EXHIBIT 4.2
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES
STOCK PURCHASE WARRANT
To Purchase __________ Shares of Common Stock of
AUTHENTIDATE HOLDING CORP.
THIS CERTIFIES that, for value received, _____________ (the
"Holder"), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on or after May
___, 2003 (the "Initial Exercise Date") and on or prior to the close of business
on the fifth anniversary of the Initial Exercise Date (the "Termination Date")
but not thereafter, to subscribe for and purchase from Authentidate Holding
Corp., a corporation incorporated in the State of Delaware (the "Company"), up
to ____________ shares (the "Warrant Shares") of Common Stock, par value $0.001
per share, of the Company (the "Common Stock"). The purchase price of one share
of Common Stock (the "Exercise Price") under this Warrant shall be $_____,
subject to adjustment hereunder. The Exercise Price and the number of Warrant
Shares for which the Warrant is exercisable shall be subject to adjustment as
provided herein. CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN SHALL
HAVE THE MEANINGS SET FORTH IN THAT CERTAIN SECURITIES PURCHASE AGREEMENT (THE
"PURCHASE AGREEMENT"), DATED MAY __, 2003, BETWEEN THE COMPANY AND THE INVESTORS
SIGNATORY THERETO.
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1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed.
2. Authorization of Shares. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).
3. Exercise of Warrant.
Except as provided in Section 4 herein, exercise of the purchase
rights represented by this Warrant may be made at any time or times
on or after the Initial Exercise Date and on or before the
Termination Date by the surrender of this Warrant and the Notice of
Exercise Form annexed hereto duly executed, at the office of the
Company (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the
address of such Holder appearing on the books of the Company) and
upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States bank or
by means of a cashless exercise, the Holder shall be entitled to
receive a certificate for the number of Warrant Shares so purchased.
Certificates for shares purchased hereunder shall be delivered to
the Holder within seven (7) Trading Days after the date on which
this Warrant shall have been exercised as aforesaid. This Warrant
shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any
other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as
of the date the Warrant has been exercised by payment to the Company
of the Exercise Price and all taxes required to be paid by the
Holder, if any, pursuant to Section 5 prior to the issuance of such
shares, have been paid. If the Company fails to deliver to the
Holder a certificate or certificates representing the Warrant Shares
pursuant to this Section 3(a) by the seventh Trading Day after the
date of exercise, then the Holder will have the right to rescind
such exercise. In addition to any other rights available to the
Holder, if the Company fails to deliver to the Holder a certificate
or certificates representing the Warrant Shares pursuant to an
exercise by the seventh Trading Day after the date of exercise, and
if after such seventh Trading Day the Holder is required by its
broker to purchase (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a "Buy-In"), then the Company shall (1) pay in
cash to the Holder the amount by which (x) the Holder's total
purchase price (including
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brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to
the Holder in connection with the exercise at issue times (B) the
closing bid price of the Common Stock at the time of the obligation
giving rise to such purchase obligation, and (2) at the option of
the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not
honored or deliver to the Holder the number of shares of Common
Stock that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example,
if the Holder purchases Common Stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise
of shares of Common Stock with a market price on the date of
exercise totaled $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In. Nothing herein shall limit a Holder's right to pursue any
other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company's failure to
timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.
Notwithstanding anything to the contrary herein, in the event a
Holder is entitled to collect liquidated damages hereunder and
liquidated damages pursuant to Section 4.1(a) of the Purchase
Agreement, the Holder shall be limited to collect, at its option, of
such remedies, only one such remedy on any given occasion.
(b) If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing
the rights of Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
(c) Notwithstanding anything herein to the contrary, in no
event shall the Holder be permitted to exercise this Warrant for Warrant
Shares to the extent that (i) the number of shares of Common Stock owned
by such Holder (other than Warrant Shares issuable upon exercise of this
Warrant) plus (ii) the number of Warrant Shares issuable upon exercise of
this Warrant, would be equal to or exceed 4.9999% of the number of shares
of Common Stock then issued and outstanding, including shares issuable
upon exercise of this Warrant held by such Holder after application of
this Section 3(c). As used herein, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act. To the
extent that the limitation contained in this Section 3(c) applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder) and of which a portion of this Warrant is
exercisable shall be in the sole discretion of such Xxxxxx, and the
submission of a Notice of Exercise shall be deemed to be such Holder's
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder) and of which portion of this Warrant is
exercisable, in each case subject to such aggregate percentage limitation,
and the Company shall have no obligation to verify or confirm the accuracy
of such
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determination. Nothing contained herein shall be deemed to restrict the
right of a Holder to exercise this Warrant into Warrant Shares at such
time as such exercise will not violate the provisions of this Section
3(c). The provisions of this Section 3(c) may be waived by the Holder
upon, at the election of the Holder, not less than 61 days' prior notice
to the Company, and the provisions of this Section 3(c) shall continue to
apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver). No exercise of this
Warrant in violation of this Section 3(c) but otherwise in accordance with
this Warrant shall affect the status of the Warrant Shares as validly
issued, fully-paid and nonassessable.
(d) This Warrant may also be exercised by means of a "cashless
exercise" in which the Holder shall be entitled to receive a certificate
for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:
(A) = the average of the high and low trading prices per share of
Common Stock on the Trading Day preceding the date of such
election;
(B) = the Exercise Price of the Warrants; and
(X) = the number of Warrant Shares issuable upon exercise of the
Warrants in accordance with the terms of this Warrant.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant.
7. Transfer, Division and Combination.
(a) Subject to compliance with any applicable securities laws,
transfer of this Warrant and all rights hereunder, in whole or in part,
shall be registered on the books of the Company to be maintained for such
purpose, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant
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substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of
this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned, may be exercised by a new
holder for the purchase of Warrant Shares without having a new Warrant
issued.
(b) This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in
which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with Section 7(a), as to any transfer
which may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants under this
Section 7.
(d) The Company agrees to maintain, at its aforesaid office,
books for the registration and the registration of transfer of the
Warrants.
8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise),
the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender or payment.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
11. Adjustments of Exercise Price and Number of Warrant Shares.
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(a) Stock Splits, etc. The number and kind of securities
purchasable upon the exercise of this Warrant and the Exercise Price shall
be subject to adjustment from time to time upon the happening of any of
the following. In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock to holders
of its outstanding Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which it would
have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and
number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder shall thereafter be entitled to purchase
the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security
obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of Warrant Shares purchasable pursuant
hereto immediately prior to such adjustment and dividing by the number of
Warrant Shares or other securities of the Company resulting from such
adjustment. An adjustment made pursuant to this paragraph shall become
effective immediately after the effective date of such event retroactive
to the record date, if any, for such event.
(b) Anti-Dilution Provisions. During the Exercise Period, the
Exercise Price shall be subject to adjustment from time to time as
provided in this Section 11(b). In the event that any adjustment of the
Exercise Price as required herein results in a fraction of a cent, such
Exercise Price shall be rounded up or down to the nearest cent.
(i) Adjustment of Exercise Price. If and whenever the Company
issues or sells, or in accordance with Section 11(b)(ii)(B) hereof
is deemed to have issued or sold, any shares of Common Stock for a
consideration per share of less than the then the Exercise Price or
for no consideration (such lower price, the "Base Share Price" and
such issuances collectively, a "Dilutive Issuance"), then, the
Exercise Price shall be reduced to a price determined by dividing
(i) an amount equal to the sum of (a) the total number of shares of
Common Stock outstanding immediately prior to such issuance or sale
multiplied by the Exercise Price then in effect, plus (b) the
consideration, if any, received by the Company upon such issuance or
sale, by (ii) the total number of shares of Common Stock outstanding
immediately after such issuance or sale, provided, that for purposes
hereof, all shares of Common Stock that are issuable upon
conversion, exercise or exchange of Capital Share Equivalents shall
be deemed outstanding immediately after the issuance of such Common
Stock. Such adjustment shall be made whenever such shares of Common
Stock or Capital Share Equivalents are issued.
(ii) Effect on Exercise Price of Certain Events. For purposes
of determining the adjusted Exercise Price under Section 11(b)
hereof, the following will be applicable:
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(A) Issuance of Rights or Options. If the Company in any
manner issues or grants any warrants, rights or options, whether or
not immediately exercisable, to subscribe for or to purchase Common
Stock or other securities exercisable, convertible into or
exchangeable for Common Stock ("Convertible Securities") (such
warrants, rights and options to purchase Common Stock or Convertible
Securities are hereinafter referred to as "Options") and the price
per share for which Common Stock is issuable upon the exercise of
such Options is less than the Exercise Price ("Below Base Price
Options"), then the maximum total number of shares of Common Stock
issuable upon the exercise of all such Below Base Price Options
(assuming full exercise, conversion or exchange of Convertible
Securities, if applicable) will, as of the date of the issuance or
grant of such Below Base Price Options, be deemed to be outstanding
and to have been issued and sold by the Company for such price per
share. For purposes of the preceding sentence, the "price per share
for which Common Stock is issuable upon the exercise of such Below
Base Price Options" is determined by dividing (i) the total amount,
if any, received or receivable by the Company as consideration for
the issuance or granting of all such Below Base Price Options, plus
the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of all such Below Base
Price Options, plus, in the case of Convertible Securities issuable
upon the exercise of such Below Base Price Options, the minimum
aggregate amount of additional consideration payable upon the
exercise, conversion or exchange thereof at the time such
Convertible Securities first become exercisable, convertible or
exchangeable, by (ii) the maximum total number of shares of Common
Stock issuable upon the exercise of all such Below Base Price
Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Exercise Price will be
made upon the actual issuance of such Common Stock upon the exercise
of such Below Base Price Options or upon the exercise, conversion or
exchange of Convertible Securities issuable upon exercise of such
Below Base Price Options.
(B) Issuance of Convertible Securities. If the Company
in any manner issues or sells any Convertible Securities, whether or
not immediately convertible (other than where the same are issuable
upon the exercise of Options) and the price per share for which
Common Stock is issuable upon such exercise, conversion or exchange
is less than the Exercise Price, then the maximum total number of
shares of Common Stock issuable upon the exercise, conversion or
exchange of all such Convertible Securities will, as of the date of
the issuance of such Convertible Securities, be deemed to be
outstanding and to have been issued and sold by the Company for such
price per share. For the purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon such
exercise, conversion or exchange" is determined by dividing (i) the
total amount, if any, received or receivable
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by the Company as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
exercise, conversion or exchange thereof at the time such
Convertible Securities first become exercisable, convertible or
exchangeable, by (ii) the maximum total number of shares of Common
Stock issuable upon the exercise, conversion or exchange of all such
Convertible Securities. No further adjustment to the Exercise Price
will be made upon the actual issuance of such Common Stock upon
exercise, conversion or exchange of such Convertible Securities.
(C) Change in Option Price or Conversion Rate. If there
is a change at any time in (i) the amount of additional
consideration payable to the Company upon the exercise of any
Options; (ii) the amount of additional consideration, if any,
payable to the Company upon the exercise, conversion or exchange of
any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for
Common Stock (in each such case, other than under or by reason of
provisions designed to protect against dilution), the Exercise Price
in effect at the time of such change will be readjusted to the
Exercise Price which would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for
such changed additional consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold.
(D) Calculation of Consideration Received. If any Common
Stock, Options or Convertible Securities are issued, granted or sold
for cash, the consideration received therefor for purposes of this
Warrant will be the amount received by the Company therefor, before
deduction of reasonable commissions, underwriting discounts or
allowances or other reasonable expenses paid or incurred by the
Company in connection with such issuance, grant or sale. In case any
Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash,
the amount of the consideration other than cash received by the
Company will be the fair market value of such consideration, except
where such consideration consists of securities, in which case the
amount of consideration received by the Company will be the Market
Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any
merger or consolidation in which the Company is the surviving
corporation, the amount of consideration therefor will be deemed to
be the fair market value of such portion of the net assets and
business of the non-surviving corporation as is attributable to such
Common Stock, Options or Convertible Securities, as the case may be.
The fair market value of any consideration other than cash or
securities will be determined in good faith by an investment banker
or other
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appropriate expert of national reputation selected by the Company
and reasonably acceptable to the holder hereof, with the costs of
such appraisal to be borne by the Company.
(E) Exceptions to Adjustment of Exercise Price. No
adjustment to the Exercise Price will be made upon (i) the grant or
exercise of any Convertible Securities which may hereafter be
granted or exercised under any employee benefit plan of the Company
now existing or to be implemented in the future, so long as the
issuance of such Convertible Securities is approved by a majority of
the non-employee members of the Board of Directors of the Company or
a majority of the members of a committee of non-employee directors
established for such purpose, (ii) the issuance of up to 100,000
shares of Common Stock, in the aggregate, to consultants or advisors
to the Company for services to be rendered to the Company by such
consultants or advisors, (iii) upon the exercise of this Warrant or
any other warrant of this series or of any other series or security
issued by the Company in connection with the offer and sale of this
Company's securities pursuant to the Purchase Agreement; or (iv)
upon the exercise of or conversion of any Convertible Securities,
options or warrants issued and outstanding on the initial issuance
date of this Warrant.
(iii) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise
Price in effect at the time such adjustment is otherwise required to be
made, but any such lesser adjustment shall be carried forward and shall be
made at the time and together with the next subsequent adjustment which,
together with any adjustments so carried forward, shall amount to not less
than 1% of such Exercise Price.
12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, at
their option, (a) upon exercise of this Warrant, the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event,
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or (b) cash equal to the value of this Warrant as determined in accordance with
the Black-Sholes option pricing formula. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by registered or certified mail, return receipt requested,
to the Holder notice of such adjustment or adjustments setting forth the number
of Warrant Shares (and other securities or property) purchasable upon the
exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice, in the absence of
manifest error, shall be conclusive evidence of the correctness of such
adjustment.
15. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or
other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any
other securities or property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger of the Company with, or any sale,
transfer or other disposition of all or substantially all the property,
assets or business of the Company to, another corporation or,
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(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Xxxxxx appearing on the books of the Company and delivered in
accordance with Section 17(d).
16. Authorized Shares. The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.
The Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any Warrant Shares
above the amount payable therefor upon such exercise immediately prior to such
increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
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Before taking any action which would result in an adjustment
in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
17. Miscellaneous.
(a) Jurisdiction. This Warrant shall constitute a contract
under the laws of New York, without regard to its conflict of law,
principles or rules.
(b) Restrictions. The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will
have restrictions upon resale imposed by state and federal securities
laws.
(c) Nonwaiver and Expenses. No course of dealing or any delay
or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice Xxxxxx's rights,
powers or remedies, notwithstanding all rights hereunder terminate on the
Termination Date. If the Company willfully and knowingly fails to comply
with any provision of this Warrant, which results in any material damages
to the Holder, the Company shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to,
reasonable attorneys' fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase
Agreement.
(e) Limitation of Liability. No provision hereof, in the
absence of affirmative action by Holder to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give rise
to any liability of Holder for the purchase price of any Common Stock or
as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant. The
Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of
this Warrant and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(g) Successors and Assigns. Subject to applicable securities
laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors of the Company
and the successors and permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of all Holders
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from time to time of this Warrant and shall be enforceable by any such
Holder or holder of Warrant Shares.
(h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Holder.
(i) Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions
of this Warrant.
(j) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
********************
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.
Dated: May __, 2003
AUTHENTIDATE HOLDING CORP.
By:
------------------------------------------
Name:
Title:
14
NOTICE OF EXERCISE
To: Authentidate Holding Corp.
(1) The undersigned hereby elects to purchase ________ Warrant
Shares (the "Common Stock"), of Authentidate Holding Corp., pursuant to the
terms of the attached Warrant, and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:
----------------------------------------
The Warrant Shares shall be delivered to the following:
----------------------------------------
----------------------------------------
----------------------------------------
(3) The undersigned agrees to comply with the prospectus delivery
requirements under the applicable securities laws in connection with any
transfer of the aforesaid Warrant Shares.
[PURCHASER]
By:
------------------------------
Name:
Title:
Dated:
---------------------------
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
whose address is
------------------------------------------------
.
---------------------------------------------------------------
---------------------------------------------------------------
Dated: ,
---------------- ---------
Holder's Signature:
--------------------------------
Holder's Address:
--------------------------------
--------------------------------
Signature Guaranteed:
-------------------------------------------
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
NOTICE OF EXERCISE OF COMMON STOCK WARRANT
PURSUANT TO CASHLESS EXERCISE PROVISIONS
To: Authentidate Holding Corp.
Aggregate Price of Warrant Before Exercise: $_______
Aggregate Price Being Exercised: $______
Exercise Price: $______ per share
Number of Shares of Common Stock to be Issued Under this Notice: ________
Remaining Aggregate Price (if any) After Issuance: $_______
Gentlemen:
The undersigned, registered Holder of the Warrant delivered herewith,
hereby irrevocably exercises such Warrant for, and purchases thereunder, shares
of the Common Stock of Authentidate Holding Corp., as provided below.
Capitalized terms used herein, unless otherwise defined herein, shall have the
meanings given in the Warrant. The portion of the Exercise Price (as defined in
the Warrant) to be applied toward the purchase of Common Stock pursuant to this
Notice of Exercise is $_______, thereby leaving a remaining Exercise Price (if
any) equal to $________. Such exercise shall be pursuant to the cashless
exercise provisions of Section 3 of the Warrant; therefore, Holder makes no
payment with this Notice of Exercise. The number of shares to be issued pursuant
to this exercise shall be determined by reference to the formula in Section 3 of
the Warrant which, by reference to Section 3, requires the use of the high and
low trading price of the Company's Common Stock on the Trading Day preceding the
date of such election. The high and low trading price of the Company's Common
Stock has been determined by Holder to be $______ and $_________, respectively,
which figure is acceptable to Holder for calculations of the number of shares of
Common Stock issuable pursuant to this Notice of Exercise. Holder requests that
the certificates for the purchased shares of Common Stock be issued in the name
of _________________________ and delivered to _________________________________.
To the extent the foregoing exercise is for less than the full Aggregate Price
of the Warrant, a replacement Warrant representing the remainder of the
Aggregate Price (and otherwise of like form, tenor and effect) shall be
delivered to Holder along with the share certificate evidencing the Common Stock
issued in response to this Notice of Exercise.
[Purchaser]
By:
------------------------------------------
Name:
Title:
Date:
NOTE
The execution to the foregoing Notice of Exercise must exactly correspond
to the name of the Holder on the Warrant.
