Exhibit 10.72

 

 

 

 

 

 

 

 

 

iSign Solutions Inc.

 

 

 

 

 

 

Note and Warrant Purchase Agreement

 

 

 

 

 

 

 

 

 

 

Dated as of

 

____________, 2016

 

 

 

 

 

 

 
 

 

TABLE OF CONTENTS

 

      Page         1 Purchase and Sale of the Notes and Warrants 2   1.1
Authorization of Issuance of the Notes and Warrants. 2   1.2 Purchase and Sale
of the Initial Closing Notes and Initial Closing Warrants. 2   1.3 Purchase and
Sale of Additional Notes and Additional Warrants 2   1.4 Use of Proceeds 2   1.5
Initial Closing 3   1.6 Delivery 3   1.7 Subsequent Closings 3         2
Representations and Warranties of the Company 3   2.1 Organization, Standing and
Power 3   2.2 Certificate of Incorporation and Bylaws 4   2.3 Power; Authority
and Enforceability 4   2.4 Capitalization 4   2.5 Authorization; Consents 5  
2.6 Absence of Conflicts 5   2.7 Compliance with All Securities Laws; Offering
Exemption 5   2.8 Governmental Consents 5   2.9 SEC Reports; Disclosure 6   2.10
Financial Statements 6   2.11 Disclosure 6         3 Representations and
Warranties of each Purchaser 6   3.1 Organization and Qualification 6   3.2
Authorization and Enforceability 7   3.3 Purchase Entirely for Own Account 7  
3.4 Access to Information 7   3.5 Investment Experience 7   3.6 Accredited
Investor 7   3.7 Restricted Securities 7   3.8 Legends 8   3.9 No General
Solicitation 8         4 Conditions to Closing; Covenants of Company 8   4.1
Conditions of Purchasers’ Obligations at Closing 8   4.2 Conditions of Initial
Purchasers’ Obligations at the Initial Closing 9   4.3 Conditions of Additional
Purchasers’ Obligations at any Applicable Subsequent Closing 9   4.4 Conditions
to Obligations of the Company 9   4.5 Reservation of Stock 9   4.6 Restrictions
on Certain Indebtedness 9   4.7 Participation Rights to Future Issuances 10    
    5 Amendment and Waiver 11   5.1 Requirements 11   5.2 Copies of Amendments,
Waivers and Consents 11   5.3 Binding Effect, Etc 11   5.4 Notes Held by Issuer,
Etc 11

 

 
 

 

6 Miscellaneous 11   6.1 Governing Law 11   6.2 Survival 12   6.3 Successors and
Assigns 12   6.4 Entire Agreement 12   6.5 Notices, etc 12   6.6 Severability 12
  6.7 Counterparts 12   6.8 No Joint Venture or Partnership 12   6.9 Expenses 12
  6.10 Waiver of Jury Trial 13   6.11 Further Assurances 13   6.12 Delays or
Omissions 13   6.13 Heading; References 13

 

Schedule A - Initial Purchasers Schedule B - Form of Unsecured Convertible
Promissory Note Exhibit A - Additional Purchasers Exhibit B - Form of Warrant

 

-ii-
 

 

iSign Solutions Inc.

 

Note and Warrant Purchase Agreement

 

This Note Purchase Agreement (the “Agreement”) is dated as of           , 2016,
by and among iSign Solutions Inc., a Delaware corporation (the “Company”), and
the purchasers listed on Schedule A attached hereto, each of which is herein
referred to as an “Initial Purchaser” and the purchasers listed from time to
time on Schedule B attached hereto, each of which is herein referred to as an
“Additional Purchaser” and, collectively, as the “Purchasers”).

 

W I T N E S S E T H:

 

WHEREAS, subject to the terms and conditions set forth herein, the Company
desires to issue and sell to each Initial Purchaser on the Initial Closing Date
(as defined below) (i) an unsecured convertible promissory note (each an
“Initial Closing Note” and, collectively, the “Initial Closing Notes”) and (ii)
a warrant (each an “Initial Closing Warrant,” and, collectively, the “Initial
Closing Warrants”) to purchase such number of shares of Common Stock of the
Company as determined by dividing (x) 50% of the aggregate principal amount of
the Initial Closing Note purchased by such Initial Purchaser, by (y) the
exercise price of $1.625 per share (the “Warrant Exercise Price”), and the
Initial Purchasers desire to purchase the Initial Closing Notes and the Initial
Closing Warrants from the Company on the terms and conditions set forth herein;
provided, however, that the aggregate original principal amount of Initial
Closing Notes issued and sold at the Initial Closing shall not be less than

$500,000;

 

WHEREAS, subject to the terms and conditions set forth herein, the Company
desires to issue and sell to each Additional Purchaser on the applicable
Subsequent Closing Date (as defined below) (i) an unsecured convertible
promissory note (each, an “Additional Note” and, collectively, the “Additional
Notes” and, together with the Initial Closing Notes, the “Notes”) and (ii) a
warrant (each an “Additional Warrant,” and, collectively, the “Additional
Warrants” and, together with the Initial Closing Warrants, the “Warrants”) to
purchase such number of shares of Common Stock of the Company as determined by
dividing (x) 50% of the aggregate principal amount of the Additional Note
purchased by such Additional Purchaser, by (y) the Warrant Exercise Price, and
the Additional Purchasers desire to purchase such Additional Notes and
Additional Warrants from the Company on the terms and conditions set forth
herein; provided, however, that the aggregate original principal amount of Notes
that the Company may sell pursuant to this Agreement shall not be more than
$2,000,000; and

 

WHEREAS, the board of directors of the Company (the “Board”) and the special
committee of the Board (the “Special Committee”) have approved the execution and
delivery of this Agreement, the Notes and all ancillary agreements related
hereto, and the transactions contemplated hereby.

 

 -1- 

 

 

NOW, THEREFORE, in consideration of the premises and agreements contained in
this Agreement, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, THE PARTIES HEREBY AGREE AS
FOLLOWS:

 

1.            Purchase and Sale of the Notes and Warrants.

 

1.1         Authorization of Issuance of the Notes and Warrants.

 

(a)          Subject to the terms and conditions of this Agreement, on or prior
to the Initial Closing Date, the Company shall have authorized the issuance and
sale to the Initial Purchasers of (a) the Initial Closing Notes in the form
attached hereto as Exhibit A and (b) the Initial Closing Warrants in the form
attached hereto as Exhibit B.

 

(b)          Subject to the terms and conditions of this Agreement, on or prior
to any Subsequent Closing Date, the Company shall have authorized the issuance
and sale to the Additional Purchasers of (a) all Additional Notes to be issued
at any Subsequent Closing (as defined below) in the form attached hereto as
Exhibit A and (b) all Additional Warrants to be issued at any Subsequent Closing
in the form attached hereto as Exhibit B.

 

1.2          Purchase and Sale of the Initial Closing Notes and Initial Closing
Warrants. Subject to the terms and conditions of this Agreement, each Initial
Purchaser, severally and not jointly, hereby agrees to purchase at the Initial
Closing (as defined below), and the Company hereby agrees to issue and sell to
such Initial Purchaser at the Initial Closing, (i) an Initial Closing Note,
dated as of the date of the Initial Closing Date, in the aggregate original
principal amount equal to the dollar amount set forth opposite such Initial
Purchaser’s name under the heading “Initial Closing Principal Amount” on
Schedule A hereto and (ii) an Initial Closing Warrant to purchase shares of
Common Stock of the Company as set forth opposite such Initial Purchaser’s name
under the heading “Initial Closing Warrant Shares” on Schedule A hereto, in
exchange for cash (or such other consideration permitted by Section 1.6) in the
amount set forth opposite such Initial Purchaser’s name under the heading
“Initial Closing Principal Amount” on Schedule A.

 

1.3          Purchase and Sale of Additional Notes and Additional Warrants. At
any time and from time to time, one or more Additional Purchasers may purchase
at one or more Subsequent Closings, Additional Notes and Additional Warrants,
the aggregate purchase price of which, together with the aggregate purchase
price of the Initial Closing Notes and the Initial Closing Warrants, shall not
exceed $2,000,000. Subject to the terms and conditions of this Agreement, each
Additional Purchaser, severally and not jointly, hereby agrees to purchase at
the applicable Subsequent Closing, and the Company hereby agrees to issue and
sell to such Additional Purchaser at the applicable Subsequent Closing, (i) an
Additional Note, dated as of the date of the applicable Subsequent Closing Date,
in the aggregate original principal amount equal to the dollar amount set forth
opposite such Additional Purchaser’s name under the heading “Subsequent Closing
Principal Amount” on Schedule B hereto and (ii) and Additional Warrant to
purchase shares of Common Stock of the Company as set forth opposite such
Additional Purchaser’s name under the heading “Subsequent Closing Warrant
Shares” on Schedule B hereto, in exchange for cash in the amount set forth
opposite such Additional Purchaser’s name under the heading “Subsequent Closing
Principal Amount” on Schedule B. Schedule B attached hereto shall be amended
from time to time concurrent with each Subsequent Closing to include the names
of the Additional Purchasers purchasing Additional Notes and Additional Warrants
at such Subsequent Closing, as well as the purchase price of the Additional
Notes and Additional Warrants.

 

1.4          Use of Proceeds. The Company agrees to use the net proceeds from
the sale and issuance of the Notes and Warrants pursuant to this Agreement for
working capital and general corporate purposes.

 

 -2- 

 

 

1.5          Initial Closing. The purchase and sale of the Initial Closing Notes
and Initial Closing Warrants will take place at the offices of Pillsbury
Winthrop Shaw Pittman LLP, 1540 Broadway, New York, New York 10036 on the date
hereof, or at such other time and place the Company and a majority-in-interest
of the Initial Purchasers shall mutually agree, either orally or in writing
(which time and place are designated as the “Initial Closing”). The date of the
Initial Closing is referred to herein as the “Initial Closing Date.”

 

1.6          Delivery. At the Initial Closing, the Company will deliver to each
Initial Purchaser (a) an Initial Closing Note in the aggregate original
principal amount equal to the dollar amount set forth opposite such Initial
Purchaser’s name under the heading “Initial Closing Principal Amount” on
Schedule A attached hereto, (b) an Initial Closing Warrant to purchase shares of
Commons Stock of the Company as set forth opposite such Initial Purchaser’s name
under the heading “Initial Closing Warrant Shares” on Schedule A attached hereto
and (c) this Agreement, executed by the Company and the Initial Purchasers. At
the Initial Closing, each Initial Purchaser shall deliver to the Company the
amount set forth opposite such Initial Purchaser’s name under the heading
“Initial Closing Principal Amount” on Schedule A hereto by any combination of
(i) bank check, (ii) personal check, (iii) wire transfer of immediately
available funds to such account as the Company designates or (iv) if applicable,
surrender to the Company for exchange on a dollar for dollar, principal amount
for principal amount basis, in whole but not in part, one or more unsecured
demand promissory notes of the Company previously issued (and outstanding
immediately prior to giving effect to the Initial Closing) (the “Existing
Notes”), and this Agreement, executed by such Initial Purchaser. Each Initial
Purchaser surrendering an Existing Note pursuant hereto (a) shall receive cash
for accrued and unpaid interest on the principal amount of the Existing Note as
of the Initial Closing Date and (b) hereby acknowledges and agrees that,
notwithstanding any provisions of the Existing Note, the Existing Note tendered
to the Company for exchange is automatically cancelled as of the Initial Closing
Date.

 

1.7          Subsequent Closings. Subsequent Closings shall take place at the
offices of Pillsbury Winthrop Shaw Pittman LLP, 1540 Broadway, New York, New
York 10036, on such date and at such time as the Company shall determine (each,
a “Subsequent Closing” and, collectively, the “Subsequent Closings” and,
together with the Initial Closing, individually, a “Closing” and, collectively,
the “Closings”). The date of each applicable Subsequent Closing is referred to
herein as a “Subsequent Closing Date.” At each Subsequent Closing, the Company
shall deliver to each Additional Purchaser (a) an Additional Note, dated as of
such applicable Subsequent Closing Date, in an aggregate original principal
amount equal to the dollar amount set forth opposite such Additional Purchaser’s
name under the heading “Subsequent Closing Principal Amount” on Schedule B
hereto, (b) an Additional Warrant to purchase shares of Common Stock of the
Company as set forth opposite such Additional Purchaser’s name under the heading
“Subsequent Closing Warrant Shares” on Schedule B attached hereto and (c) this
Agreement, executed by the Company and the Additional Purchasers. The Company
shall update Schedule B from time to time as necessary upon each Subsequent
Closing. At each Subsequent Closing, each Additional Purchaser shall deliver to
the Company the amount set forth opposite such Additional Purchaser’s name under
the heading “Subsequent Closing Principal Amount” on Schedule B hereto, by any
combination of (i) bank check, (ii) personal check or (iii) wire transfer of
immediately available funds to such account as the Company designates.

 

2.            Representations and Warranties of the Company. The Company hereby
represents and warrants to the each Purchaser as of the Initial Closing Date and
in the case of any Additional Purchasers as of such Subsequent Closing Date as
follows:

 

2.1         Organization, Standing and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as contemplated to be
conducted. The Company is duly qualified to transact business as a foreign
corporation and is in good standing in any jurisdiction in which the failure to
do so would have a material adverse effect on its business, properties,
prospects or condition (financial or otherwise).

 

 -3- 

 

 

2.2         Certificate of Incorporation and Bylaws. The Company has made
available to such Purchaser true, correct, and complete copies of the
certificate of incorporation of the Company as in effect on the date of this
Agreement (the “Certificate of Incorporation”) and the Company’s bylaws as in
effect on the date of this Agreement (the “Bylaws”).

 

2.3         Power; Authority and Enforceability. The Company has all requisite
corporate power and authority to execute and deliver this Agreement, the Notes
and the Warrants (each, a “Transaction Document” and, collectively, the
“Transaction Documents”) and to perform fully its obligations hereunder and
thereunder. The Company has all requisite corporate power and authority to issue
and sell the Notes and the Warrants to the Purchasers hereunder. The execution
and delivery of the Transaction Documents and the consummation of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Company. The Transaction Documents have been
duly executed and delivered by the Company and constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors’ rights and remedies generally and subject, as to
enforceability, to general principles of equity, regardless of whether
enforceability is considered in a proceeding at law or in equity.

 

2.4          Capitalization.

 

(a)          Immediately prior to the date hereof, the Company is authorized to
issue 2,045,000,000 shares of capital stock of which (i) 2,000,000,000 are
designated as Common Stock, of which [5,498,246] shares are issued and
outstanding and (ii) 45,000,000 are designated as Preferred Stock, of which (A)
2,000,000 are designated as Series A-1 Cumulative Convertible Preferred Stock of
the Company of which none are issued and outstanding, (B) 14,000,000 of which
are designated as Series B Participating Convertible Preferred Stock of which
none are issued and outstanding, (C) 10,000,000 of which are designated as
Series C Participating Convertible Preferred Stock of which none are issued and
outstanding, (D) 10,000,000 of which are designated as Series D-1 Convertible
Preferred Stock of which none are issued and outstanding and (E) 9,000,000 of
which are designated as Series D-2 Convertible Preferred Stock of which none are
issued and outstanding. Immediately prior to the date of this Agreement, 3,200
shares of Common Stock are reserved for issuance under the Company’s 1999 Stock
Option Plan, under which no shares are subject to outstanding options and no
further grants will be made; 5,600 shares of Common Stock are reserved for
issuance under the Company’s 2009 Stock Compensation Plan, under which 100
shares are subject to outstanding awards and 5,334 shares are available for
grant; 120,000 shares of Common Stock are reserved for issuance under the
Company’s 2011 Stock Compensation Plan, under which 71,427 shares are subject to
outstanding awards and 48,523 shares are available for grant; and no shares are
subject to outstanding non-plan awards. An aggregate of 1,755,559 shares of
Common Stock are reserved for issuance upon the exercise of warrants and other
convertible securities outstanding on the date hereof. Immediately prior to the
date of this Agreement, the Company has no other shares of capital stock
authorized, issued, outstanding or reserved.

 

(b)         As of the date hereof (and after giving effect to the conversion or
exchange of the Existing Notes on the Initial Closing Date), other than as set
forth in Section 2.4(a) or the Notes issued under this Agreement, (i) there are
no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital stock
of the Company, or arrangements by which the Company is or may become bound to
issue additional shares of capital stock, nor are any such issuances or
arrangements contemplated; (ii) the Company has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity securities
or any interests therein or to pay any dividend or make any distribution in
respect thereof; and (iii) the Company has not reserved any shares of capital
stock for issuance pursuant to any stock option plan or similar arrangement.

 

 -4- 

 

 

2.5         Authorization; Consents. The execution, delivery and performance by
the Company of this Agreement and the other Transaction Documents, the sale,
issuance and delivery of the Notes and Warrants, and the performance of all of
the obligations of the Company under this Agreement and each of the other
Transaction Documents have been authorized by the Company’s Board and the
Special Committee, and no other corporate action on the part of the Company and
no other corporate or other approval or authorization is required on the part of
the Company or any other individual, corporation, limited liability company,
partnership, trust, incorporated or unincorporated organization, joint venture,
joint stock company, or a government or any agency or political subdivision
thereof or other entity of any kind (each a “Person”), by Law or otherwise, in
order to make this Agreement and the other Transaction Documents the valid,
binding and enforceable obligations (subject to (i) Laws of general application
relating to bankruptcy, insolvency, and the relief of debtors, and (ii) rules of
Law governing specific performance, injunctive relief, or other equitable
remedies) of the Company, as the case may be. “Law” shall mean any foreign,
federal, state or local law, statute, rule, regulation, ordinance, code,
directive, writ, injunction, decree, judgment or order applicable to the
Company.

 

2.6         Absence of Conflicts. The Company is not in violation of or default
under any provision of its Certificate of Incorporation or its Bylaws. The
execution, delivery, and performance of, and compliance with the Transaction
Documents, and the consummation of the transactions contemplated hereby and
thereby, have not and will not:

 

(a)         violate, conflict with or result in a breach of any provision of or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, any of the terms, conditions or
provisions of the Company’s Certificate of Incorporation or its Bylaws or any
Material Contract (as defined below); or

 

(b)          violate any Law of any court or federal, state, county or local
government or any other governmental, regulatory or administrative agency or
authority which is applicable to the Company or any of its assets, properties or
businesses.

 

“Material Contract” shall mean any written and oral contract, agreement, deed,
mortgage, lease, sublease, license, instrument, note, commitment, commission,
undertaking, arrangement or understanding (i) which by its terms involve, or
would reasonably be expected to involve, aggregate payments by or to the Company
during any 12-month period in excess of $50,000, (ii) the breach of which by the
Company or its subsidiary would be material to the Company or its subsidiary or
(iii) which is required to be filed as an exhibit by the Company with the SEC
pursuant to Items 601(b)(4) and 601(b)(10) of Regulation S- K promulgated by the
SEC.

 

2.7          Compliance with All Securities Laws; Offering Exemption. Assuming
the truth and accuracy of the each Purchaser’s representations and warranties
set forth in Section 3 hereof, (i) the sale of the Notes and Warrants is exempt
from registration under the Securities Act, and will be registered or qualified
(or exempt from registration or qualification) under applicable state securities
and “blue sky” Laws, as currently in effect, and (ii) the issuance and delivery
of the Notes and Warrants, and the shares of Common Stock issuable upon
conversion and exercise, respectively, thereof (collectively, the “Securities”),
as contemplated by this Agreement, does not violate or breach any applicable
securities laws.

 

2.8          Governmental Consents. No consent, approval, qualification, order
or authorization of, or filing with, any local, state or federal governmental
authority is required on the part of the Company in connection with the
Company’s valid execution, delivery or performance of this Agreement or the
issuance and sale of the Securities, except such filings as have been made prior
to the Initial Closing, any notices of sale required to be filed with the
Securities and Exchange Commission under Regulation D of the Securities Act of
1933, as amended (the “Securities Act”), or such post-closing filings as may be
required under applicable state securities laws, which will be timely filed
within the applicable periods thereafter.

 

 -5- 

 

 

2.9          SEC Reports; Disclosure. The Company has filed all required forms,
reports and documents required to be filed by the Company with the Securities
and Exchange Commission (the “SEC”) since December 31, 2015, each of which has
complied in all material respects with all applicable requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and the rules and regulations promulgated thereunder, each as
in effect on the date such forms, reports and documents were filed. The Company
has made available to each Purchaser, in the form filed with the SEC (including
any amendments thereto) its (i) Annual Report on Form 10-K for the year ended
December 31, 2015; (ii) Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 2016 and June 30, 2016; (iii) Current Reports on Form 8-K dated
January 6 and 25, 2016 and May 19, 2016 and (iv) all definitive proxy statements
relating to the Company’s meeting of shareholders (whether annual or special)
held since December 31, 2015 (collectively, the “SEC Reports”). None of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading.

 

2.10        Financial Statements. Included in the SEC Reports are the audited
financial statements of the Company as at and for the years ended December 31,
2015 and 2014 and the unaudited financial statements of the Company for the
fiscal quarters ended March 31, 2016 and June 30, 2016 (the “Financial
Statements”). The Financial Statements have been prepared in accordance with
GAAP and fairly present the financial condition and operating results of the
Company and its subsidiary on a consolidated basis as of the dates, and for the
periods, indicated therein, except that the unaudited financial statements as at
and for the quarters ended March 31, 2016 and June 30, 2016 are subject to
normal year-end adjustments and do not contain all notes required under GAAP. As
of the date hereof (and after giving effect to the conversion or exchange of the
Existing Notes on the Initial Closing Date), the Company has no liabilities,
obligations or commitments of any nature (whether accrued, absolute, contingent,
unliquidated or otherwise, due or to become due and regardless of when
addressed) other than (a) liabilities that have arisen in the ordinary course of
business consistent with past practice since the date of the Company’s most
recent quarterly report on Form 10-Q; (b) liabilities under the Notes issued
pursuant to this Agreement, and (c) obligations to perform after the date hereof
any contracts or agreements which have been disclosed or which are not required
to be disclosed in the SEC Reports because such contracts and agreements are not
material to the Company.

 

2.11        Disclosure. The Company understands and confirms that such Purchaser
will rely on the foregoing representations in purchasing securities of the
Company. No representation or warranty by the Company contained in this
Agreement contains any untrue statement of a material fact or omits to state a
material fact in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Company
acknowledges and agrees that such Purchaser does not make and has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3 hereof.

 

3.           Representations and Warranties of each Purchaser. As of the Initial
Closing Date or the applicable Subsequent Closing Date, as the case may be, such
Purchaser severally and not jointly hereby represents and warrants to the
Company that:

 

3.1       Organization and Qualification. Such Purchaser is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
incorporation or organization to carry on its business as it is now being
conducted or proposed to be conducted.

 

 -6- 

 

 

3.2          Authorization and Enforceability. Such Purchaser has all requisite
corporate power and authority to enter into the Transaction Documents, as
applicable. The execution, delivery and performance by such Purchaser of the
Transaction Documents to which it is a party, and the performance of all of the
obligations of such Purchaser under each of such Transaction Documents have been
duly and validly authorized, and no other action, approval or authorization is
required on the part of such Purchaser in order to make the Transaction
Documents the valid, binding and enforceable obligations (subject to (i) Laws of
general application relating to bankruptcy, insolvency, and the relief of
debtors, and (ii) rules of Law governing specific performance, injunctive
relief, or other equitable remedies) of such Purchaser. The Transaction
Documents constitute legal, valid and binding obligations of such Purchaser,
enforceable against it in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors’ rights and remedies
generally and subject, as to enforceability, to general principles of equity,
regardless of whether enforceability is considered in a proceeding at law or in
equity.

 

3.3         Purchase Entirely for Own Account. The Securities will be acquired
for investment for such Purchaser’s own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and such
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same. Such Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation in any of the Securities to such person or to any third person.

 

3.4         Access to Information. Such Purchaser has been given access to the
Company and has had an opportunity to ask questions and receive answers from the
Company regarding the Company’s business, prospects, properties and condition
(financial or otherwise) and the terms and conditions of the offering and sale
of the Securities. The foregoing, however, does not limit or modify in any
respect the representations and warranties of the Company in Section 2 or the
right of the Purchasers to rely thereon.

 

3.5         Investment Experience. Such Purchaser acknowledges that it is able
to fend for itself and bear the economic risk of its investment, including the
complete loss thereof, and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the
investment in the Securities. Such Purchaser has not been organized for the
purpose of acquiring the Securities.

 

3.6         Accredited Investor. Such Purchaser is an “accredited investor”
within the meaning of the Securities and Exchange Commission’s Rule 501 of
Regulation D as promulgated under the Securities Act.

 

3.7          Restricted Securities. Such Purchaser understands that the
Securities it is purchasing are characterized as “restricted securities” under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this connection,
such Purchaser is familiar with Rule 144 under the Securities Act, as presently
in effect, and understands the resale limitations imposed thereby and by the
Securities Act. Such Purchaser understands Rule 144 under the Securities Act is
not currently available for the sale of the Securities.

 

 -7- 

 

 

3.8          Legends. It is understood that the certificates evidencing the
Securities may bear one or all of the following legends:

 

(a)         “NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) IF REASONABLY
REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT. THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH
SECURITIES.”

 

(b)         Any legend required by the laws of any applicable state.

 

3.9         No General Solicitation. Such Purchaser acknowledges that the Notes
and Warrants were not offered to such Purchaser by means of: (a) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium, or broadcast over television or radio, or
(b) any other form of general solicitation or advertising.

 

4.            Conditions to Closing; Covenants of Company.

 

4.1          Conditions of Purchasers’ Obligations at Closing. The obligations
of such Purchaser under this Agreement are subject to the fulfillment, on or
prior to the date of such Closing, of each of the following conditions, any of
which may be waived in whole or in part in writing by such Purchaser:

 

(a)         The representations and warranties made by the Company in Section 2
shall be true and correct when made, and shall be true and correct on and as of
the Initial Closing and shall be true and correct in all material respects on
and as of any applicable Subsequent Closing Date, the with the same force and
effect as if they had been made on and as of the same date.

 

(b)         The Company shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or prior to the date of such Closing.

 

(c)         No material adverse effect on the Company’s business, properties,
prospects or condition (financial or otherwise) shall have occurred between the
date hereof and such Closing and the President and/or Chief Executive Officer of
the Company shall deliver to such Purchaser, if requested, at each such
applicable Closing a certificate stating that the conditions specified in
Sections 4.1(a), (b) and (c) have been fulfilled.

 

(d)         Except for the notices required or permitted to be filed after the
date of such Closing pursuant to applicable federal and state securities laws,
the Company shall have obtained all governmental approvals required in
connection with the lawful sale and issuance of the Securities.

 

(e)          At such applicable Closing, the sale and issuance by the Company,
and the purchase by the Purchaser, of the Securities shall be legally permitted
by all laws and regulations to which such Purchaser and/or the Company are
subject.

 

(f)          At such applicable Closing, the Company shall have delivered to the
Purchaser, if requested, a certificate executed by the Secretary of the Company
dated as of the date of such Closing certifying with respect to (i) a copy of
the Company’s Certificate of Incorporation and its Bylaws in effect on such date
and that the Company is not in violation of or default under any provision of
its Certificate of Incorporation or Bylaw as of and on the date of the Closing,
(ii) resolutions of (A) the Board of the Company and (B) the Special Committee,
each authorizing the transactions contemplated by this Agreement and the other
Transaction Documents.

 

 -8- 

 

 

4.2         Conditions of Initial Purchasers’ Obligations at the Initial
Closing. In addition to the conditions set forth in Section 4.1 hereof, the
obligations of each Initial Purchaser under Section 1.2 are subject to the
satisfaction by the Company on the Initial Closing Date of each of the following
condition:

 

(a)          The Company shall deliver to each Initial Purchaser its respective
Initial Closing Note and Initial Closing Warrant.

 

4.3          Conditions of Additional Purchasers’ Obligations at any Applicable
Subsequent Closing. In addition to the conditions set forth in Section 4.1
hereof, the obligations of each Additional Purchaser under Section 1.3 are
subject to the satisfaction by the Company on each applicable Subsequent Closing
Date of the following conditions:

 

(a)          On or before any Subsequent Closing Date, the Company shall deliver
to each Additional Purchaser, a supplement to Schedule B reflecting the amount
of Additional Notes and Additional Warrants that the Company will issue to such
Additional Purchaser on such Subsequent Closing Date and the aggregate purchase
price therefor.

 

(b)          The Company shall deliver to the Additional Purchaser such
Additional Purchaser’s Additional Notes and Additional Warrants.

 

4.4         Conditions to Obligations of the Company. The Company’s obligation
to issue and sell the Notes and Warrants at any Closing is subject to the
fulfillment, to the Company’s reasonable satisfaction, on or prior to the date
of such applicable Closing, of the following conditions, any of which may be
waived in whole or in part by the Company:

 

(a)          The representations and warranties made by the each Purchaser in
Section 3 shall be true and correct when made, and shall be true and correct on
the date of such applicable Closing with the same force and effect as if they
had been made on and as of the same date.

 

(b)          Each Purchaser shall have delivered to the Company in accordance
with Section 1.6 or 1.7, as the case may be, the purchase price for the Notes
and Warrants being purchased pursuant hereto on such Closing.

 

4.5          Reservation of Stock. For so long as the Notes are outstanding
and/or the Warrants are exercisable, the Company covenants that it will (i)
reserve from its authorized and unissued Common Stock, a sufficient number of
shares to provide for the issuance of the Common Stock, upon conversion of the
Notes and exercise of the Warrants, and (ii) take all necessary steps, as
needed, to amend its Certificate of Incorporation to provide sufficient reserves
of shares of Common Stock issuable upon conversion of the Notes and the exercise
of the Warrants.

 

4.6          Restrictions on Certain Indebtedness. For so long as the Notes are
outstanding, the Company shall not, nor shall it permit any subsidiary to,
directly or indirectly (a) incur any indebtedness for borrowed money that ranks
senior or pari passu with the Notes or (b) declare or pay any dividend or
interest or make any other payment in respect to any securities (debt or equity)
that are subordinate to the Notes, except in the case of clause (a) or (b), with
the prior written consent of the Required Holders (as defined herein).

 

 -9- 

 

 

4.7          Participation Rights to Future Issuances.

 

(a)          For so long as the Notes are outstanding, subject to the terms and
conditions of this Section 4.7 and applicable securities laws, if the Company
proposes to offer or sell any New Securities (as defined below), the Company
shall first offer such New Securities to the Purchasers in accordance with the
terms hereof.

 

(b)         The Company shall give written notice (the “Offer Notice”) to each
Purchaser, stating (i) its bona fide intention to offer such New Securities,
(ii) the number of such New Securities to be offered, and (iii) the price and
terms, if any, upon which it proposes to offer such New Securities.

 

(c)          By notification to the Company within ten (10) days after the Offer
Notice is given, each Purchaser may elect to purchase or otherwise acquire, at
the price and on the terms specified in the Offer Notice, up to that portion of
such New Securities which equals the proportion of the principal amount of the
Notes purchased by such Purchaser bears to the total principal amount of Notes
sold by the Company pursuant to this Agreement (which, for avoidance of doubt,
shall be determined by dividing the aggregate original principal amount of Notes
purchased by such Purchaser pursuant to the terms of this Agreement by the
aggregate original principal amount of Notes issued by the Company to all the
Purchasers pursuant to this Agreement).

 

(d)          If all New Securities referred to in the Offer Notice are not
elected to be purchased or acquired by the Purchasers as provided in this
Section 4.7 then the Company may, during the one hundred eighty (180) day period
following the expiration of the period provided in the Offer Notice, offer and
sell the remaining unsubscribed portion of such New Securities to any Person or
Persons at a price not less than, and upon terms no more favorable to the
offeree than, those specified in the Offer Notice. If the Company does not enter
into a definitive agreement for the sale of the New Securities within such 180
day period, or if such transaction is not consummated within sixty (60) days of
the expiration of such 180 day period, the right provided hereunder shall be
deemed to be revived and such New Securities shall not be offered unless first
reoffered to the Purchasers in accordance with this Section 4.7.

 

(e)          Notwithstanding anything to the contrary, the pro rata
participation right provided in this Section 4.7 shall not be applicable to (i)
Exempted Securities (as defined below) or (ii) New Securities issued in a public
offering pursuant to the Securities Act.

 

(f)          For purposes of this Agreement, the term “New Securities” means any
equity securities of the Company (including Common Stock), as well as rights,
options, or warrants to purchase such equity securities, or securities of any
type whatsoever (including evidences of indebtedness) that are, or may become,
convertible or exchangeable into or exercisable for such equity securities. For
purposes of this Agreement, the term “Exempted Securities” means (i) shares of
Common Stock, options or convertible securities issued by reason of a dividend,
stock split, split-up or other distribution on shares of Common Stock; (ii)
shares of common stock or options issued to employees or directors of, or
consultants or advisors to, the Company or any of its subsidiaries pursuant to a
plan, agreement or arrangement approved by the Board; (iii) shares of Common
Stock or convertible securities issued upon the exercise of options or shares of
Common Stock issued upon the conversion or exchange of convertible securities,
in each case provided such issuance is pursuant to the terms of such option or
convertible security; (iv) shares of Common Stock, options or convertible
securities issued to banks or other financial institutions or to investment
banks pursuant to a financing approved by the Board (including shares underlying
any such options or convertible securities); (v) shares of Common Stock, options
or convertible securities issued to suppliers or third party service providers
in connection with the provision of goods or services pursuant to transactions
approved by the Board; (vi) shares of Common Stock, options or convertible
securities issued pursuant to the acquisition of another company by the Company
by merger, purchase of substantially all of the assets or other reorganization
or to a joint venture agreement, provided that such issuances are approved by
the Board; or (vii) shares of Common Stock, options or convertible securities
issued in connection with a technology license, development agreement or other
similar agreement or strategic partnership approved by the Board.

 

 -10- 

 

 

(g)          The right of first offer set forth in this Section 4.7 shall
terminate with respect to any Purchaser who fails to purchase, in any
transaction subject to this Section 4.7, all of such Purchaser’s pro rata amount
of the New Securities allocated. Following any such termination, such Purchaser
shall no longer be deemed a “Purchaser” for any purpose of this Section 4.7.

 

5.          Amendment and Waiver.

 

5.1          Requirements. The Transaction Documents may be amended, and the
observance of any term hereof or thereof may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders (as defined below), except that no such amendment or waiver
may, without the written consent of each Purchaser at the time outstanding
affected thereby, (i) reduce the principal amount or interest rate or change the
method of computation of interest (including with respect to the amount of cash)
in the Notes, (ii) change the percentage of the outstanding principal amount of
the Notes required to consent to any such amendment or waiver under this Section
5.1or (iii) amend this Section 5.1. “Required Holders” means at any time, the
holders of a majority of the outstanding principal amount of the Notes
(exclusive of Notes then owned by the Company), with reference to the aggregate
principal amount of the Notes listed for each Purchaser on the schedules of this
Agreement.

 

5.2          Copies of Amendments, Waivers and Consents. The Company will
deliver executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 5 to each Purchaser of
outstanding Notes and Warrants promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the requisite
Purchasers.

 

5.3          Binding Effect, Etc.. Any amendment or waiver consented to as
provided in this Section 5 applies equally to all Purchasers and is binding upon
them and upon each Additional Purchaser and upon the Company without regard to
whether such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant,
agreement, Event of Default (as defined in the Notes) not expressly amended or
waived or impair any right consequent thereon. No course of dealing between the
Company and any Purchaser or any delay in exercising any rights under this
Agreement or any Note or Warrant shall operate as a waiver of any rights of any
Purchaser. As used herein, the term “Transaction Documents” and references
thereto shall mean the Transaction Documents, or any one of them, as they or it
may from time to time be amended or supplemented.

 

5.4          Notes Held by Issuer, Etc.. Solely for the purpose of determining
whether the requisite percentage of the aggregate principal balance of Notes
then outstanding approved or consented to any amendment, waiver or consent to be
given under the Transaction Documents, or have directed the taking of any action
provided herein or therein to be taken upon the direction of the Purchasers of a
specified percentage of the aggregate principal balance of Notes then
outstanding, Notes directly or indirectly owned by the Company shall be deemed
not to be outstanding.

 

 -11- 

 

 

6.          Miscellaneous.

 

6.1          Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflict of laws provisions thereof. Each of the parties hereto hereby
irrevocably consents to the exclusive jurisdiction of the courts of the State of
Delaware and of any federal court located therein in connection with any suit,
action or other proceeding arising out of or relating to the Transaction
Documents and waives any objection to venue in the State of Delaware. Process in
any such suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction or any such court. Without
limiting the foregoing, each party agrees that service of process on such party
as provided in Section 6.5 shall be deemed effective service of process on such
party.

 

6.2          Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by the Purchasers and the
Closings of the transactions contemplated hereby indefinitely.

 

6.3          Successors and Assigns. The Company may not assign its rights or
obligations under the Transaction Documents without the prior written consent of
the Purchasers. Subject to the foregoing sentence and the restrictions on
transfer described in the Notes and Warrants, the provisions hereof and of the
other Transaction Documents shall inure to the benefit of, and be binding upon,
the successors, assigns, heirs, executors and administrators of the parties
hereto and thereto.

 

6.4          Entire Agreement. This Agreement (including the Schedules and
Exhibits attached hereto) and the Notes and Warrants constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.

 

6.5          Notices, etc.. All notices and other communications required or
permitted hereunder shall be effective upon receipt, shall be in writing, and
may be delivered in person, by fax, electronic mail, overnight delivery service
or United States mail, in which event they may be mailed by first-class,
certified or registered, postage prepaid, addressed (a) if to a Purchaser, at
such Purchaser’s address and electronic mail address as set forth on its
signature page hereto, or to such other address or electronic mail address as
such Purchaser shall have furnished to the Company in writing, or (b) if to the
Company, at its address and electronic mail address set forth on its signature
page hereto, or at such other address or electronic mail address as the Company
shall have furnished to the parties hereto in writing.

 

6.6          Severability. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

6.7          Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall be deemed to constitute one instrument. Any signature page delivered by a
fax machine or email shall be binding to the same extent as an original
signature page, with regard to any agreement subject to the terms hereof or any
amendment thereto. Any party who delivers such a signature page agrees to
deliver promptly an original counterpart to each party to whom the faxed or
emailed signature page was sent.

 

6.8          No Joint Venture or Partnership. The relationship between the
Company and each Purchaser is a debtor and creditor relationship and not
fiduciary in nature, nor is the relationship to be construed as creating any
partnership or joint venture between such Purchaser and the Company.

 

6.9          Expenses. Regardless of whether the Initial Closing or any
Subsequent Closing is consummated, except as otherwise expressly provided in the
Notes, each party to this Agreement shall bear all reasonable costs, fees and
expenses it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement and the other Transaction Documents.

 

 -12- 

 

 

6.10          Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW WHICH CANNOT BE WAIVED, EACH PURCHASER AND THE COMPANY HEREBY WAIVE, AND
COVENANT THAT NEITHER THE COMPANY NOR SUCH PURCHASER WILL ASSERT, ANY RIGHT TO
TRIAL BY JURY ON ANY ISSUE IN ANY PROCEEDING, WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE, IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
SUBJECT MATTER HEREOF OR THEREOF OR IN ANY WAY CONNECTED WITH, RELATED OR
INCIDENTAL TO THE DEALINGS OF SUCH PURCHASER AND THE COMPANY HEREUNDER OR
THEREUNDER, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER
IN TORT OR CONTRACT OR OTHERWISE. The Company acknowledges that it has been
informed by such Purchaser that the provisions of this Section 6.10 constitute a
material inducement upon which such Purchaser is relying and will rely in
entering into this Agreement. Such Purchaser or the Company may file an original
counterpart or a copy of this Section 6.10 with any court as written evidence of
the consent of such Purchaser and the Company to the waiver of the right to
trial by jury.

 

6.11          Further Assurances. At any time or from time to time after any
Closing, the Company, on the one hand, and each Purchaser, on the other hand,
agree to cooperate with each other, and at the request of the other party, to
execute and deliver any further instruments or documents and to take all such
further action as the other party may reasonably request in order to evidence or
effectuate the consummation of the transactions contemplated hereby relating to
the purchase contemplated herein and to otherwise carry out the intent of the
parties hereunder.

 

6.12          Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such nonbreaching or nondefaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring.

 

6.13          Heading; References. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Agreement.
Except as otherwise indicated, all references herein to Sections refer to
Sections hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 -13- 

 

 

IN WITNESS WHEREOF, the parties have caused this Note and Warrant Purchase
Agreement to be duly executed and delivered by their proper and duly authorized
officers.

 

  Company:       ISIGN SOLUTIONS INC.         By:           Name:     Title:  

 

  Address: 2025 Gateway Place, Suite 485     San Jose, California 95110        
Email: ir@isignnow.com

 

[Signature Page to Note and Warrant Purchase Agreement]

 

 
 

 

  Purchaser:                     By:     Name:     Title:     Address:         
            Email:  

 

[Signature Page to Note and Warrant Purchase Agreement]

 

 
 

 

SCHEDULE A

 

 

NAME OF INITIAL PURCHASER

  INITIAL CLOSING PRINCIPAL AMOUNT   INITIAL CLOSING WARRANT SHARES           

 

  $   $             

Total

  $            

 

SCHEDULE A

 

 
 

 

SCHEDULE B

 

 

NAME OF ADDITIONAL PURCHASER

  SUBSEQUENT CLOSING PRINCIPAL AMOUNT   SUBSEQUENT CLOSING WARRANT SHARES    
      

 

  $   $             

Total

  $            

 

SCHEDULE B

 

 
 

 

EXHIBIT A

 

Form Of Unsecured Convertible Promissory Note

 

 

 

EXHIBIT A

 

 
 

 

EXHIBIT B

 

Form Of Warrant

 

 

 

EXHIBIT B

 
 

 

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT, OR (B) IF REASONABLY REQUESTED BY THE
COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT. THESE SECURITIES AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

 

ISIGN SOLUTIONS INC.

 

COMMON STOCK PURCHASE WARRANT

 

Warrant No.     Dated:  

 

iSign Solutions Inc., a Delaware corporation (the “Company”), hereby certifies
that, for value received, _____________, or his, hers or its registered assigns
(the “Holder”), is entitled to purchase from the Company up to a total of
____________ shares of common stock, $0.01 par value per share (the “Common
Stock”), of the Company (each such share, a “Warrant Share” and all such shares,
the “Warrant Shares”) at an exercise price equal to $1.625 (as adjusted from
time to time as provided in Section 9, the “Exercise Price”) at any time from
October , 2016, and through and including October , 2019 (the “Expiration
Date”), and subject to the following terms and conditions. This Warrant (this
“Warrant”) is issued pursuant to that certain Note and Warrant Purchase
Agreement, dated October __, 2016, between the Company and the Holder.

 

1.           Definitions. In addition to the terms defined elsewhere in this
Warrant, capitalized terms that are not otherwise defined herein have the
meanings given to such terms in Annex D hereto.

 

2.           Registration of Warrant. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.

 

3.           Registration of Transfers. The Company shall register the transfer
of any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto as Annex A duly completed
and signed, to the transfer agent or to the Company at its address specified
herein, provided such transfer is made in accordance with all applicable federal
and state securities laws. Upon any such registration or transfer, a new warrant
to purchase Common Stock, in substantially the form of this Warrant (any such
new warrant, a “New Warrant”), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing the
remaining portion of this Warrant not so transferred, if any, shall be issued to
the transferring Holder. The acceptance of the New Warrant by the transferee
thereof shall be deemed the acceptance by such transferee of all of the rights
and obligations of a holder of a Warrant.

 

 
 

 

4.           Exercise and Duration of Warrants; Redemption.

 

(a)          General. This Warrant shall be exercisable in whole or in part by
the registered Holder at any time from the date hereof and through and including
the Expiration Date. At 5:30 p.m. New York City time on the Expiration Date, the
portion of this Warrant not exercised prior thereto shall be and become void and
of no value.

 

(b)          Redemption of Warrant. Beginning one (1) year from the original
date of issuance, the Company shall have the option, subject to the conditions
set forth herein, to redeem the Warrant in whole and not in part upon written
notice (“Notice of Redemption”) to the Holder; provided, that at the time of
delivery of such Notice of Redemption the last reported sale price of the
Company’s Common Stock for each of the ten (10) consecutive Trading Days ending
three (3) Trading Days prior to the date of the Notice of Redemption is at least
200% of the Exercise Price, as proportionately adjusted to reflect any stock
splits, stock dividends, combination of shares or like events. The Notice of
Redemption will be effective upon mailing in accordance with this Section and
such date may be referred to below as the “Notice Date.” Notice of Redemption
shall be mailed by first class mail, postage prepaid, by the Company not less
than thirty (30) days prior to the date fixed for redemption to the Holder to be
redeemed at its last address as it shall appear on the registration books. Any
notice mailed in the manner herein provided shall be conclusively presumed to
have been duly given whether or not the Holder received such notice.

 

(c)          Redemption Date and Redemption Price. The Notice of Redemption
shall state the date set for redemption, which date shall be not less than
thirty (30) days, from the Notice Date (the “Redemption Date”). The redemption
price to be paid to the Holder will be $0.001 for each share of Common Stock of
the Company to which the Holder would then be entitled upon exercise of the
Warrant being redeemed, as adjusted from time to time as provided herein (the
“Redemption Price”).

 

(d)          Exercise. Following the Notice Date, the Holder may exercise its
Warrant in accordance with Section 4 of this Warrant between the Notice Date and
5:00 p.m. New York City Time on the Redemption Date and such exercise shall be
timely if the form of election to purchase is duly executed and the Exercise
Price for the shares of Common Stock to be purchased are actually received by
the Company at its principal offices prior to 5:00 p.m. New York City Time on
the Redemption Date. On and after 5:00 p.m. New York City Time on the Redemption
Date, the obligation evidenced by the Warrant not effectively exercised shall be
deemed no longer outstanding, and all rights with respect thereto shall
forthwith cease and terminate, except only the right of the holder of the
Warrant subject to redemption to receive the Redemption Price for each share of
Common Stock to which he would be entitled if such Holder exercised the Warrant
upon receiving Notice of Redemption of the Warrant subject to redemption held by
such Holder.

 

 2 

 

 

(e)          Cashless Exercise. Notwithstanding anything contained in this
Warrant to the contrary, but only if a Registration Statement registering the
issuance or resale of the Warrant Shares under the Securities Act is not
effective or available for the issuance or resale of the Warrant Shares, the
Holder may, in its sole discretion, exercise this Warrant in whole or in part
and, in lieu of making the cash payment otherwise contemplated to be made to the
Company upon such exercise in payment of the Exercise Price, elect instead to
receive upon such exercise the “Net Number” of shares of Common Stock determined
according to the following formula (a “Cashless Exercise”):

 

  Net Number = (A x B) – (A x C)       B  

 

For purposes of the forgoing formula:

 

  A   = the total number of shares with respect to which this Warrant is then
being exercised.         B    = the weighted average price of the shares of
Common Stock (as reported by Bloomberg) on the date immediately preceding the
Date of Exercise (as defined below).         C    = the Exercise Price then in
effect for the applicable Warrant Shares at the time of such exercise.

 

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued.

 

5.           Delivery of Warrant Shares.

 

(a)          Other than as may be required in connection with registration of a
transfer of this Warrant, the Holder shall not be required to physically
surrender this Warrant unless this Warrant is being exercised in full. To effect
exercises hereunder, the Holder shall duly execute and deliver to the Company at
its address for notice set forth herein (or to such other address as the Company
may designate by notice in writing to the Holder), an Exercise Notice in the
form of Annex B hereto, along with the Warrant Share Exercise Log in the form of
Annex C hereto, and shall pay the Exercise Price, if applicable, multiplied by
the number of Warrant Shares that the Holder intends to purchase hereunder. The
Company shall promptly (but in no event later than three (3) Trading Days after
the Date of Exercise (as defined herein)) issue or cause to be issued and cause
to be delivered to or upon the written order of the Holder a certificate (or
book-entry form) for the Warrant Shares issuable upon such exercise. The Company
shall, upon request of the Holder, and subsequent to the date, if any, on which
a Registration Statement covering the resale of the Warrant Shares has been
declared effective by the SEC, use commercially reasonable efforts to deliver
Warrant Shares hereunder electronically, through book-entry with the Depository
Trust Corporation or another established clearing corporation performing similar
functions. A “Date of Exercise” for purposes of this Warrant, means the date on
which the Holder shall have delivered to the Company: (i) the Exercise Notice
(with the Warrant Exercise Log attached to it), appropriately completed and duly
signed and (ii) payment of the Exercise Price, if applicable, for the number of
Warrant Shares so indicated by the Holder to be purchased. If by the third
Trading Day after the Date of Exercise, the Company fails to deliver the
required number of Warrant Shares, the Holder will have the right to rescind the
exercise.

 

 3 

 

 

(b)          In the event that a Holder surrenders this Warrant following one or
more partial exercises, the Company shall, provided, that the applicable number
of Warrant Shares related to each such partial exercise has been delivered
pursuant to Section 5(a), cancel such surrendered Warrant and issue or cause to
be issued to the Holder, at the Company’s expense, a new Warrant evidencing the
right to purchase the remaining number of Warrant Shares.

 

(c)          The Company’s obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of
any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of Warrant Shares. 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 (or book-entry form) representing shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms
hereof.

 

6.           Charges, Taxes and Expenses. Issuance and delivery of certificates
for Warrant Shares upon exercise of this Warrant shall be made without charge to
the Holder for any issue or transfer tax, transfer agent fee or other incidental
tax or expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that (a) the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder and (b) Holder shall be
responsible for all income and other tax liability that may arise as a result of
holding or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.

 

 4 

 

 

7.            Replacement of Warrant. If this Warrant is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as
a result of a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the Company’s
obligation to issue the New Warrant.

 

8.            Reservation of Warrant Shares.

 

(a)          The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares that are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (after giving effect to the adjustments and
restrictions of Section 9, if any). The Company covenants that all Warrant
Shares so issuable and deliverable shall, upon issuance and the payment of the
applicable Exercise Price in accordance with the terms hereof, be duly and
validly authorized, issued and fully paid and non-assessable. The Company will
take all such action as may be necessary to assure that such shares of Common
Stock may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of any securities exchange or automated
quotation system upon which the Common Stock may be listed. The Company will
notify its transfer agent for the Common Stock of the reservation of shares of
Common Stock as required under this provision.

 

(b)          Insufficient Authorized Shares. If the Company does not have a
sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon exercise of this Warrant and
Warrants of like tenor at least a number of shares of Common Stock as shall from
time to time be necessary to effect the exercise of all of the Warrants of like
tenor then outstanding (an “Authorized Share Failure”), then the Company shall
promptly take all action reasonably necessary to increase the Company’s
authorized shares of Common Stock to an amount sufficient to allow the Company
to reserve the required amount for the Warrants of like tenor then outstanding.
Without limiting the generality of the foregoing sentence, as soon as
practicable after the date of the occurrence of an Authorized Share Failure, but
in no event later than ninety (90) days after the occurrence of such Authorized
Share Failure, the Company shall hold a meeting of its stockholders for the
approval of an increase in the number of authorized shares of Common Stock. In
connection with such meeting, the Company shall provide each stockholder with a
proxy statement and shall use commercially reasonable efforts to solicit its
stockholders’ approval of such increase in authorized shares of Common Stock and
to cause its Board of Directors to recommend to the stockholders that they
approve such proposal.

 

 5 

 

 

9.           Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9.

 

(a)          Stock Dividends and Splits. If at any time while this Warrant is
outstanding, the number of outstanding shares of Common Stock is increased by a
stock dividend payable in shares of Common Stock or by a split-up of shares of
Common Stock or other similar event, then, on the effective date thereof, the
number of shares issuable on exercise of each Warrant shall be increased in
proportion to such increase in outstanding shares and the then applicable
Exercise Price shall be correspondingly decreased, each in accordance with
Section 9(e).

 

(b)          Aggregation of Shares. If at any time while this Warrant is
outstanding, the number of outstanding shares of Common Stock is decreased by a
reverse stock split, consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, upon the effective date of such
consolidation, combination or reclassification, the number of shares issuable on
exercise of each Warrant shall be decreased in proportion to such decrease in
outstanding shares and the then applicable Exercise Price shall be
correspondingly increased.

 

(c)          Replacement of Securities Upon Reorganization, etc. If at any time
while this Warrant is outstanding (1) the Company effects any merger or
consolidation of the Company with or into another Person, (2) the Company
effects any sale of all or substantially all of its assets in one or a series of
related transactions, (3) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (4) the Company effects any capital reorganization or
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (each, a “Fundamental Transaction”), then, as a
condition of such Fundamental Transaction, lawful and fair provision shall be
made whereby the Holder of the Warrant shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions specified
in the Warrants and in lieu of the shares of Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented thereby, such shares of stock, securities, or assets as may
be issued or payable with respect to or in exchange for the number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by the Warrants, had such Fundamental Transaction not
taken place and in such event appropriate provision shall be made with respect
to the rights and interests of the Holder of the Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Exercise Price and of the number of shares purchasable upon the exercise of
the Warrants) shall thereafter be applicable, as nearly as may be in relation to
any share of stock, securities, or assets thereafter deliverable upon the
exercise hereof. The Company shall not effect any such Fundamental Transaction
unless prior to the consummation thereof the successor corporation (if other
than the Company) resulting from such Fundamental Transaction, or the
corporation purchasing such assets in a Fundamental Transaction, shall assume by
written instrument executed and delivered to the Holders of the Warrants the
obligation to deliver to the Holders of the Warrant such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
Holders may be entitled to purchase. Notwithstanding the foregoing, in the event
of any Fundamental Transaction in which common shareholders receive cash for
their ownership interest, other than a Fundamental Transaction in which a
successor entity of the Company that is a publicly traded corporation whose
stock is quoted or listed for trading on a Trading Market assumes this Warrant
such that the Warrant shall thereafter be exercisable for the publicly traded
common stock of such successor entity, then, at the written request of the
Holder, if and only if such request is delivered by notice in writing to the
Company within 30 Business Days following the effective date of the Fundamental
Transaction, the Company (or the successor entity) shall purchase this Warrant
from the Holder by paying to the Holder, within five Business Days after such
request (or, if later, on the effective date of the Fundamental Transaction),
cash in an amount per Warrant Share equal to the Transaction Value per share of
Common Stock outstanding less the Exercise Price. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this Section 9(c) and insuring that the Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction.

 

 6 

 

 

“Transaction Value” shall mean the value on the effective date of the
Fundamental Transaction of the net pre-tax proceeds received or receivable by
common stockholders of the Company in the Fundamental Transaction. Any proceeds
not constituting cash shall be valued at their fair market value (as determined
in good faith by the Company’s Board of Directors after reasonable prior notice
of the proposed determination to the Holder, and an opportunity for the Holder
to discuss the proposed determination with the Company).

 

(d)          Number of Warrant Shares. Simultaneously with any adjustment to the
Exercise Price pursuant to this Section 9, the number of Warrant Shares that may
be purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the adjusted number of Warrant Shares shall be the same as
the aggregate Exercise Price in effect immediately prior to such adjustment.

 

(e)          Calculations. All calculations under this Section 9 shall be made
to the nearest cent or the nearest 1/100th of a share, as applicable. The number
of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.

 

 7 

 

 

(f)          Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 9, the Company at its expense will promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Warrant Shares or other
securities, cash or property issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based. Upon written
request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s transfer agent.

 

(g)          Notice of Corporate Events. If the Company (i) declares a dividend
or any other distribution of cash, securities or other property in respect of
its Common Stock, including without limitation any granting of rights or
warrants to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Holder a notice describing
the material terms and conditions of such transaction, at least ten Business
Days prior to the applicable record or effective date on which a Person would
need to hold Common Stock in order to participate in or vote with respect to
such transaction, and the Company will take all steps reasonably necessary in
order to insure that the Holder is given the practical opportunity to exercise
this Warrant prior to such time so as to participate in or vote with respect to
such transaction; provided, however, that the failure to deliver such notice or
any defect therein shall not affect the validity of the corporate action
required to be described in such notice.

 

(h)          Rights Upon Distribution Of Assets. If the Company shall declare or
make any dividend or other distribution of its assets (or rights to acquire its
assets) to Holders of shares of Common Stock in respect to such shares of Common
Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of
arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive such Distribution and such record date shall be deemed to be the date of
such Distribution (the “Record Date”), then, in each such case:

 

(A)          any Exercise Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders of shares of
Common Stock entitled to receive the Distribution shall be reduced, effective as
of the close of business on such record date, to a price determined by
multiplying such Exercise Price by a fraction of which (I) the numerator shall
be the closing bid price of the shares of Common Stock on the Trading Day
immediately preceding such record date minus the fair market value of the
Distribution (as determined in good faith by the Company’s Board of Directors)
applicable to one share of Common Stock, and (II) the denominator shall be the
closing bid price of the shares of Common Stock on the Trading Day immediately
preceding such record date; and

 

 8 

 

 

(B)          the number of Warrant Shares shall be increased to a number of
shares equal to the number of shares of Common Stock obtainable immediately
prior to the close of business on the record date fixed for the determination of
holders of shares of Common Stock entitled to receive the Distribution
multiplied by the reciprocal of the fraction set forth in the immediately
preceding paragraph (A); provided, that in the event that the Distribution is of
shares of Common Stock (or common stock) (“Other Shares of Common Stock”) of a
company whose common shares are traded on a national securities exchange or a
national automated quotation system, then the Holder may elect to receive a
warrant to purchase Other Shares of Common Stock in lieu of an increase in the
number of Warrant Shares, the terms of which shall be identical to those of this
Warrant, except that such warrant shall be exercisable into the number of shares
of Other Shares of Common Stock that would have been payable to the Holder
pursuant to the Distribution had the Holder exercised this Warrant immediately
prior to such record date and with an aggregate exercise price equal to the
product of the amount by which the exercise price of this Warrant was decreased
with respect to the Distribution pursuant to the terms of the immediately
preceding paragraph (A) and the number of Warrant Shares calculated in
accordance with the first part of this paragraph (B).

 

(i)          Treasury Shares. The number of shares of Common Stock outstanding
at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an
issue or sale of Common Stock for the purpose of this Section 9.

 

10.          Payment of Exercise Price. The Holder shall pay the Exercise Price
in immediately available funds; provided, however, that if a Registration
Statement registering the issuance or resale of the Warrant Shares under the
Securities Act is not effective or available for the issuance or resale of the
Warrant Shares, the Holder may satisfy its obligation to pay the Exercise Price
through a Cashless Exercise as described in Section 4 (e) of this Warrant.

 

11.          Fractional Shares. The Company shall not be required to issue or
cause to be issued fractional Warrant Shares on the exercise of this Warrant. If
any fraction of a Warrant Share would, except for the provisions of this
Section, be issuable upon exercise of this Warrant, the number of Warrant Shares
to be issued will be rounded up to the nearest whole share.

 

12.          Notices. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be deemed given and effective on the earliest of (i) the next Trading
Day after the date of transmission, if such notice or communication is delivered
via facsimile or email, (ii) the Trading Day following the date of mailing, if
sent by nationally recognized overnight courier service or (iii) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices or communications shall be the last known address as set forth
in the Company’s books and records or at such other address as the Holder shall
notify the Company.

 

 9 

 

 

13.          Warrant Agent. The Company shall serve as warrant agent under this
Warrant. Upon 10 days’ notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last
address as shown on the Warrant Register.

 

14.          Miscellaneous.

 

(a)          Subject to the restrictions on transfer set forth herein, this
Warrant may be assigned by the Holder in whole or in part. This Warrant may not
be assigned by the Company except to a successor in the event of a sale of all
or substantially all of the Company’s assets or a merger or acquisition of the
Company. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentences, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder and their successors and
assigns.

 

(b)          The Company will not, by amendment of its governing documents 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 action as may be reasonably necessary or
appropriate in order to protect the rights of the Holder against impairment.
Without limiting the generality of the foregoing, the Company (i) will not
increase the par value of any Warrant Shares above the amount payable therefor
on such exercise, (ii) will take all such action as may be reasonably necessary
or appropriate in order that the Company may validly and legally issue fully
paid and non-assessable Warrant Shares on the exercise of this Warrant, and
(iii) will not close its stockholder books or records in any manner which
interferes with the timely exercise of this Warrant.

 

(c)          GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
WILMINGTON, COUNTY OF NEW CASTLE, DELAWARE, FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY
OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT
IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
(WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD
AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

 10 

 

 

(d)          The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

 

(e)          In case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected
or impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

 

(f)          Prior to exercise of this Warrant, the Holder hereof shall not, by
reason of being a Holder, be entitled to any rights of a stockholder with
respect to the Warrant Shares.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE PAGE FOLLOWS]

 

 11 

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its authorized officer as of the date first indicated above.

 

  ISIGN SOLUTIONS INC.               By:     Name: Philip Sassower   Title:
Chief Executive Officer

 

[Signature Page to Common Stock Warrant No ______]

 

 
 

 

ANNEX A

 

FORM OF ASSIGNMENT

 

[To be completed and signed only upon transfer of Warrant]

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the
right represented by the within Warrant to purchase shares of Common Stock of
iSign Solutions Inc. to which the within Warrant relates and appoints attorney
to transfer said right on the books of iSign Solutions Inc. with full power of
substitution in the premises.

 

Dated: ____________

 

      (Signature must conform in all respects to name of holder as specified on
the face of the Warrant)      

 

  Address of Transferee                

 

In the presence of:          

 

 
 

 

ANNEX B

 

FORM OF EXERCISE NOTICE

 

[To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant]

 

To: ISIGN SOLUTIONS INC.

 

The undersigned is the Holder of Warrant No. (the “Warrant”) issued by iSign
Solutions Inc., a Delaware corporation (the “Company”). Capitalized terms used
herein and not otherwise defined have the respective meanings set forth in the
Warrant.

 

1.The Warrant is currently exercisable to purchase a total of ________ Warrant
Shares.    2.The undersigned Holder hereby exercises its right to purchase
___________ Warrant Shares pursuant to the Warrant.    3.The Holder intends that
payment of the Exercise Price shall be made as (check one):

 

______ “Cash Exercise” under Section 10

 

______ “Cashless Exercise” under Section 10

 

4.If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $
_______ to the Company in accordance with the terms of the Warrant.   
4.Pursuant to this exercise, the Company shall deliver to the Holder ________
Warrant Shares in accordance with the terms of the Warrant.    5.Following this
exercise, the Warrant shall be exercisable to purchase a total of __________
Warrant Shares.

 

 

Dated: Name of Holder:         (Print)                 By:     Name:     Title:
      (Signature must conform in all respects to name of holder as specified on
the face of the Warrant)

 

 
 

 

ANNEX C

 

WARRANT SHARES EXERCISE LOG

 

 

DATE

NUMBER OF WARRANT SHARES AVAILABLE TO

BE EXERCISED

NUMBER OF WARRANT SHARES EXERCISED

NUMBER OF WARRANT SHARES REMAINING TO

BE EXERCISED

                               

 

 
 

 

ANNEX D

DEFINITIONS

 

“Business Day” means any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York, or is a day on which
banking institutions located in such state are closed or which the Federal
Reserve Banks are closed.

 

“Person” means and includes natural persons, corporations, limited liability
companies, limited partnerships, limited liability partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof and their respective permitted successors and
assigns (or in the case of a governmental person, the successor functional
equivalent of such person).

 

“Registration Statement” means a registration statement filed with the
Securities and Exchange Commission for the purposes of registering the Warrant
Shares, including (in each case) the prospectus, amendments and supplements to
such registration statements or prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference therein.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Trading Day” means any day excluding Saturday and Sunday on which shares of the
Company’s Common Stock are traded on OTCQB or the primary market on which shares
of the Company’s Common Stock are traded as of the Date of Exercise, as the case
may be.

 

“Trading Market” means a national securities exchange, an automated inter-dealer
quotation system of a national securities association, or such other market on
which shares of the successor entity of the Company are publicly traded, as the
case may be.