Document:

Exhibit 4.2

 

AMENDMENT TO PREFERRED STOCK RIGHTS AGREEMENT

 

This Amendment to Preferred
Stock Rights Agreement (this “Amendment”)
is entered into as of this 14th day of March, 2006 by and between Copart, Inc.,
a California corporation (the “Company”),
and Computershare Trust Company, N.A. (formerly Equiserve Trust Company, N.A.)
(the “Rights Agent”).

 

RECITALS

 

WHEREAS, on March 6,
2003, the Company entered into a Preferred Stock Rights Agreement (the “Rights Agreement”) with the Rights Agent;

 

WHEREAS, on March 9,
2006, the Company’s Board of Directors approved an amendment to Section 7(b) of
the Rights Agreement changing the exercise price of a Right to one hundred
twenty dollars and forty-eight cents ($120.48).

 

WHEREAS, pursuant to Section 27
of the Rights Agreement, the Company and the Rights Agent may from time to time
supplement or amend the Rights Agreement without the approval of any holders of
Rights (as defined in the Rights Agreement) prior to the occurrence of a
Distribution Date (as defined in the Rights Agreement), in any respect;

 

WHEREAS, the Distribution
Date has not occurred; and

 

WHEREAS, Section 27 of
the Rights Agreement further provides that the Rights Agent shall duly execute
and deliver any supplement or amendment to the Rights Agreement requested by
the Company, which satisfies the terms of Section 27.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the foregoing premises and the respective agreements set forth
herein, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Company and the Rights Agent hereby agree
as follows:

 

1.  Amendment to Section 7(b) of the
Rights Agreement. Section 7(b) of the Rights Agreement shall be
amended in its entirety to read as follows:

 

“The Exercise Price for each one-thousandth
of a Preferred Share issuable pursuant to the exercise of a Right shall
initially be one hundred twenty dollars and forty-eights cents ($120.48), shall
be subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.”

 

2.  Amendment to Form of Rights
Certificate. The first sentence of the first paragraph of the Form of
Rights Certificate attached as Exhibit B to the Rights Agreement is
amended and restated to read in its entirety as follows:

 

 

“This certifies that
                            ,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of March 6,
2003, (the “Rights Agreement”), as
amended, between Copart, Inc., a California corporation (the “Company”), and Equiserve Trust
Company, N.A. (the “Rights Agent”), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York time, on
March 21, 2013 at the office of the Rights Agent designated for such purpose,
or at the office of its successor as Rights Agent, one one-thousandth (0.001)
of a fully paid and non-assessable share of Series A Participating
Preferred Stock, par value $0.001 per share (the “Preferred
Shares”), of the Company, at an Exercise Price of one hundred
twenty dollars and forty-eight cents ($120.48) per one-thousandth (0.001) of a
Preferred Share (the “Exercise Price”),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed.”

 

3.  Amendment to Summary of Rights. The
sentence set forth next to the heading “Preferred Stock Purchasable Upon
Exercise of Rights” in the Summary of Rights attached as Exhibit C to the
Rights Agreement is amended and restated to read in its entirety as follows:

 

“After the Distribution Date, each Right will
entitle the holder to purchase for one hundred twenty dollars and forty-eight
cents ($120.48) (the “Exercise Price”),
a fraction of a share of the Company’s Preferred Stock with economic terms
similar to that of one share of the Company’s Common Stock.”

 

4.  No Other Changes. The remainder of the
Rights Agreement shall remain unchanged.

 

5.  Counterparts. This Amendment may be
executed in counterparts, each of which shall be considered an original, and
each of the counterparts when taken together shall constitute one and the same
instrument.

 

***

 

2

 

IN WITNESS WHEREOF, the undersigned have executed
this Amendment as of the date first written above.

 

 

	
  COPART,
  INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  /s/ Willis J. Johnson

  	
   

  	
   

  
	
  Name:

  	
  Willis J. Johnson

  	
   

  	
   

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  COMPUTERSHARE
  TRUST COMPANY, N.A.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Katherine S. Anderson

  	
   

  	
   

  
	
  Name:

  	
  Katherine S. Anderson

  	
   

  	
   

  
	
  Title:

  	
  Managing Director

  	
   

  	
   

  

 

3Exhibit 10.13

 

BIO-key
International, Inc.

3349
Highway 138

Building D Suite B

Wall, NJ 07719

 

January 23, 2006

 

Aether Systems, Inc

621 E. Pratt Street, Suite 601

Baltimore, Maryland 21202

 

Ladies and Gentlemen:

 

1.                                       References.

 

Reference is made to that certain letter
agreement dated as of September 30, 2004 (the “Agreement”) by and
between BIO-key International, Inc. (“BIO-key”) and Aether Systems, Inc.
(“Aether”) relating to BIO-key’s deposit with Aether of $1,000,000 in
cash to serve as part of the collateral supporting Aether’s letter of
credit in favor of Hamilton County, Ohio (such $1,000,000, the “Hamilton
Cash Collateral”).

 

Reference is made to that certain sublease
dated as of September 30, 2004 by and between BIO-key and Aether relating
to the sublease of premises known as Marlborough Corporate Place III in
Marlborough, Massachusetts (the “Sublease”).

 

Reference is made to that certain
subordinated secured promissory note dated as of September 30, 2004 issued
by BIO-key and Public Safety Group, Inc. in favor of Aether (the “Note”).

 

Reference is made to that certain letter
agreement dated as of September 30, 2004 (the “Side-Letter”) by and
between BIO-key and Aether relating to the Glenborough Letter of Credit Number
3038323 (the “Glenborough LC”)

 

Capitalized terms used in this letter
agreement without definition shall have the respective meanings ascribed to
them in the Agreement, the Sublease, the Note or the Side-Letter, as
applicable.

 

2.                                       Return of
Hamilton Cash Collateral.

 

At the request of BIO-key, and in
consideration of agreements, and subject to the satisfaction of the conditions,
set forth in this letter agreement, Aether shall allow for the return to
BIO-key of up to 100% of the Hamilton Cash Collateral as follows:

 

a.                                       Aether
will remit to BIO-key, from time to time, such portion of the Hamilton Cash
Collateral (up to 100% of the Hamilton Cash Collateral, in the aggregate) as is
equal to the amount received by Aether from BIO-key, following the Effective
Date (as defined below) of this letter agreement, of (i) Rent and
Additional Rent under the Sublease, and (ii) interest and Hamilton Fees
under the Note. Aether will remit the requisite portion of the Hamilton Cash
Collateral to BIO-key within two business days of the later of (i) BIO-key’s
written request therefor and (ii) Aether’s receipt of a payment from
BIO-key that entitles BIO-key to receive a return of any portion of the
Hamilton Cash Collateral.

 

b.                                      Aether
will retain custody and control of the Hamilton Cash Collateral in accordance
with, and subject to, the Agreement, and in no event shall the payments by
Aether to BIO-key pursuant to subsection (a) above exceed $1,000,000
or include the funds held by Aether as a deposit under the Sublease.

 

c.                                       The
provisions of this paragraph 2 shall terminate and shall have no further force
or effect if BIO-key defaults on, or fails to make timely payments under, the
Agreement, the Note, the Sublease, the APA (as defined below) or any of the
other Ancillary Agreements (as such term is defined in the APA).

 

3.                                       Representations and Warranties of BIO-key.

 

BIO-key hereby represents and warrants to Aether
that, as of the date hereof, it (i) has delivered to Aether a true and
complete copy of BIO-key’s cash-flows statement for the period ended December 31,
2005 to June 30, 2006, (ii) has not received any notice, nor does it
have any reason to believe, that it is currently in default under the Hamilton
Sales Agreement (as that term is used in the Agreement), and (iii) has
obtained all necessary approvals required to be obtained by BIO-key in
connection with the execution and delivery of this letter agreement and the
transactions contemplated hereby.

 

 

4.                                       Conditions to Aether’s Obligations.

 

BIO-key and Aether hereby acknowledge and agree that
Aether has entered into this letter agreement at the request of BIO-key and
nothing hereunder relinquishes or reduces Aether’s right to seek recovery for
breaches or violations of this letter agreement, the Agreement, the Asset
Purchase Agreement, dated as of August 16, 2004, by and among Aether,
Cerulean Technologies, Inc., SunPro, Inc. and BIO-key (the “APA”),
the Sublease, the Note (including with respect to all collateral securing the
Note) or any of the other Ancillary Agreements.

 

Aether’s obligations under this letter agreement are
subject to (i) the representations and warranties of BIO-key set forth in
paragraph 4 above being true and correct, (ii) BIO-key’s receipt of at
least $1,000,000 in additional equity or unsecured debt financing from The
Shaar Fund, Ltd. and/or other institutional financiers; provided, that such
additional financing shall not require any waiver or consent by Aether, in its
capacity as a creditor of BIO-Key, or any amendment of any of the Note or any
of the related credit documents to which Aether is party, except, in each case,
as shall be acceptable to Aether in its sole discretion, (iii) BIO-key’s
using reasonable commercial efforts to obtain terms more favorable to BIO-key
under its currently outstanding institutional debt financings and using
reasonable commercial efforts to obtain a forbearance agreement with The Shaar
Fund and Laurus Master Fund Ltd. relating to payments of principal during 2006
under Bio-Key’s existing financing arrangements, excluding payments made under
the Note, (iv) the execution by BIO-key and delivery to Aether of an
amendment to the Note giving effect to the matters specified in paragraph 5
below, (v) the receipt of all necessary consents to permit the foregoing
amendment to the Note, and (vi) payment by BIO-key to Aether of an amount
equal to the reasonable legal fees incurred by Aether in connection with the
execution and delivery of this Agreement. The “Effective Date” of this letter
agreement shall be the date on which the last of these conditions shall have
been satisfied.

 

5.                                       Amendment of the Note.

 

As a material inducement to Aether to enter into
this letter agreement, the parties have agreed to amend the Note as follows:

 

a.                                       The principal amount due and payable to
Aether under the Note shall be increased from $6,884,588 to $7,884,558.

 

b.                                      No interest shall accrue on the Note
following the Effective Date with respect to amounts in excess of $6,884,588 ,
unless and only to the extent that BIO-key receives payment from Aether
pursuant to paragraph 2 of this letter agreement.

 

c.                                       If Aether, in its sole discretion, agrees to
extend the Hamilton LC beyond December 31, 2006 and to extend the payment
date under the Note to correspond to such extension, then BIO-key hereby agrees
to pay Aether a letter of credit fee equal to 2% of the amount of the Hamilton
LC (the “LC Extension Fee”), which shall be payable on the effective
date of such extension by Aether. If Aether should decide to extend the
Hamilton LC for more than six months (either in a single extension or as a
result of multiple extensions), an additional LC Extension Fee will be due and
payable on each six-month anniversary of such extension period following December 31,
2006, and each LC Extension Fee shall be deemed earned when due and shall not
be subject to any pro-ration or reduction if the Hamilton LC or the Note is
terminated, expires, is drawn upon or is reduced in amount any time prior to
six months following the date of payment of an LC Extension Fee. For the
avoidance of doubt, the LC Extension Fee shall be in addition to, and not in
lieu of, the Hamilton Fees. Notwithstanding anything to the contrary in this
paragraph 4(c), if (i) BIO-key is able to reduce the amount outstanding
under the Hamilton LC by at least fifty -percent (50%) as of September 30,
2006 and (ii) BIO-key has timely made all payments required under the Note
and the Sublease in accordance with the terms of such agreements, the initial
LC Extension Fee shall be equal to 1% of the amount of the Hamilton LC (the “Reduced
LC Extension Fee”). If BIO-key qualifies for the Reduced LC Extension Fee
and if Aether should decide to extend the Hamilton LC for more than six months
(either in a single extension or as a result of multiple extensions), BIO-key
will be required to pay the full LC Extension Fee on each six-month anniversary
of such extension period following December 31, 2006.

 

d.                                      If Aether, in its sole discretion, agrees to
extend the Hamilton LC beyond December 31, 2006, the termination date of
the Note shall be automatically extended to such date that is thirty (30) days
following the extended expiration date of the Hamilton LC. In the case of
multiple extensions of the Hamilton LC by Aether, the termination date of the
Note shall automatically be extended to such date that is thirty (30) days
following such extended expiration date of the Hamilton LC.

 

e.                                       In no event shall the Note terminate less
than thirty (30) days after the expiration of the Hamilton LC.

 

2

 

6.                                       Amendment of the Side-Letter.

 

As a material inducement to Aether to enter into
this letter agreement, the parties have agreed to amend the Side-Letter as
follows:

 

a.                                       If BIO-key defaults on, or fails to make
timely payments under, the Agreement, the Note, the Sublease, the APA or any of
the other Ancillary Agreements , Aether shall have the right to draw on the
Cash Collateral (as defined in the Side-Letter) to satisfy any outstanding
amounts due from BIO-key to Aether. Aether’s ability to draw on the Cash
Collateral in the event of a default or failure to pay by BIO-key shall be in
addition to and not in lieu of Aether’s right to draw on Cash Collateral if the
landlord draws on the Glenborough LC.

 

b.                                      The undrawn balance of the Cash Collateral,
if any, shall be transferred to BIO-key upon the termination of the Glenborough
LC.

 

7.                                       Other Agreements and Obligations Not Affected.

 

All other current agreements and obligations between
the parties remain in full force and effect and are not affected by this letter
agreement.

 

	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
  BIO-KEY INTERNATIONAL, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Thomas J. Colatosti

  	
   

  
	
   

  	
  Thomas J. Colatosti, Chairman

  
						

 

Agreed
and accepted by a duly authorized officer

of
the undersigned:

 

	
  AETHER SYSTEMS, INC.

  
	
   

  
	
  By:

  	
   /s/ David C. Reymann

  	
   

  
	
   

  	
  Name: David C. Reymann

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
				

 

3

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