seller is effecting such disposition pursuant to Rule 144 or 145 of the
Securities Act.

          10.3 Indemnification.

               (a) As used in this Section 10.3 the following terms shall have the
following respective meanings:

               (i) “Selling Shareholder” shall mean Seller and any transferee of
the Seller who is entitled to resell Purchase Price Shares or Warrant
Shares pursuant to the Registration Statement;

               (ii) “Registration Statement” shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 10.1; and

               (iii) “Untrue Statement” shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in
the Registration Statement a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

               (b) Buyer agrees to indemnify and hold harmless each Selling Shareholder
(and each person, if any, who controls the Selling Shareholder within the
meaning of Section 15 of the Securities Act, and each officer, director,
employee and representative of the Selling Shareholder) from and against any
losses, claims, damages or liabilities to which such Selling Shareholder (and
each person, if any, who controls the Selling Shareholder within the meaning of
Section 15 of the Securities Act, and each officer, director, employee and
representative of the Selling Shareholder) may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any Untrue Statement on or after the effective date of the
Registration Statement, or on or after the date of any prospectus or prospectus
supplement or the date of any sale by Seller thereunder, or arise out of any
failure by the Buyer to fulfill any undertaking included in the Registration
Statement; provided, however, that the Buyer shall not be liable to such
Selling Shareholder in any such case to the extent that such loss, claim,
damage or liability arises out of, or is based upon, an Untrue Statement made
in such Registration Statement in reliance upon and in conformity with written
information furnished to the Buyer by or on behalf of such Selling Shareholder
specifically

18

 

for use in preparation of the Registration Statement, or the failure of
such Selling Shareholder to comply with the covenants and agreements of Selling
Shareholder contained in Article 10 respecting sale of the Shares.

               (c) Seller agrees to indemnify and hold harmless Buyer (and each person,
if any, who controls Buyer within the meaning of Section 15 of the Securities
Act, and each officer and director of Buyer) from and against any losses,
claims, damages or liabilities to which Buyer (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with Seller’s covenants and agreements contained in this Article 10
respecting sale of the Purchase Price Shares or Warrant Shares, or any Untrue
Statement contained in the Registration Statement on or after the effective
date thereof, or in any prospectus supplement as of its issue date or date of
any sale by Seller thereunder, if such Untrue Statement was made in reliance
upon and in conformity with written information furnished by or on behalf of
Seller specifically for use in preparation of the Registration Statement.

               (d) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 10.3 such
indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein,
and, to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for the
fees and expenses of more than one separate counsel for all indemnified
parties.

          10.4 Termination of Conditions and Obligations. The conditions precedent
imposed by Articles 3 and 10 upon the transferability of the Purchase Price
Shares and Warrant Shares shall cease and terminate as to any particular number
of such shares when such shares shall have been sold or otherwise disposed of
in accordance with the intended method of disposition set forth in the
Registration Statement covering such shares or at such time as an opinion of
counsel satisfactory to Buyer shall have been rendered to the effect that the
Securities may be transferred in a transaction exempt from registration under
the Securities Act.

          10.5 Lock Up Restrictions on Purchase Price Shares.

In addition to the other restrictions and limitations set forth in Articles 3
and 10 on the transfer or sale by Seller of the Purchase Price Shares, Seller
hereby covenants and agrees that, with respect to the 675,000 Purchase Price
Shares:

               (a) From and after the effective date of the Registration Statement Seller
shall have the right to transfer or sell 275,000 Purchase Price Shares;
provided, however, that 400,000 of the Purchase Prices Shares (the “Lock Up
Shares”) will be subject to the lock up restrictions and restrictive legends
described below;

               (b) 200,000 of the Lock Up Shares will bear an additional restrictive
legend prohibiting any transfer or resale of such shares prior to the date
which is six months after the effective date of the Registration Statement, and
Seller shall have no right to, and shall not, prior to such date, directly or
indirectly transfer or sell such shares in the absence of the removal of such
legend by the Buyer’s transfer agent, which removal shall require the prior
written consent of Buyer as described in Section 10.6; and

               (c) 200,000 of the Lock Up Shares will bear an additional restrictive
legend prohibiting any transfer or resale of such shares prior to the date
which is 12 months after the effective date of the Registration Statement, and
Seller shall have no right to, and shall not, prior to such date, directly or
indirectly transfer or sell

19

 

such shares in the absence of the removal of such legend by the Buyer’s
transfer agent, which removal shall require the prior written consent of Buyer
as described in Section 10.6.

          10.6 Removal of Restrictive Legends.

               (a) If Buyer is requested by a holder of the Purchase Price Shares or
Warrant Shares to remove such restrictive legend from any stock certificates
representing Purchase Price Shares (other than Lock Up Shares) or Warrant
Shares, Buyer shall remove, or shall instruct its transfer agent to remove such
legend if (i) such shares are being sold in a transaction registered under the
Securities Act or (ii) such shares are being sold pursuant to an exemption from
the registration requirements of the Securities Act, and such holder provides
Buyer with an opinion of counsel, in form, substance and scope reasonably
satisfactory to Buyer and customary for opinions of counsel in comparable
transactions, to the effect that the sale and transfer of such shares have been
made in reliance upon an exemption from registration under the Securities Act;
provided, however, notwithstanding the foregoing, such holder shall not be
required to provide to Buyer an opinion of counsel if the sale and transfer of
such shares is being effectuated pursuant to Rule 144 or Rule 145 under the
Securities Act.

               (b) Following the expiration of each restrictive period set forth in
Sections 10.5(a)(b) and (c), respectively Buyer shall, if requested by a holder
of Lock Up Shares, remove, or shall instruct its transfer agent to remove, the
restrictive legend described n Section 3.1(e)(ii) from the stock certificates
representing such Lock Up Shares as are no longer subject to such restrictions;
provided, however, that Buyer shall not be required to remove, or instruct its
transfer agent to remove, such restrictive legend if Buyer has exercised its
right to withhold the removal of such legend pursuant to Section 11.7.

Artible 11

Survival; Indemnification

          11.1 Survival Periods. The representations and warranties in this
Agreement shall survive the Closing for a period of 18 months after the Closing
Date.

          11.2 Indemnification by Seller and Representing Shareholders. From and
after the Closing Date, Seller and each Representing Shareholder shall,
individually and collectively, indemnify, defend and hold harmless Buyer, its
Affiliates, each of their respective directors, officers, employees and agents,
and each of the heirs, executors, successors and assigns of any of the
foregoing (collectively, the “Buyer Indemnified Parties”) from and against any
and all damages, claims, losses, expenses, costs, obligations and liabilities,
including without limitation liabilities for all reasonable attorneys’,
accountants’, and experts’ fees and expenses including those incurred to
enforce the terms of this Agreement (collectively, “Covered Liabilities”),
suffered or incurred, directly or indirectly, by a Buyer Indemnified Party by
reason of, or arising directly or indirectly out of, or related to (i) any of
the Excluded Assets or the Retained Liabilities, including any liability based
on negligence, gross negligence, strict liability or any other theory of
liability, whether in law (whether common or statutory) or equity, or (ii) any
breach of any representation, warranty or covenant of Seller or of any
Identified Employee contained in the Transactional Documents or (iii) any
action or inaction of Seller or its Affiliates with respect to the Acquired
Assets or Intellectual Property on or before the Closing Date, (iv) any claim
or Action from any current or former employee of Seller regarding wrongful
termination or separation of employment, or (v) any present or former Contract,
express or implied, between Seller (or any Affiliate of Seller) and any third
party. The obligations of Seller in this Section 11.2 shall survive the
Closing Date. Seller and Representing Shareholders agree that Buyer may offset
any Covered Liabilities arising under this Section 11.2 per the procedures
described in Section 11.7. Any claim for indemnification by a Buyer
Indemnified Party under this Section 11.2 shall be delivered in writing to
Representing Shareholders and Seller on or prior to that date which is 18
months following the Closing Date. Notwithstanding anything to the contrary in
this Section 11.2, the maximum aggregate liability of Seller and Representing
Shareholders under this Agreement shall not exceed the dollar amount that is
equal to the product of the per share Closing Price times 995,000.

          11.3 Indemnification by Buyer. From and after the Closing Date, Buyer
shall indemnify, defend and hold harmless Seller and Representing Shareholders
and each of the heirs, executors, successors and assigns of any of the
foregoing (collectively, the “Seller Indemnified Parties”) from and against any
and all damages, claims, losses, expenses, costs, obligations and liabilities,
including without limitation liabilities for all reasonable

20

 

attorneys’, accountants’, and experts’ fees and expenses suffered or
incurred, directly or indirectly, by a Seller Indemnified Party by reason of,
or arising directly or indirectly out of, or related to any breach of any
representation or warranty or covenant of Buyer contained in the Transactional
Documents and the failure of Buyer to fulfill its obligations under the DTN
Contract following the Closing Date. Any claim for indemnification by a Seller
Indemnified Party under this Section 11.3 shall be delivered in writing to
Buyer on or prior to that date which is 18 months following the Closing Date.
Notwithstanding anything to the contrary in this Section 11.3, the maximum
aggregate liability of Buyer under this Agreement shall not exceed the dollar
amount that is equal to the product of the per share Closing Price times
995,000.

          11.4 Remedies. In the case of any and all claims with respect to fraud
and willful misconduct, each of the Seller and the Seller Indemnified Parties,
and each of the Buyer and the Buyer Indemnified Parties, shall have all rights
and remedies under law and this Agreement from and after the Closing. In the
case of any and all claims pursuant to Section 11.2 relating to breaches of
representations, warranties and covenants contained in this agreement, Buyer
acknowledges and agrees, for itself and on behalf of the Buyer Indemnified
Parties, that its sole and exclusive remedy with respect to any and all such
claims shall be pursuant to the indemnification provisions set forth in this
Article 11. In the case of any and all claims pursuant to Section 11.3
relating to breaches of representations, warranties and covenants contained in
this agreement, Seller acknowledges and agrees, for itself and on behalf of the
Seller Indemnified Parties, that its sole and exclusive remedy with respect to
any and all such claims shall be pursuant to the indemnification provisions set
forth in this Article 11.

          11.5 Indemnification Procedures. If there occurs an event or occurrence
(including any claim asserted or action or proceeding commenced by a third
party) which a party (an “Indemnified Party”) asserts constitutes an
indemnifiable event pursuant to Sections 11.2 or 11.3, the Indemnified Party
shall provide written notice to the party obligated to provide indemnification
hereunder (an “Indemnifying Party”), setting forth the nature of the claim and
the basis for indemnification hereunder. The Indemnified Party shall give such
written notice to the Indemnifying Party promptly after it becomes aware of the
existence of any such event or occurrence. If a party receives written notice
under this Article 11 and does not agree that it is required to indemnify the
party giving such notice, it shall give notice of the same (a “Dispute Notice”)
within 30 days of receipt of notice of the claim. If the parties cannot agree
whether such claim is subject to the indemnity obligations hereunder within 10
days after receipt of the Dispute Notice, then the parties shall submit such
dispute to arbitration under Article 13.2. If no Dispute Notice is received
within such 30 day period, the party receiving such notice shall be deemed to
have acknowledged liability for the relevant claim.

          11.6 Third Party Claims. In case any action shall be brought against any
Indemnified Party and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to elect to
assume the defense thereof with counsel selected by it and reasonably
acceptable to Indemnifying Party (provided that the Indemnifying Party has not
denied its responsibility to indemnify the Indemnified Party hereunder with
respect to such matter and, provided further, that any reservation of rights by
the Indemnifying Party with respect to the question of whether it is
responsible to indemnify the Indemnified Party hereunder shall not be deemed to
constitute a denial for purposes of the preceding proviso). After notice from
the Indemnifying Party to the Indemnified Party of such election so to assume
the defense of any such claim, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof. The Indemnified Party agrees to cooperate fully with (and to
provide all relevant documents and records and make all relevant personnel
available to) the Indemnifying Party and its counsel in the defense of any such
asserted claim at the cost of the Indemnifying Party. No Indemnifying Party
shall consent to the entry of any judgment or enter into any settlement without
the prior written consent of the Indemnified Party, which shall not be
unreasonably withheld.

          11.7 Buyer’s Right to Offset. The amount of the Covered Liabilities
related to each claim of the Buyer Indemnified Parties pursuant to Section 11.2
which (a) the Seller or the Representing Parties shall affirmatively
acknowledge liability for or be deemed to acknowledge liability for by failure
to timely provide a Dispute Notice pursuant to Section 11.5 or (b) has been
Definitively Resolved in favor of the Buyer Indemnified Parties shall be
satisfied by Buyer withholding its consent to the removal of the restrictive
legends appearing on the stock certificate for the number of Lock Up Shares as
is determined by dividing the amount of such Covered Liabilities by the closing
price of the Common Stock on Nasdaq on the date the Buyer Indemnified Party
gives notice to Seller and the Representing Shareholders pursuant to Section
11.5 (the “Claim Date Price”). If, following

21

 

delivery of a notice for indemnification by Buyer Indemnified Parties to
Seller or Representing Shareholders under Section 11.5, Seller and Representing
Shareholders timely deliver a Dispute Notice to the Buyer Indemnified Parties,
Buyer may withhold its consent to the removal of the restrictive legends
appearing on the stock certificate for the number of Lock Up Shares as is
determined by dividing the amount of such Covered Liabilities by the Claim Date
Price, until such Dispute has been Definitively Resolved. From and after the
expiration of each restrictive period set forth in Section 10.5(b) and (c) and
except for any Lock Up Shares relating to pending or disputed indemnification
claims, Buyer will not have the right to withhold the removal of the
restrictive legends appearing on the stock certificates for the Lock Up Shares
which are no longer subject to the restrictions of Section 10.5. For purposes
hereof, any claim for indemnification by the Buyer Indemnified Parties shall be
deemed to have been “Definitively Resolved” when any of the following events
has occurred: (i) a claim is settled by mutual written agreement of Buyer,
Seller and the Representing Parties; or (ii) a final judgment, order or award
of a court of competent jurisdiction or arbitrator deciding such claim has been
rendered, as evidenced by a certified copy of such judgment, order or award,
provided that such judgment, order or award is not appealable or the time for
making an appeal has expired.

Artible 12

Termination

          12.1 Termination. This Agreement may be terminated at any time prior to
the Closing by:

               (a) The mutual written consent of Seller and Buyer; or

               (b) Seller, provided it is not then in breach of any of its obligations
hereunder, if Buyer fails to perform in any material respect any covenant in
this Agreement when performance thereof is due or Buyer shall have breached in
any material respect any of the representations or warranties contained in this
Agreement and does not cure the failure or breach within thirty (30) business
days after Seller delivers written notice thereof; or

               (c) Buyer, provided it is not then in breach of any of its obligations
hereunder, if Seller or Representing Shareholders fail to perform in any
material respect any covenant in this Agreement when performance thereof is due
or Seller or Representing Shareholders shall have breached in any material
respect any of the representations or warranties contained in this Agreement
and do not cure the failure or breach within thirty (30) business days after
Buyer delivers written notice thereof; or

               (d) By Buyer, Seller or the Representing Shareholders if the Closing shall
not have occurred on or prior to the date which is ninety (90) days from the
date hereof.

          12.2 Procedure and Effect of Termination. In the event of termination of
this Agreement by either or both of Seller and Buyer pursuant to Section 12.1,
written notice thereof shall forthwith be given by the terminating party to the
other party hereto, and this Agreement shall thereupon terminate and become
void and have no effect, and the transactions contemplated hereby shall be
abandoned without further action by the parties hereto, and except as expressly
provided in this Agreement, neither party shall have any further obligation or
liability of any kind to the other party hereunder. Notwithstanding the
foregoing, the provisions of Section 13.4 shall survive the termination of
this Agreement. No termination of this Agreement shall relieve any party hereto
of any liability for any breach of this Agreement (including liability for fees
and expenses incurred by the non-breaching party). If this Agreement is
terminated as provided herein, all filings, applications and other submissions
made pursuant to Section 3.6 (if any) shall, to the extent practicable, be
withdrawn from the agency or other persons to which they were made. Any
materials or documents furnished by Seller or the Representing Shareholders to
Buyer shall be retuned or destroyed pursuant to Section 6 of the Confidential
Disclosure Agreement dated as of September 24, 2003 between Buyer and Seller.

22

 

Artible 13

Miscellaneous

          13.1 Counterparts. This Agreement may be executed by facsimile signature,
and may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party.

          13.2 Governing Law; Consent to Jurisdiction.

               (a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, U.S.A. without reference to the choice of
law principles thereof. Buyer and Seller irrevocably consent to and hereby
submit to the jurisdiction of any state or federal court located in Hennepin
County, Minnesota, in connection with any action, suit or proceeding arising
out of or relating to this Agreement, and each of the parties hereto
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum. The parties agree that
process in any suit before any court sitting in the State of Minnesota may be
commenced by service given in accordance with the provisions of Section 13.5.

               (b) Disputes; Arbitration.

               (i) Any indemnity claim dispute (a “Dispute”) under Section 11.5
arising between the Buyer, on the one hand, and Seller and the
Representing Shareholders, on the other hand, shall be resolved by
negotiation or, failing negotiation, by binding arbitration.

               (ii) The parties shall first attempt to settle any Dispute by
negotiation. Within 10 days of receipt by a party of notice of a Dispute
(“Dispute Notice”), each party shall designate in writing to the other
party a representative who shall be authorized to resolve such Dispute.
The parties’ representatives shall promptly meet and attempt to negotiate
a resolution. If the Dispute has not been resolved within 45 days of
receipt of the relevant Dispute Notice, then on the demand of either
party the Dispute shall be finally and exclusively resolved by
arbitration in accordance with the following provisions, provided that
with regard to an arbitration filed within 60 days of receipt of Dispute
Notice, no party shall assert the defense of statute of limitations or
laches if the Dispute Notice was filed within the deadline or contractual
time period provided for in this Agreement or the limitations period
provided for under applicable law.

               (iii) If the Dispute has not been resolved by negotiation as
provided above, then the Dispute shall be determined by binding
arbitration in Minneapolis, Minnesota. The arbitration shall be
conducted in accordance with the Commercial Arbitration Rules (the
“Rules”) of the American Arbitration Association (“AAA”) in effect on the
date of this Agreement, subject to any modifications contained in this
Agreement or by mutual agreement by the parties. The parties knowingly
and voluntarily waive their rights to have any Dispute tried and
adjudicated by a judge or a jury. There shall be a single neutral
arbitrator.

               (iv) The arbitrator shall be required to follow the law of the State
of Delaware, except that procedural issues shall be governed by the
Rules. The arbitrator shall be empowered to award damages in excess of
compensatory damages, including punitive, exemplary or similar damages
with respect to any Dispute. The award shall be final and binding upon
the parties and shall be the sole and exclusive remedy between the
parties regarding any claims, counterclaims, issues or accounting
presented to the arbitral tribunal. Each party shall bear its own
expenses and will share equally in the arbitrator’s fees. The arbitrator
shall be empowered to assess the costs of the arbitration, including
reasonable attorneys’ fees and disbursements, against the non-prevailing
party.

          13.3 Entire Agreement. This Agreement, the Schedules attached hereto, the
Warrant, the Assignments, the Non-Compete Agreements, and the Consulting
Agreements hereto contain the entire agreement between the parties with respect
to the subject matter hereof and there are no agreements, understandings,
representations or warranties between the parties other than those set forth or
referred to herein.

23

 

          13.4 Expenses. Except as set forth in this Agreement, whether the
purchase of the Acquired Assets is or is not consummated, all legal and other
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
costs and expenses; provided that nothing herein shall preclude a party from
seeking recovery of its expenses from a party that breached this Agreement;
provided, further, that Seller shall pay the Buyer a termination fee equal to
U.S. $500,000 in the aggregate if Seller indirectly or directly violates any of
the restrictions set forth in Section 5.8. Such fee shall be paid by Seller to
Buyer in immediately available funds within two business days of written demand
by Buyer for payment under this Section 13.4.

          13.5 Notices. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopy,
telefax or other electronic transmission service to the appropriate address or
number as set forth below. Notices to Seller shall be addressed to:

Delean Vision Worldwide, Inc

Bison Court

P.O. Box 3460

Road Town, Tortola

British Virgin Islands 

Facsimile:

or at such other address and to the attention of such other Person as Seller
may designate by written notice to the other parties. Notices to Mr. Delean
shall be addressed to:

or at such other address and to the attention of such other Person as Mr.
Delean may designate by written notice to the other parties. Notices to Mr.
Vandenberghe shall be addressed to:

or at such other address and to the attention of such other Person as Mr.
Vandenberghe may designate by written notice to the other parties. Notices to
Buyer shall be addressed to:

Identix Incorporated

5600 Rowland Road

Minnetonka, MN 55343

Attn: Legal Dept.

Telecopy No.: (952) 979 8486

or at such other address and to the attention of such other Person as Buyer may
designate by written notice to the other parties.

          13.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefits of the parties hereto and their respective successors and
assigns; provided, however, that no party hereto will assign its rights or
delegate its obligations, under this Agreement without the express prior
written consent of each other party hereto. Notwithstanding the foregoing,
Buyer acknowledges and agrees that Seller shall be entitled to assign its
rights under Article 10 of this Agreement to the Representing Shareholders and
the other shareholders of Seller upon prior notice to Buyer but without the
prior written consent of Buyer; provided, however, that any permitted assignee
of Seller hereunder shall expressly agree in writing to assume and be bound by
all of Seller’s restrictions and obligations set forth in Article 10 as a
condition to any such assignment.

          13.7 Headings. The section and article headings contained in this
Agreement are inserted for convenience of reference only and will not affect
the meaning or interpretation of this Agreement. All references to Sections or
Articles contained herein mean Sections or Articles of this Agreement unless
otherwise stated.

24

 

          13.8 Amendment. This Agreement may not be amended, modified, superseded,
canceled, renewed or extended except by a written instrument signed by both
parties.

          13.9 Waiver; Effect of Waiver. No provision of this Agreement may be
waived except by a written instrument signed by the party waiving compliance.
No waiver by any party hereto of any of the requirements hereof or of any of
such party’s rights hereunder shall release the other parties from full
performance of their remaining obligations stated herein. No failure to
exercise or delay in exercising on the part of any party hereto any right,
power or privilege of such party shall operate as a waiver thereof, nor shift
any single or partial exercise of any right, power or privilege of such party
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege by such party.

          13.10 Interpretation; Absence of Presumption.

               (a) For the purposes hereof, (i) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (ii) the terms “hereof,”
“herein,” and “herewith” and words of similar import shall, unless otherwise,
stated, be construed to refer to this Agreement as a whole (including all of
the Schedules hereto) and not to any particular provision of this Agreement,
and Article, Section, paragraph, and Schedule references are to the Articles,
Sections, paragraphs, and Schedules to this Agreement unless otherwise
specified, (iii) the word “including” and words of similar import when used in
this Agreement means “including, without limitation,” unless the context
otherwise requires or unless otherwise specified, (iv) the word “or” shall not
be exclusive, (v) provisions shall apply, when appropriate, to successive
events and transactions, and (vi) all reference, to any period of days shall be
deemed to be to the relevant number of calendar days.

               (b) This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.

          13.11 Specific Performance. The parties hereto each acknowledge that, in
view of the uniqueness of the subject matter hereof, the parties hereto would
not have an adequate remedy at law for money damages in the event that this
Agreement were not performed in accordance with its terms, and therefore agree
that the parties hereto shall be entitled to specific enforcement of the terms
hereof in addition to any other remedy to which the parties hereto may be
entitled at law or in equity.

          13.12 Remedies Cumulative; Third Party Beneficiaries. All rights, powers
and remedies provided under this Agreement or otherwise available in respect
hereof at law or in equity shall be cumulative and not alternative, and the
exercise or beginning of the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party. Only the Seller and Buyer, and their permitted
successors and assigns, shall have rights and obligations under the
Transactional Documents and no other Persons shall have any rights to enforce
any provisions of the Transactional Documents.

25

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by their respective
officers, thereunto duly authorized, on and as of the date first set forth
above.

	 	 	 	 	 
	 	 	DELEAN VISION WORLDWIDE, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	BRUNO DELEAN
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Name: Bruno Delean
	 
	 	 	 	 
	 	 	NICOLAS VANDENBERGHE
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Name: Nicolas Vandenberghe
	 ’
	 	 	 	 
	 	 	IDENTIX INCORPORATED
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Name: Joseph J. Atick
	

	 	 	 	Title: President & CEO

26

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]