Exhibit 10.7
EXECUTION VERSION
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT, dated as of
October 5, 2005 (this “ Lock-Up Agreement”
or this “Agreement” ) is by and between Lau
Acquisition Corp. d/b/a Lau Technologies (the “Lau
Technologies” ) and Viisage Technology, Inc. a Delaware
corporation ( “Company” ). Capitalized terms
used herein but not defined shall have the meanings ascribed to
them in the Investment Agreement (as defined below).
WHEREAS, the Company and L-1
Investment Partners LLC (the “Investor” ) have
entered into a certain Investment Agreement dated as of
October 5, 2005 (the “Investment Agreement”
), pursuant to which, upon the terms and subject to the conditions
thereof, the Investor will purchase shares of common stock of the
Company and warrants to purchase shares of common stock of the
Company (the “Investment” ); and
WHEREAS, as a condition to the
willingness of the Company and the Investor to consummate the
Investment, the Company and the Investor have required that Lau
Technologies agree, and in order to induce the Company and the
Investor to enter into the Investment, Lau Technologies is willing
to agree, to restrict the sale of its shares of the Company’s
capital stock upon the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants and agreements contained
herein, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. Lock-Up Agreement
.
(a) In consideration of the Investor
and the Company entering into the Investment Agreement and to
induce the Investor and the Company to consummate the Investment,
and subject to the Pledge and Security Agreement between Lau
Acquisition Corp. d/b/a Lau Technologies and Fleet National Bank
dated as of May 30, 2003, as amended, Lau Technologies hereby
agrees that it will not, without the prior written approval of the
Company, directly or indirectly, sell, offer or agree to sell,
contract to sell, grant any option for the sale of, make any short
sale, pledge, or enter into any hedging transaction that could
result in a transfer of, or otherwise encumber or dispose of,
(i) any shares of Common Stock (including, without limitation,
any shares of Common Stock acquired pursuant to the exercise of any
stock option or warrant) or interest therein, (ii) any options
or warrants to acquire shares of Common Stock or (iii) any
securities exchangeable for or convertible into shares of Common
Stock of the Company, in each case, which Lau Technologies may now
or hereafter own, for a period commencing as of the date hereof and
ending on the first anniversary of the Closing Date (as defined in
the Investment Agreement).
(b) Notwithstanding anything herein
to the contrary, Section 1(a) above shall not apply to
(i) the transfer by Lau Technologies of up to 300,000 shares
of Common Stock in any twelve-month period following the date
hereof (including the period commencing as of the date hereof and
ending on the first anniversary of the date hereof) so long as Lau
Technologies provides the Company’s Board of Directors with
prior written notice of such transfer, and (ii) the transfer
of shares of Common Stock by Lau Technologies to its affiliates, as
such term is defined
in Rule 405 under the Securities Act of 1933, as
amended; provided that , in the case of clause (b)(ii)
above, each transferee agrees in writing as a condition precedent
to such transfer to be bound by the terms of this
Agreement.
(c) This Agreement shall terminate
upon the earlier of (i) the first anniversary of the Closing
(as defined in the Investment Agreement) and (ii) a Change of
Control. For purposes of this Agreement, a “Change of
Control
