Business
Comnetix responds to Bio-Key press release
Comnetix responds to Bio-Key press release.
About this update from Currency Exchange International, Corp.
[{"type":"text","content":"\n\n\n\nWill Take Legal Action to Stop Bio-key's Offer to Purchase ComnetiX\n\n\nShares\n\n\nOAKVILLE, ON, Feb. 2 /CNW/ - ComnetiX Inc. (TSX: CXI) wishes to respond\nto a press release issued on January 31, 2007 by Bio-key International, Inc.\n\n\nOn May 17, 2006, during preliminary discussions between ComnetiX and\nBio-key with respect to a possible merger or other business combination, which\ndid not materialize, ComnetiX and Bio-key entered into a five-page letter\nagreement. The agreement provided for exclusive negotiations between the two\ncompanies for a period of 30 days. The agreement also included a standard\n\"standstill\" clause, which provided that Bio-key would not acquire ComnetiX's\nshares, or make an offer to acquire ComnetiX's shares, for a period of one\nyear.\n\n\nThe agreement stated that it would terminate in 30 days if the parties\ndid not sign a definitive acquisition agreement, but that the one-year\n\"standstill\" clause would continue in effect even after the termination of the\nagreement.\n\n\nThe agreement terminated on June 16, 2006, 30 days after the date of the\nagreement, because ComnetiX and Bio-key did not sign a definitive acquisition\nagreement. The one-year \"standstill\" clause continues in effect until May 17,\n2007.\n\n\nBio-key stated in its press release that: (i) the continuation of\nnegotiations between ComnetiX and Bio-key after June 16, 2006 \"effectively\nextended\" the agreement; (ii) by meeting with L-1 Identity Solutions, Inc.,\nComnetiX breached the exclusivity clause of the agreement; (iii) therefore,\nthe agreement was at an end; and (iv) therefore, Bio-key is no longer bound by\nthe one-year \"standstill\" provision.\n\n\nBio-key's claims are without merit for the following reasons:\n- ComnetiX never agreed to an extension of the 30-day term of the\n agreement;\n- It is ComnetiX's position that Bio-key's claim that on-going\n discussions \"effectively extended\" the written agreement is without\n foundation; and\n- ComnetiX did not breach the exclusivity clause of the agreement while\n it was in effect.\n\n\nThe agreement and its exclusivity clause terminated on June 16, 2006. The\none-year \"standstill\" provision remains in effect to this day. Bio-key\nbreached the \"standstill\" provision by making its unsolicited offer to acquire\nall of ComnetiX's outstanding shares.\n\n...