Bio-key's Offer to Purchase ComnetiX Shares Breaches May 2006
"Standstill" Agreement
OAKVILLE, ON, Jan. 30 /CNW/ - ComnetiX Inc. (TSX: CXI) announced today that it has written to Bio-key International, Inc. and demanded that Bio-key immediately undertake all necessary steps to withdraw its unsolicited take-over bid for the common shares of ComnetiX.
The demand was made by ComnetiX because the offer by Bio-key is in clear breach of a contractual undertaking made by Bio-key in favour of ComnetiX in May 2006.
In May 2006, during preliminary discussions between ComnetiX and Bio-key with respect to a possible merger or other business combination, which did not materialize, Bio-key agreed in writing, among other things, not to acquire ComnetiX's shares, or make an offer to acquire ComnetiX's shares, for a period of one year. ComnetiX has not waived this "standstill" agreement, which remains in effect until May 17, 2007.
ComnetiX has also notified Bio-key that ComnetiX may commence legal proceedings should Bio-key fail to immediately withdraw its offer and that ComnetiX holds Bio-key responsible for any and all costs and fees incurred by ComnetiX (including legal fees) and any and all damages suffered by ComnetiX as a result of Bio-key's breach of the May 2006 agreement. ComnetiX also reserved the right to seek punitive and exemplary damages against Bio-key.
Separately, ComnetiX announced the Ontario Securities Commission has been informed of Bio-key's breach of the "standstill" agreement.
The Board of Directors of ComnetiX continues its unanimous support of ComnetiX's arrangement with L-1 Identity Solutions, Inc. and recommends that ComnetiX's shareholders and warrantholders vote FOR the special resolution approving the arrangement with L-1, under which L-1 will pay ComnetiX shareholders US$1.12 per share in cash for all of the issued and outstanding shares of ComnetiX, at the annual and special meeting of shareholders to be held on February 8, 2007.
To ensure that each shareholder's or warrant holder's vote will be counted, it is imperative that proxies be returned in advance of the Meeting or delivered to the Chairman of the Meeting at any time prior to the commencement of the Meeting on February 8, 2007. SHAREHOLDERS AND WARRANTHOLDERS MAY REVOKE A PREVIOSULY-SUBMITTED PROXY VOTING AGAINST THE PLAN OF ARRANGMENT BY COMPLETING AND DELIVERING A LATER-DATED COMNETIX MANAGEMENT PROXY. A LATER-DATED PROXY AUTOMATICALLY REVOKES ANY AND ALL PRIOR PROXIES GIVEN IN CONNECTION WITH THE MEETING.
Shareholders who need assistance voting or revoking a prior proxy should contact Georgeson at 1-866-598-9985.
About ComnetiX(TM) Inc (www.ComnetiX.com)
ComnetiX(TM) Inc provides secure identification and authentication solutions to both the public and private sectors throughout North America. ComnetiX offers multimode biometric identification solutions for use in areas such as applicant screening, financial services, health care, transportation, airlines and airports, casinos and gaming, and energy and utilities. Clients include American Airlines, Lehman Brothers, New York City Health and Hospital Corporation, New York State Division of Criminal Justice Services, Toronto Police Services Board, Boston Police Department and the Royal Canadian Mounted Police. ComnetiX is also Canada's premier applicant fingerprinting services company, facilitating tens of thousands of criminal background checks each year through its chain of ten offices across Canada. In addition, ComnetiX has established more than 40 applicant fingerprinting services locations throughout the United States.
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