Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of
November 11, 2013, among Authentidate Holding Corp., a Delaware corporation (the
“Company”), and each of the purchasers identified on the signature pages hereto
(each, a “Purchaser” and collectively, the “Purchasers”).

BACKGROUND

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506 as promulgated by the U.S. Securities and
Exchange Commission (the “Commission”) under the Securities Act, the Company
desires to issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, a number of units of the
Company’s securities (the “Units”) as is set forth beneath such Purchaser’s name
on the signature pages hereof, with each Unit consisting of (i) one (1) share of
common stock, par value $0.001 per share (the “Common Stock”) and (ii) one
(1) Common Stock Purchase Warrant to purchase 0.33 of one share of Common Stock,
as more fully described in this Agreement (the “Offering”).

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers hereby
agree as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Definitions. In addition to the other terms specifically defined
elsewhere in this Agreement, the following capitalized terms shall have the
following respective meanings when used herein:

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
“control”, when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

“Board of Directors” means the board of directors of the Company or any
authorized committee of the board of directors.

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which the banking institutions in the City of New York, New York
are authorized or obligated by law or executive order to close or be closed.

“Closing” means the closing of the purchase and sale of the Units pursuant to
Section 2.1.

“Closing Date” means the Trading Day on which this Agreement has been executed
and delivered by the parties hereto, and all conditions precedent to (i) the
Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the securities comprising the Units, in each case, have
been satisfied or waived.

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

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“Common Stock” shall mean the common stock of Authentidate Holding Corp., par
value $0.001 per share.

“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exempt Issuance” means the issuance of (a) shares of securities of the Company
or options to employees, officers or directors of the Company pursuant to any
stock or option plan duly adopted for such purpose, by a majority of the
non-employee members of the Board of Directors or a majority of the members of a
committee of non-employee directors established for such purpose (for purposes
of clarity, the issuance of shares of Common Stock upon exercise of options or
vesting of restricted stock units granted pursuant to such a Company plan
subsequent to the date hereof shall also be an Exempt Issuance), (b) securities
upon the exercise or exchange of or conversion of any Securities issued
hereunder and/or other securities exercisable or exchangeable for or convertible
into shares of securities of the Company issued and outstanding on the date of
this Agreement (including shares of common stock that the Company may issue
pursuant to the presently outstanding shares of Series D Preferred Stock in lieu
of cash dividends thereon) provided that such securities have not been amended
since the date of this Agreement to increase the number of such securities or to
decrease the exercise price, exchange price or conversion price of such
securities, (c) securities issued pursuant to mergers, acquisitions or strategic
transactions approved by a majority of the disinterested directors of the
Company, provided that any such issuance shall only be to a Person (or to the
equityholders of a Person) which is, itself or through its subsidiaries, an
operating company or an owner of an asset in a business synergistic with the
business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, but shall not include a transaction in
which the Company is issuing securities primarily for the purpose of raising
capital or to an entity whose primary business is investing in securities,
(d) shares of Common Stock (or securities convertible into or exercisable or
exchangeable for shares of Common Stock) which may be issued to consultants,
vendors, lessors, distributors or similar persons, to the Company as
consideration for services or assets provided to the Company (and the shares of
Common Stock which may be issued upon exercise or conversion of convertible
securities issued to the class persons specified in this clause), and (e) shares
of Common Stock or other securities issued in connection with any stock split,
stock dividend or recapitalization of the Company.

“Indebtedness” means, without duplication, with respect to any Person (the
“subject Person”), all liabilities, obligations and indebtedness of the subject
Person to any other Person, of any kind or nature, now or hereafter owing,
arising, due or payable, howsoever evidenced, created, incurred, acquired or
owing, whether primary, secondary, direct, contingent, fixed or otherwise,
consisting of indebtedness for borrowed money or the deferred purchase price of
property, excluding purchases of property, product, merchandise and services in
the ordinary course of business, but including (a) all obligations and
liabilities under guarantees; (b) the present value of lease payments due under
synthetic leases; and (c) all obligations and liabilities under any asset
securitization or sale/leaseback transaction; provided, further, however, that
in no event shall the term Indebtedness include the capital stock surplus,
retained earnings, minority interests in the common stock of Subsidiaries, lease
obligations (other than pursuant to (b) above), reserves for deferred income
taxes and investment credits, other deferred credits or reserves.

 

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“knowledge of the Company” means the actual knowledge of the Company as opposed
to implied or ascribed knowledge.

“Liens” means any lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction, other than restrictions imposed
by securities laws.

“Majority in Interest” shall mean the holders of at least a majority (50.1%) of
the aggregate number of the shares of Common Stock and Warrants issued hereunder
then outstanding at the time of such determination.

“Per Unit Purchase Price” equals $1.05.

“Person” shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company, a limited liability
company, an unincorporated association, a joint venture or other entity or a
governmental authority.

“Registration Rights Agreement” means the Registration Rights Agreement,
substantially in the form attached hereto as Exhibit B, pursuant to which the
Company will agree to provide certain registration rights with respect to the
Registrable Securities (as defined in the Registration Rights Agreement) under
the Securities Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.

“Required Approvals” means (i) filings expressly required pursuant to this
Agreement, (ii) application(s) and/or notification(s) to the Company’s principal
Trading Market for the listing of the shares of Common Stock which may be issued
pursuant to the terms of this Agreement for trading thereon in the time and
manner required thereby; (iii) such filings as are required to be made under
applicable federal and state securities laws; (iv) approvals or consents that
have been made or obtained prior to or contemporaneously with the date of this
Agreement; (v) filings pursuant to the Exchange Act; and (vi) the filing with
the SEC of one or more registration statements in accordance with the
requirements of the Registration Rights Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act.

“Subscription Amount” means the aggregate amount to be paid for the Units
purchased hereunder as specified beneath each Purchaser’s name on the signature
page of this Agreement and next to the heading “Subscription Amount,” payable in
United States dollars and in immediately available funds.

“Subsidiary” means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of capital stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers, general partners or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such
Person; (ii) such Person and one or more Subsidiaries of such Person; or
(iii) one or more Subsidiaries of such Person.

“Trading Day” means a day on which the Trading Market on which the Company’s
Common Stock is listed for trading is open for trading.

 

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“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange or the OTC Bulletin Board.

“Transaction Agreements” means this Agreement, the Warrants, the Registration
Rights Agreement, and any other agreement or instrument executed by a party to
this Agreement or in connection with the transactions contemplated hereunder.

“Transfer Agent” means Continental Stock Transfer & Trust Company, the current
transfer agent of the Company, and any successor transfer agent of the Company.

ARTICLE II

PURCHASE AND SALE OF SECURITIES

2.1 Purchase and Sale of Securities; Binding Agreement Date; Closing.

(a) The Company has duly authorized the issuance and sale at the Closing of a
maximum of 2,857,142 Units at the Per Unit Purchase Price for an aggregate
purchase price of up to $3,000,000, with each Unit consisting of (i) one
(1) share of the Company’s Common Stock and (ii) warrants (each, a “Warrant” and
collectively, the “Warrants”) to purchase 0.33 of one share of Common Stock (the
“Warrant Shares”) which Warrants shall be exercisable at a per share exercise
price equal to 120% of the last reported closing price of the Company’s Common
Stock published by the Nasdaq Stock Market prior to the execution of this
Agreement and otherwise be substantially in the form attached hereto as Exhibit
A. The shares of Common Stock issued to the Purchasers pursuant to this
Agreement, the Warrants and the Warrant Shares may collectively be referred to
herein as the “Securities”.

(b) Upon all of the terms and subject to all of the conditions hereof, the
Company agrees to issue and sell to each Purchaser, and each of the Purchasers
hereby agrees to purchase on the Closing Date (defined below), (i) the number of
shares of Common Stock set forth below the Purchaser’s name on the Purchaser
Signature Page and (ii) the number of Warrants set forth below the Purchaser’s
name on the Purchaser Signature Page. The obligations of the Purchasers to
purchase Units are several and not joint.

(c) The closing of the purchase and sale of the Securities pursuant to this
Agreement (the “Closing”) shall occur on such Business Day as the Purchasers and
Company agree upon satisfaction of the covenants and conditions set forth in
Section 2.2 of this Agreement. The “Closing Date” shall mean the Business Day on
which this Agreement has been executed and delivered by the parties hereto, and
all conditions precedent to (i) the Purchaser’s obligations to pay the
Subscription Amount and (ii) the Company’s obligations to deliver the Securities
comprising the Units, in each case, have been satisfied or waived.

(d) At the Closing, upon the terms and subject to the conditions set forth
herein, substantially concurrently with the execution and delivery of this
Agreement by the parties hereto, the Company shall sell, and each Purchaser
shall purchase, the number of Units specified beneath each such Purchaser’s name
on the signature pages hereto. At the Closing, each Purchaser shall deliver to
the Company an amount equal to such Purchaser’s Subscription Amount as set forth
beneath such Purchaser’s name on the signature page hereto, and the Company
shall deliver to such Purchaser the securities represented by the Units so
purchased, and the Company and the Purchaser shall deliver the other items set
forth in Section 2.2 deliverable at the Closing. Each Purchaser shall deliver
its Subscription Amount to the Company via wire transfer of immediately
available U.S. funds to the

 

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account designated for receipt of such funds by the Company. Upon satisfaction
of the requirements, covenants and conditions set forth in Section 2.2 and
Article V, the Closing shall occur at the offices of the Company or such other
location, and at such time, as the parties shall mutually agree.

(e) Each Purchaser acknowledges and agrees that the Company reserves the right,
in its absolute discretion, to reject a subscription for Units, in whole or in
part, at any time prior to the closing time. If a subscription is rejected in
whole, any checks or other forms of payment delivered to the Company
representing the Subscription Amount will be promptly returned to such Purchaser
without interest or deduction. If a subscription is accepted only in part, a
check representing any refund of the Subscription Amount for that portion of the
subscription for the Units which is not accepted will be promptly delivered to
each Purchaser without interest or deduction.

2.2 Deliveries.

(a) On or prior to the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following: (i) this Agreement, duly executed by
the Company; (ii) the Registration Rights Agreement, duly executed by the
Company; (iii) a copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver, on an expedited basis, a certificate
evidencing a number of shares of Common Stock equal to such Purchaser’s
Subscription Amount divided by the Per Share Purchase Price, registered in the
name of such Purchaser; (iv) a Warrant registered in the name of such Purchaser
to purchase up to a number of Warrant Shares as is set forth below the
Purchaser’s name on the Purchaser Signature Page, duly executed by the Company
(such Warrant certificate may be delivered within five Trading Days of the
Closing Date); and (v) such other documents relating to the transactions
contemplated by this Agreement as the Purchasers or their counsel may reasonably
request.

(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following: (i) this Agreement, duly executed by
such Purchaser; (ii) the Purchaser’s Subscription Amount by wire transfer of
immediately available U.S. funds to the account as specified in writing by the
Company for the amount of Securities being purchased by payment of U.S. funds;
(iii) the Registration Rights Agreement, duly executed by such Purchaser; (iv) a
fully completed and duly executed Accredited Investor Certification,
substantially in the form attached hereto as Schedule A; and (v) such other
documents relating to the transactions contemplated by this Agreement as the
Company or its counsel may reasonably request.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. The Company hereby represents
and warrants to the Purchasers as follows:

(a) Organization and Qualification. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite legal authority to own and use its properties and assets
and to carry on its business as currently conducted. The Company is not in
violation of any of the provisions of its certificate of incorporation, bylaws
or other organizational or charter documents. The Company is duly qualified to
do business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by the Company makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not,
individually or in the aggregate, have, or reasonably be expected to result in,
a Material Adverse Effect (defined below). For purposes of this Agreement,
“Material Adverse Effect” means (i) a material adverse effect on the results

 

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of operations, assets, business or financial condition of the Company and its
Subsidiaries, taken as a whole on a consolidated basis, or (ii) material and
adverse impairment of the Company’s ability to perform its obligations under
this Agreement, provided that none of the following alone shall be deemed, in
and of itself, to constitute a Material Adverse Effect: (A) a change in the
market price or trading volume of the shares of Common Stock of the Company or
(B) changes in general economic conditions or changes affecting the industry in
which the Company operates generally (as opposed to Company-specific changes) so
long as such changes do not have a disproportionate effect on the Company and
its Subsidiaries, taken as a whole.

(b) Authorization; Enforcement. The Company has the requisite corporate
authority to enter into this Agreement and to carry out its obligations
hereunder subject to the terms and conditions set forth herein. The execution
and delivery of this Agreement, the certificates representing the shares of
Common Stock and the Warrants, and the other Transaction Agreements have been
duly authorized by all necessary corporate action on the part of the
Company. This Agreement and the other Transaction Agreements have been duly
executed and delivered by the Company and constitutes, and the certificates
representing the Common Stock and Warrants, when executed and delivered in
accordance with the terms hereof, will constitute, a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally; (ii) the effect of rules of law
governing the availability of specific performance, injunctive relief and other
equitable remedies; and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

(c) Required Approvals; No Conflicts. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person or entity in connection with the
execution, delivery and performance by the Company of this Agreement or the
issuance, sale or delivery of the Securities other than the Required Approvals.
Subject to the Required Approvals, the execution and delivery by the Company of
this Agreement and the certificates representing the Common Stock and the
Warrants, and the performance by the Company of its obligations hereunder and
thereunder, do not and will not (i) conflict with or violate any provision of
the Company’s certificate of incorporation, bylaws or other organizational or
charter documents, (ii) conflict with, or constitute a default under (or an
event that, with notice or lapse of time or both, would become a default under),
or give to others any rights of termination, amendment, acceleration or
cancellation under (with or without notice, lapse of time or both), any
agreement, credit facility, debt or other instrument evidencing a debt of the
Company or other understanding to which the Company is a party, or by which any
of its properties or assets is bound, except to the extent that such conflict or
default or termination, amendment, acceleration or cancellation right would not
reasonably be expected to have a Material Adverse Effect, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company is
subject, or by which any of its properties or assets is bound, except to the
extent that such violation would not reasonably be expected to have a Material
Adverse Effect.

(d) Capitalization. As of October 31, 2013, the authorized capital stock of the
Company consists of (i) 100,000,000 shares of Common Stock, of which
(A) 35,373,008 shares are issued and outstanding; (B) 3,864,800 shares are
reserved for issuance upon the exercise of stock options and the vesting of
restricted stock units outstanding under the Company’s equity compensation
plans; (C) 26,515,638 shares are reserved for issuance upon exercise of common
stock purchase warrants granted or committed to be granted prior to the date of
this Agreement; (D) such number of additional shares of Common Stock as may be
issued by the Company from time to time in lieu of the payment of cash dividends
pursuant to the Certificate of Designations, Preferences and Rights and Number
of Shares of

 

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Series D Convertible Preferred Stock; and (E) and such additional stock options
and shares of Common Stock which may be issued from time to time in accordance
with the terms of the Company’s current equity compensation plans; and
(ii) 5,000,000 shares of Preferred Stock, $0.10 par value per share, of which
(x) 28,000 shares are issued and outstanding and designated as Series B
Convertible Preferred Stock and which shares of Series B Convertible Preferred
Stock are convertible into an aggregate of 250,000 shares of Common Stock,
(y) 665,000 shares are issued and outstanding and designated as Series D
Convertible Preferred Stock and which shares of Series D Convertible Preferred
Stock are convertible into an aggregate of 6,125,024 shares of Common Stock. All
of the issued shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and were issued in full
compliance with applicable state and federal securities laws. Except as
disclosed in this Agreement, the SEC Reports (as defined below), or in another
document publicly filed by the Company with the Commission prior to the date
first set forth above, as of such date, the Company has no outstanding options
or warrants to purchase, or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
warrants, rights, convertible securities or obligations. The description of the
Company’s equity compensation plans and the options or other rights granted and
exercised thereunder set forth in the SEC Reports accurately and fairly presents
in all material respects the information required by the Securities Act to be
shown with respect to such plans, options and rights.

(e) Due Issuance. The Common Stock and the Warrants to be issued and the Warrant
Shares to be issued upon exercise of the Warrants will be duly authorized and,
when issued and paid for in accordance with this Agreement and the Warrants, as
the case may be, will be duly and validly issued and outstanding, fully paid and
non-assessable, free and clear of all Liens and will not be subject to
pre-emptive or similar rights of stockholders of the Company.

(f) Litigation. Except as described in the Company’s reports filed with the SEC
pursuant to the Exchange Act (the “SEC Reports”), there is no pending or, to the
best knowledge of the Company, threatened action, suit, proceeding or
investigation before any court, governmental agency or body, or arbitrator
having jurisdiction over the Company, or any of its Affiliates that would affect
the execution by the Company or the performance by the Company of its
obligations under this Agreement, and all other agreements entered into by the
Company relating hereto. Except as disclosed in the SEC Reports, there is no
pending or, to the best knowledge of the Company, threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Company, or any of its Affiliates which
litigation if adversely determined would reasonably be expected to have a
Material Adverse Effect.

(g) Intellectual Property. Except as disclosed in the SEC Reports, each of the
Company and its subsidiaries owns or has the valid right to use all Intellectual
Property (as defined below) necessary for the conduct of the businesses of the
Company and its subsidiaries in the manner described in the SEC Reports as now
conducted or proposed to be conducted. Except as disclosed in the SEC Reports:
(i) to the knowledge of the Company, no third party has infringed,
misappropriated, diluted or otherwise violated in any material respect any
Intellectual Property rights of the Company or any of its subsidiaries, and no
claims for any of the foregoing have been brought against any third party by the
Company or any of its subsidiaries; (ii) the Intellectual Property owned by the
Company or its subsidiaries and, to the knowledge of the Company, the
Intellectual Property licensed to the Company or its subsidiaries have not been
adjudged invalid or unenforceable, in whole or in part, and there is no pending
or, to the knowledge of the Company, threatened action, suit, proceeding,
investigation or claim challenging the validity, enforceability, scope,
issuance/registration, use or ownership of any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis for any
such claim; (iii) there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others that the Company or any
of its subsidiaries infringes, misappropriates,

 

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dilutes or otherwise violates any Intellectual Property of others, which could
have or would reasonably be expected to have a Material Adverse Effect; and
(iv) each of the Company and its subsidiaries has taken commercially reasonable
steps, consistent with industry standards, to maintain and protect all
Intellectual Property that is material to the conduct of its business. The term
“Intellectual Property” as used herein means all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade dress,
domain names, copyrights, licenses, inventions, trade secrets, technology,
software, systems, know-how and other intellectual property and proprietary
rights.

(h) Property. The Company does not own any real property. The Company and its
subsidiaries have good and marketable title to all properties and assets
described in the SEC Reports as owned by it, in each case free and clear of all
Liens, except such as (i) are described in the SEC Reports or (ii) do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries. Any real property and buildings held under lease by the Company
and its subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as do not interfere with the use made and proposed
to be made of such property and buildings by the Company and its subsidiaries.

(i) Permits. The Company and its subsidiaries possess all licenses,
certificates, clearances, authorizations or permits issued by the appropriate
governmental or regulatory agencies or authorities (collectively, “Permits”)
that are necessary to enable them to own, lease and operate their respective
properties and to carry on their respective businesses as presently conducted,
except where the failure to possess such licenses, certificates, authorization
or permits would not reasonably be expected to have a Material Adverse Effect.
The Company has not received notice of any revocation or modification of any
such Permits and has no reason to believe that any such license, certificate,
permit or authorization will not be renewed in the ordinary course. The Company
has not received any Form 483 notice of adverse finding from the U.S. Food and
Drug Administration (“FDA”), warning letter, untitled letter or other
correspondence or notice from FDA or any other governmental or regulatory
authority alleging or asserting noncompliance with any applicable laws or any
Permits. The Company has filed, obtained, maintained or submitted all material
reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments as required by any applicable laws or Permits and
that all such reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were complete and correct on the date
filed in all material respects (or were corrected or supplemented by a
subsequent submission).

(j) Financial Statements. The financial statements of the Company, together with
the related schedules and the notes thereto, included or incorporated by
reference in the SEC Reports comply in all material respects with applicable
accounting requirements and the applicable requirements of the Securities Act
and Exchange Act as in effect at the time of filing. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Company as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments. EisnerAmper LLP, who has
audited certain financial statements of the Company, are independent registered
public accountants as required by the Securities Act and Exchange Act and have
been appointed by the Company’s audit committee comprised only of independent
directors.

(k) Material Liabilities and Indebtedness. Since the date of the latest audited
financial statements included in the SEC Reports, except as disclosed in the SEC
Reports: (i) there has been no event, occurrence or development that,
individually or in the aggregate, has had or would reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any

 

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liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting or the identity of its auditors, and (iv) other than with respect to
the Company’s shares of Series B Convertible Preferred Stock and Series D
Convertible Preferred Stock, the Company has not declared or made any dividend
or distribution of cash or other property to its shareholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock. Except for the issuance of the Securities contemplated by this Agreement
or as set forth in the SEC Reports, no event, liability or development has
occurred or exists with respect to the Company or its subsidiaries or their
respective business, properties, operations or financial condition, that would
be required to be disclosed by the Company under applicable securities laws at
the time this representation is made or deemed made that has not been publicly
disclosed at least one Trading Day prior to the date that this representation is
made.

(l) Transactions with Related Parties. Except as set forth in the SEC Reports,
none of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any
transaction with the Company or any subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, in each
case as would be required to be disclosed pursuant to the requirements of
Item 404 of Regulation S-K.

(m) Nature of Company’s Obligation. The Company further acknowledges that its
obligations under the Transaction Agreements, including, without limitation, its
obligation to issue the Warrant Shares, are unconditional and absolute and not
subject to any right of set off, counterclaim, delay or reduction, regardless of
the effect of any such dilution or any claim the Company may have against any
Purchaser and regardless of the dilutive effect that such issuance may have on
the ownership of the other stockholders of the Company.

(n) No Defaults. Except as disclosed in the Company’s SEC Reports, the Company
and its Subsidiaries are not, nor have they received notice that they would be
with the passage of time, giving of notice, or both, in breach or violation of
any of the terms and provisions of, or in default under (a) their charters and
bylaws, (b) any statute, rule, regulation or order of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over them, or any of
their material assets or properties, or (c) any material agreement or instrument
to which they are a party or by which they are bound or to which any of their
assets or properties are subject, except, in the case of clauses (b) and
(c) only, for such conflicts, breaches or violations as have not and are not
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect.

(o) Insurance. The Company, on behalf of itself and its subsidiaries, carries,
or is covered by, insurance from insurers of recognized financial responsibility
in such amounts and covering such risks as is customary for companies engaged in
similar businesses in similar industries. All policies of insurance of the
Company and its subsidiaries are in full force and effect; each of the Company
and its subsidiaries is in compliance with the terms of such policies in all
material respects; and none of the Company or its subsidiaries has received
notice from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to continue
such insurance; there are no claims by the Company or any of its subsidiaries
under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; and none of the
Company or its subsidiaries has any reason to believe that it will not be able

 

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to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that could not reasonably be expected to have a Material
Adverse Effect.

(p) Taxes. The Company has filed all federal, state, local and foreign income
and franchise tax returns required to be filed through the date hereof, subject
to permitted extensions, and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company, nor does the Company
have any knowledge of any tax deficiencies that could, in the aggregate,
reasonably be expected to have a Material Adverse Effect. There is no pending
dispute with any taxing authority relating to the Company’s payment of taxes in
any material amount except which the Company is contesting in good faith and the
Company has no knowledge of any proposed liability for any tax to be imposed
upon the properties or assets of the Company for which there is not an adequate
reserve reflected in the Company’s financial statements included or incorporated
by reference in the SEC Reports.

(q) Trading Market. Except as disclosed in the SEC Reports, the Company has not,
in the twelve (12) months preceding the date hereof, received notice from the
Nasdaq Stock Market to the effect that the Company is not in compliance with the
listing or maintenance requirements of the Nasdaq Stock Market. Except as
described in the SEC Reports, the Company has no reason to believe that it will
not in the foreseeable future continue to be in compliance or regain compliance
in a timely manner, as the case may be, with all such listing and maintenance
requirements. The issuance and sale of the Securities hereunder does not
contravene, in a manner which is expected to have a Material Adverse Effect, the
rules and regulations of the Nasdaq Stock Market and no stockholder approval is
required for the Company to fulfill its obligations under the Transaction
Agreements. The Common Stock has been registered pursuant to Section 12(b) of
the Exchange Act and is currently listed on the Nasdaq Stock Market.

(r) SEC Reports. The Company has filed all SEC Reports required to be filed by
it under the Exchange Act for the two years preceding the date hereof on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As of
their respective dates, the SEC Reports filed for the two years preceding the
date hereof have complied in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder, and none of
such 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 therein, in the light of the circumstances under
which they were made, not misleading.

(s) Sarbanes-Oxley Compliance. The Company is in compliance in all material
respects with all provisions of the Sarbanes-Oxley Act of 2002, as amended,
applicable to it, and the applicable rules and regulations promulgated
thereunder by all government and regulatory authorities and agencies. The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles in the United States and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect thereto. The
Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and Rule 15d-15 under the
Exchange Act) and “internal control over financial reporting” (as such term is
defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act). The Company’s
certifying officers have evaluated the effectiveness of the Company’s disclosure
controls and procedures and the Company presented in its most recent periodic
report filed for a completed fiscal quarter in accordance with the Exchange Act,
the conclusions of the Company’s certifying officers about the effectiveness of
such disclosure controls and procedures.

 

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(t) Certain Fees. No brokerage or finder’s fees or commissions are or will be
payable by the Company or any Subsidiary to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction Agreements. The
Purchasers shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by the Transaction Agreements.

The Purchaser acknowledges and agrees that the Company does not make and has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those representations and warranties specifically
set forth in this Agreement.

3.2 Representations, Warranties and Acknowledgements of the Purchasers. Each
Purchaser, severally and not jointly, represents and warrants with respect to
only itself, as of the Closing Date, that:

(a) Organization; Authority. Each Purchaser certifies that it is resident in the
jurisdiction set out on the applicable signature page of this Agreement. Such
address was not created and is not used solely for the purpose of acquiring the
Securities and each Purchaser was solicited to purchase in such jurisdiction.
The Purchaser is either a natural person or an entity, and in the case of an
entity, (i) such Purchaser is an entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and has the
requisite corporate, partnership or other power and authority to enter into this
Agreement, to subscribe for and purchase the Securities as contemplated herein
and to carry out its obligations hereunder, and (ii) the execution and delivery
of, and performance under, this Agreement and the other Transaction Agreements
have been duly authorized by all necessary corporate, partnership or other
action on the part of such Purchaser. The Purchaser is duly authorized to
execute, deliver and perform this Agreement, the other Transaction Agreements
and all other necessary documentation. In the case of all Purchasers, whether or
not a natural person, this Agreement has been duly authorized, executed and
delivered by such Purchaser and constitutes a legal, valid and binding
obligation of each such Purchaser, enforceable against him, her or it in
accordance with its terms, except as may be limited by (A) applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors’ rights generally, (B) the
effect of rules of law governing the availability of specific performance and
other equitable remedies, and (C) insofar as indemnification and contribution
provisions may be limited by applicable law.

(b) No Conflicts. The execution, delivery and performance by the Purchaser of
this Agreement and each of the Transaction Agreements to which it is a party,
and the consummation by the Purchaser of the transactions contemplated by this
Agreement and each such Transaction Agreement, do not and will not (i) conflict
with or violate any provision of the Purchaser’s certificate of incorporation,
bylaws or other organizational or charter documents, or (ii) conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Purchaser is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Purchaser is bound or
affected.

(c) No General Solicitation. Such Purchaser is not purchasing the Securities as
a result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

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(d) Restricted Securities. Each Purchaser understands that the Common Stock, the
Warrants, and the Warrant Shares, will be characterized as “restricted
securities” under U.S. federal securities laws inasmuch as, if issued, they will
be acquired from the Company in a transaction not involving a public offering
and that, under U.S. federal securities laws and applicable regulations, the
Common Stock, the Warrants, and the Warrant Shares may be resold without
registration under the Securities Act only in certain limited
circumstances. Such Purchaser acknowledges that all certificates representing
any of the shares of Common Stock, the Warrants, and the Warrant Shares will
bear a restrictive legend in a form as set forth below and hereby consents to
the transfer agent for the Company’s Common Stock making a notation on its
records to implement the restrictions on transfer described herein. Such
Purchaser understands that except as provided in the Transaction Agreements:
(i) the Securities have not been and are not being registered under the
Securities Act or any state securities laws, must be held indefinitely and may
not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Purchaser shall have delivered to the Company an
opinion of counsel, in a generally acceptable form, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) such
Purchaser provides the Company with reasonable assurance that such Securities
can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act (or a successor rule thereto)
(collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on
Rule 144 may be made only in accordance with the terms of Rule 144 and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the seller (or the Person (through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the Commission thereunder; (iii) neither the Company nor any
other Person is under any obligation to register the Securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder; and (iv) the Company shall bear the
reasonable expenses of any legal opinions relating to (I) the sale of Securities
made in reliance on Rule 144 by any Purchaser that is not an “affiliate” as
defined in Rule 144 made after the first anniversary of the Closing Date or (II)
any private sale or other transfer of Securities.

(e) Certain Legends.

(i) Such Purchaser understands that:

(A) the Securities are “restricted securities” and that the certificates or
other instruments representing the Common Stock and the Warrant Shares shall
bear any applicable legend as required under U.S. federal securities laws and by
the “blue sky” laws of any state and a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of such
certificates):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT, OR APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY;

 

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and (B) the Warrants shall bear a legend as set forth on Exhibit A.

(ii) The Company may at any time place a stop transfer order on its transfer
books against the shares of Common Stock issued pursuant to this Agreement,
including the Warrant Shares. Such stop order will be removed, and further
transfer of such shares of Common Stock and Warrant Shares will be permitted,
upon an effective registration of the respective shares of Common Stock and
Warrant Shares or the receipt by the Company of an opinion of counsel
satisfactory to the Company that such further transfer may be effected pursuant
to an applicable exemption from registration.

(f) Reliance on Representations. Such Purchaser understands that the Securities
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein and in the
applicable schedules and exhibits in order to determine the availability of such
exemptions and the eligibility of such Purchaser to acquire the Securities. The
Purchaser undertakes to immediately notify the Company of any change in any
statement or other information relating to the Purchaser set forth in such
applicable schedules and exhibits which takes place prior to the Closing time.
No Person has made any written or oral representations to the Purchaser that
(i) any Person will resell or repurchase the shares of Common Stock, the
Warrants or the Warrant Shares, (ii) that any Person will refund all or any part
of the Purchase Price, or (iii) as to the future price or value of the shares of
Common Stock of the Company.

(g) Schedules. Each Purchaser acknowledges that this Agreement and Schedule A
attached hereto require the Purchaser to provide certain personal information to
the Company. Such information is being collected by the Company for the purposes
of completing the transactions contemplated by this Agreement, which includes,
without limitation, determining the Purchaser’s eligibility to purchase the
Securities under the securities laws applicable in the United States and other
applicable securities laws, preparing and registering certificates representing
the Securities and completing filings required by any stock exchange or
securities regulatory authority. The Purchaser’s personal information may be
disclosed by the Company to: (a) stock exchanges or securities regulatory
authorities, (b) any of the other parties involved in the Offering, including
legal counsel and may be included in record books in connection with the
Offering, and (c) pursuant to any disclosure requirements existing under the
U.S. federal or state securities laws. By executing this Agreement, the
Purchaser is deemed to be consenting to the foregoing collection, use and
disclosure of the Purchaser’s personal information; provided, that in the event
of a disclosure pursuant to clause (a) of the preceding sentence, the Company
shall (to the extent it is legally permitted), use commercially reasonable
efforts to give such Purchaser advance notice of any required disclosure. The
Purchaser also consents to the filing of copies or originals of any of the
Purchaser’s documents as may be required to be filed with any stock exchange or
securities regulatory authority in connection with the transactions contemplated
hereby.

(h) No Public Sale or Distribution. Each Purchaser will be acquiring the Common
Stock, the Warrants and the Warrant Shares, in the ordinary course of business
for his, her or its own account and not for the benefit of any other Person and
not with a view towards, or for resale in connection with, the public sale or
distribution thereof, and the Purchaser covenants that it will not resell the
Common Stock, the Warrants and the Warrant Shares except pursuant to sales
registered under the Securities Act or under an exemption from such registration
and in compliance with applicable U.S. federal and state securities laws, and
such Purchaser does not have a present arrangement to effect any distribution of
the Common Stock, the Warrants and the Warrant Shares to or through any Person
or entity.

 

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(i) Investor Status. On the date such Purchaser was offered the Securities and
on the date hereof and such Purchaser is and will be either an “accredited
investor” as defined in Rule 501(a) promulgated under Regulation D of the
Securities Act or a “qualified institutional buyer” as defined in Rule 144A(a)
under the Securities Act. The Purchaser has properly completed, executed and
delivered to the Company the applicable “accredited investor” certificate set
forth in the Schedules hereto and the information contained therein is true and
correct. Such Purchaser is not required to be registered as a broker-dealer
under Section 15 of the Exchange Act.

(j) Experience of Purchaser. There are risks associated with the purchase of and
investment in the Securities, and the Purchaser, either alone or together with
his, her or its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of entering into this Agreement and making his, her or its
Purchase Price and the merits and risks of the prospective investment in the
Securities, and such Purchaser has so evaluated such merits and risks. Such
Purchaser understands that he, she or it must bear the economic risk of an
investment in the Securities, if any, indefinitely and is able to bear such risk
and to afford a complete loss of such investment.

(k) Access to Information. Such Purchaser acknowledges that he, she or it has
reviewed the SEC Reports and has been afforded (i) the opportunity to ask such
questions as he, she or it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of this
Agreement and the merits and risks of the prospective investment in the
Securities, (ii) access to information about the Company and its Subsidiaries
and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable him, her or it to
evaluate the terms and conditions of this Agreement and the merits and risks of
the prospective investment in the Securities and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed decision.
The Purchaser is not purchasing the Units based on knowledge of material
information concerning the Company that has not been generally disclosed. Such
Purchaser and its advisors, if any, in acquiring the Securities, have relied
solely on their independent investigation of the Company and have been afforded
the opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by such Purchaser or its advisors,
if any, or its representatives shall modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained herein.
Such Purchaser understands that its investment in the Securities involves a high
degree of risk. Such Purchaser has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.

(l) No Governmental Review. Each Purchaser understands that no United States
federal or state agency, or any other government or governmental agency has
reviewed or passed on or made, or will pass on or make, any recommendation or
endorsement of the Securities or the fairness or suitability of the prospective
investment in the Securities.

(m) Aggregate Investment. Each Purchaser understands that his, her or its
subscription for the Securities forms part of a larger offering of Securities by
the Company as described herein. Each Purchaser understands that there is no
minimum aggregate subscription required to close the Offering.

(n) Securities and Other Transactions. Other than consummating the transactions
contemplated hereunder, the Purchaser has not, nor has any Person acting on
behalf of or pursuant to any

 

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understanding with the Purchaser, directly or indirectly executed any purchases
or sales, including Short Sales, of the securities of the Company during the
period commencing as of the time that the Purchaser first became aware of the
proposed transactions contemplated hereunder and ending immediately prior to the
execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that
is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of the Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of the Purchaser’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Units
covered by this Agreement. Other than to other Persons party to this Agreement
and its Affiliates and their respective investment advisors, agents, counsel and
other advisors, the Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction). Such Purchaser has no present intent
to effect a “change of control” of the Company as such term is understood under
the rules promulgated pursuant to Section 13(d) of the Exchange Act.

(o) No Legal, Tax or Investment Advice. Each Purchaser understands that nothing
in this Agreement or any other materials presented by or on behalf of the
Company to him, her or it in connection with this Agreement and the transactions
contemplated herein, including the prospective investment in the Securities,
constitutes legal, tax or investment advice. Each Purchaser has consulted such
legal, tax and investment advisors as he, she or it, in his, her or its sole
discretion, has deemed necessary or appropriate in the circumstances. The
Purchaser is not relying on the Company or its counsel in this regard.

(p) Certain Fees. Each Purchaser represents on behalf of itself that it was not
introduced to the Company by any broker-dealer, investment banker, investment
advisor or other intermediary, except as may be set forth on a separate schedule
to this Agreement. The Purchaser’s participation in the transactions
contemplated by this Agreement will not result in the Company or any Subsidiary
being obligated for the payment of any brokerage or finder’s fees or commissions
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.

The Company acknowledges and agrees that the Purchaser does not make or has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.

ARTICLE IV

REGISTRATION RIGHTS

4.1 Registration Rights. Each Purchaser and the Company agree that the
Purchasers shall be entitled to the registration rights with respect to the
Securities as set forth in the Registration Rights Agreement entered into in
accordance with this Agreement.

ARTICLE V

CONDITIONS OF CLOSING

5.1 Closing Conditions in Favor of the Purchasers. The obligation of each of the
Purchasers to deliver the Purchase Price to the Company in connection with the
Closing is subject to the satisfaction, or the waiver by such Purchaser, on or
prior to such payment, of each of the following conditions:

(a) Representations and Warranties. The representations and warranties of the
Company contained herein shall be true and correct in all material respects as
of the date hereof and as of the applicable Closing as though made on and as of
such date (provided that representations and warranties which are confined to a
specified date shall speak only as of such date).

 

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(b) Performance. The Company shall have performed, satisfied and complied with,
in all material respects, all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by it at or prior to
the Closing, including the delivery of the items set forth in Section 2.2(a) of
this Agreement.

(c) Required Approval. The Company shall have received all Required Approvals
for the applicable Closing.

5.2 Closing Conditions in Favor of the Company. The entering into of this
Agreement by the Company with each of the Purchasers, and the acceptance by the
Company of such Purchaser’s Purchase Price, is subject to the satisfaction, or
the waiver by the Company, at or prior to the applicable Closing, of each of the
following conditions:

(a) Representations and Warranties. The representations and warranties of such
Purchaser contained herein shall be true and correct in all material respects as
of the date hereof and as of the applicable Closing as though made on and as of
such date.

(b) Accredited Investor Certificate. Such Purchaser shall have completed and
executed and delivered the applicable Accredited Investor Certificate.

(c) Performance. Such Purchaser shall have performed, satisfied and complied
with, in all material respects, all other covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by him,
her or it at or prior to the applicable Closing, including the delivery of the
items set forth in Section 2.2(b) of this Agreement.

(d) Required Approval. The Company shall have received all Required Approvals
for the applicable Closing.

ARTICLE VI

OTHER AGREEMENTS OF THE PARTIES

6.1 Reservation of Common Stock. So long as any Purchaser owns any Warrants, the
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue shares of Common Stock issued
upon the exercise of the Warrants issued as part of the Units purchased pursuant
to this Agreement.

6.2 Securities Laws Disclosure; Publicity. The Company shall, by 5:30 p.m. (New
York City time) on the fourth Trading Day immediately following the date hereof,
file a Current Report on Form 8-K disclosing the material terms of the
transactions contemplated hereby and including the form of this Agreement as an
exhibit thereto. From and after the issuance of such Form 8-K, the Company shall
have publicly disclosed all material, non-public information delivered to any
Purchaser by the Company or any of its subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions
contemplated by this Agreement. Except for information that may be provided to
the Purchaser pursuant to the Registration Rights Agreement, the Company shall
not, and shall use commercially reasonable efforts to cause each of its
officers, directors, employees and agents not to, provide Purchaser with any
material nonpublic information regarding the Company from and after the filing
of such Form 8-K without the express written consent of such Purchaser. The
Company

 

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understands and confirms that the Purchaser will rely on the representations and
covenants set forth in this Section 6.2 in effecting transactions in securities
of the Company. The Company and the Purchasers shall consult with each other in
issuing any press releases with respect to the transactions contemplated hereby,
and neither the Company nor the Purchasers shall issue any such press release
without the prior consent of the Company, with respect to any press release of
any of the Purchasers, or without the prior consent of the Majority in Interest,
with respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication.

6.3 Use of Proceeds. The Company shall use the additional net proceeds from the
sale of the Securities hereunder for general business and working capital
purposes.

6.4 Form D and Blue Sky; Listing of Common Stock; Reporting Status. The Company
agrees to file a Form D with respect to the Securities as required under
Regulation D promulgated under the Securities Act and to promptly provide a copy
thereof to any Purchaser who requests a copy after such filing. The Company, on
or before the Closing Date, shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for or to
qualify the Units for sale to the Purchasers at Closing pursuant to this
Agreement under the applicable securities or “blue sky” laws of the states of
the United States (or to obtain an exemption from such qualification), and if
requested by a Purchaser, shall provide evidence of any such action so taken.
The Company shall make such filings and reports relating to the offer and sale
of the Units as required under applicable securities or “blue sky” laws of the
states of the United States following or on the Closing Date. No Purchaser shall
incur any costs or expenses relating to Form D or such filings under applicable
securities or “blue sky” laws. The Company hereby agrees to use commercially
reasonable efforts to maintain the listing of the Common Stock on the Nasdaq
Stock Market, and as soon as reasonably practicable, to list all of the shares
of Common Stock issuable pursuant to this Agreement. Until the earlier of
(i) the date on which the Purchaser shall have sold all of the Warrant Shares
and (ii) the date on which the Purchaser may sell all of the Securities without
restriction pursuant to Rule 144 and without the requirement to be in compliance
with Rule 144(c)(1) (or any successor thereto) promulgated under the Securities
Act (the “Reporting Period”), the Company shall timely file all reports required
to be filed with the Commission pursuant to the Exchange Act, and the Company
shall not terminate its status as an issuer required to file reports under the
Exchange Act even if the Exchange Act or the rules and regulations thereunder
would no longer require or otherwise permit such termination.

6.5 Certain Transactions and Confidentiality. Each Purchaser covenants that
neither it nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any purchases or sales, including Short
Sales, of any of the Company’s securities during the period commencing with the
execution of this Agreement and ending at such time that the transactions
contemplated by this Agreement are first publicly announced pursuant to
Section 6.2. Each Purchaser covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to
Section 6.2, such Purchaser will maintain the confidentiality of the existence
and terms of this transaction. Notwithstanding the foregoing and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly
acknowledges and agrees that unless a Purchaser possesses material, non-public
information with respect to the Company, has entered into a confidentiality
agreement with the Company, or otherwise is restricted in its trading activities
with respect to the Company’s Common Stock, (i) no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in effecting
transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced;
(ii) no Purchaser shall be restricted or prohibited from effecting any
transactions in any securities of the Company in accordance with applicable
securities laws from and after the time that the transactions contemplated by
this Agreement are first publicly announced; and (iii) no Purchaser shall have
any duty of confidentiality to the Company or its Subsidiaries relating to this
Agreement after the initial disclosure of the transactions contemplated by this
Agreement.

 

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6.6 Integration. The Company shall not sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2
of the Securities Act) that would be integrated with the offer or sale of the
Securities to the Purchasers in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers.

6.7 Transfer Restrictions. The Securities may only be disposed of in compliance
with state and federal securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement, to the
Company or to an affiliate of a Purchaser or to an entity managed by a Purchaser
(provided, in such case the prospective transferee agrees in all such instances
in writing to be subject to the terms hereof to the same extent as if he or she
were an original Purchaser hereunder), the Company may require the transferor
thereof to provide to the Company an opinion of counsel, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act; provided that the Company shall bear the reasonable
expense of any legal opinions relating to (I) the sale of Securities made in
reliance on Rule 144 by any Purchaser that is not an “affiliate” as defined in
Rule 144 made after the first anniversary of the Closing Date or (II) any
private sale or other transfer of Securities. As a condition of transfer, any
such transferee shall agree in writing to be bound by the terms of this
Agreement. Each Purchaser, severally and not jointly with the other Purchasers,
agrees with the Company that such Purchaser will sell any Securities pursuant to
either the registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption therefrom, and that
if Securities are sold pursuant to a Registration Statement, they will be sold
in compliance with the plan of distribution set forth therein.

6.8 Right of Participation.

(a) From the date hereof until the date that is the first anniversary of the
Closing Date, upon any issuance by the Company of Common Stock or Common Stock
Equivalents for cash consideration (a “Subsequent Financing”), each Purchaser
shall have the right to participate in up to an amount of the Subsequent
Financing such that such Purchaser’s beneficial ownership of the Company
(ignoring for such purpose any beneficial ownership caps) on a fully diluted
basis immediately following such Subsequent Financing would not be less than its
beneficial ownership of the Company (ignoring for such purposes any beneficial
ownership caps) solely based on such Purchaser’s investment in this Offering
(the “Participation Maximum”) on the same terms, conditions and price provided
for in the Subsequent Financing.

(b) At least five (5) Trading Days prior to the closing of the Subsequent
Financing, the Company shall deliver to each Purchaser a written notice of its
intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice
shall ask such Purchaser if it wants to review the details of such financing
(such additional notice, a “Subsequent Financing Notice”). Upon the request of a
Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing
Notice, the Company shall promptly, but no later than two (2) Trading Days after
such request, deliver a Subsequent Financing Notice to such Purchaser. The
Subsequent Financing Notice shall describe in reasonable detail the proposed
terms of such Subsequent Financing, the amount of proceeds intended to be raised
thereunder and the Person or Persons through or with whom such Subsequent
Financing is proposed to be effected and shall include a term sheet or similar
document relating thereto as an attachment.

(c) Any Purchaser desiring to participate in such Subsequent Financing must
provide written notice to the Company by not later than 5:30 p.m. (New York City
time) on the second

 

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(2nd) Trading Day after all of the Purchasers have received the Subsequent
Financing Notice that such Purchaser is willing to participate in the Subsequent
Financing, the amount of such Purchaser’s participation, and representing and
warranting that such Purchaser has such funds ready, willing, and available for
investment on the terms set forth in the Subsequent Financing Notice. If the
Company receives no such notice from a Purchaser as of such second (2nd) Trading
Day, such Purchaser shall be deemed to have notified the Company that it does
not elect to participate.

(d) If by 5:30 p.m. (New York City time) on the second (2nd) Trading Day after
all of the Purchasers have received the Subsequent Financing Notice,
notifications by the Purchasers of their willingness to participate in the
Subsequent Financing (or to cause their designees to participate) is, in the
aggregate, less than the total amount of the Subsequent Financing, then the
Company may effect the remaining portion of such Subsequent Financing on the
terms and with the Persons set forth in the Subsequent Financing Notice.

(e) The Company must provide the Purchasers with a second Subsequent Financing
Notice, and the Purchasers will again have the right of participation set forth
above in this Section 6.8, if the Subsequent Financing subject to the initial
Subsequent Financing Notice is not consummated for any reason on the terms set
forth in such Subsequent Financing Notice within sixty (60) Trading Days after
the date of the initial Subsequent Financing Notice.

(f) Notwithstanding the foregoing, this Section 6.8 shall not apply in respect
of an Exempt Issuance or to a registered primary public offering. The right of
first refusal set forth in this Section 6.8 is nonassignable, except that
(i) such right is assignable by a Purchaser to any Affiliate of the Purchaser,
(ii) upon the death of any individual Purchaser, such right shall pass to the
beneficiaries under the deceased Purchaser’s last will and testament or to the
distributees of the deceased Purchaser’s estate, and (iii) such right is
assignable by a partnership or limited liability company to its partners or
members, as applicable.

ARTICLE VII

INDEMNIFICATION

7.1 Indemnification.

(a) The Company agrees to indemnify and hold harmless each Purchaser, its
Affiliates, each of their officers, directors, employees and agents and their
respective successors and assigns, from and against any losses, damages, or
expenses which are caused by or arise out of (A) any breach or default in the
performance by the Company of any covenant or agreement made by the Company in
the this Agreement or in the other Transaction Agreements; (B) any breach of
warranty or representation made by the Company in this Agreement or in the other
Transaction Agreements; and (C) any and all actions, suits, proceedings, claims,
demands, judgments, costs and expenses (including reasonable legal fees and
expenses) incident to any of the foregoing.

(b) Each Purchaser agrees to indemnify and hold harmless the Company, its
Affiliates, each of their officers, directors, employees and agents and their
respective successors and assigns, from and against any losses, damages, or
expenses which are caused by or arise out of: (A) any breach or default in the
performance by such Purchaser of any covenant or agreement made by such
Purchaser in this Agreement or in the other Transaction Agreements; (B) any
breach of warranty or representation made by such Purchaser in this Agreement or
in the other Transaction Agreements; and (C) any and all actions, suits,
proceedings, claims, demands, judgments, costs and expenses (including
reasonable legal fees and expenses) incident to any of the foregoing.

 

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ARTICLE VIII

GENERAL

8.1 Termination. Solely in the event that the Closing has not been consummated
on or before November 18, 2013, this Agreement may be terminated by any
Purchaser, as to such Purchaser’s obligations hereunder only and without any
effect whatsoever on the obligations between the Company and the other
Purchasers, by written notice to the other parties; provided, however, that
(a) any Purchaser may elect to extend the foregoing date solely with respect to
its purchase of the Securities hereunder and (b) any such termination will not
affect the right of any party to sue for any breach by the other party (or
parties).

8.2 Confidentiality. The Purchasers acknowledge that due to certain of the
covenants contained herein or in the other Transaction Agreements, from time to
time the Purchasers may come into possession of confidential information of the
Company, including material, non-public information relating to the Company. The
Purchasers hereby agree that (i) they shall keep all such information strictly
confidential, applying, at a minimum, the same degree of care as it does to
protect its own confidential information of a similar nature; (ii) shall only
use such information in connection with the transactions contemplated by this
Agreement; and (iii) shall not disclose any of such information other than:
(a) to the Purchaser’s employees, representatives, directors, attorneys,
auditors, or Affiliates who are advised of the confidential nature of such
information (so long as any of the foregoing persons agree to be bound by the
provisions of this Section), (b) to the extent such information presently is or
hereafter becomes available on a non-confidential basis from any source of such
information that is in the public domain at the time of disclosure, (c) to the
extent disclosure is required by law (including applicable securities law),
regulation, subpoena or judicial order or any administrative body or commission
to whose jurisdiction the Purchasers are subject (provided that notice of such
requirement or order shall be promptly furnished to the Company in advance of
such disclosure), (d) to assignees or participants or prospective assignees or
participants who agree to be bound by the provisions of this Section, or
(e) with the Company’s prior written consent. The Purchasers agree to be
responsible for any breach of this agreement by any of the persons identified in
Section 8.2(iii). The Purchasers are aware that, under certain circumstances,
the United States securities laws may prohibit a Person who has received
material, non-public information from an issuer from purchasing or selling
securities of such issuer or from communicating such information to any other
Person under circumstances in which it is reasonably foreseeable that such other
Person is likely to purchase or sell such securities.

8.3 Fees and Expenses. Except as expressly set forth in this Agreement to the
contrary, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. Notwithstanding the foregoing, however, at the
Closing, the Company has agreed to pay to Hahn & Hessen, LLP, counsel to the
lead investor, an amount not to exceed $25,000, in payment for its reasonable
legal fees incurred in connection with the transactions contemplated by this
Agreement.

8.4 Amendments; Waivers. No provision of this Agreement may be amended or waived
except in a written instrument signed, (i) in the case of an amendment, by the
Company and Purchasers representing a Majority in Interest, or (ii) in the case
of a waiver, by the party against whom enforcement of any such waiver is sought;
provided that, in the case of waiver by or on behalf of all of the Purchasers,
such written instrument shall be signed by Purchasers representing a Majority in
Interest; and provided, further that that any amendment that would modify this
Section 8.4 shall, in each case, require the approval of each Purchaser to which
such amendment shall apply. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right.

 

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8.5 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile or e-mail at the facsimile
number or e-mail address referred to in this Section 8.5 prior to 5:00 p.m.
(Eastern time) on a Business Day, (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile or
e-mail at the facsimile number or e-mail address referred to in this Section 8.5
on a day that is not a Business Day or later than 5:00 p.m. (Eastern time) on
any Business Day, (c) the Business Day following the date of deposit with a
nationally recognized overnight courier service or (d) upon actual receipt by
the party to whom such notice is required to be given. The addresses, facsimile
numbers and e-mail addresses for such notices and communications are those set
forth on the signature pages hereof, or such other address, facsimile number or
e-mail address as may be designated in writing hereafter, in the same manner, by
the relevant party hereto.

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

8.7 Entire Agreement. This Agreement, together with the other Transaction
Agreements contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such agreements and exhibits. At or after the Closing, and
without further consideration, the parties hereto will make, do and execute and
deliver, or cause to be made, done and executed and delivered, such further
acts, deeds, assurances, documents and things as may be reasonably requested by
any of the other parties hereto in order to give practical effect to the
intention of the parties hereunder.

8.8 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of Purchasers representing a
Majority in Interest (other than by merger, consolidation or sale of all or
substantially all of the Company’s assets). A Purchaser may assign any or all of
its rights under this Agreement to any Person to whom the Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions of this
Agreement that apply to the “Purchasers.”

8.9 No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person or entity.

8.10 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York, Borough of Manhattan. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees

 

21

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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 or is an inconvenient venue for such proceeding. 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 other manner permitted by
law. If either party shall commence an action or proceeding to enforce any
provisions of this Agreement, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

8.11 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under this Agreement.
The parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations contained in this Agreement
and hereby agree to waive and not to assert in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.

8.12 Execution. This Agreement may be executed by one or more of the parties
hereto on any number of separate counterparts (including by facsimile or e-mail
transmission), all of which when taken together shall be considered one and the
same agreement. In the event that any signature is delivered by facsimile
transmission or e-mail attachment, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or e-mail-attached
signature page were an original thereof.

8.13 Survival; Severability. All representations and warranties made by the
Company and each of the Purchasers herein will survive the execution of this
Agreement, the Closing and the delivery to the Purchasers of the Securities
being purchased and the payment therefor until the first anniversary of the
Closing Date, except for those representations and warranties which speak as of
a specific date. All covenants and other agreements set forth in this Agreement
shall survive the Closing for the respective periods set forth therein and if no
such period is specified until the first anniversary of the Closing Date.
Notwithstanding anything to the contrary contained herein, Sections 7.1 and 8.4
shall survive for the applicable statute of limitations. If any provision of
this Agreement is held to be invalid or unenforceable in any respect, the
validity and enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affected or impaired thereby and the parties
will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

8.14 Replacement of Certificates. If any certificate evidencing the securities
issued or issuable hereunder is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity or security, if requested. The applicant for
a new certificate under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance
of such replacement certificates.

8.15 Interpretation. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise this Agreement and,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the

 

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interpretation of this Agreement or any amendments hereto. In addition, each and
every reference to share prices and shares of capital stock in this Agreement
shall be subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock
that occur after the date of this Agreement. The word “including”, whenever used
in this Agreement, shall be deemed to be followed by the phrase “without
limitation”.

8.16 Independent Nature of Purchasers’ Obligations and Rights. The obligations
of each Purchaser under any Transaction Agreement are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Agreement. Nothing contained herein or in any
other Transaction Agreement, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Agreements. Each Purchaser shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of the other Transaction Agreements, and it
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. Each Purchaser has been advised to
retain its own representation, including its own separate legal counsel, in
their review and negotiation of the Transaction Agreements.

[SIGNATURE PAGES TO FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

AUTHENTIDATE HOLDING CORP.    

Address for Notice:

Connell Corporate Center

300 Connell Drive, 5th Floor

Berkeley Heights, NJ 07922

Attn: President

By:  

 

    Fax:   Name:   O’Connell Benjamin       Title:   Chief Executive Officer and
President     With a copy to (which shall not constitute notice):    

Becker & Poliakoff, LLP

45 Broadway, 8th Floor

New York, NY 10006

Attn: Michael Goldstein

Fax: 212-557-0295

   

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

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[PURCHASER SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase
Agreement to be duly executed by its authorized signatories as of the date first
indicated above.

 

Name of Purchaser:  

 

 

Signature of Authorized Signatory of Purchaser:  

 

 

Name of Authorized Signatory:  

 

 

Title of Authorized Signatory:  

 

 

Email Address of Authorized Signatory:  

 

 

Facsimile Number of Authorized Signatory:  

 

 

EIN Number:  

 

 

Address for Notices to Purchaser:  

 

 

 

 

 

 

 

Address for Delivery of certificated Securities for Purchaser (if not same as
address for notices):

 

 

 

 

Total Subscription Amount: $  

 

Securities Purchased, comprised of:

 

No. of shares of Common Stock:  

 

  No. of Common Stock Warrants:  

 

 

 

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SCHEDULE A

ACCREDITED INVESTOR CERTIFICATE

This Accredited Investor Certificate is being delivered to the Company pursuant
to the Purchase Agreement. Capitalized terms used in this Accredited Investor
Certificate, but not defined herein, have the respective meanings attributed to
such terms in the Purchase Agreement. Investor agrees to furnish any additional
information the Company deems necessary in order to verify the information
provided below.

The Purchaser hereby acknowledges that the Company is relying on this Accredited
Investor Certificate to determine the Purchaser’s suitability for investment in
the Securities pursuant to the Securities Purchase Agreement (collectively, the
“Investment”) and hereby represents and warrants and certifies that, as of the
Closing, the Purchaser:

 

Category I    ¨    The Purchaser is an individual (not a partnership,
corporation, etc.) whose individual net worth, or joint net worth with his or
her spouse, presently exceeds $1,000,000 (excluding the value of such
Purchaser’s principal residence). Category II    ¨    The Purchaser is a
corporation, partnership, business trust or a non profit organization within the
meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended,
that was not formed for the specific purpose of acquiring the securities offered
and that has total assets in excess of $5,000,000. Category III    ¨   

The Purchaser is an individual (not a partnership, corporation, etc.) who
reasonably expects an individual income in excess of $200,000 in the current
year and had an individual income in excess of $200,000 in each of the last two
years (including foreign income, tax exempt income and the full amount of
capital gains and losses but excluding any income of the Purchaser’s spouse or
other family members and any unrealized capital appreciation);

 

Or

   ¨    The Purchaser is an individual (not a partnership, corporation, etc.)
who, together with his or her spouse, reasonably expects joint income in excess
of $300,000 for the current year and had joint income in excess of $300,000 in
each of the last two years (including foreign income, tax exempt income and the
full amount of realized capital gains and losses). Category IV    ¨    The
Purchaser is a director or executive officer of the Company. Category V    ¨   
The Purchaser is a bank, savings and loan association or credit union, insurance
company, registered investment company, registered business development company,
licensed small business investment company, or employee benefit plan within the
meaning of Title 1 of ERISA whose plan fiduciary is either a bank, insurance
company or registered investment advisor or whose total assets exceed
$5,000,000.       Describe entity:  

 

     

 

 

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Category VI    ¨    The Purchaser is a private business development company as
defined in Section 202(a)(22) of the Investment Advisors Act of 1940. Category
VII    ¨    The Purchaser is a trust with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person (a person who either alone or
with his or her purchaser representative(s) has such knowledge and experience in
financial and business matters that he or she is capable of evaluating the
merits and risks of the prospective investment). A copy of the declaration of
trust or trust agreement and a representation as to the sophistication of the
person directing purchases for the trust is enclosed. Category VIII    ¨    The
Purchaser is a self directed employee benefit plan for which all persons making
investment decisions are “accredited investors” within one or more of the
categories described above. Category IX    ¨    The Purchaser is an entity in
which all of the equity owners are “accredited investors” within one or more of
the categories described above. If relying upon this category alone, each equity
owner must complete a separate copy of this agreement.    ¨    Describe entity:
 

 

     

 

Category X    ¨    The Purchaser does not come within any of the Categories I –
IX set forth above.

 

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IN WITNESS WHEREOF, the Purchaser has duly executed this Accredited Investor
Certificate as of the Closing.

 

IF THE PURCHASER IS AN ENTITY:

 

(Name of Entity – Please Print) By:  

 

Name:  

 

Title:  

 

IF THE PURCHASER IS AN INDIVIDUAL:

 

(Name – Please Print)

 

(Signature)

 

 

(Address)

 

(Telephone)

 

(Facsimile)

 

(E-Mail)

 

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EXHIBIT A

FORM OF COMMON STOCK PURCHASE WARRANT

 

29

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EXHIBIT B

FORM OF REGISTRATION RIGHTS AGREEMENT

 

30