Exhibit 10.2 

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (this “Agreement”) is dated as of March 20, 2017,
between Authentidate Holding Corp., a Delaware corporation (the “Company”) and
the holder identified on the signature pages hereto (the “Holder”).

 

 Recitals

 

WHEREAS, the Holders beneficially owns and holds 28,000 shares of the Company’s
Series B Preferred Stock, par value $0.10 per share; and

 

WHEREAS, pursuant to the terms and conditions of this Agreement, the Company
hereby offers to the Holder shares of a newly created class of convertible
preferred stock (the “Series E Preferred Stock”) and the Holder wishes to
acquire shares of Series E Preferred Stock in exchange for the surrender and
cancellation of all of the shares of Series B Preferred Stock currently held by
the Holder upon the terms and conditions set forth herein in reliance on the
exemption from registration provided by Section 3(a)(9) of the Securities Act of
1933, as amended.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby agreed
and acknowledged, the parties hereto hereby agree as follows:

 

1.             Defined Terms. In addition to the terms defined elsewhere in this
Agreement: (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Series E Designation and (b) the following
terms have the meanings set forth in this Section 1:

 

“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.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

“Closing Date” means the Trading Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to: (i) the Holders’ obligations to surrender the Series B
Preferred Stock and (ii) the Company’s obligations to deliver the Series E
Preferred Stock have been satisfied or waived.

 

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

 

“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed.

 

“Conversion Price” shall have the meaning ascribed to such term in the Series E
Designation.

 

“Conversion Shares” means the shares of Common Stock issuable upon the
conversion of the shares of Series E Preferred Stock.

 

“Encumbrances” shall mean any security or other property interest or right,
claim, lien, pledge, option, charge, security interest, contingent or
conditional sale, or other title claim or retention agreement interest or other
right or claim of third parties, whether perfected or not perfected, voluntarily
incurred or arising by operation of law, and including any agreement (other than
this Agreement) to grant or submit to any of the foregoing in the future.

 

 1 

 

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Required Approvals” shall have the meaning ascribed to such term in
Section 4(d).

 

“Required Minimum” means, as of any date, the maximum aggregate number of shares
of Common Stock then issued or potentially issuable in the future pursuant to
the shares of Series E Preferred Stock to be issued under this Agreement,
ignoring any conversion or exercise limits set forth therein.

 

“Securities” means the Series E Preferred Stock and the Conversion Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Series B Preferred Stock” means the shares of Series B Convertible Preferred
Stock, par value $0.10 per share, with such preferences, rights and other terms
and conditions as is set forth in that certain Certificate of Designations,
Preferences and Rights and Number of Shares of Series B Convertible Preferred
Stock originally filed by the Company with the Secretary of State of the State
of Delaware on October 5, 1999 and as has been amended to date.

 

“Series E Preferred Stock” means the shares of Series E Convertible Preferred
Stock, par value $0.10 per share, with such preferences, rights and other terms
and conditions as is set forth in the Series E Designation.

 

“Series E Designation” means the Certificate of Designations, Preferences and
Rights and Number of Shares of Series E Convertible Preferred Stock filed by the
Company with the Secretary of State of the State of Delaware on or before the
Closing Date. The form of Series E Designation to be filed with the Secretary of
State of the State of Delaware is attached as Exhibit A to this Agreement.

 

“Trading Day” means a day on which the principal Trading Market is open for
trading.

 

“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 any tier of the OTC Markets Inc.
(or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement, the Series E Designation, all
exhibits and schedules thereto and hereto and any other documents or agreements
executed in connection with the transactions contemplated hereunder.

 

2.            Securities Exchange.

 

2.1            Exchange and Closing.

 

(a)            Upon the following terms and subject to the conditions contained
herein, Holder agrees to acquire from the Company the number of shares of Series
E Preferred Stock set forth on the Holder’s signature page to this Agreement in
exchange for and in consideration of all of such Holder’s rights, title and
interest in and to the 28,000 shares of Series B Preferred Stock owned by the
Holder. In accordance with the terms and conditions of this Agreement, Holder
shall deliver and surrender to the Company at its principal offices for
cancellation certificates representing all of the shares of Series B Preferred
Stock owned by Holder, free and clear of any liens, claims, charges, security
interest or other legal or equitable Encumbrances in exchange for a certificate
representing such number of shares of Series E Preferred Stock set forth on the
Holder’s signature page to this Agreement. Upon satisfaction of the covenants
and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the
offices of Company’s counsel or such other location and on such Business Day as
the parties shall mutually agree.

 

 2 

 

 

(b)            Assuming the accuracy of the representations and warranties of
the Company and the Holder set forth in Sections 2 and 3, respectively, of this
Agreement, the parties acknowledge and agree that the purpose of such
representations and warranties is, among other things, to ensure that the
exchange transaction contemplated hereby qualifies as an exchange of securities
under Section 3(a)(9) of the Securities Act.

 

(c)            In the event Holder has lost his, her or its physical
certificate(s) representing its shares of Series B Preferred Stock, or such
certificate(s) were lost, stolen or destroyed, Holder shall, instead of
returning such physical certificate(s), execute and deliver to the Company an
affidavit of loss and indemnification undertaking (in a form acceptable to the
Company) with respect to such shares of Series B Preferred Stock and in which
instrument the Holder acknowledges that the shares of Series B Preferred Stock
are cancelled in all respect in consideration of the Company’s issuance of the
shares of Series E Preferred Stock hereunder.

 

2.2           Deliveries.

 

(a)            On or prior to the Closing Date (except as otherwise provided
below), the Company shall deliver or cause to be delivered to Holder the
following: (i) this Agreement duly executed by the Company; (ii) physical
certificate representing the shares of Series Preferred Stock acquired by the
Holder hereunder and registered in the name of Holder (such original certificate
may be delivered within three Trading Days following Closing Date); and (iii)
such other documents relating to the transactions contemplated by this Agreement
as the Holder or its counsel may reasonably request.

 

(b)           On or prior to the Closing Date, Holder shall deliver or cause to
be delivered to the Company, as applicable, the following: (i) this Agreement
duly executed by Holder; (ii) the Holder’s certificates representing shares of
Series B Preferred Stock (or an affidavit of loss and indemnity undertaking with
respect thereto, in a form reasonably acceptable to the Company); and (iii) such
other documents relating to the transactions contemplated by this Agreement as
the Company or its counsel may reasonably request.

 

2.3           Closing Conditions.

 

(a)          The obligations of the Company hereunder in connection with the
Closing are subject to the satisfaction, or waiver by the Company, of the
following conditions: (i) the accuracy in all material respects on the Closing
Date of the representations and warranties of the Holder contained herein
(unless as of a specific date therein in which case they shall be accurate as of
such date); (ii) all obligations, covenants and agreements of the Holder
required to be performed at or prior to the Closing Date shall have been
performed; (iii) the delivery by the Holder of the items set forth in
Section 2.2(b) of this Agreement; and (iv) the Company shall have received any
Required Approvals necessary to conduct the Closing.

 

(b)          The obligations of the Holder hereunder in connection with the
Closing are subject to the satisfaction, or waiver by the Holder, of the
following conditions: (i) the accuracy in all material respects when made and on
the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein); (ii) all obligations, covenants
and agreements of the Company required to be performed at or prior to the
Closing Date shall have been performed; and (iii) the delivery by the Company of
the items set forth in Section 2.2(a) of this Agreement.

 

(c)           The obligations of the parties hereunder are subject to the
execution by the Company and an entity affiliated with the Holder, of a
definitive agreement to exchange an aggregate principal amount of $950,000 of
convertible notes held by such Affiliate for a new convertible note upon the
terms and conditions described in such definitive agreement.

 

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2.4           Status of Series B Preferred Stock. At Closing, the shares of
Series E Preferred Stock issued in exchange for surrender and cancellation of
the shares of Series B Preferred Stock shall be deemed the full and final
consideration for the cancellation of such shares of Series B Preferred Stock.
On the Closing Date, each holder of record of shares of Series B Preferred Stock
shall be deemed to be the holder of record of the shares of Series E Preferred
Stock issuable to such Holder hereunder, notwithstanding that certificates
representing such shares of Series E Preferred Stock shall not then be actually
delivered to such Holder. From and after the Closing Date, all of the shares of
Series B Preferred Stock required to be delivered for exchange under this
Agreement shall be deemed to have been retired and cancelled in all respects,
all rights of the Holder of such shares shall cease and terminate with respect
to such shares of Series B Preferred Stock except that such shares of Series B
Preferred Stock shall solely represent the right to receive the applicable
number of shares of Series E Preferred Stock issuable in consideration of the
surrender of the certificates representing shares of Series B Preferred Stock.
From and after the Closing, the shares of Series B Preferred Stock surrendered
for exchange shall not thereafter be transferred on the books of the Company or
be deemed to be outstanding for any purpose whatsoever and shall return to the
status of authorized but unissued shares of preferred stock of the Company. The
Company shall thereafter be authorized to take any and all action it determines
may be reasonably necessary to effect such cancellation of the shares of Series
B Preferred Stock.

 

3.            Representations, Warranties and Covenants of Holder.  Holder
hereby makes the following representations and warranties to the Company, and
covenants for the benefit of the Company.

 

(a)            Due Organization and Authorization; Binding Agreement. Holder is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Holder has full right, power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly authorized,
executed and delivered by Holder and (assuming due authorization, execution and
delivery by the Company) constitutes the valid and binding obligation of Holder
enforceable against Holder in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law). No consent, approval, authorization or order of any person, entity, court,
administrative agency or governmental authority is required for the execution,
delivery or performance of this Agreement by the Holder.

 

(b)            No Conflicts. The execution, delivery and performance of this
Agreement by the Holder and the consummation by the Holder of the transactions
contemplated hereby do not and will not: (i) conflict with, or constitute a
default (or an event which 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 of, any agreement, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation to
which the Holder is a party or by which the Holder’s properties or assets are
bound; or (ii) result in a violation of any federal, state, local or foreign
statute, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations) applicable to the Holder or by which any
property or asset of the Holder are bound or affected, except, in each case, for
such conflicts, defaults, terminations, amendments, acceleration, cancellations
and violations as would not, individually or in the aggregate, materially and
adversely affect the Holder’s ability to perform its obligations under this
Agreement.

 

(c)             Holder Status. At the time Holder was offered the Series E
Preferred Stock, it was, and as of the date hereof it is, and on each date on
which it converts shares of Series E Preferred Stock it will be either: (i) an
“accredited investor” as defined in Rule 501(a) under the Securities Act; or
(ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the
Securities Act. Holder is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act. Holder has sufficient knowledge and experience
in financial matters as to be capable of evaluating the risks and merits of the
transaction contemplated hereby. Holder is able to bear the economic risk of its
investment in the Series E Preferred Stock for an indefinite period of time, is
able to afford a complete loss of such investment, and acknowledges that no
public market exists for the Series E Preferred Stock or the Conversion Shares
and that there is no assurance that a public market will ever develop for such
securities. Neither, the Series E Preferred Stock nor the Conversion Shares have
been registered under the Securities Act and, therefore, cannot be sold unless
subsequently registered under the Securities Act or an exemption from such
registration is available.

 

 4 

 

 

(d)           Information. Holder has reviewed, or has had the opportunity to
review, with the assistance of professional and legal advisors of its choosing,
all information (including all documents filed or furnished to the Commission by
the Company) relating to the business, finances and operations of the Company
and materials relating to the exchange transaction which have been requested by
such Holder. Such Holder has been afforded the opportunity to ask questions of
the Company and has had sufficient access to the Company necessary for Holder to
decide to exchange its Series B Preferred Stock for the Series E Preferred Stock
in accordance with this Agreement. Such Holder acknowledges that all of the
documents filed by the Company with the Commission under Sections 13(a), 14(a)
or 15(d) of the Exchange Act, that have been posted on the EDGAR site maintained
by the Commission are available to such Holder, and such Holder has not relied
on any statement of the Company not contained in such documents in connection
with such Holder’s decision to enter into this Agreement or any other
Transaction Document and to consummate the transactions contemplated hereby.

 

(e)           Certain Disqualification Events. Neither the Holder, nor any
director, executive officer, other member or officer of the Holder participating
in the transactions contemplated by this Agreement, any beneficial owner of 20%
of more of the Holder’s outstanding voting equity securities, calculated on the
basis of voting power, nor any promoter (as that term is defined in Rule 405
under the Securities Act) connected with the Holder in any capacity at the time
of sale (each a “Holder Covered Person”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities
Act (a “Disqualification Event”), except for a Disqualification Event covered by
Rule 506(d)(2) or (3) (provided that the foregoing exception shall not be
available hereunder with respect to Rule 506(d)(2)(iv) for any Disqualification
Event of which the Company did not know as a result of the Holder’s failure to
disclose such Disqualification Event to the Company). Holder has exercised
reasonable care to determine: (i) the identity of each person that is a Holder
Covered Person; and (ii) whether any Holder Covered Person is subject to a
Disqualification Event.

 

(f)             Own Account. The Holder is and will be acquiring the Securities
for the Holder’s own account, for investment purposes, and not with a view to
any resale or distribution in whole or in part, in violation of the Securities
Act or any applicable securities laws; provided, however, that by making the
representations herein, the Holder does not agree to hold such Securities for
any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with federal and state securities laws
applicable to such disposition.

 

(g)            Restricted Securities. The Holder understands that the Securities
purchased hereunder, including the Conversion Shares, are “restricted
securities,” as that term is defined in the Securities Act and the rules
thereunder, have not been registered under the Securities Act, and that none of
the Securities can be sold or transferred unless they are first registered under
the Securities Act and such state and other securities laws as may be applicable
or an exemption from registration under the Securities Act is available (and
then the Securities may be sold or transferred only in compliance with such
exemption and all applicable state and other securities laws). Holder
acknowledges that all certificates representing any of the shares of Series E
Preferred Stock and the Conversion 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.  Holder further understands that
except as provided in the Transaction Documents: (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) Holder 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) Holder 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; and
(iii) except as set forth in the Transaction Documents, 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.

 

 5 

 

 

(h)           Reliance on Representations. Holder 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
Holder’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of Holder set forth herein in order to
determine the availability of such exemptions and the eligibility of Holder to
acquire the Securities. The Holder undertakes to immediately notify the Company
of any change in any statement or other information relating to the Holder which
takes place prior to the Closing time. No Person has made any written or oral
representations to the Holder that: (i) any Person will resell or repurchase the
shares of Series E Preferred Stock or the Conversion Shares or (ii) as to the
future price or value of the shares of Common Stock of the Company.

 

(i)             No Brokers. The Holder has not employed any broker or finder or
incurred any liability for any brokerage or investment banking fees,
commissions, finders’ structuring fees, financial advisory fees or other similar
fees in connection with any of the transactions contemplated by this Agreement.

 

(j)             No General Solicitation. The Holder acknowledges that the
Securities were not offered to the Holder by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including: (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media, or broadcast over television or radio; or (ii) any seminar or meeting to
which the Holder was invited by any of the foregoing means of communications.

 

(k)            Representations Regarding Series B Preferred Stock. The Holder
owns and holds, beneficially and of record, the entire right, title, and
interest in and to the shares of Series B Preferred Stock held by it, free and
clear of any and all pledges, liens, security interests, mortgage, claims,
charges, restrictions, options, title defects or Encumbrances other than
restrictions under the Securities Act and other applicable federal and state
securities laws. Holder has not, in whole or in part, (x) assigned, transferred,
hypothecated, pledged or otherwise disposed of the shares of Series B Preferred
Stock or its rights in such shares of Series B Preferred Stock, or (y) given any
person or entity any transfer order, power of attorney or other authority of any
nature whatsoever with respect to such shares of Series B Preferred Stock which
would limit the Holder’s power to transfer the shares of Series B Preferred
Stock hereunder. Holder has the sole and unencumbered right and power to
transfer and dispose of the shares of Series B Preferred Stock, and such shares
of Series B Preferred Stock are not subject to any agreement, arrangement or
restriction with respect to the voting or transfer of the shares of Series B
Preferred Stock, except for this Agreement. No additional consideration for any
purpose shall be due to Holder at Closing, with respect to the shares of Series
B Preferred Stock, other than the shares of Series E Preferred Stock. Upon
delivery of the shares of Series B Preferred Stock to the Company for
cancellation (as contemplated by this Agreement), the Company will receive good
and marketable title to the shares of Series B Preferred Stock, free and clear
of all pledges, liens, security interests, mortgage, claims, charges,
restrictions, options, title defects or Encumbrances. The shares of Series B
Preferred Stock being surrendered by it for cancellation pursuant to this
Agreement represent all of the shares of Series B Preferred Stock of the Company
in which Holder owns any legal or beneficial interest.

 

(l)             No Representations. No person or entity, other than the Company,
has been authorized to give any information or to make any representation on
behalf of the Company in connection with the offering of Securities, and if
given or made, such information or representations have not been relied upon by
the Holder as having been made or authorized by the Company.  The only
representations and warranties made by the Company in connection with the
offering of Securities are those contained in this Agreement, and the only
information made available by the Company in connection with the offering of
Securities is contained in this Agreement.

 

(m)           No Legal, Tax or Investment Advice.   Holder understands that the
tax consequences of the transactions contemplated by this Agreement are complex,
and accordingly Holder represents and warrants that it 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, constitutes legal, tax or investment advice.  Holder 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.  Holder is not relying on the Company or any of its respective
affiliates or agents, including its counsel and accountants, for any tax advice
regarding the tax consequences of the transactions contemplated by this
Agreement.

 

(n)            No Governmental Review. Such Holder understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement in connection with the
transactions contemplated by this Agreement or the fairness or suitability of
the investment in the Series E Preferred Stock nor have such authorities passed
upon or endorsed the merits of the Series E Preferred Stock.

 

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4.            Representations, Warranties and Covenants of the Company.  The
Company represents and warrants to the Holder, and covenants for the benefit of
the Holder, as follows:

 

(a)             Due Organization. The Company has been duly incorporated and is
validly existing and in good standing under the laws of the state of Delaware,
with full corporate power and authority to own, lease and operate its properties
and to conduct its business as currently conducted. The Company is duly
qualified to conduct 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 it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
could not have or reasonably be expected to result in: (i) a material adverse
effect on the legality, validity or enforceability of any Transaction Document;
(ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole; or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

 

(b)            Due Authorization; Binding Agreement; No Conflicts. The Company
has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each of the other
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection
herewith or therewith other than in connection with the Required Approvals. This
Agreement and each other Transaction Document to which it is a party has been
(or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to the Required Approvals and except: (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally; (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies; and (iii) insofar as indemnification and contribution provisions may
be limited by applicable law.

 

(c)           Issuance of Series E Preferred Stock. The issuance of the Series E
Preferred Stock is duly authorized and, upon issuance in accordance with the
terms hereof, the shares of Series E Preferred Stock will be validly issued,
fully paid and non-assessable. The shares of Common Stock issuable upon
conversion of the Series E Preferred Stock, when issued and delivered in
accordance with the terms of the Series E Designation, will be duly and validly
issued, fully paid and non-assessable, free and clear of all Encumbrances, other
than restrictions on transfer under applicable state and federal securities
laws.

 

(d)            Filings, Consents and Approvals. 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 in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) those that have previously been obtained; (ii) the filings
required pursuant to the Exchange Act; (iii) the notice and/or application(s) to
each applicable Trading Market, if any, for the issuance and sale of the
Securities and the listing of the Conversion Shares for trading thereon in the
time and manner required thereby; and (iv) such other filings with the
Commission as may be required under the Securities Act and such filings as are
required to be made under applicable state securities laws (collectively, the
“Required Approvals”).

  

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5.            Other Agreements.

 

5.1          Transfer Restrictions.

 

(a)           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 or Rule 144, to the Company
or to an Affiliate of a Holder, the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, 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. As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights and
obligations of a Holder under this Agreement.

 

(b)            The Holders agree to the imprinting, so long as is required by
this Section 5.1, of a legend on any of the Securities substantially in the
following form:

 

[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS
[EXERCISABLE] [CONVERTIBLE]] HAS [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”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.

 

(c)            Each Holder, severally and not jointly with the other Holders,
agrees with the Company that Holder 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, and acknowledges
that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 5.1 is predicated upon the Company’s
reliance upon this understanding.

 

5.2            Reservation of Securities. Subject to obtaining the Required
Approvals, the Company shall maintain a reserve from its duly authorized shares
of Common Stock for issuance pursuant to the Transaction Documents in an amount
no less than the Required Minimum. If, on any date, the number of authorized but
unissued (and otherwise unreserved) shares of Common Stock is less than the
Required Minimum on such date, then the Board of Directors shall use
commercially reasonable efforts to amend the Company’s certificate of
incorporation to increase the number of authorized but unissued shares of Common
Stock to at least the Required Minimum at such time, as soon as possible,
including by calling a meeting of the Company’s shareholders for such purpose.

 

5.3           Fees and Expenses.  Each party hereto shall pay the fees and
expenses of its advisors, 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.

 

5.4          Waiver of Dividends.  Effective as of the Closing Date, the Holder
hereby irrevocably waives any and all claims, demands, suits, actions, causes of
action and rights whatsoever at law or in equity, now existing or arising
relating to any accrued and unpaid dividends on the shares of Series B Preferred
Stock.  The Holder hereby acknowledges and agrees that it shall not commence or
prosecute in any way, or cause to be commenced or prosecuted, any action in any
court relating to such accrued and unpaid dividends.

 

5.5          Piggyback Registration Rights. Holder and the Company agree that
the Holder shall be entitled to the registration rights with respect to the
Underlying Shares as set forth in this Section 5.5.

 

 8 

 

 

(a)            Definition of Registrable Securities. As used in this Section
5.5, the term “Registrable Security” means, as of any date of determination, (a)
all of the shares of Common Stock then issued and issuable upon conversion in
full of the Series E Preferred Stock (assuming on such date the shares of Series
E Preferred Stock is converted in full without regard to any conversion
limitations therein), (b) any additional shares of Common Stock issued and
issuable in connection with any anti-dilution provisions in the Series E
Preferred Stock (in each case, without giving effect to any limitations on
conversion set forth in the Series E Preferred Stock), and (c) any securities
issued or then issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided,
however, that any such Registrable Securities shall cease to be Registrable
Securities (and the Company shall not be required to maintain the effectiveness
of any, or file another, registration statement hereunder with respect thereto)
for so long as (i) a registration statement with respect to the sale of such
Registrable Securities is declared effective by the Commission under the
Securities Act and such Registrable Securities have been disposed of by the
Holder in accordance with such effective registration statement, (ii) such
Registrable Securities have been previously sold in accordance with Rule 144, or
(iii) such securities become eligible for resale without volume or
manner-of-sale restrictions and without current public information pursuant to
Rule 144 as set forth in a written opinion letter to such effect, addressed,
delivered and acceptable to the Company’s transfer agent and the affected
Holders (assuming that such securities and any securities issuable upon
exercise, conversion or exchange of which, or as a dividend upon which, such
securities were issued or are issuable, were at no time held by any Affiliate of
the Company). The term “Registrable Securities” means any and all of the
securities falling within the foregoing definition of “Registrable Security.”

 

(b)            Piggyback Registration Rights. As used herein, a “Registration
Statement” shall mean any registration statement filed by the Company with the
Commission under the Securities Act at any time or from time to time commencing
on a date within one year that any Underlying Shares may be issuable to the
Holder and while any Registrable Securities remain outstanding; provided,
however, that a Registration Statement for the purposes hereof shall not
include: (A) any registration statement (or amendment thereto) filed by the
Company which has not been declared effective on or before the date hereof; (B)
any registration statement on Form S-3 (or any successor form) filed by the
Company for the purpose of effecting offers and sales of securities on a
continuous or delayed basis pursuant to Rule 415(a)(ix) or (x) under the
Securities Act; (C) a registration relating to employee benefit plans (whether
effected on Form S-8 or its successor); or (D) a registration effected on Form
S-4 (or its successor). If at any time or from time to time while any
Registrable Securities remain outstanding, the Company shall determine to
register or shall be required to register any of its Common Stock, whether or
not for its own account, the Company shall:

 

(i)          provide to each Holder written notice thereof at least seven (7)
days prior to the filing of the Registration Statement by the Company in
connection with such registration;

 

(ii)         include in such registration, and in any underwriting involved
therein, all those Registrable Securities specified in a written request by each
Holder received by the Company within five (5) days after the Company mails the
written notice referred to above. The Company may withdraw the registration at
any time. If a registration covered by this Section 5.5 is an underwritten
registration on behalf of the Company, and the underwriters advise the Company
in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company shall include in such registration: (1) first, the securities the
Company proposes to sell, (2) second, the Registrable Securities and other
securities requested to be included in such registration, pro rata among the
selling Holders and any other selling security holders on the basis of the
number of Registrable Securities owned by each such Holder and other selling
security holders. The Holders’ right to have Registrable Securities included in
the first registration statement filed by the Company may be deferred to the
second registration statement filed by the Company, which deferral may be
continued to the third or subsequent registration statement so long as the
registration statements are pursuant to underwritten offerings and the
underwriter determines in good faith that marketing factors require exclusion of
some or all of the Registrable Securities held by the Holders, but such deferral
shall be only to the extent of such required exclusion as determined by the
underwriter; and

 

(iii)        if the registration is an underwritten registration, each Holder of
Registrable Securities shall enter into an underwriting agreement in customary
form with the underwriter and provide such information regarding Holder that the
underwriter shall reasonably request in connection with the preparation of the
prospectus describing such offering, including completion of FINRA
Questionnaires.

 

 9 

 

 

(c)          Covenants with Respect to Registration. In connection with the
registration in which the Registrable Securities are included, the Company and
Holder covenant and agree as follows:

 

(i)            The foregoing registration rights shall be contingent on the
Holders furnishing the Company with such appropriate information as the Company
shall reasonably request, including (A) such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it, as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request. At
least seven days prior to the first anticipated filing date of any Registration
Statement, the Company shall notify each Holder of the information the Company
requires from such Holder if such Holder elects to have any of the Registrable
Securities included in the Registration Statement. A Holder shall provide such
information to the Company at least two (2) Business Days prior to the first
anticipated filing date of such Registration Statement if it elects to have any
of the Registrable Securities included in the Registration Statement. Each
Holder agrees to furnish to the Company a completed selling security holder
questionnaire (a “Questionnaire”) in the form provided to it by the Company not
less than two Business Days prior to the filing date of such Registration
Statement. The Company shall not be required to include the Registrable
Securities of a Holder in a Registration Statement and shall not be required to
pay any damages to such Holder who fails to furnish to the Company a fully
completed Questionnaire at least two Business Days prior to the filing date. The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by it
and, if required by the Commission, the natural persons thereof that have voting
and dispositive control over its shares of Common Stock.

 

(ii)             Each Holder, by its acceptance of the Registrable Securities
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of a Registration Statement
hereunder, unless such Holder has notified the Company in writing of its
election to exclude all of its Registrable Securities from such Registration
Statement. Each Holder agrees that, upon receipt of any notice from the Company
that it must suspend sales of Common Stock pursuant to the Registration
Statement, it will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities,
until the Holder is advised by the Company that such dispositions may again be
made.

 

(iii)           Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration
Statement.

 

(iv)           The Company shall indemnify each Holder of Registrable Securities
to be sold pursuant to the registration statement and each person, if any, who
controls such Holder within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, against all loss, claim, damage, expense or
liability (including reasonable expenses reasonably incurred in investigating,
preparing or defending against any claim) to which any of them may become
subject under the Securities Act, the Exchange Act or otherwise, arising from
such registration statement, except to the extent arising under paragraph (v)
below.

 

(v)            Each Holder owning Registrable Securities to be sold pursuant to
a registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company, its officers and directors and any
underwriter, and each person, if any, who controls the Company or such
underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage or reasonable expense or liability
(including expenses reasonably incurred in investigating, preparing or defending
against any claim) to which they may become subject under the Securities Act,
the Exchange Act or otherwise, arising (A) from information furnished by or on
behalf of such Holder, or their successors or assigns, for inclusion in such
registration statement, or (B) as a result of use by the Holder of a
registration statement that the Holder was advised to discontinue.

  

 10 

 

 

6.            Miscellaneous.

 

6.1          Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to the conflicts of laws principles thereof. Each party hereto
agrees that it shall bring any action, proceeding, suit, demand, or claim with
respect to any matter arising out of or related to this Agreement or the
transactions contained in or contemplated by this Agreement, exclusively in the
Delaware Court of Chancery and any state appellate court therefrom within the
State of Delaware (unless the Delaware Court of Chancery shall decline to accept
jurisdiction over a particular matter, in which case, in any Delaware state or
federal court within the State of Delaware) (such courts, collectively, the
“Delaware Courts”), and solely in connection with claims arising under this
Agreement or the transactions that are the subject of this Agreement (i)
irrevocably submits to the exclusive jurisdiction of the Delaware Courts, (ii)
waives any objection to laying venue in any such action or proceeding in the
Delaware Courts, (iii) waives any objection that the Delaware Courts are an
inconvenient forum or do not have jurisdiction over either party hereto, (iv)
agrees that service of process upon such party in any such action or proceeding
shall be effective if notice is given in accordance with Section 6.5 of this
Agreement, although nothing contained in this Agreement shall affect the right
to serve process in any other manner permitted by law and (v) agrees not to seek
a transfer of venue on the basis that another forum is more convenient.
Notwithstanding anything herein to the contrary, (A) nothing in this Section 6.1
shall prohibit any party from seeking or obtaining orders for conservatory or
interim relief from any court of competent jurisdiction and (B) each party
hereto agrees that any judgment issued by a Delaware Court may be recognized,
recorded, registered or enforced in any jurisdiction in the world and waives any
and all objections or defenses to the recognition, recording, registration or
enforcement of such judgment in any such jurisdiction.

 

6.2           Confidentiality.  The Holder acknowledges and agrees that the
existence of this Agreement and the information contained herein and in the
Exhibits hereto (collectively, “Confidential Information”) is of a confidential
nature and shall not, without the prior written consent of the Company, be
disclosed by the Holder to any person or entity, other than the Holder’s
personal financial and legal advisors for the sole purpose of evaluating an
investment in the Company, and that it shall not, without the prior written
consent of the Company, directly or indirectly, make any statements, public
announcements or release to trade publications or the press with respect to the
subject matter of this Agreement.  Notwithstanding the foregoing, the Holder may
use or disclose Confidential Information to the extent the Holder is required by
law to disclose such Confidential Information, provided, however, that prior to
any such required disclosure, Holder shall give the Company reasonable advance
notice of any such disclosure and shall cooperate with the Company in protecting
against any such disclosure and/or obtaining a protective order narrowing the
scope of such disclosure and/or use of the Confidential Information.  The Holder
further acknowledges and agrees that the information contained herein and in the
other documents relating to this transaction may be regarded as material
non-public information under United States federal securities laws, and that
United States federal securities laws prohibit any person who has received
material non-public information relating to the Company from purchasing or
selling securities of the Company, or from communicating such information to any
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell securities of the Company.  Accordingly,
until such time as any such non-public information has been adequately
disseminated to the public, the Holder shall not purchase or sell any securities
of the Company, or communicate such information to any other person.

 

6.3            Entire Agreement; Amendment and Waivers.  This Agreement
constitutes the entire understanding and agreement of the parties with respect
to the subject matter hereof and supersedes all prior and/or contemporaneous
oral or written proposals or agreements relating thereto all of which are merged
herein.  This Agreement may not be amended or any provision hereof waived in
whole or in part, except by a written amendment signed by all of the parties
hereto. 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.

 

6.4           Counterparts.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood that the
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, 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 “.pdf” signature page were an original
thereof.

 

 11 

 

 

6.5            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 at the
facsimile number set forth on the signature pages attached hereto at or prior to
5:30 p.m. (New York City time) on a Trading Day; (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City
time) on any Trading Day; (c) the second (2nd) Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service; or
(d) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as set forth on
the signature pages attached hereto.

 

6.6            Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.

 

6.7            Survival. All representations and warranties made by the Company
and each Holder will survive the execution of this Agreement and the Closing
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.

 

6.8            Specific Performance; Enforcement. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore, each of the parties hereto agrees that in the event of any such
breach the aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled at law or in
equity. The parties agree that they shall be entitled to enforce specifically
the terms and provisions of this Agreement in addition to any other remedy to
which they may entitled at law or in equity.

 

6.9           Assignment; Binding Effect; Benefits. This Agreement is not
assignable without the written consent of each of the other parties hereto.
Subject to the foregoing, the provisions of this Agreement shall be binding upon
and inure to the benefit of the parties and their respective heirs, legal
representatives, successors and permitted assigns. Except as expressly stated
elsewhere herein, nothing in this Agreement, express or implied, is intended or
shall be construed to give any person other than the parties or their respective
successors or assigns any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein.

 

6.10         Independent Nature of Holders’ Obligations and Rights. The
obligations of Holder under any Transaction Document are several and not joint
with the obligations of any other Holder, and no Holder shall be responsible in
any way for the performance or non-performance of the obligations of any other
Holder under any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Holder pursuant hereto or
thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents. Holder 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 Documents, and it shall not be necessary for any
other Holder to be joined as an additional party in any proceeding for such
purpose.

 

 12 

 

 

6.11         Independent Representation. Each Holder expressly represents and
warrants to the Company that (a) before executing this Agreement, said Holder
has fully informed himself or itself of the terms, contents, conditions and
effects of this Agreement; (b) said Holder has relied solely and completely upon
his or its own judgment in executing this Agreement; (c) said Holder has had the
opportunity to seek the advice of his or its own counsel and advisors before
executing this Agreement; (d) said Holder has acted voluntarily and of his or
its own free will in executing this Agreement; (e) said Holder is not acting
under duress, whether economic or physical, in executing this Agreement;
(f) this Agreement is the result of arm’s length negotiations conducted by and
among the parties; and (g) said Holder acknowledges that the law firm of Becker
& Poliakoff, LLP has been retained by the Company to prepare this Agreement as
legal counsel for the Company, that Becker & Poliakoff, LLP does not represent
any Holder in connection with the preparation or execution of this Agreement,
that such firm has not given any legal, investment or tax advice to any Holder
regarding this Agreement, and that such Holder has not relied upon any legal
advice except as provided by its own attorneys. Becker & Poliakoff, LLP is
expressly intended as a beneficiary of the representations and warranties of the
Holders contained in this Section 6.11.

 

6.12         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.

 

6.13         Replacement of Securities. If any certificate or instrument
evidencing any Securities 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 or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

 

6.14          Termination. If the Initial Closing has not been consummated on or
before March 15, 2017, this Agreement may be terminated (a) by the Holder
(except where such Holder is in breach of this Agreement or has failed to
perform or satisfy any closing condition applicable to it), as to such Holder’s
obligations hereunder only, or (b) by the Company (except for any breach by it
or failure to perform or satisfy any closing condition applicable to it), by
written notice to the other parties; provided, however, that such termination
will not affect the right of any non-breaching party to sue or seek specific
performance for any breach by any other party (or parties).

 

6.15          Construction. The parties agree that each of them and/or their
respective counsel have reviewed and had an opportunity to revise the
Transaction Documents 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 interpretation of the Transaction Documents or any
amendments thereto. In addition, each and every reference to share prices and
shares of Common Stock in any Transaction Document 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. In this Agreement, unless the context otherwise
requires: (i) words of the masculine or neuter gender will include the
masculine, neuter and/or feminine gender, and words in the singular number or in
the plural number will each include, as applicable, the singular number or the
plural number, (ii) reference to any Person includes such Person’s successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, (iii) the words “include,” “includes” and
“including” when used herein shall be deemed in each case to be followed by the
words “without limitation,” (iv) reference to any law means such law as amended,
modified codified or reenacted, in whole or in part, and in effect from time to
time, including rules and regulations promulgated thereunder, (v) except as
otherwise indicated, all references in this Agreement to the words “Section,”
“Schedule” and “Exhibit” are intended to refer to Sections, Schedules and
Exhibits to this Agreement, (vi) the headings of the Sections of this Agreement
are for convenience only and in no way modify, interpret or construe the meaning
of specific provisions of this Agreement, (vi) the words “herein,” “hereto,” and
“hereby” and other words of similar import in this Agreement shall be deemed in
each case to refer to this Agreement as a whole and not to any particular
Section or other subdivision of this Agreement, (vii) any reference herein to
“dollars” or “$” shall mean United States dollars, (viii) any reference herein
to a Governmental Authority shall be deemed to include reference to any
successor thereto, and (ix) the specificity of any representation or warranty
contained herein shall not be deemed to limit the generality of any other
representation or warranty contained herein.

 

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 13 

 

 

IN WITNESS WHEREOF, the Company and each Holder has caused this Agreement to be
executed on its behalf as of the date first written above.

 

AUTHENTIDATE HOLDING CORP.       Address for Notice:       2225 Centennial Drive
      Gainesville, GA 30504       Attn:  Chief Executive Officer              
Fax: Name: Hanif A. Roshan     Title:  Chief Executive Officer           With a
copy to (which shall not constitute notice):           Becker & Poliakoff, LLP  
  45 Broadway, 8th Floor     New York, NY 10006     Attn: Michael A. Goldstein  
  Fax: 212-557-0295    

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 14 

 

 

[HOLDER SIGNATURE PAGES TO EXCHANGE AGREEMENT]

 

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

 

Name of Holder:                  Signature of Authorized Signatory of Holder:  
        Name of Authorized Signatory:                  Title of Authorized
Signatory:            Email Address of Authorized Signatory:           Facsimile
Number of Authorized Signatory:           Social Security or Tax I.D. Number:  
        Address for Notices to Holder:                             Address for
Delivery of certificated Securities for Holder (if not same as address for
notices):                      

 

Number of Shares of Series E Preferred Stock to be issued at Closing:
________________

 

 15 

 

 

EXHIBIT A

 

CERTIFICATE OF DESIGNATIONS OF SERIES E PREFERRED STOCK

 

 16