Document:

EXHIBIT
4.1

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS
PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH
APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION
OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS
WARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION
PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY
OF THE SECURITIES REPRESENTED HEREBY.

 

WARRANT TO PURCHASE SHARES COMMON STOCK

of

ACTIVIDENTITY CORPORATION

Dated as of
[               ],
2009

Void after the date specified in Section 7

 

	
  No. [        ]

  	
  Warrant to Purchase  

  [              ]
  Shares of  

  Common Stock  

  (subject to adjustment)

  

 

THIS
CERTIFIES THAT, for value received, [insert name of warrant
holder], or its registered assigns (the “Holder”),
is entitled, subject to the provisions and upon the terms and conditions set
forth herein, to purchase from ActivIdentity Corporation, a Delaware
corporation (the “Company”), shares of the
Company’s Common Stock (the “Shares”),
in the amounts, at such times and at the price per share set forth in Section 1.
The term “Warrant” as used herein shall
include this Warrant and any warrants delivered in substitution or exchange
therefor as provided herein. This Warrant is issued in connection with the
transactions described in that certain Agreement and Plan of Merger, dated as
of December 13, 2009 by and among the Company, Terrapin Holding
Corporation, Terrapin Acquisition Corporation, CoreStreet, Ltd., and John F.
Burton as Stockholder Representative.

 

The
following is a statement of the rights of the Holder and the conditions to
which this Warrant is subject, and to which Holder, by acceptance of this
Warrant, agrees:

 

1.                                      Number
and Price of Shares; Exercise Period.

 

(a)                                  Number
of Shares. Subject to any previous exercise of the Warrant,
the Holder shall have the right to purchase up to
[              ]
Shares, as may be adjusted pursuant hereto, prior to (or in connection with)
the expiration of this Warrant as provided in Section 7.

 

(b)                                 Exercise
Price. The exercise price per Share shall be equal to
$4.25, subject to adjustment pursuant hereto (the “Exercise
Price”).

 

(c)                                  Exercise
Period. This Warrant shall be exercisable at the election
of the Holder, in whole or in part, prior to (or in connection with) the
expiration of this Warrant as set forth in Section 7.

 

 

2.                                      Exercise
of the Warrant.

 

(a)                                  Exercise. The purchase
rights represented by this Warrant may be exercised at the election of the
Holder, in whole or in part, in accordance with Section 1, by:

 

(i)             the tender to
the Company at its principal office (or such other office or agency as the
Company may designate) of a notice of exercise in the form of Exhibit A (the “Notice of Exercise”), duly completed
and executed by or on behalf of the Holder, together with the surrender of this
Warrant; and

 

(ii)          the payment to
the Company of an amount equal to (x) the Exercise Price multiplied by (y) the
number of Shares being purchased, by wire transfer or certified, cashier’s or
other check acceptable to the Company and payable to the order of the Company.

 

(b)                                 Net
Issue Exercise. In lieu of exercising this Warrant pursuant to Section 2(a)(ii),
if the fair market value of one Share is greater than the Exercise Price (at
the date of calculation as set forth below), the Holder may elect to receive a
number of Shares equal to the value of this Warrant (or of any portion of this
Warrant being canceled) by surrender of this Warrant at the principal office of
the Company (or such other office or agency as the Company may designate)
together with a properly completed and executed Notice of Exercise reflecting
such election, in which event the Company shall issue to the Holder that number
of Shares computed using the following formula (the number of Shares to be
rounded down to the nearest whole Share):

 

	
  X

  	
  =

  	
  Y (A – B)

  
	
  A

  

 

Where:

 

	
  X

  	
  =

  	
  The
  number of Shares to be issued to the Holder

  
	
   

  	
   

  	
   

  
	
  Y

  	
  =

  	
  The
  number of Shares purchasable under this Warrant or, if only a portion of the
  Warrant is being exercised, the portion of the Warrant being canceled (at the
  date of such calculation)

  
	
   

  	
   

  	
   

  
	
  A

  	
  =

  	
  The
  fair market value of one Share (at the date of such calculation)

  
	
   

  	
   

  	
   

  
	
  B

  	
  =

  	
  The
  Exercise Price (as adjusted to the date of such calculation)

  

 

For
purposes of the calculation above, the fair market value of one Share shall be
the average of the closing bid prices of the common stock or the closing price
quoted on the national securities exchange on which the common stock is listed
as published in the Wall Street Journal,
as applicable, for the ten (10) trading day period ending five (5) trading
days prior to the date of determination of fair market value.

 

(c)                                  Stock
Certificates. The rights under this Warrant shall be deemed to
have been exercised and the Shares issuable upon such exercise shall be deemed
to have been issued immediately prior to the close of business on the date this
Warrant is exercised in accordance with its terms, and the person entitled to
receive the Shares issuable upon such exercise shall be treated for all
purposes as the holder of record of such Shares as of the close of business on
such date. As promptly as reasonably practicable on or after such date, and in
any event within five business (5) days thereafter, the Company shall
issue and deliver 

 

2

 

to
the person or persons entitled to receive the same a certificate or
certificates for that number of shares issuable upon such exercise. In the
event that the rights under this Warrant are exercised in part and have not
expired, the Company shall execute and deliver a new Warrant reflecting the
number of Shares that remain subject to this Warrant.  Alternatively, at the option of the Company,
the shares issuable upon the exercise of this Warrant may be issued in
uncertificated form.

 

(d)                                 No
Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of the
rights under this Warrant. In lieu of such fractional share to which the Holder
would otherwise be entitled, the Company shall make a cash payment to the
Holder in an amount equal to the Exercise Price multiplied by such fraction.

 

(e)                                  Automatic Exercise. If the Holder of this Warrant has not
elected to exercise this Warrant prior to the expiration of this Warrant
pursuant to Section 7(b), then this Warrant shall automatically (without
any act on the part of the Holder) be exercised pursuant to Section 2(b) effective
immediately prior to the expiration of the Warrant to the extent such net issue
exercise would result in the issuance of Shares, unless Holder shall earlier
provide written notice to the Company that the Holder desires that this Warrant
expire unexercised. If this Warrant is automatically exercised, the Company
shall notify the Holder of the automatic exercise as soon as reasonably
practicable, and the Holder, as a condition to the receipt of Shares so issued,
shall surrender the Warrant to the Company in accordance with the terms hereof.

 

(f)                                    Reservation
of Stock. During the term the rights under this Warrant are
exercisable, the Company agrees to reserve and keep available from its
authorized and unissued shares of common stock for the purpose of effecting the
exercise of this Warrant such number of shares as shall from time to time be
sufficient to effect the exercise of the rights under this Warrant; and if at
any time the number of authorized but unissued shares of common stock shall not
be sufficient for purposes of the exercise of this Warrant in accordance with
its terms, without limitation of such other remedies as may be available to the
Holder, the Company will take such corporate action as may be necessary to
increase its authorized and unissued shares of common stock to a number of
shares as shall be sufficient for such purposes.  The Company represents and warrants that all
shares of its common stock that may be issued upon the exercise of this Warrant
will, when issued in accordance with the terms hereof, be validly issued, fully
paid and nonassessable.

 

3.                                       Replacement
of the Warrant. Subject to the receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor and amount.

 

4.                                      Transfer
of the Warrant.

 

(a)                                  Warrant
Register. The Company shall maintain a register (the “Warrant Register”) containing the
name and address of the Holder or Holders. Until this Warrant is transferred on
the Warrant Register in accordance herewith, the Company may treat the Holder
as shown on the Warrant Register as the absolute owner of this Warrant for all
purposes, notwithstanding any notice to the contrary. Any Holder of this
Warrant (or of any portion of this Warrant) may change its address as shown on
the Warrant Register by written notice to the Company requesting a change.

 

(b)                                 Warrant
Agent. The Company may appoint an agent for the purpose of
maintaining the Warrant Register referred to in Section 4(a), issuing the
Shares or other securities then issuable upon the exercise of the rights under
this Warrant, exchanging this Warrant, replacing this Warrant or conducting
related activities.

 

3

 

(c)                                  Transferability
of the Warrant. Subject to the provisions of this Warrant with
respect to compliance with the Securities Act of 1933, as amended (the “Securities Act”) and limitations on
assignments and transfers, including without limitation compliance with the
restrictions on transfer set forth in Section 5, title to this Warrant may
be transferred by endorsement (by the transferor and the transferee executing the
assignment form attached as Exhibit B  (the “Assignment
Form”)) and delivery in the same manner as a negotiable
instrument transferable by endorsement and delivery.

 

(d)                                 Exchange
of the Warrant upon a Transfer. On surrender of this
Warrant (and a properly endorsed Assignment Form) for exchange, subject to the
provisions of this Warrant with respect to compliance with the Securities Act
and limitations on assignments and transfers, the Company shall issue to or on
the order of the Holder a new warrant or warrants of like tenor, in the name of
the Holder or as the Holder (on payment by the Holder of any applicable
transfer taxes) may direct, for the number of shares issuable upon exercise
hereof, and the Company shall register any such transfer upon the Warrant
Register. This Warrant (and the securities issuable upon exercise of the rights
under this Warrant) must be surrendered to the Company or its warrant or
transfer agent, as applicable, as a condition precedent to the sale, pledge,
hypothecation or other transfer of any interest in any of the securities
represented hereby.

 

(e)                                  Taxes. In no event
shall the Company be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of any certificate in a name
other than that of the Holder, and the Company shall not be required to issue
or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid or is not payable.

 

5.                                       Restrictions
on Transfer of the Warrant and Shares; Compliance with Securities Laws. By acceptance
of this Warrant, the Holder agrees to comply with the following:

 

(a)                                  Restrictions
on Transfers. Subject to Section 5(b), this Warrant may not
be transferred or assigned in whole or in part at any time on or prior to the
first anniversary of the date of this Warrant without the Company’s prior
written consent.

 

(b)                               Permitted
Transfers. This Warrant may be transferred or assigned in
whole or in part without the Company’s prior written consent pursuant to
transactions involving the distribution without consideration of this Warrant
by any Holder to (i) a parent, subsidiary or other affiliate of a Holder
that is a corporation, (ii) any of the Holder’s partners, members or other
equity owners, or retired partners or members, or to the estate of any of its
partners, members or other equity owners or retired partners or members, or (iii) a
venture capital fund that is controlled by or under common control with one or
more general partners or managing members of, or shares the same management
company with, the Holder.

 

(c)                                  Compliance with Securities Laws.  Notwithstanding anything to the contrary
contained in this Warrant, any transfer of this Warrant or the Shares (the “Securities”) must be in compliance
with all applicable federal and state securities laws. Notwithstanding anything
to the contrary contained in this Warrant, the Holder agrees not to make any
sale, assignment, transfer, pledge or other disposition of all or any portion
of the Warrant, or any beneficial interest therein, unless and until the
transferee thereof has agreed in writing for the benefit of the Company to take
and hold such Warrant subject to, and to be bound by, the terms and conditions
set forth in this Warrant to the same extent as if the transferee were the
original Holder hereunder.

 

(d)                                 Investment
Representation Statement. Unless the rights under
this Warrant are exercised pursuant to an effective registration statement
under the Securities Act that includes the Shares with respect to which the
Warrant was exercised, it shall be a condition to any exercise of the rights
under 

 

4

 

this
Warrant that the Holder shall have confirmed to the satisfaction of the Company
in writing, substantially in the form of Exhibit A-1, that the Shares so purchased are being acquired
solely for the Holder’s own account and not as a nominee for any other party,
for investment and not with a view toward distribution or resale and that the
Holder shall have confirmed such other matters related thereto as may be
reasonably requested by the Company.

 

(e)                                  Legends. The Securities
shall (unless otherwise permitted by the provisions of this Warrant) be stamped
or imprinted with a legend substantially similar to the following (in addition
to any legend required by state securities laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS
PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH
APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION
OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS
CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A
CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY
INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

 

The Shares issued upon any
exercise of the Warrant prior to December 14, 2010 also shall be stamped
or imprinted with a legend substantially similar to the following:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
PRIOR TO DECEMBER 14, 2010.

 

(f)                                    Instructions
Regarding Transfer Restrictions. The Holder consents to the
Company making a notation on its records and giving instructions to any transfer
agent in order to implement the restrictions on transfer established in this Section 5.

 

(g)                                 Removal
of Legend. The legend referring to federal and state
securities laws identified in Section 5(e) stamped
on a certificate evidencing the Shares and the stock transfer instructions and
record notations with respect to such securities shall be removed and the
Company shall issue a certificate without such legend to the holder of such
securities if (i) such securities are registered under the Securities Act,
or (ii) such holder provides the Company with an opinion of counsel
reasonably acceptable to the Company to the effect that a sale or transfer of
such securities may be made without registration or qualification.

 

6.                                       Adjustments. Subject to the
expiration of this Warrant pursuant to Section 8, the number and kind of
shares purchasable hereunder and the Exercise Price therefor are subject to
adjustment from time to time, as follows:

 

(a)                                  Merger
or Reorganization. If at any time there shall be any reorganization,
recapitalization, merger or consolidation (a “Reorganization”)
involving the Company (other than as otherwise provided for herein or as would
cause the expiration of this Warrant under Section 7) in which 

 

5

 

shares
of the Company’s stock are converted into or exchanged for securities, cash or
other property, then, as a part of such Reorganization, lawful provision shall
be made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, at a total price equal to that payable upon exercise
of this Warrant, the kind and amount of securities, cash or other property of
the successor or acquiring corporation resulting from such Reorganization,
which a holder of the Shares deliverable upon exercise of this Warrant would
have been entitled in such Reorganization if the right to purchase the Shares
hereunder had been exercised immediately prior to such Reorganization. In any
such case, appropriate adjustment (as determined in good faith by the Board of
Directors of the successor corporation) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the
Holder after such Reorganization to the end that the provisions of this Warrant
shall be applicable after the event, as near as reasonably may be, in relation
to any shares or other securities deliverable after that event upon the
exercise of this Warrant.

 

(b)                                 Reclassification
of Shares. If the securities issuable upon exercise of this
Warrant are changed into the same or a different number of securities of any
other class or classes by reclassification, capital reorganization or otherwise
(other than as otherwise provided for herein) (a “Reclassification”),
then, in any such event, in lieu of the number of Shares which the Holder would
otherwise have been entitled to receive, the Holder shall have the right
thereafter to exercise this Warrant for a number of shares of such other class
or classes of stock that a holder of the number of securities deliverable upon
exercise of this Warrant immediately before that change would have been
entitled to receive in such Reclassification, all subject to further adjustment
as provided herein with respect to such other shares.

 

(c)                                  Subdivisions
and Combinations. In the event that the outstanding shares of
common stock are subdivided (by stock split, by payment of a stock dividend or
otherwise) into a greater number of shares of such securities, the number of
Shares issuable upon exercise of the rights under this Warrant immediately
prior to such subdivision shall, concurrently with the effectiveness of such
subdivision, be proportionately increased, and the Exercise Price shall be
proportionately decreased, and in the event that the outstanding shares of
common stock are combined (by reclassification or otherwise) into a lesser
number of shares of such securities, the number of Shares issuable upon
exercise of the rights under this Warrant immediately prior to such combination
shall, concurrently with the effectiveness of such combination, be
proportionately decreased, and the Exercise Price shall be proportionately
increased.

 

(d)                                 Notice
of Adjustments. Upon any adjustment in accordance with this Section 6,
the Company shall give notice thereof to the Holder, which notice shall state
the event giving rise to the adjustment, the Exercise Price as adjusted and the
number of securities or other property purchasable upon the exercise of the
rights under this Warrant, setting forth in reasonable detail the method of
calculation of each. The Company shall, upon the written request of any Holder,
furnish or cause to be furnished to such Holder a certificate setting forth (i) such
adjustments, (ii) the Exercise Price at the time in effect and (iii) the
number of securities and the amount, if any, of other property that at the time
would be received upon exercise of this Warrant.

 

7.                                       Expiration of the Warrant. This Warrant shall expire and shall no
longer be exercisable as of the earlier of:

 

(a)                                  5:00 p.m., Pacific time, on December 31,
2011; or

 

(b)                                 (i) the acquisition of the Company
by another entity by means of any transaction or series of related transactions
to which the Company is a party (including, without limitation, any stock
acquisition, reorganization, merger or consolidation, but excluding any sale of
stock for capital raising purposes and any transaction effected primarily for
purposes of changing the Company’s jurisdiction of incorporation) other than a
transaction or series of related transactions in which the holders of the
voting 

 

6

 

securities of the Company
outstanding immediately prior to such transaction or series of related
transactions retain, immediately after such transaction or series of transactions,
as a result of shares in the Company held by such holders prior to such
transaction or series of transactions, at least a majority of the total voting
power represented by the outstanding voting securities of the Company or such
other surviving or resulting entity (or if the Company or such other surviving
or resulting entity is a wholly-owned subsidiary immediately following such
acquisition, its parent), or (ii) a sale, lease or other disposition of
all or substantially all of the assets of the Company and its subsidiaries
taken as a whole by means of any transaction or series of related transactions,
except where such sale, lease or other disposition is to a wholly-owned
subsidiary of the Company.

 

8.                                       No
Rights as a Stockholder. Nothing contained herein shall entitle the
Holder to any rights as a stockholder of the Company or to be deemed the holder
of any securities that may at any time be issuable on the exercise of the
rights hereunder for any purpose nor shall anything contained herein be
construed to confer upon the Holder, as such, any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value or change of stock to no par value, consolidation,
merger, conveyance or otherwise) or to receive notice of meetings, or to
receive dividends or subscription rights or any other rights of a stockholder
of the Company until the rights under the Warrant shall have been exercised and
the Shares purchasable upon exercise of the rights hereunder shall have become
deliverable as provided herein.

 

9.                                       Representations
and Warranties of the Holder. By acceptance of this
Warrant, the Holder represents and warrants to the Company as follows:

 

(a)                                  No
Registration. The Holder understands that the Securities have not been, and will not
be, registered under the Securities Act by reason of a specific exemption from
the registration provisions of the Securities Act, the availability of which
depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of the Holder’s
representations as expressed herein or otherwise made pursuant hereto.

 

(b)                                 Investment
Intent. The Holder is acquiring the Securities for
investment for its own account, not as a nominee or agent, and not with a view
to, or for resale in connection with, any distribution thereof. The Holder has
no present intention of selling, granting any participation in, or otherwise
distributing the Securities, nor does it have any contract, undertaking,
agreement or arrangement for the same.

 

(c)                                  Investment
Experience. The Holder has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to the Company, and has such knowledge and experience in financial or
business matters so that it is capable of evaluating the merits and risks of
its investment in the Company and protecting its own interests.

 

(d)                                 Speculative
Nature of Investment. The Holder understands and acknowledges that
its investment in the Company is highly speculative and involves substantial
risks. The Holder can bear the economic risk of its investment and is able,
without impairing its financial condition, to hold the Securities for an
indefinite period of time and to suffer a complete loss of its investment.

 

(e)                                  Access
to Data. The Holder has had an opportunity to ask questions
of officers of the Company, which questions were answered to its satisfaction.
The Holder believes that it has received all the information that it considers
necessary or appropriate for deciding whether to acquire the Securities. The
Holder understands that any such discussions, as well as any information issued
by the Company, were intended to describe certain aspects of the Company’s
business and prospects, but were not necessarily a 

 

7

 

thorough
or exhaustive description. The Holder acknowledges that any business plans
prepared by the Company have been, and continue to be, subject to change and
that any projections included in such business plans or otherwise are
necessarily speculative in nature, and it can be expected that some or all of
the assumptions underlying the projections will not materialize or will vary
significantly from actual results.

 

(f)                                    Accredited
Investor. The Holder is an “accredited investor” within the
meaning of Regulation D, Rule 501(a), promulgated by the Securities
and Exchange Commission and agrees to submit to the Company such further
assurances of such status as may be reasonably requested by the Company.

 

(g)                                 Residency. The residency
of the Holder (or, in the case of a partnership or corporation, such entity’s
principal place of business) is correctly set forth on the signature page hereto.

 

(h)                                 Restrictions
on Resales. The Holder acknowledges that the Securities must be
held indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. The Holder is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permit
resale of shares purchased in a private placement subject to the satisfaction
of certain conditions, which may include, among other things, the availability
of certain current public information about the Company; the resale occurring
not less than a specified period after a party has purchased and paid for the
security to be sold; the number of shares being sold during any three-month
period not exceeding specified limitations; the sale being effected through a “broker’s
transaction,” a transaction directly with a “market maker” or a “riskless
principal transaction” (as those terms are defined in the Securities Act or the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder); and the filing of a Form 144 notice, if
applicable. The Holder acknowledges and understands that the Company may not be
satisfying the current public information requirement of Rule 144 at the
time the Holder wishes to sell the Securities and that, in such event, the
Holder may be precluded from selling the Securities under Rule 144 even if
the other applicable requirements of Rule 144 have been satisfied. The
Holder acknowledges that, in the event the applicable requirements of Rule 144
are not met, registration under the Securities Act or an exemption from
registration will be required for any disposition of the Securities. The Holder
understands that, although Rule 144 is not exclusive, the Securities and
Exchange Commission has expressed its opinion that persons proposing to sell
restricted securities received in a private offering other than in a registered
offering or pursuant to Rule 144 will have a substantial burden of proof
in establishing that an exemption from registration is available for such
offers or sales and that such persons and the brokers who participate in the
transactions do so at their own risk.

 

(i)                                     Brokers
and Finders. The Holder has not engaged any brokers, finders or
agents in connection with the Securities, and the Company has not incurred nor
will incur, directly or indirectly, as a result of any action taken by the
Holder, any liability for brokerage or finders’ fees or agents’ commissions or
any similar charges in connection with the Securities.

 

(j)                                     Legal
Counsel. The Holder has had the opportunity to review this
Warrant, the exhibits and schedules attached hereto and the transactions
contemplated by this Warrant with its own legal counsel. The Holder is not
relying on any statements or representations of the Company or its agents for
legal advice with respect to this investment or the transactions contemplated
by this Warrant.

 

(k)                                  Tax
Advisors. The Holder has reviewed with its own tax advisors
the U.S. federal, state and local and non-U.S. tax consequences of this
investment and the transactions contemplated by this Warrant. With respect to
such matters, the Holder relies solely on any such advisors and not on any
statements or representations of the Company or any of its agents, written or
oral. The Holder understands that it (and not the Company) shall be responsible
for its own tax liability that may arise as a result of this investment and the
transactions contemplated by this Warrant.

 

8

 

10.                                 Miscellaneous.

 

(a)                                  Amendments. Except as expressly provided herein, neither
this Warrant nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument referencing this Warrant and
signed by the Company and the Holder.

 

(b)                                 Waivers. No waiver of
any single term, condition or provision shall be deemed a waiver of any other
term, condition or provision theretofore or thereafter occurring.

 

(c)                                  Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, sent by facsimile or electronic mail (if to
the Holder) or otherwise delivered by hand, messenger or courier service
addressed:

 

(i)             if to the
Holder, to the Holder at the Holder’s address, facsimile number or electronic
mail address as shown in the Company’s records, as may be updated in accordance
with the provisions hereof, or until any such Holder so furnishes an address,
facsimile number or electronic mail address to the Company, then to and at the
address, facsimile number or electronic mail address of the last holder of this
Warrant for which the Company has contact information in its records; or

 

(ii)          if to the
Company, to the attention of the President or Chief Financial Officer of the
Company at the Company’s address as shown on the signature page hereto, or
at such other address as the Company shall have furnished to the Holder, with a
copy to Douglas H. Collom and Julia Reigel, Wilson Sonsini Goodrich &
Rosati, P.C., 650 Page Mill Road, Palo Alto, CA 94304.

 

Each
such notice or other communication shall for all purposes of this Warrant be
treated as effective or having been given (i) if delivered by hand,
messenger or courier service, when delivered, or (ii) if sent by mail, at
the earlier of its receipt or 72 hours after the same has been deposited
in a regularly maintained receptacle for the deposit of the United States mail,
addressed and mailed as aforesaid, or (iii) if sent by facsimile, upon
confirmation of facsimile transfer or, if sent by electronic mail, upon
confirmation of delivery when directed to the relevant electronic mail address.
In the event of any conflict between the Company’s books and records and this
Warrant or any notice delivered hereunder, the Company’s books and records will
control absent fraud or error.

 

(d)                                 Governing Law. This Warrant and all
actions arising out of or in connection with this Warrant shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to the conflicts of law provisions of the State of Delaware, or of any
other state.

 

(e)                                  Jurisdiction
and Venue.  Each of the Holder and the
Company irrevocably consents to the jurisdiction and venue of any court within
Santa Clara County, State of California, in connection with any matter based
upon or arising out of this Warrant or the matters contemplated herein, and
agrees that process may be served upon them in any manner authorized by the
laws of the State of California for such persons.

 

(f)                                    Titles
and Subtitles. The titles and subtitles used in this Warrant are
used for convenience only and are not to be considered in construing or
interpreting this Warrant. All references in this Warrant to sections,
paragraphs and exhibits shall, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits attached hereto.

 

(g)                                 Severability. If any
provision of this Warrant becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, portions of such provision,
or such provision in its 

 

9

 

entirety,
to the extent necessary, shall be severed from this Warrant, and such illegal,
unenforceable or void provision shall be replaced with a valid and enforceable
provision that will achieve, to the extent possible, the same economic,
business and other purposes of the illegal, unenforceable or void provision.
The balance of this Warrant shall be enforceable in accordance with its terms.

 

(h)                                 Waiver
of Jury Trial.  EACH OF THE HOLDER AND THE COMPANY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO
THIS WARRANT. If the waiver of jury trial set forth in this
paragraph is not enforceable, then any claim or cause of action arising out of
or relating to this Warrant shall be settled by judicial reference pursuant to
California Code of Civil Procedure Section 638 et seq.
before a referee sitting without a jury, such referee to be mutually acceptable
to the parties or, if no agreement is reached, by a referee appointed by the
Presiding Judge of the California Superior Court for Santa Clara County. This
paragraph shall not restrict the Holder or the Company from exercising remedies
under the Uniform Commercial Code or from exercising pre-judgment remedies
under applicable law.

 

(i)                                     California Corporate Securities Law. THE SALE OF
THE SECURITIES THAT ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS WARRANT ARE
EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.

 

(j)                                     Saturdays,
Sundays and Holidays. If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
be a Saturday, Sunday or U.S. federal holiday, then such action may be taken or
such right may be exercised on the next succeeding day that is not a Saturday,
Sunday or U.S. federal holiday.

 

(k)                                  Rights
and Obligations Survive Exercise of the Warrant. Except as
otherwise provided herein, the rights and obligations of the Company and the
Holder under this Warrant shall survive exercise of this Warrant.

 

(l)                                     Entire
Agreement. Except as expressly set forth herein, this Warrant
(including the exhibits attached hereto) constitutes the entire agreement and
understanding of the Company and the Holder with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.

 

(signature
page follows)

 

10

 

The
Company signs this Warrant as of the date stated on the first page.

 

	
   

  	
  ACTIVIDENTITY CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  6623
  Dumbarton Circle

  
	
   

  	
  Fremont,
  CA 94555

  

 

 

(Signature
Page to Warrant to Purchase Shares Common Stock of ActivIdentity Corporation)

 

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

TO:                         ACTIVIDENTITY
CORPORATION (the “Company”)

 

Attention:              President

 

(1)                                  Exercise. The
undersigned elects to purchase the following pursuant to the terms of the
attached warrant:

 

Number of shares:

 

Type of security:

 

(2)                                  Method of Exercise. The
undersigned elects to exercise the attached warrant pursuant to:

 

o                                    A cash payment,
and tenders herewith payment of the purchase price for such shares in full,
together with all applicable transfer taxes, if any.

 

o                                    The net issue exercise
provisions of Section 2(b) of the attached warrant.

 

(3)                                  Stock Certificate. Please issue a
certificate or certificates representing the shares in the name of:

 

o                                    The undersigned

 

o                                    Other—Name:

 

Address:

 

 

(4)                                  Unexercised Portion of the
Warrant. Please issue a new warrant for the unexercised
portion of the attached warrant in the name of:

 

o                                    The undersigned

 

o                                    Other—Name:

 

Address:

 

 

o                                    Not applicable

 

(5)                                  Investment Intent. The
undersigned represents and warrants that the aforesaid shares are being acquired
for investment for its own account, not as a nominee or agent, and not with a
view to, or for resale in connection with, the distribution thereof, and that
the undersigned has no present intention of selling, granting any participation
in, or otherwise distributing the shares, nor does it have any contract,
undertaking, agreement or arrangement for the same, and all representations and
warranties of the undersigned set forth in Section 9 of the attached
warrant are true and correct as of the date hereof.

 

A-1

 

(6)                                  Investment Representation
Statement. The undersigned has executed, and delivers
herewith, an Investment Representation Statement in a form substantially
similar to the form attached to the warrant as Exhibit A-1.

 

(7)                                  Consent
to Receipt of Electronic Notice. Subject to the limitations
set forth in Delaware General Corporation Law §232(e), the undersigned consents
to the delivery of any notice to stockholders given by the Company under the
Delaware General Corporation Law or the Company’s certificate of incorporation
or bylaws by (i) facsimile telecommunication to the facsimile number
provided below (or to any other facsimile number for the undersigned in the
Company’s records), (ii) electronic mail to the electronic mail address
provided below (or to any other electronic mail address for the undersigned in
the Company’s records), (iii) posting on an electronic network together
with separate notice to the undersigned of such specific posting or (iv) any
other form of electronic transmission (as defined in the Delaware General
Corporation Law) directed to the undersigned. This consent may be revoked by
the undersigned by written notice to the Company and may be deemed revoked in
the circumstances specified in Delaware General Corporation Law §232.

 

	
   

  	
   

  
	
   

  	
  (Print name
  of the warrant holder)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name and
  title of signatory, if applicable)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Date)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Fax number)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Email
  address)

  

 

 

(Signature page to the Notice of
Exercise)

 

A-2

 

EXHIBIT A-l

 

INVESTMENT REPRESENTATION
STATEMENT

 

	
  INVESTOR:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  	
  ACTIVIDENTITY
  CORPORATION

  
	
   

  	
   

  	
   

  
	
  SECURITIES:

  	
   

  	
  THE
  WARRANT ISSUED ON [INSERT DATE]
  (THE “WARRANT”) AND
  THE SECURITIES ISSUED OR ISSUABLE UPON EXERCISE THEREOF

  

 

DATE:

 

In
connection with the purchase or acquisition of the above-listed Securities, the
undersigned Investor represents and warrants to, and agrees with, the Company
as follows:

 

1.             No
Registration. The Investor understands that the Securities have not
been, and will not be, registered under the Securities Act of 1933, as amended
(the “Securities Act”), by reason
of a specific exemption from the registration provisions of the Securities Act,
the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy
of the Investor’s representations as expressed herein or otherwise made
pursuant hereto.

 

2.             Investment Intent. The Investor is acquiring the Securities
for investment for its own account, not as a nominee or agent, and not with a
view to, or for resale in connection with, any distribution thereof. The
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the Securities, nor does it have any contract,
undertaking, agreement or arrangement for the same.

 

3.             Investment
Experience. The Investor has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to the Company, and has such knowledge and experience in financial or
business matters so that it is capable of evaluating the merits and risks of
its investment in the Company and protecting its own interests.

 

4.             Speculative
Nature of Investment. The Investor understands and acknowledges that
its investment in the Company is highly speculative and involves substantial
risks. The Investor can bear the economic risk of its investment and is able,
without impairing its financial condition, to hold the Securities for an
indefinite period of time and to suffer a complete loss of its investment.

 

5.             Access to
Data. The Investor has had an opportunity to ask questions of
officers of the Company, which questions were answered to its satisfaction. The
Investor believes that it has received all the information that it considers
necessary or appropriate for deciding whether to acquire the Securities. The
Investor understands that any such discussions, as well as any information
issued by the Company, were intended to describe certain aspects of the Company’s
business and prospects, but were not necessarily a thorough or exhaustive
description. The Investor acknowledges that any business plans prepared by the
Company have been, and continue to be, subject to change and that any
projections included in such business plans or otherwise are necessarily
speculative in nature, and it can be expected that some or all of the
assumptions underlying the projections will not materialize or will vary
significantly from actual results.

 

A-1-1

 

6.             Accredited
Investor. The Investor is an “accredited investor” within the
meaning of Regulation D, Rule 501(a), promulgated by the Securities
and Exchange Commission and agrees to submit to the Company such further
assurances of such status as may be reasonably requested by the Company.

 

7.             Residency.
The residency of the Investor (or, in the case of a partnership or corporation,
such entity’s principal place of business) is correctly set forth on the
signature page hereto.

 

8.             Restrictions
on Resales. The Investor acknowledges that the Securities must be
held indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. The Investor is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permit
resale of shares purchased in a private placement subject to the satisfaction
of certain conditions, which may include, among other things, the availability of
certain current public information about the Company; the resale occurring not
less than a specified period after a party has purchased and paid for the
security to be sold; the number of shares being sold during any three-month
period not exceeding specified limitations; the sale being effected through a “broker’s
transaction,” a transaction directly with a “market maker” or a “riskless
principal transaction” (as those terms are defined in the Securities Act or the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder); and the filing of a Form 144 notice, if
applicable. The Investor acknowledges and understands that the Company may not
be satisfying the current public information requirement of Rule 144 at
the time the Investor wishes to sell the Securities and that, in such event,
the Investor may be precluded from selling the Securities under Rule 144
even if the other applicable requirements of Rule 144 have been satisfied.
The Investor understands and acknowledges that, in the event the applicable
requirements of Rule 144 are not met, registration under the Securities
Act or an exemption from registration will be required for any disposition of
the Securities. The Investor understands that, although Rule 144 is not
exclusive, the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell restricted securities received in a private
offering other than in a registered offering or pursuant to Rule 144 will
have a substantial burden of proof in establishing that an exemption from
registration is available for those offers or sales and that those persons and
the brokers who participate in the transactions do so at their own risk.

 

9.             Brokers and
Finders. The Investor has not engaged any brokers, finders or agents
in connection with the Securities, and the Company has not incurred nor will
incur, directly or indirectly, as a result of any action taken by the Investor,
any liability for brokerage or finders’ fees or agents’ commissions or any
similar charges in connection with the Securities.

 

10.           Legal Counsel.
The Investor has had the opportunity to review the Warrant, the exhibits and
schedules attached thereto and the transactions contemplated by the Warrant
with its own legal counsel. The Investor is not relying on any statements or
representations of the Company or its agents for legal advice with respect to
this investment or the transactions contemplated by the Warrant.

 

11.           Tax Advisors.
The Investor has reviewed with its own tax advisors the U.S. federal, state and
local and non-U.S. tax consequences of this investment and the transactions
contemplated by the Warrant. With respect to such matters, the Investor relies
solely on such advisors and not on any statements or representations of the
Company or any of its agents, written or oral. The Investor understands that it
(and not the Company) shall be responsible for its own tax liability that may
arise as a result of this investment or the transactions contemplated by the
Warrant.

 

(signature page follows)

 

A-1-2

 

The
Investor is signing this Investment Representation Statement on the date first
written above.

 

 

	
   

  	
  INVESTOR

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print name
  of the investor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name and
  title of signatory, if applicable)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Street
  address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (City,
  state and ZIP)

  

 

A-1-3

 

EXHIBIT B

 

ASSIGNMENT FORM

 

	
  ASSIGNOR:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  	
  ACTIVIDENTITY
  CORPORATION

  
	
   

  	
   

  	
   

  
	
  WARRANT:

  	
   

  	
  THE
  WARRANT TO PURCHASE SHARES OF COMMON STOCK ISSUED ON [INSERT
  DATE] (THE “WARRANT”)

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  	
   

  

 

(1)                                  Assignment. The
undersigned registered holder of the Warrant (“Assignor”) assigns and transfers to the assignee named
below (“Assignee”) all of the rights
of Assignor under the Warrant, with respect to the number of shares set forth
below:

 

	
  Name
  of Assignee:

  	
   

  
	
   

  	
   

  
	
  Address
  of Assignee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Number
  of Shares Assigned:

  	
   

  
				

 

and does irrevocably
constitute and appoint
                                            
as attorney to make such transfer on the books of ActivIdentity Corporation,
maintained for the purpose, with full power of substitution in the premises.

 

(2)                                  Obligations of Assignee. Assignee
agrees to take and hold the Warrant and any shares of stock to be issued upon
exercise of the rights thereunder (the “Securities”)
subject to, and to be bound by, the terms and conditions set forth in the
Warrant to the same extent as if Assignee were the original holder thereof.

 

(3)                                  Investment Intent. Assignee
represents and warrants that the Securities are being acquired for investment
for its own account, not as a nominee or agent, and not with a view to, or for
resale in connection with, the distribution thereof, and that Assignee has no
present intention of selling, granting any participation in, or otherwise
distributing the shares, nor does it have any contract, undertaking, agreement
or arrangement for the same, and all representations and warranties set forth
in Section 9 of the Warrant are true and correct as to Assignee as of the
date hereof.

 

(4)                                  Investment Representation
Statement. Assignee has executed, and delivers herewith, an
Investment Representation Statement in a form substantially similar to the form
attached to the Warrant as Exhibit A-1.

 

1

 

Assignor and Assignee are signing this Assignment Form on
the date first set forth above.

 

	
  ASSIGNOR

  	
   

  	
  ASSIGNEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print
  name of Assignor)

  	
   

  	
  (Print name
  of Assignee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature
  of Assignor)

  	
   

  	
  (Signature
  of Assignee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print name
  of signatory, if applicable)

  	
   

  	
  (Print name
  of signatory, if applicable)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print
  title of signatory, if applicable)

  	
   

  	
  (Print
  title of signatory, if applicable)

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

2EXHIBIT
4.2

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS
PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH
APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION
OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS
WARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION
PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY
OF THE SECURITIES REPRESENTED HEREBY.

 

WARRANT TO PURCHASE SHARES COMMON STOCK

of

ACTIVIDENTITY CORPORATION

Dated as of
[                ],
2009

Void after the date specified in Section 7

 

	
  No. [        ]

  	
  Warrant to Purchase

  [              ]
  Shares of

  Common Stock

  (subject to adjustment)

  

 

THIS
CERTIFIES THAT, for value received, [insert name of warrant
holder], or its registered assigns (the “Holder”),
is entitled, subject to the provisions and upon the terms and conditions set
forth herein, to purchase from ActivIdentity Corporation, a Delaware
corporation (the “Company”), shares of the
Company’s Common Stock (the “Shares”),
in the amounts, at such times and at the price per share set forth in Section 1.
The term “Warrant” as used herein shall
include this Warrant and any warrants delivered in substitution or exchange
therefor as provided herein. This Warrant is issued in connection with the
transactions described in that certain Agreement and Plan of Merger, dated as
of December 13, 2009 by and among the Company, Terrapin Holding
Corporation, Terrapin Acquisition Corporation, CoreStreet, Ltd., and John F.
Burton as Stockholder Representative.

 

The
following is a statement of the rights of the Holder and the conditions to
which this Warrant is subject, and to which Holder, by acceptance of this
Warrant, agrees:

 

1.                                      Number
and Price of Shares; Exercise Period.

 

(a)                                  Number
of Shares. Subject to any previous exercise of the Warrant,
the Holder shall have the right to purchase up to
[              ]
Shares, as may be adjusted pursuant hereto, prior to (or in connection with)
the expiration of this Warrant as provided in Section 7.

 

(b)                                 Exercise
Price. The exercise price per Share shall be equal to
$5.00, subject to adjustment pursuant hereto (the “Exercise
Price”).

 

(c)                                  Exercise
Period. This Warrant shall be exercisable at the election
of the Holder, in whole or in part, prior to (or in connection with) the
expiration of this Warrant as set forth in Section 7.

 

 

2.                                      Exercise
of the Warrant.

 

(a)                                  Exercise. The purchase
rights represented by this Warrant may be exercised at the election of the
Holder, in whole or in part, in accordance with Section 1, by:

 

(i)             the tender to
the Company at its principal office (or such other office or agency as the
Company may designate) of a notice of exercise in the form of Exhibit A (the “Notice of Exercise”), duly completed
and executed by or on behalf of the Holder, together with the surrender of this
Warrant; and

 

(ii)          the payment to
the Company of an amount equal to (x) the Exercise Price multiplied by (y) the
number of Shares being purchased, by wire transfer or certified, cashier’s or
other check acceptable to the Company and payable to the order of the Company.

 

(b)                                 Net
Issue Exercise. In lieu of exercising this Warrant pursuant to Section 2(a)(ii),
if the fair market value of one Share is greater than the Exercise Price (at
the date of calculation as set forth below), the Holder may elect to receive a
number of Shares equal to the value of this Warrant (or of any portion of this
Warrant being canceled) by surrender of this Warrant at the principal office of
the Company (or such other office or agency as the Company may designate)
together with a properly completed and executed Notice of Exercise reflecting
such election, in which event the Company shall issue to the Holder that number
of Shares computed using the following formula (the number of Shares to be
rounded down to the nearest whole Share):

 

	
  X

  	
  =

  	
  Y (A – B)

  
	
  A

  

 

Where:

 

	
  X

  	
  =

  	
  The number of Shares to be
  issued to the Holder

  
	
   

  	
   

  	
   

  
	
  Y

  	
  =

  	
  The number of Shares
  purchasable under this Warrant or, if only a portion of the Warrant is being
  exercised, the portion of the Warrant being canceled (at the date of such
  calculation)

  
	
   

  	
   

  	
   

  
	
  A

  	
  =

  	
  The fair market value of
  one Share (at the date of such calculation)

  
	
   

  	
   

  	
   

  
	
  B

  	
  =

  	
  The Exercise Price (as
  adjusted to the date of such calculation)

  

 

For
purposes of the calculation above, the fair market value of one Share shall be
the average of the closing bid prices of the common stock or the closing price
quoted on the national securities exchange on which the common stock is listed
as published in the Wall Street Journal,
as applicable, for the ten (10) trading day period ending five (5) trading
days prior to the date of determination of fair market value.

 

(c)                                  Stock
Certificates. The rights under this Warrant shall be deemed to
have been exercised and the Shares issuable upon such exercise shall be deemed
to have been issued immediately prior to the close of business on the date this
Warrant is exercised in accordance with its terms, and the person entitled to
receive the Shares issuable upon such exercise shall be treated for all
purposes as the holder of record of such Shares as of the close of business on
such date. As promptly as reasonably practicable on or after such date, and in
any event within five business (5) days thereafter, the Company shall
issue and deliver 

 

2

 

to
the person or persons entitled to receive the same a certificate or
certificates for that number of shares issuable upon such exercise. In the
event that the rights under this Warrant are exercised in part and have not
expired, the Company shall execute and deliver a new Warrant reflecting the
number of Shares that remain subject to this Warrant.  Alternatively, at the option of the Company,
the shares issuable upon the exercise of this Warrant may be issued in
uncertificated form.

 

(d)                                 No
Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of the
rights under this Warrant. In lieu of such fractional share to which the Holder
would otherwise be entitled, the Company shall make a cash payment to the
Holder in an amount equal to the Exercise Price multiplied by such fraction.

 

(e)                                  Automatic Exercise. If the Holder of this Warrant has not
elected to exercise this Warrant prior to the expiration of this Warrant
pursuant to Section 7(b), then this Warrant shall automatically (without
any act on the part of the Holder) be exercised pursuant to Section 2(b) effective
immediately prior to the expiration of the Warrant to the extent such net issue
exercise would result in the issuance of Shares, unless Holder shall earlier
provide written notice to the Company that the Holder desires that this Warrant
expire unexercised. If this Warrant is automatically exercised, the Company
shall notify the Holder of the automatic exercise as soon as reasonably
practicable, and the Holder, as a condition to the receipt of Shares so issued,
shall surrender the Warrant to the Company in accordance with the terms hereof.

 

(f)                                    Reservation
of Stock. During the term the rights under this Warrant are
exercisable, the Company agrees to reserve and keep available from its
authorized and unissued shares of common stock for the purpose of effecting the
exercise of this Warrant such number of shares as shall from time to time be
sufficient to effect the exercise of the rights under this Warrant; and if at
any time the number of authorized but unissued shares of common stock shall not
be sufficient for purposes of the exercise of this Warrant in accordance with
its terms, without limitation of such other remedies as may be available to the
Holder, the Company will take such corporate action as may be necessary to
increase its authorized and unissued shares of common stock to a number of
shares as shall be sufficient for such purposes.  The Company represents and warrants that all
shares of its common stock that may be issued upon the exercise of this Warrant
will, when issued in accordance with the terms hereof, be validly issued, fully
paid and nonassessable.

 

3.                                       Replacement
of the Warrant. Subject to the receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the
Company or, in the case of mutilation, on surrender and cancellation of this
Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor and amount.

 

4.                                      Transfer
of the Warrant.

 

(a)                                  Warrant
Register. The Company shall maintain a register (the “Warrant Register”) containing the
name and address of the Holder or Holders. Until this Warrant is transferred on
the Warrant Register in accordance herewith, the Company may treat the Holder
as shown on the Warrant Register as the absolute owner of this Warrant for all
purposes, notwithstanding any notice to the contrary. Any Holder of this
Warrant (or of any portion of this Warrant) may change its address as shown on
the Warrant Register by written notice to the Company requesting a change.

 

(b)                                 Warrant
Agent. The Company may appoint an agent for the purpose of
maintaining the Warrant Register referred to in Section 4(a), issuing the
Shares or other securities then issuable upon the exercise of the rights under
this Warrant, exchanging this Warrant, replacing this Warrant or conducting
related activities.

 

3

 

(c)                                  Transferability
of the Warrant. Subject to the provisions of this Warrant with
respect to compliance with the Securities Act of 1933, as amended (the “Securities Act”) and limitations on
assignments and transfers, including without limitation compliance with the
restrictions on transfer set forth in Section 5, title to this Warrant may
be transferred by endorsement (by the transferor and the transferee executing
the assignment form attached as Exhibit B  (the “Assignment
Form”)) and delivery in the same manner as a negotiable
instrument transferable by endorsement and delivery.

 

(d)                                 Exchange
of the Warrant upon a Transfer. On surrender of this
Warrant (and a properly endorsed Assignment Form) for exchange, subject to the
provisions of this Warrant with respect to compliance with the Securities Act
and limitations on assignments and transfers, the Company shall issue to or on
the order of the Holder a new warrant or warrants of like tenor, in the name of
the Holder or as the Holder (on payment by the Holder of any applicable
transfer taxes) may direct, for the number of shares issuable upon exercise
hereof, and the Company shall register any such transfer upon the Warrant
Register. This Warrant (and the securities issuable upon exercise of the rights
under this Warrant) must be surrendered to the Company or its warrant or
transfer agent, as applicable, as a condition precedent to the sale, pledge,
hypothecation or other transfer of any interest in any of the securities
represented hereby.

 

(e)                                  Taxes. In no event
shall the Company be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of any certificate in a name
other than that of the Holder, and the Company shall not be required to issue
or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid or is not payable.

 

5.                                       Restrictions
on Transfer of the Warrant and Shares; Compliance with Securities Laws. By acceptance
of this Warrant, the Holder agrees to comply with the following:

 

(a)                                  Restrictions
on Transfers. Subject to Section 5(b), this Warrant may not
be transferred or assigned in whole or in part at any time on or prior to the
first anniversary of the date of this Warrant without the Company’s prior
written consent.

 

(b)                                 Permitted
Transfers. This Warrant may be transferred or assigned in
whole or in part without the Company’s prior written consent pursuant to
transactions involving the distribution without consideration of this Warrant
by any Holder to (i) a parent, subsidiary or other affiliate of a Holder
that is a corporation, (ii) any of the Holder’s partners, members or other
equity owners, or retired partners or members, or to the estate of any of its
partners, members or other equity owners or retired partners or members, or (iii) a
venture capital fund that is controlled by or under common control with one or
more general partners or managing members of, or shares the same management
company with, the Holder.

 

(c)                                  Compliance with Securities Laws.  Notwithstanding anything to the contrary
contained in this Warrant, any transfer of this Warrant or the Shares (the “Securities”) must be in compliance
with all applicable federal and state securities laws. Notwithstanding anything
to the contrary contained in this Warrant, the Holder agrees not to make any
sale, assignment, transfer, pledge or other disposition of all or any portion
of the Warrant, or any beneficial interest therein, unless and until the
transferee thereof has agreed in writing for the benefit of the Company to take
and hold such Warrant subject to, and to be bound by, the terms and conditions
set forth in this Warrant to the same extent as if the transferee were the
original Holder hereunder.

 

(d)                                 Investment
Representation Statement. Unless the rights under
this Warrant are exercised pursuant to an effective registration statement
under the Securities Act that includes the Shares with respect to which the
Warrant was exercised, it shall be a condition to any exercise of the rights
under 

 

4

 

this
Warrant that the Holder shall have confirmed to the satisfaction of the Company
in writing, substantially in the form of Exhibit A-1, that the Shares so purchased are being acquired
solely for the Holder’s own account and not as a nominee for any other party,
for investment and not with a view toward distribution or resale and that the
Holder shall have confirmed such other matters related thereto as may be
reasonably requested by the Company.

 

(e)                                  Legends. The Securities
shall (unless otherwise permitted by the provisions of this Warrant) be stamped
or imprinted with a legend substantially similar to the following (in addition
to any legend required by state securities laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS
PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH
APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION
OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS
CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A
CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY
INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

 

The Shares issued upon any
exercise of the Warrant prior to December 14, 2010 also shall be stamped
or imprinted with a legend substantially similar to the following:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
PRIOR TO DECEMBER 14, 2010.

 

(f)                                    Instructions
Regarding Transfer Restrictions. The Holder consents to the
Company making a notation on its records and giving instructions to any transfer
agent in order to implement the restrictions on transfer established in this Section 5.

 

(g)                                 Removal
of Legend. The legend referring to federal and state
securities laws identified in Section 5(e) stamped
on a certificate evidencing the Shares and the stock transfer instructions and
record notations with respect to such securities shall be removed and the
Company shall issue a certificate without such legend to the holder of such
securities if (i) such securities are registered under the Securities Act,
or (ii) such holder provides the Company with an opinion of counsel
reasonably acceptable to the Company to the effect that a sale or transfer of
such securities may be made without registration or qualification.

 

6.                                       Adjustments. Subject to the
expiration of this Warrant pursuant to Section 8, the number and kind of
shares purchasable hereunder and the Exercise Price therefor are subject to
adjustment from time to time, as follows:

 

(a)                                  Merger
or Reorganization. If at any time there shall be any reorganization,
recapitalization, merger or consolidation (a “Reorganization”)
involving the Company (other than as otherwise provided for herein or as would
cause the expiration of this Warrant under Section 7) in which 

 

5

 

shares
of the Company’s stock are converted into or exchanged for securities, cash or
other property, then, as a part of such Reorganization, lawful provision shall
be made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, at a total price equal to that payable upon exercise
of this Warrant, the kind and amount of securities, cash or other property of
the successor or acquiring corporation resulting from such Reorganization,
which a holder of the Shares deliverable upon exercise of this Warrant would
have been entitled in such Reorganization if the right to purchase the Shares
hereunder had been exercised immediately prior to such Reorganization. In any
such case, appropriate adjustment (as determined in good faith by the Board of
Directors of the successor corporation) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the
Holder after such Reorganization to the end that the provisions of this Warrant
shall be applicable after the event, as near as reasonably may be, in relation
to any shares or other securities deliverable after that event upon the
exercise of this Warrant.

 

(b)                                 Reclassification
of Shares. If the securities issuable upon exercise of this
Warrant are changed into the same or a different number of securities of any
other class or classes by reclassification, capital reorganization or otherwise
(other than as otherwise provided for herein) (a “Reclassification”),
then, in any such event, in lieu of the number of Shares which the Holder would
otherwise have been entitled to receive, the Holder shall have the right
thereafter to exercise this Warrant for a number of shares of such other class
or classes of stock that a holder of the number of securities deliverable upon
exercise of this Warrant immediately before that change would have been
entitled to receive in such Reclassification, all subject to further adjustment
as provided herein with respect to such other shares.

 

(c)                                  Subdivisions
and Combinations. In the event that the outstanding shares of
common stock are subdivided (by stock split, by payment of a stock dividend or
otherwise) into a greater number of shares of such securities, the number of
Shares issuable upon exercise of the rights under this Warrant immediately
prior to such subdivision shall, concurrently with the effectiveness of such
subdivision, be proportionately increased, and the Exercise Price shall be
proportionately decreased, and in the event that the outstanding shares of
common stock are combined (by reclassification or otherwise) into a lesser
number of shares of such securities, the number of Shares issuable upon
exercise of the rights under this Warrant immediately prior to such combination
shall, concurrently with the effectiveness of such combination, be
proportionately decreased, and the Exercise Price shall be proportionately
increased.

 

(d)                                 Notice
of Adjustments. Upon any adjustment in accordance with this Section 6,
the Company shall give notice thereof to the Holder, which notice shall state
the event giving rise to the adjustment, the Exercise Price as adjusted and the
number of securities or other property purchasable upon the exercise of the
rights under this Warrant, setting forth in reasonable detail the method of
calculation of each. The Company shall, upon the written request of any Holder,
furnish or cause to be furnished to such Holder a certificate setting forth (i) such
adjustments, (ii) the Exercise Price at the time in effect and (iii) the
number of securities and the amount, if any, of other property that at the time
would be received upon exercise of this Warrant.

 

7.                                       Expiration of the Warrant. This Warrant shall expire and shall no
longer be exercisable as of the earlier of:

 

(a)                                  5:00 p.m., Pacific time, on December 31,
2012; or

 

(b)                                 (i) the acquisition of the Company
by another entity by means of any transaction or series of related transactions
to which the Company is a party (including, without limitation, any stock
acquisition, reorganization, merger or consolidation, but excluding any sale of
stock for capital raising purposes and any transaction effected primarily for
purposes of changing the Company’s jurisdiction of incorporation) other than a
transaction or series of related transactions in which the holders of the
voting 

 

6

 

securities of the Company
outstanding immediately prior to such transaction or series of related
transactions retain, immediately after such transaction or series of transactions,
as a result of shares in the Company held by such holders prior to such
transaction or series of transactions, at least a majority of the total voting
power represented by the outstanding voting securities of the Company or such
other surviving or resulting entity (or if the Company or such other surviving
or resulting entity is a wholly-owned subsidiary immediately following such
acquisition, its parent), or (ii) a sale, lease or other disposition of
all or substantially all of the assets of the Company and its subsidiaries
taken as a whole by means of any transaction or series of related transactions,
except where such sale, lease or other disposition is to a wholly-owned
subsidiary of the Company.

 

8.                                       No
Rights as a Stockholder. Nothing contained herein shall entitle the
Holder to any rights as a stockholder of the Company or to be deemed the holder
of any securities that may at any time be issuable on the exercise of the
rights hereunder for any purpose nor shall anything contained herein be construed
to confer upon the Holder, as such, any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or any other rights of a stockholder of the Company until
the rights under the Warrant shall have been exercised and the Shares
purchasable upon exercise of the rights hereunder shall have become deliverable
as provided herein.

 

9.                                       Representations
and Warranties of the Holder. By acceptance of this
Warrant, the Holder represents and warrants to the Company as follows:

 

(a)                                  No
Registration. The Holder understands that the Securities have not been, and will not
be, registered under the Securities Act by reason of a specific exemption from
the registration provisions of the Securities Act, the availability of which
depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of the Holder’s
representations as expressed herein or otherwise made pursuant hereto.

 

(b)                                 Investment
Intent. The Holder is acquiring the Securities for
investment for its own account, not as a nominee or agent, and not with a view
to, or for resale in connection with, any distribution thereof. The Holder has
no present intention of selling, granting any participation in, or otherwise
distributing the Securities, nor does it have any contract, undertaking,
agreement or arrangement for the same.

 

(c)                                  Investment
Experience. The Holder has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to the Company, and has such knowledge and experience in financial or
business matters so that it is capable of evaluating the merits and risks of
its investment in the Company and protecting its own interests.

 

(d)                                 Speculative
Nature of Investment. The Holder understands and acknowledges that
its investment in the Company is highly speculative and involves substantial
risks. The Holder can bear the economic risk of its investment and is able,
without impairing its financial condition, to hold the Securities for an
indefinite period of time and to suffer a complete loss of its investment.

 

(e)                                  Access
to Data. The Holder has had an opportunity to ask questions
of officers of the Company, which questions were answered to its satisfaction.
The Holder believes that it has received all the information that it considers
necessary or appropriate for deciding whether to acquire the Securities. The
Holder understands that any such discussions, as well as any information issued
by the Company, were intended to describe certain aspects of the Company’s
business and prospects, but were not necessarily a 

 

7

 

thorough
or exhaustive description. The Holder acknowledges that any business plans
prepared by the Company have been, and continue to be, subject to change and
that any projections included in such business plans or otherwise are
necessarily speculative in nature, and it can be expected that some or all of
the assumptions underlying the projections will not materialize or will vary
significantly from actual results.

 

(f)                                    Accredited
Investor. The Holder is an “accredited investor” within the
meaning of Regulation D, Rule 501(a), promulgated by the Securities
and Exchange Commission and agrees to submit to the Company such further
assurances of such status as may be reasonably requested by the Company.

 

(g)                                 Residency. The residency
of the Holder (or, in the case of a partnership or corporation, such entity’s
principal place of business) is correctly set forth on the signature page hereto.

 

(h)                                 Restrictions
on Resales. The Holder acknowledges that the Securities must be
held indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. The Holder is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permit
resale of shares purchased in a private placement subject to the satisfaction
of certain conditions, which may include, among other things, the availability
of certain current public information about the Company; the resale occurring
not less than a specified period after a party has purchased and paid for the
security to be sold; the number of shares being sold during any three-month
period not exceeding specified limitations; the sale being effected through a “broker’s
transaction,” a transaction directly with a “market maker” or a “riskless
principal transaction” (as those terms are defined in the Securities Act or the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder); and the filing of a Form 144 notice, if
applicable. The Holder acknowledges and understands that the Company may not be
satisfying the current public information requirement of Rule 144 at the
time the Holder wishes to sell the Securities and that, in such event, the
Holder may be precluded from selling the Securities under Rule 144 even if
the other applicable requirements of Rule 144 have been satisfied. The
Holder acknowledges that, in the event the applicable requirements of Rule 144
are not met, registration under the Securities Act or an exemption from
registration will be required for any disposition of the Securities. The Holder
understands that, although Rule 144 is not exclusive, the Securities and
Exchange Commission has expressed its opinion that persons proposing to sell
restricted securities received in a private offering other than in a registered
offering or pursuant to Rule 144 will have a substantial burden of proof
in establishing that an exemption from registration is available for such
offers or sales and that such persons and the brokers who participate in the
transactions do so at their own risk.

 

(i)                                     Brokers
and Finders. The Holder has not engaged any brokers, finders or
agents in connection with the Securities, and the Company has not incurred nor
will incur, directly or indirectly, as a result of any action taken by the
Holder, any liability for brokerage or finders’ fees or agents’ commissions or
any similar charges in connection with the Securities.

 

(j)                                     Legal
Counsel. The Holder has had the opportunity to review this
Warrant, the exhibits and schedules attached hereto and the transactions
contemplated by this Warrant with its own legal counsel. The Holder is not
relying on any statements or representations of the Company or its agents for
legal advice with respect to this investment or the transactions contemplated
by this Warrant.

 

(k)                                  Tax
Advisors. The Holder has reviewed with its own tax advisors
the U.S. federal, state and local and non-U.S. tax consequences of this
investment and the transactions contemplated by this Warrant. With respect to
such matters, the Holder relies solely on any such advisors and not on any
statements or representations of the Company or any of its agents, written or
oral. The Holder understands that it (and not the Company) shall be responsible
for its own tax liability that may arise as a result of this investment and the
transactions contemplated by this Warrant.

 

8

 

10.                                 Miscellaneous.

 

(a)                                  Amendments. Except as expressly provided herein, neither
this Warrant nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument referencing this Warrant and
signed by the Company and the Holder.

 

(b)                                 Waivers. No waiver of
any single term, condition or provision shall be deemed a waiver of any other
term, condition or provision theretofore or thereafter occurring.

 

(c)                                  Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, sent by facsimile or electronic mail (if to
the Holder) or otherwise delivered by hand, messenger or courier service
addressed:

 

(i)                     if to the
Holder, to the Holder at the Holder’s address, facsimile number or electronic
mail address as shown in the Company’s records, as may be updated in accordance
with the provisions hereof, or until any such Holder so furnishes an address,
facsimile number or electronic mail address to the Company, then to and at the
address, facsimile number or electronic mail address of the last holder of this
Warrant for which the Company has contact information in its records; or

 

(ii)                  if to the
Company, to the attention of the President or Chief Financial Officer of the
Company at the Company’s address as shown on the signature page hereto, or
at such other address as the Company shall have furnished to the Holder, with a
copy to Douglas H. Collom and Julia Reigel, Wilson Sonsini Goodrich &
Rosati, P.C., 650 Page Mill Road, Palo Alto, CA 94304.

 

Each
such notice or other communication shall for all purposes of this Warrant be
treated as effective or having been given (i) if delivered by hand,
messenger or courier service, when delivered, or (ii) if sent by mail, at
the earlier of its receipt or 72 hours after the same has been deposited
in a regularly maintained receptacle for the deposit of the United States mail,
addressed and mailed as aforesaid, or (iii) if sent by facsimile, upon
confirmation of facsimile transfer or, if sent by electronic mail, upon
confirmation of delivery when directed to the relevant electronic mail address.
In the event of any conflict between the Company’s books and records and this
Warrant or any notice delivered hereunder, the Company’s books and records will
control absent fraud or error.

 

(d)                                 Governing Law. This Warrant and all
actions arising out of or in connection with this Warrant shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to the conflicts of law provisions of the State of Delaware, or of any
other state.

 

(e)                                  Jurisdiction
and Venue.  Each of the Holder and the
Company irrevocably consents to the jurisdiction and venue of any court within
Santa Clara County, State of California, in connection with any matter based
upon or arising out of this Warrant or the matters contemplated herein, and
agrees that process may be served upon them in any manner authorized by the
laws of the State of California for such persons.

 

(f)                                    Titles
and Subtitles. The titles and subtitles used in this Warrant are
used for convenience only and are not to be considered in construing or
interpreting this Warrant. All references in this Warrant to sections,
paragraphs and exhibits shall, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits attached hereto.

 

(g)                                 Severability. If any
provision of this Warrant becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, portions of such provision,
or such provision in its 

 

9

 

entirety,
to the extent necessary, shall be severed from this Warrant, and such illegal,
unenforceable or void provision shall be replaced with a valid and enforceable
provision that will achieve, to the extent possible, the same economic,
business and other purposes of the illegal, unenforceable or void provision.
The balance of this Warrant shall be enforceable in accordance with its terms.

 

(h)                                 Waiver
of Jury Trial.  EACH OF THE HOLDER AND THE COMPANY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO
THIS WARRANT. If the waiver of jury trial set forth in this
paragraph is not enforceable, then any claim or cause of action arising out of
or relating to this Warrant shall be settled by judicial reference pursuant to
California Code of Civil Procedure Section 638 et seq.
before a referee sitting without a jury, such referee to be mutually acceptable
to the parties or, if no agreement is reached, by a referee appointed by the
Presiding Judge of the California Superior Court for Santa Clara County. This
paragraph shall not restrict the Holder or the Company from exercising remedies
under the Uniform Commercial Code or from exercising pre-judgment remedies
under applicable law.

 

(i)                                     California Corporate Securities Law. THE SALE OF
THE SECURITIES THAT ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS WARRANT ARE
EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.

 

(j)                                     Saturdays,
Sundays and Holidays. If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
be a Saturday, Sunday or U.S. federal holiday, then such action may be taken or
such right may be exercised on the next succeeding day that is not a Saturday,
Sunday or U.S. federal holiday.

 

(k)                                  Rights
and Obligations Survive Exercise of the Warrant. Except as
otherwise provided herein, the rights and obligations of the Company and the
Holder under this Warrant shall survive exercise of this Warrant.

 

(l)                                     Entire
Agreement. Except as expressly set forth herein, this Warrant
(including the exhibits attached hereto) constitutes the entire agreement and
understanding of the Company and the Holder with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.

 

(signature
page follows)

 

10

 

The
Company signs this Warrant as of the date stated on the first page.

 

	
   

  	
  ACTIVIDENTITY CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  6623
  Dumbarton Circle

  
	
   

  	
  Fremont,
  CA 94555

  

 

 

(Signature
Page to Warrant to Purchase Shares Common Stock of ActivIdentity Corporation)

 

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

TO:                                                                          ACTIVIDENTITY
CORPORATION (the “Company”)

 

Attention:                                         President

 

(1)                                  Exercise. The
undersigned elects to purchase the following pursuant to the terms of the
attached warrant:

 

Number of shares:

 

Type of security:

 

(2)                                  Method of Exercise. The
undersigned elects to exercise the attached warrant pursuant to:

 

o                                    A cash payment,
and tenders herewith payment of the purchase price for such shares in full,
together with all applicable transfer taxes, if any.

 

o                                    The net issue
exercise provisions of Section 2(b) of the attached warrant.

 

(3)                                  Stock Certificate. Please issue a
certificate or certificates representing the shares in the name of:

 

o                                    The undersigned

 

o                                    Other—Name:

 

Address:

 

 

(4)                                  Unexercised Portion of the
Warrant. Please issue a new warrant for the unexercised
portion of the attached warrant in the name of:

 

o                                    The undersigned

 

o                                    Other—Name:

 

Address:

 

 

o                                    Not applicable

 

(5)                                  Investment Intent. The
undersigned represents and warrants that the aforesaid shares are being acquired
for investment for its own account, not as a nominee or agent, and not with a
view to, or for resale in connection with, the distribution thereof, and that
the undersigned has no present intention of selling, granting any participation
in, or otherwise distributing the shares, nor does it have any contract,
undertaking, agreement or arrangement for the same, and all representations and
warranties of the undersigned set forth in Section 9 of the attached
warrant are true and correct as of the date hereof.

 

A-1

 

(6)                                  Investment Representation
Statement. The undersigned has executed, and delivers
herewith, an Investment Representation Statement in a form substantially
similar to the form attached to the warrant as Exhibit A-1.

 

(7)                                  Consent
to Receipt of Electronic Notice. Subject to the limitations
set forth in Delaware General Corporation Law §232(e), the undersigned consents
to the delivery of any notice to stockholders given by the Company under the
Delaware General Corporation Law or the Company’s certificate of incorporation
or bylaws by (i) facsimile telecommunication to the facsimile number
provided below (or to any other facsimile number for the undersigned in the
Company’s records), (ii) electronic mail to the electronic mail address
provided below (or to any other electronic mail address for the undersigned in
the Company’s records), (iii) posting on an electronic network together
with separate notice to the undersigned of such specific posting or (iv) any
other form of electronic transmission (as defined in the Delaware General
Corporation Law) directed to the undersigned. This consent may be revoked by
the undersigned by written notice to the Company and may be deemed revoked in
the circumstances specified in Delaware General Corporation Law §232.

 

	
   

  	
   

  
	
   

  	
  (Print name
  of the warrant holder)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name and
  title of signatory, if applicable)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Date)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Fax number)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Email
  address)

  

 

 

(Signature page to the Notice of
Exercise)

 

A-2

 

EXHIBIT A-l

 

INVESTMENT REPRESENTATION
STATEMENT

 

	
  INVESTOR:

  	
   

  
	
   

  	
   

  
	
  COMPANY:

  	
  ACTIVIDENTITY
  CORPORATION

  
	
   

  	
   

  
	
  SECURITIES:

  	
  THE
  WARRANT ISSUED ON [INSERT DATE]
  (THE “WARRANT”) AND
  THE SECURITIES ISSUED OR ISSUABLE UPON EXERCISE THEREOF

  

 

DATE:

 

In
connection with the purchase or acquisition of the above-listed Securities, the
undersigned Investor represents and warrants to, and agrees with, the Company
as follows:

 

1.                                       No
Registration. The Investor understands that the Securities have
not been, and will not be, registered under the Securities Act of 1933, as
amended (the “Securities Act”), by reason
of a specific exemption from the registration provisions of the Securities Act,
the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy
of the Investor’s representations as expressed herein or otherwise made
pursuant hereto.

 

2.                                       Investment
Intent. The Investor is acquiring the Securities for investment for its own
account, not as a nominee or agent, and not with a view to, or for resale in
connection with, any distribution thereof. The Investor has no present
intention of selling, granting any participation in, or otherwise distributing
the Securities, nor does it have any contract, undertaking, agreement or
arrangement for the same.

 

3.                                       Investment
Experience. The Investor has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company, and has such knowledge and experience in
financial or business matters so that it is capable of evaluating the merits
and risks of its investment in the Company and protecting its own interests.

 

4.                                       Speculative
Nature of Investment. The Investor understands and acknowledges
that its investment in the Company is highly speculative and involves
substantial risks. The Investor can bear the economic risk of its investment
and is able, without impairing its financial condition, to hold the Securities
for an indefinite period of time and to suffer a complete loss of its
investment.

 

5.                                       Access
to Data. The Investor has had an opportunity to ask
questions of officers of the Company, which questions were answered to its
satisfaction. The Investor believes that it has received all the information
that it considers necessary or appropriate for deciding whether to acquire the
Securities. The Investor understands that any such discussions, as well as any
information issued by the Company, were intended to describe certain aspects of
the Company’s business and prospects, but were not necessarily a thorough or
exhaustive description. The Investor acknowledges that any business plans
prepared by the Company have been, and continue to be, subject to change and
that any projections included in such business plans or otherwise are
necessarily speculative in nature, and it can be expected that some or all of
the assumptions underlying the projections will not materialize or will vary
significantly from actual results.

 

A-1-1

 

6.                                       Accredited
Investor. The Investor is an “accredited investor” within the
meaning of Regulation D, Rule 501(a), promulgated by the Securities
and Exchange Commission and agrees to submit to the Company such further
assurances of such status as may be reasonably requested by the Company.

 

7.                                       Residency. The residency
of the Investor (or, in the case of a partnership or corporation, such entity’s
principal place of business) is correctly set forth on the signature page hereto.

 

8.                                       Restrictions
on Resales. The Investor acknowledges that the Securities must
be held indefinitely unless subsequently registered under the Securities Act or
an exemption from such registration is available. The Investor is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permit
resale of shares purchased in a private placement subject to the satisfaction
of certain conditions, which may include, among other things, the availability
of certain current public information about the Company; the resale occurring
not less than a specified period after a party has purchased and paid for the
security to be sold; the number of shares being sold during any three-month
period not exceeding specified limitations; the sale being effected through a “broker’s
transaction,” a transaction directly with a “market maker” or a “riskless
principal transaction” (as those terms are defined in the Securities Act or the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder); and the filing of a Form 144 notice, if
applicable. The Investor acknowledges and understands that the Company may not
be satisfying the current public information requirement of Rule 144 at
the time the Investor wishes to sell the Securities and that, in such event,
the Investor may be precluded from selling the Securities under Rule 144
even if the other applicable requirements of Rule 144 have been satisfied.
The Investor understands and acknowledges that, in the event the applicable
requirements of Rule 144 are not met, registration under the Securities
Act or an exemption from registration will be required for any disposition of
the Securities. The Investor understands that, although Rule 144 is not exclusive,
the Securities and Exchange Commission has expressed its opinion that persons
proposing to sell restricted securities received in a private offering other
than in a registered offering or pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for those offers or sales and that those persons and the brokers
who participate in the transactions do so at their own risk.

 

9.                                       Brokers
and Finders. The Investor has not engaged any brokers, finders
or agents in connection with the Securities, and the Company has not incurred
nor will incur, directly or indirectly, as a result of any action taken by the
Investor, any liability for brokerage or finders’ fees or agents’ commissions
or any similar charges in connection with the Securities.

 

10.                                 Legal
Counsel. The Investor has had the opportunity to review the
Warrant, the exhibits and schedules attached thereto and the transactions
contemplated by the Warrant with its own legal counsel. The Investor is not
relying on any statements or representations of the Company or its agents for
legal advice with respect to this investment or the transactions contemplated
by the Warrant.

 

11.                                 Tax
Advisors. The Investor has reviewed with its own tax advisors
the U.S. federal, state and local and non-U.S. tax consequences of this
investment and the transactions contemplated by the Warrant. With respect to
such matters, the Investor relies solely on such advisors and not on any
statements or representations of the Company or any of its agents, written or
oral. The Investor understands that it (and not the Company) shall be
responsible for its own tax liability that may arise as a result of this
investment or the transactions contemplated by the Warrant.

 

(signature page follows)

 

A-1-2

 

The
Investor is signing this Investment Representation Statement on the date first
written above.

 

 

	
   

  	
  INVESTOR

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print name
  of the investor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name and
  title of signatory, if applicable)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Street
  address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (City,
  state and ZIP)

  

 

A-1-3

 

EXHIBIT B

 

ASSIGNMENT FORM

 

	
  ASSIGNOR:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  	
  ACTIVIDENTITY
  CORPORATION

  
	
   

  	
   

  	
   

  
	
  WARRANT:

  	
   

  	
  THE
  WARRANT TO PURCHASE SHARES OF COMMON STOCK ISSUED ON [INSERT
  DATE] (THE “WARRANT”)

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  	
   

  

 

(1)                                  Assignment. The
undersigned registered holder of the Warrant (“Assignor”) assigns and transfers to the assignee named
below (“Assignee”) all of the rights
of Assignor under the Warrant, with respect to the number of shares set forth
below:

 

	
  Name
  of Assignee:

  	
   

  
	
   

  	
   

  
	
  Address
  of Assignee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Number
  of Shares Assigned:

  	
   

  
				

 

and does irrevocably
constitute and appoint
                                            
as attorney to make such transfer on the books of ActivIdentity Corporation,
maintained for the purpose, with full power of substitution in the premises.

 

(2)                                  Obligations of Assignee. Assignee
agrees to take and hold the Warrant and any shares of stock to be issued upon
exercise of the rights thereunder (the “Securities”)
subject to, and to be bound by, the terms and conditions set forth in the
Warrant to the same extent as if Assignee were the original holder thereof.

 

(3)                                  Investment Intent. Assignee represents
and warrants that the Securities are being acquired for investment for its own
account, not as a nominee or agent, and not with a view to, or for resale in
connection with, the distribution thereof, and that Assignee has no present
intention of selling, granting any participation in, or otherwise distributing
the shares, nor does it have any contract, undertaking, agreement or
arrangement for the same, and all representations and warranties set forth in Section 9
of the Warrant are true and correct as to Assignee as of the date hereof.

 

(4)                                  Investment Representation
Statement. Assignee has executed, and delivers herewith, an
Investment Representation Statement in a form substantially similar to the form
attached to the Warrant as Exhibit A-1.

 

1

 

Assignor and Assignee are signing this Assignment Form on
the date first set forth above.

 

	
  ASSIGNOR

  	
   

  	
  ASSIGNEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print
  name of Assignor)

  	
   

  	
  (Print name
  of Assignee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature
  of Assignor)

  	
   

  	
  (Signature
  of Assignee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print name
  of signatory, if applicable)

  	
   

  	
  (Print name
  of signatory, if applicable)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print
  title of signatory, if applicable)

  	
   

  	
  (Print
  title of signatory, if applicable)

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

2

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