Document:

Exhibit 10.2 

 

EXCHANGE AGREEMENT

 

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

 

 Recitals

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question:
the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
or any tier of the OTC Markets Inc. (or any successors to any of the foregoing).

 

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

 

2.            Securities Exchange.

 

2.1            Exchange
and Closing.

 

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

 

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

 

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

 

2.2           Deliveries.

 

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

 

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

 

2.3           Closing Conditions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)            Restricted
Securities. The Holder understands that the Securities purchased hereunder, including the Conversion Shares, are “restricted
securities,” as that term is defined in the Securities Act and the rules thereunder, have not been registered under the Securities
Act, and that none of the Securities can be sold or transferred unless they are first registered under the Securities Act and such
state and other securities laws as may be applicable or an exemption from registration under the Securities Act is available (and
then the Securities may be sold or transferred only in compliance with such exemption and all applicable state and other securities
laws). Holder acknowledges that all certificates representing any of the shares of Series E Preferred Stock and the Conversion
Shares will bear a restrictive legend in a form as set forth below and hereby consents to the transfer agent for the Company’s
Common Stock making a notation on its records to implement the restrictions on transfer described herein.  Holder further
understands that except as provided in the Transaction Documents: (i) the Securities have not been and are not being registered
under the Securities Act or any state securities laws, must be held indefinitely and may not be offered for sale, sold, assigned
or transferred unless: (A) subsequently registered thereunder; (B) Holder shall have delivered to the Company an opinion of counsel,
in a generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration; or (C) Holder provides the Company with reasonable assurance that
such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (or
a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made in reliance
on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of
the Securities under circumstances in which the seller (or the Person (through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the
rules and regulations of the Commission thereunder; and (iii) except as set forth in the Transaction Documents, neither the Company
nor any other Person is under any obligation to register the Securities under the Securities Act or any state securities laws or
to comply with the terms and conditions of any exemption thereunder.

 

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

 

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

 

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

 

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

 

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

 

(m)           No
Legal, Tax or Investment Advice.   Holder understands that the tax consequences of the transactions contemplated
by this Agreement are complex, and accordingly Holder represents and warrants that it understands that nothing in this Agreement
or any other materials presented by or on behalf of the Company to him, her or it in connection with this Agreement and the transactions
contemplated herein, constitutes legal, tax or investment advice.  Holder has consulted such legal, tax and investment
advisors as he, she or it, in his, her or its sole discretion, has deemed necessary or appropriate in the circumstances. 
Holder is not relying on the Company or any of its respective affiliates or agents, including its counsel and accountants, for
any tax advice regarding the tax consequences of the transactions contemplated by this Agreement.

 

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

 

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

 

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

 

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

 

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

 

(d)            Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) those
that have previously been obtained; (ii) the filings required pursuant to the Exchange Act; (iii) the notice and/or application(s)
to each applicable Trading Market, if any, for the issuance and sale of the Securities and the listing of the Conversion Shares
for trading thereon in the time and manner required thereby; and (iv) such other filings with the Commission as may be required
under the Securities Act and such filings as are required to be made under applicable state securities laws (collectively, the
“Required Approvals”).

  

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5.            Other Agreements.

 

5.1          Transfer
Restrictions.

 

(a)          
The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Holder,
the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer,
any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations
of a Holder under this Agreement.

 

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

 

[NEITHER] THIS SECURITY [NOR
THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

(c)            Each Holder,
severally and not jointly with the other Holders, agrees with the Company that Holder will sell any Securities pursuant to either
the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan
of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities
as set forth in this Section 5.1 is predicated upon the Company’s reliance upon this understanding.

 

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

 

5.3           Fees and
Expenses.  Each party hereto shall pay the fees and expenses of its advisors, counsel, accountants and other experts,
if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance
of this Agreement.

 

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

 

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

 

    	 	8	 

     

    

 

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

 

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

 

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

 

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

 

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

 

    	 	9	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

  

    	 	10	 

     

    

 

6.            Miscellaneous.

 

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

 

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

 

6.3            Entire Agreement;
Amendment and Waivers.  This Agreement constitutes the entire understanding and agreement of the parties with respect
to the subject matter hereof and supersedes all prior and/or contemporaneous oral or written proposals or agreements relating thereto
all of which are merged herein.  This Agreement may not be amended or any provision hereof waived in whole or in part,
except by a written amendment signed by all of the parties hereto. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.

 

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

 

    	 	11	 

     

    

 

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

 

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

 

6.7            Survival.
All representations and warranties made by the Company and each Holder will survive the execution of this Agreement and the Closing
until the first anniversary of the Closing Date, except for those representations and warranties which speak as of a specific date.
All covenants and other agreements set forth in this Agreement shall survive the Closing for the respective periods set forth therein
and if no such period is specified until the first anniversary of the Closing Date.

 

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

 

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

 

6.10         Independent
Nature of Holders’ Obligations and Rights. The obligations of Holder under any Transaction Document are several and not
joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance or non-performance
of the obligations of any other Holder under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by the Transaction Documents. Holder shall be entitled
to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out
of the other Transaction Documents, and it shall not be necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.

 

    	 	12	 

     

    

 

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

 

6.12         Fees
and Expenses. Except as expressly set forth in this Agreement to the contrary, each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.

 

6.13
        Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument,
but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant
for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including
customary indemnity) associated with the issuance of such replacement Securities.

 

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

 

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

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    	 	13	 

     

    

 

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

 

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

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

    	 	14	 

     

    

 

[HOLDER SIGNATURE PAGES TO EXCHANGE AGREEMENT]

 

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

 

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

 

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

 

    	 	15	 

     

    

 

EXHIBIT A

 

CERTIFICATE OF DESIGNATIONS OF SERIES
E PREFERRED STOCK

 

    	 	16Exhibit 10.3

 

AMENDED AND RESTATED SECURITY AGREEMENT

 

THIS AMENDED AND RESTATED
SECURITY AGREEMENT (this “Security Agreement”) is made and entered into as of March 20, 2017 by Authentidate
Holding Corp., a Delaware corporation (the “Company”) and the parties signatory hereto (each, a “Secured
Party” and collectively, the “Secured Parties”). This Security Agreement is being executed and delivered
by the Company and the Secured Parties in connection with the Company’s issuance to the Secured Parties of those certain
Senior Secured Promissory Notes, dated as of the date first set forth above (the “Secured Notes”). Capitalized
terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Secured Notes.

 

WITNESSETH:

 

WHEREAS, the Company
had previously issued an aggregate principal amount of $1,270,000 of Secured Notes to certain of the Secured Parties (the “Prior
Notes”), which Prior Notes are secured by liens certain of the Company’s assets pursuant to that certain security
agreement, dated as of August 7, 2015, between the Company and the holders of the Prior Notes, and as subsequently amended on
December 11, 2015 (the “Prior Security Agreement”);

 

WHEREAS, the Company
now wishes to issue up to $2,545,199 of new Secured Notes due March 20, 2018 to certain Persons, including holders of the Prior
Notes, pursuant to a certain Exchange Agreements dated as of the date first set forth above (the “Exchange Agreement”);
and;

 

WHEREAS, it is a condition
of the transactions contemplated by the Exchange Agreement that the Company enter into a security agreement with the Secured Parties;
and

 

WHEREAS, in order
to induce the Secured Parties to extend the loans evidenced by the Secured Note, the Company has agreed to execute and deliver
to the Secured Parties this Security Agreement and to grant the security interests described herein to secure the prompt payment,
performance and discharge in full of all of the Company’s obligations under the Secured Notes, and the holders of the Prior
Notes, being the sole secured parties under the Prior Security Agreement, have all agreed to exchange such Prior Notes for Secured
Notes pursuant to the Exchange Agreement.

 

NOW, THEREFORE, in
consideration of the foregoing, the covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Secured Parties and the Company hereby agree as follows.

 

SECTION
I

DEFINITIONS

 

Section 1.1   Certain
Definitions. As used in this Security Agreement, the following terms shall have the meanings set forth in this Section 1.  Terms
used but not otherwise defined in this Security Agreement that are defined in Article 9 of the UCC (such as “account”,
“chattel paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”,
“fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”,
“investment property”, “letter-of-credit rights”, “proceeds” and “supporting obligations”)
shall have the respective meanings given such terms in Article 9 of the UCC.

 

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

 

    	 	 	 

    

    

 

(b)    “Collateral”
means the collateral in which the Secured Party are granted a security interest by this Security Agreement and which consists
of the following personal property of the Company, whether presently owned or existing or hereafter acquired or coming into existence,
wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds,
products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of
insurance covering the same and of any tort claims in connection therewith: all assets of the Company, including without limitation
all of the Company’s rights, title and interests in and to all of the following, whether now or hereafter existing or acquired
by the Company: (i) accounts; (ii) as-extracted collateral; (iii) chattel paper; (iv) deposit accounts; (v) documents; (vi) equipment;
(vii) farm products; (viii) fixtures; (ix) General Intangibles; (x) inventory; (xi) instruments; (xii) investment property; (xiii)
letter-of-credit rights; (xiv) other goods; (xv) supporting obligations; (xvi) commercial tort claims; and (xvii) all proceeds
and products of all of the foregoing, including without limitation whatever is received when any of the foregoing Collateral is
sold, exchanged, leased, licensed, collected or otherwise disposed of and includes all distributions on account thereof, rights
and claims arising therefrom. Notwithstanding the foregoing, none of the following items will be included in the Collateral: (a)
assets if the granting of a security interest in such asset would (I) be prohibited by applicable law (but proceeds and receivables
thereof, the assignment of which is expressly deemed effective under the UCC, shall not be deemed excluded from the Collateral
regardless of such prohibition), or (II) be prohibited by contract (except to the extent such prohibition is overridden by UCC
Section 9-408) (but proceeds and receivables thereof shall not be deemed excluded from the Collateral regardless of such prohibition);
(b) any property and assets, the pledge of which would require approval, license or authorization of any governmental body, unless
and until such consent, approval, license or authorization shall have been obtained or waived provided that the Company has used
commercially reasonable efforts to obtain or waive such consent, approval, license or authorization; (c) assets in circumstances
where the Secured Parties reasonably determines that the cost, burden or consequences (including adverse tax consequences) of
obtaining or perfecting a security interest in such assets is excessive in relation to the practical benefit afforded thereby;
provided, however, that to the extent permitted by applicable law, this Security Agreement shall create a valid
security interest in such asset and, to the extent permitted by applicable law, this Security Agreement shall create a valid security
interest in the proceeds of such asset.

 

(c)    “General
Intangibles” means general intangibles (as that term is defined in the UCC), and, in any event, includes payment intangibles,
contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill
(including the goodwill associated with any trademark), patents, trademarks, copyrights, URLs and domain names, industrial designs
and other Intellectual Property or rights therein or applications therefor, whether under license or otherwise, programs, programming
materials, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights
to payment and other rights under any royalty or licensing agreements, including Intellectual Property Licenses, infringement
claims, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, pension
plan refunds, pension plan refund claims, insurance premium rebates, tax refunds, and tax refund claims, interests in a partnership
or limited liability company which do not constitute a security under Article 8 of the UCC, and any other personal property
of the Company, other than those assets which are excluded from the definition of the term “General Intangibles” pursuant
to the UCC.

 

(d)    “Indebtedness”
means (x) any liabilities for borrowed money or amounts (other than trade accounts payable, accrued expenses or deferred revenue
incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (z) the present value of any lease payments due under leases required to be capitalized
in accordance with GAAP; provided, further, however, that in no event shall the term Indebtedness include the capital stock
surplus, retained earnings, minority interests in the common stock of subsidiaries, operating lease obligations, reserves for
deferred income taxes and investment credits, other deferred credits or reserves.

 

    	 	2	 

    

    

 

(e)    “Intellectual
Property” means the collective reference to all rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights
arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all
letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof,
and all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part
thereof, (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress,
service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing
or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether
in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade
secrets arising under the laws of the United States, any other country or any political subdivision thereof, (v) all rights to
obtain any reissues, renewals or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes
of action for infringement of the foregoing.

 

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

 

(g)    “Majority
in Interest” shall mean the holders of fifty-one percent (51%) or more of the then outstanding principal amount of all
then outstanding Secured Notes at the time of such determination.

 

(h)    “Material
Adverse Effect” means an event or occurrence that has a material adverse effect on (i) the legality, validity or enforceability
of the Secured Notes or this Security Agreement; (ii) the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) the Company’s ability to perform in any
material respect on a timely basis its obligations under the Secured Notes or this Security Agreement.

 

(i)    “Obligations”
means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become
due, or that are now or may be hereafter contracted or acquired, or owing to, of the Company to the Secured Parties, including,
without limitation, all obligations under this Security Agreement and the Secured Notes, whether now or hereafter existing, voluntary
or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly
or indirectly from any of the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.  Without limiting the generality of the foregoing,
the term “Obligations” shall include, without limitation: (i) principal of, and interest on the Secured Notes
and the loans extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Company
from time to time under or in connection with this Security Agreement or the Secured Notes; and (iii) all amounts (including but
not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations
to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding
involving the Company.

 

    	 	3	 

    

    

 

(j)    “Permitted
Indebtedness” means (a) Indebtedness secured by Permitted Liens, including without limitation Indebtedness incurred
in connection with arrangements contemplated by clause (h) of the definition of the term “Permitted Liens”; (b) Indebtedness
to trade creditors or for professional services incurred in the ordinary course of business; (c) all capital lease obligations
and other obligations or liabilities created or arising under any conditional sale or other title retention agreement with respect
to property used or acquired by the subject Person, even if the rights and remedies of the lessor, seller or lender thereunder
are limited to repossession of such property and the present value of lease payments due under synthetic leases; (d) obligations
of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions
for the account of such Person in the ordinary course of the business of such Person; (e) purchase money financing and equipment
financing facilities covering existing and newly-acquired property, plant or equipment; (f) Indebtedness of any amount outstanding
immediately prior to the execution of this Security Agreement; (g) Indebtedness incurred by the Company that is made expressly
subordinate in right of payment to the Indebtedness evidenced by the Secured Note, which Indebtedness does not provide at any
time for the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if
any, thereon until after the maturity date of the Secured Note; (h) Indebtedness incurred by the Company that is unsecured; (i)
Indebtedness in an amount of up to $5,000,000 pursuant to a term loan, revolving credit facility, credit line or other extensions
of credit from a commercial banking or financial institution; and (j) extensions, refinancings and renewals of any items of Permitted
Indebtedness described above (including the issuance of new debt or convertible debt securities in exchange for the cancellation
of existing debt securities in an Alternative Transaction), provided that the principal amount is not increased or the terms modified
to impose more burdensome terms upon the Company or its Subsidiaries, as the case may be. Permitted Indebtedness shall include,
without limitation, (i) the principal amount of such Indebtedness, (ii) unpaid accrued interest thereon, and (iii) all other obligations
of the Company arising out of the Permitted Indebtedness now existing or hereafter arising, together with all costs of collecting
such obligations (including attorneys’ fees), including, without limitation, all interest accruing after the commencement
by or against the Company of any bankruptcy, reorganization or similar proceeding.

 

(k)    “Permitted
Liens” means: (a) Liens for taxes not yet due or delinquent or being contested in good faith and by appropriate proceedings,
for which adequate reserves have been established; (b) Liens in respect of property or assets imposed by law which were incurred
in the ordinary course of business, such as carriers’, warehousemen’s, materialmen’s and mechanics’ Liens
and other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty
or which are being contested in good faith and by appropriate proceedings; (c) Liens incurred or deposits made in the ordinary
course of business in connection with workers’ compensation, unemployment insurance and other types of social security,
and other Liens to secure the performance of tenders, statutory obligations, contract bids, government contracts, performance
and return of money bonds and other similar obligations, incurred in the ordinary course of business, whether pursuant to statutory
requirements, common law or consensual arrangements; (d) Liens in favor of the Secured Parties; (e) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payments of customs duties in connection with the importation of
goods; (f) Liens which constitute rights of setoff of a customary nature or banker’s liens, whether arising by law or by
contract; (g) leases or subleases and licenses or sublicenses granted in the ordinary course of Company’s business; (h)
Liens in the ordinary course of business (A) upon or in any equipment acquired or held by the Company (or any of its Subsidiaries)
to secure the purchase price of such equipment or Indebtedness incurred solely for the purpose of financing the acquisition or
lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined
solely to the property so acquired and improvements thereon, and the proceeds of such equipment; (i) Liens in existence prior
to the execution of this Security Agreement; (j) Liens that are expressly subordinated to the Liens granted pursuant to this Security
Agreement; (k) Liens securing Indebtedness contemplated by clause (i) of the definition of “Permitted Indebtedness”
set forth in Section 1.1(j) of this Security Agreement; and (l) Liens incurred in connection with the extension, renewal or refinancing
of the Permitted Indebtedness secured by Liens of the type described above, provided that any extension, renewal or replacement
Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended,
renewed or refinanced does not increase.

 

    	 	4	 

    

    

 

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

 

(m)   “Prior
Notes” means instruments described in Recitals to this Security Agreement which evidence Indebtedness issued by the
Company prior to the date of this Security Agreement, as such instruments may be amended to date, and any deferrals, renewals
or extensions thereof, and any notes or other instruments or evidences of Indebtedness issued in respect of or in exchange thereof.

 

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

 

(o)    “UCC”
means the Uniform Commercial Code as the same is, from time to time, in effect in the State of Georgia and or any other applicable
law of any state or states which has jurisdiction with respect to all, or any portion of, the Collateral or this Security Agreement,
from time to time.

SECTION II

COLLATERAL; OBLIGATION SECURED

 

Section 2.1    Grant
and Description. In order to secure the full and complete payment and performance of the Obligations when due, the Company
hereby grants to the Secured Parties, subject to the Permitted Liens, a first priority security interest in all of the Company’s
rights, titles, and interests in and to the Collateral (the “Security Interest”) and subject to the Permitted
Liens, pledges, collaterally transfers, and assigns the Collateral to the Secured Parties, all upon and subject to the terms and
conditions of this Security Agreement; provided, however, that each Secured Party shall subordinate from time to
time upon the Company’s request its Security Interests granted in such Collateral to any Lien(s) granted by the Company
or any of its Subsidiaries to third parties which constitutes Permitted Liens contemplated within clauses (h) through (k) of the
definition of Permitted Liens. If the grant, pledge, or collateral transfer or assignment of any specific item of the Collateral
is expressly prohibited by any contract or by law, then the Security Interest created hereby nonetheless remains effective to
the extent allowed by such contract, the UCC or other applicable laws, but is otherwise limited by that prohibition. The Security
Interest granted herein shall terminate in accordance with Section 7.1 hereof.

 

Section 2.2   Financing
Statements; Further Assurances.

 

(a)    The
Secured Parties shall be named as the sole secured parties on any and all financing statements and security agreements filed pursuant
to this Security Agreement for the ratable benefit of all of the Secured Parties, and agree that the Majority in Interest of the
Secured Parties are authorized to file any and all terminations of such financing statements at such time or times as it determines
is appropriate pursuant to the Security Agreement.

 

    	 	5	 

    

    

 

(b)    As
soon as practicable following the execution and delivery of this Security Agreement and upon the authorization of the Majority
in Interest of the Secured Parties, the Company shall:

 

(i)    file
with the State of Delaware and any other offices that the Majority in Interest of the Secured Parties may reasonably request in
writing an initial financing statement that (i) indicates the Collateral in a manner consistent with the definition of the
term “Collateral” as contained in this Security Agreement, and (ii) contains any other information required by Article 9
of the UCC of the state or such jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment,
including whether the Company is an organization, the type of organization, and any organization identification number issued
to the Company;

 

(ii)    file
with the U.S. Patent and Trademark Office, such financing statements and/or patent security agreements in the form necessary to
record the Liens granted hereunder on the Company’s patents and patent applications; and

 

(iii)    upon
the reasonable request of the Majority in Interest of the Secured Parties, file such additional financing statements and other
documents, including amendments to the financing statements, in order to maintain the Liens in the Collateral.

 

(c)    Until
the Obligations are paid and performed in full, the Company covenants and agrees that it will, at its own expense and upon the
request of the Majority in Interest, but in all cases subject to the rights of the grantees of the Permitted Liens: (i) after
an Event of Default, file or cause to be filed such applications and take such other actions as the Majority in Interest may reasonably
request to obtain the consent or approval of any governmental authority to the rights of the Secured Parties hereunder, including,
without limitation, the right to sell all the Collateral upon an Event of Default without additional consent or approval from
such governmental authority; (ii) from time to time, either before or after an Event of Default, promptly execute and deliver
to the Secured Parties all such other assignments, certificates, supplemental documents, and financing statements, and do all
other acts or things as the Majority in Interest may reasonably request in order to more fully create, evidence, perfect, continue,
and preserve the priority of the Security Interest and to carry out the provisions of this Security Agreement; and (iii) either
before or after an Event of Default, pay all filing fees in connection with any financing, continuation, or termination statement
or other instrument with respect to the Security Interest.

 

Section 2.3    Priority.
The Secured Parties hereby covenant and agree with the Company that the Company has granted and may subsequently grant, from time
to time, Permitted Liens and that the security interest granted to the Secured Parties in the Collateral hereunder is (i) subordinated
to the respective Permitted Liens in the Collateral that was granted and remains outstanding immediately prior to the date hereof
or as contemplated in Section 2.1, above (the “Senior Permitted Liens”); (ii) senior to other Liens granted
by the Company in the Collateral after the date hereof; and (iii) that as between all Secured Parties, the Security Interest granted
to each Secured Party under this Security Agreement is pari passu with the Security Interests of the other Secured Parties.
The priorities specified herein are applicable irrespective of the time, order or method of attachment or perfection of security
interests or the time or order of filing of financing statements. The Secured Parties agree not to seek to challenge, to avoid,
to subordinate or to contest or directly or indirectly to support any other Person in challenging, avoiding, subordinating or
contesting in any judicial or other proceeding, including, without limitation, any proceeding involving the Company, the priority,
validity, extent, perfection or enforceability of any Senior Permitted Liens in all or any part of the Collateral. The Secured
Parties further covenant and agree that they shall not, and they shall not instruct, authorize or otherwise permit or consent
to allowing any third party to, take any action that is in violation of, or inconsistent with, the provisions of this section.

 

    	 	6	 

    

    

 

Section 2.4    Company
Remains Liable; Third Party Licensees.  (A) Anything herein to the contrary notwithstanding, (a) the Company shall
remain liable under the contracts and agreements included in the Collateral to perform all of the duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the exercise by the Secured Parties of any of the rights
hereunder shall not release the Company from any of its duties or obligations under such contracts and agreements included in
the Collateral, and (c) the Secured Parties shall not have any obligation or liability under such contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Secured Parties be obligated to perform any of the obligations
or duties of the Company thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. 
Until an Event of Default shall occur and be continuing, except as otherwise provided in this Security Agreement, the Secured
Notes, or other Transaction Documents, the Company shall have the right to possession and enjoyment of the Collateral for the
purpose of conducting the ordinary course of its business, subject to and upon the terms hereof and of the Secured Notes, and
the other Transaction Documents.

 

(B)    The
Secured Parties acknowledge and agree that the security interest arising hereunder in any Intellectual Property licensed by the
Company to a third party in an arms-length transaction shall be subject to the rights of such third party licensee, whether such
arms-length transaction is now existing or is entered into following the execution and delivery of this Security Agreement. Upon
the request of the Company, the Secured Parties shall promptly provide an estoppel to such third party licensee with respect to
the foregoing. The Secured Parties acknowledge and agree that no security interest or right is granted by the Company in property
to the extent that such property is not owned by the Company.

 

SECTION
III

COVENANTS

 

Section 3.1    Duties
of the Company Regarding Collateral. At all times from and after the date hereof and until the Secured Notes have been paid
in full (including if such Secured Notes shall have been converted into the Common Stock of the Company in accordance with their
terms) or this Security Agreement is sooner terminated, the Company agrees that it shall:

 

(a)          Preserve
the Collateral in good condition and order (ordinary wear and tear excepted) and not permit it to be abused or misused;

 

(b)          Not
allow any of the Collateral to be affixed to real estate, except for any property deemed to be fixtures;

 

(c)          Maintain
good and complete title to the Collateral subject only to Permitted Liens;

 

(d)          Keep
the Collateral free and clear at all times of all Liens other than Permitted Liens;

 

(e)          Take
or cause to be taken such acts and actions as shall be necessary or appropriate to assure that each Secured Party’s security
interest in the Collateral (other than the Permitted Liens) not become subordinate to or on parity with the security interests,
Liens or claims of any other Person;

 

    	 	7	 

    

    

 

 

(f)          Except
as permitted pursuant to this Security Agreement, refrain from selling, assigning or otherwise disposing of any of the Collateral
or moving or removing any of the Collateral, without obtaining the prior written consent of the Majority in Interest of the Secured
Parties, or until all of the Obligations have been fully performed and paid in full; provided, however, that concurrently
with any disposition permitted by this Section 3.1, (x) the security interest granted hereby shall automatically be released
from the Collateral so disposed, and (y) the security interest shall continue in the Proceeds (as defined in the UCC) of such
Collateral or any property purchased with such Proceeds; and provided further, that, the Secured Parties shall execute
and deliver, at the Company’s sole cost and expense, any releases or other documents reasonably requested by the Company,
that are in form and substance reasonably acceptable to the executing party, confirming the release of the security interest in
that portion of the Collateral that is the subject of a disposition permitted by this Section 3.1;

 

(g)          Except
in the ordinary course of business, the Company may not (i) transfer, pledge, hypothecate, encumber, license, sell or otherwise
dispose of any of the Collateral (except for non-exclusive licenses granted by the Company in its ordinary course of business
and sales of inventory or obsolete capital equipment by the Company in its ordinary course of business) without the prior written
consent of the Majority in Interest or (ii) consign any of its inventory which constitutes any part of the Collateral, or sell
any of its inventory which constitutes any part of the Collateral on bill and hold, sale or return, sale on approval, or other
conditional terms of sale without the consent of the Majority in Interest of the Secured Parties which shall not be unreasonably
withheld.

 

(h)          Promptly
provide to the Secured Parties such financial statements, reports, lists and schedules related to the Collateral and any other
information relating to the Collateral as the Majority in Interest of the Secured Parties may reasonably request from time to
time;

 

(i)          Maintain,
at the place where the Company is entitled to receive notices under the Secured Notes, a current record of where all material
Collateral is located, permit representatives of the Secured Parties (acting upon the authorization of the Majority in Interest)
at any time, upon reasonable prior written notice during normal business hours to inspect and make abstracts from such records
(provided, that so long as no Event of Default exists, the Secured Parties shall conduct such inspections no more frequently
than semi-annually);

 

(j)          Within
three (3) Business Days notify each Secured Party if any Event of Default (as hereinafter defined) occurs; and

 

(k)          In
accordance with prudent business practices, endeavor to collect or cause to be collected from each account debtor under its accounts,
as and when due, any and all amounts owing under such accounts.

 

For purposes of
clarity, nothing in this Security Agreement, including without limitation the restrictions set forth in Section 3.1(f) of this
Security Agreement, shall be construed as restricting the Company and its Subsidiaries from (I) granting licenses or sublicenses
to any of the Collateral which constitutes Intellectual Property; (II) from licensing, selling, leasing or renting, directly or
indirectly, any inventory or other property sold or disposed of in the ordinary course of business and on ordinary business terms;
(III) from engaging in joint ventures, strategic alliances or other similar arrangements for bona fide business purposes consistent
with industry practices; (IV) from utilizing the cash generated from the Company’s business operations in accordance with
the business judgment of management or the board of directors; or (V) from entering into transactions contemplated by the definition
of Permitted Liens.

 

    	 	8	 

    

    

 

Section 3.2    Duties
with Respect to Intellectual Property. At all times from and after the date hereof and until the Secured Notes have been paid
in full (including if such Secured Notes shall have been converted into the Common Stock of the Company in accordance with their
terms) or this Security Agreement is sooner terminated, the Company agrees that it shall:

 

(a)       Except
to the extent that failure to act cannot reasonably be expected to have a Material Adverse Effect, take all commercially reasonable
steps necessary to (x) maintain the validity and enforceability of any Collateral that constitutes Intellectual Property
in full force and effect and (y) pursue the application, obtain the relevant registration and maintain the registration of
each of its patents, trademarks and copyrights that is part of the Collateral, including, without limitation, by the payment of
required fees and taxes, the filing of responses to office actions issued by the U.S. Patent and Trademark Office, the U.S. Copyright
Office or other governmental authorities, the filing of applications for renewal or extension, the filing of affidavits, the filing
of divisional, continuation, continuation-in-part, reissue and renewal applications or extensions, the payment of maintenance
fees and the participation in interference, reexamination, opposition, cancellation, infringement and misappropriation proceedings.

 

(b)        Except
to the extent that failure to act cannot reasonably be expected to have a Material Adverse Effect, not do or permit any act or
knowingly omit to do any act whereby any of its Intellectual Property that is part of the Collateral may lapse, be terminated,
or become invalid or unenforceable or placed in the public domain (or in case of a trade secret, lose its competitive value).

 

(c)        Except
to the extent that failure to act cannot reasonably be expected to have a Material Adverse Effect, take all commercially reasonable
steps to preserve and protect each item of its Intellectual Property that is part of the Collateral, including, without limitation,
maintaining the quality of any and all products or services used or provided in connection with any of the trademarks, consistent
with the quality of the products and services as of the date hereof, and taking all commercially reasonable steps necessary to
ensure that all licensed users of any of the Trademarks abide by the applicable license’s terms with respect to the standards
of quality.

 

Notwithstanding the
foregoing provisions of this Section 3.2 or anything to the contrary elsewhere in this Security Agreement, nothing in this
Security Agreement shall prevent the Company or its Subsidiaries from discontinuing the use or maintenance of any of its Intellectual
Property, the enforcement of its license agreements or the pursuit of actions against infringers, if they determine in its reasonable
business judgment that such discontinuance is desirable in the conduct of its business.

 

Section 3.3 Other
Encumbrances. At all times after the date hereof and until such time as there are no Obligations due to the Secured Parties
or this Security Agreement is sooner terminated, the Company shall, subject to the rights of the holders of the Permitted Liens:
(i) defend its title to, and each Secured Party’s interest in, the Collateral against all claims, (ii) take any action necessary
to remove any encumbrances on the Collateral other than Permitted Liens, and (iii) defend the right, title and interest of each
Secured Party in and to any of the Company’s rights in the Collateral.

 

Section 3.4 Change
Name or Location. At all times after the date hereof and until such time as there are no Obligations due to the Secured Parties
or this Security Agreement is sooner terminated, the Company shall not, except upon 10 days’ prior written notice to the
Secured Parties, change its company name or conduct its business under any name other than that set forth herein or change its
jurisdiction of organization or incorporation, chief executive office, place of business from the current location.

 

    	 	9	 

    

    

 

SECTION
IV

REPRESENTATIONS AND WARRANTIES

 

The Company represents
and warrants to each Secured Party as follows:

 

Section 4.1    Title
to Collateral. The Company is the owner of and has good and marketable title to, or has a valid and subsisting leasehold interest
in, all of the Collateral.

 

Section 4.2    No
Other Encumbrances. Other than the Permitted Liens, the Company has not granted, nor will it grant, a security interest in
the Collateral to any other individual or entity, and to the actual knowledge of the Company, such Collateral is free and clear
of any mortgage, pledge, lease, trust, bailment, lien, security interest, encumbrance, charge or other arrangement, other than
the Permitted Liens.

 

Section 4.3    Authority;
Enforceability. The execution, delivery and performance of this Security Agreement by the Company does not: (i) violate
any of the provisions of the Certificate of Incorporation or By-laws of the Company or any judgment, decree, order or award of
any court, governmental body or arbitrator or any applicable law, rule or regulation applicable to the Company; or (ii) subject
to each Secured Party’s performance of its respective obligations under any subordination agreements with respect to Permitted
Liens or Permitted Indebtedness, conflict with, or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing the Company’s debt
or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound
or affected. The Company has the authority and capacity to perform its obligations hereunder, and this Security Agreement is the
valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors' rights
or general equitable principles, whether applied in law or equity.

 

Section 4.4    Company
Name; Place of Business; Location of Collateral. The Company’s true and correct company name, all trade name(s) under
which it conducts its business, its jurisdiction of organization or incorporation and each of its chief executive offices, its
place(s) of business and the locations of the Collateral or records relating to the Collateral are set forth in Schedule I
hereto. The Company’s place of business and chief executive office is where the Company is entitled to receive notices
hereunder; the present and foreseeable location of the Company’s books and records concerning any of the Collateral that
is accounts is as set forth on Schedule I hereto, and the location of all other Collateral, including, without limitation,
the Company’s inventory and equipment is as set forth on Schedule I hereto.

 

Section 4.5    Perfection;
Security Interest. This Security Agreement creates in favor of the Secured Parties, a valid security interest in the Collateral,
subject only to Permitted Liens securing the payment and performance of the Obligations. For Collateral in which the Security
Interest may be perfected by the filing of financing statements, once those financing statements have been properly filed in the
appropriate jurisdictions, the Security Interest in such Collateral will be fully perfected, subject only to Permitted Liens.
Other than the financing statements and with respect to this Security Agreement, to the actual knowledge of the Company, there
are no other financing statements or control agreements covering any Collateral, other than those evidencing Permitted Liens.

 

    	 	10	 

    

    

 

SECTION
V

EVENTS OF DEFAULT

 

Section 5.1     Events
of Default Defined. The occurrence of any of the following events prior to the termination or expiration of this Security
Agreement shall constitute an event of default under this Security Agreement (each, an “Event of Default”):

 

(a)          The
failure of the Company to perform or comply in a material respect with any act, duty or obligation required to be performed under
this Security Agreement if such failure is not remedied within twenty (20) calendar days after the Company receives written notice
of such failure from the Majority in Interest or thirty (30) calendar days after the occurrence thereof;

 

(b)          If
any of the representations or warranties of the Company set forth in this Security Agreement shall prove to have been incorrect
in any material respect when made, or becomes incorrect in any material respect and, if subject to cure, is not cured within twenty
(20) calendar days after the Company receives written notice thereof from the
Majority in Interest of the Secured Parties or within thirty (30) calendar days after the Company becomes aware, and immediately
notifies the Secured Parties, of any such incorrectness;

 

(c)          If
any material portion of the Collateral shall be damaged, destroyed or otherwise lost and such damage, destruction or loss is not
covered by insurance; or

 

(d)          If
an “Event of Default” as defined in the Secured Notes shall have occurred and is continuing.

 

Section 5.2   Rights
and Remedies Upon Default. If an Event of Default exists and is continuing, the Majority in Interest of the Secured Parties
shall, at its election (but subject to Section 7 below and to the terms and conditions of the Transaction Documents),
exercise any and all rights available to a secured party under the UCC, in addition to any and all other rights afforded by the
Transaction Documents, at law, in equity, or otherwise, including, without limitation, (a) requiring the Company to assemble
all or part of the Collateral and make it available to the Secured Parties at a place to be designated by the Majority in Interest
of the Secured Parties which is reasonably convenient to the Secured Parties and the Company, (b) surrendering any policies
of insurance on all or part of the Collateral and receiving and applying the unearned premiums as a credit on the Obligation,
(c) applying by appropriate judicial proceedings for appointment of a receiver for all or part of the Collateral (and the
Company hereby consents to any such appointment), (d) applying to the Obligation any cash held by Secured Parties under this
Security Agreement, and (e) as legally permissible, selling, reselling, assigning and delivering or granting a license to use
or otherwise dispose of the Collateral or any part thereof, in one or more parcels at public or private sale, at any of the Secured
Parties’ offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Majority in
Interest of the Secured Parties may deem commercially reasonable.

 

Section 5.3     Notice.
Reasonable notification of the time and place of any public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be made, shall be sent to the Company, the holders
of Permitted Liens, and to any other person or entity entitled to notice under the UCC. It is agreed that notice sent or given
not less than ten calendar days prior to the taking of the action to which the notice relates is reasonable notification and notice
for the purposes of this subparagraph.

 

Section 5.4     Application
of Proceeds. The Secured Parties shall apply the proceeds of any sale or other disposition of the Collateral hereunder in
the following order: first, to the payment of all expenses incurred in retaking, holding, and preparing any of the Collateral
for sale(s) or other disposition, in arranging for such sale(s) or other disposition, and in actually selling or disposing of
the same (all of which are part of the Obligation); second, toward repayment of amounts expended by the Secured Parties
in so acting hereunder; and third, toward payment of the balance of the Obligations in the order and manner as the Majority
in Interest of the Secured Parties determines in its sole discretion. Any surplus remaining shall be delivered to the Company
or as a court of competent jurisdiction may direct. If the proceeds are insufficient to pay the Obligations in full, then the
Company shall remain liable for any deficiency.

 

    	 	11	 

    

    

 

Section 5.5    Compliance
with Other Laws. The Secured Parties shall comply with any applicable state or federal laws in connection with a disposition
of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

 

SECTION
VI

ADDITIONAL REMEDIES

 

Section 6.1    Additional
Remedies. If an Event of Default exists and is continuing, the Company shall:

 

(a)          Endorse
any and all documents evidencing any Collateral (other than any Collateral if and to the extent subject to the Permitted Liens)
in accordance with the instructions provided by the Majority in Interest of the Secured Parties, and notify any payor that said
documents have been so endorsed and that all sums due and owing pursuant to them should be paid directly to such Secured Parties,
or as otherwise instructed by the Majority in Interest of the Secured Parties;

 

(b)          Turn
over to the Secured Parties, or as otherwise instructed by the Majority in Interest of the Secured Parties, copies of all documents
evidencing any right to collection of any sums due to the Company arising from or in connection with any of the Collateral;

 

(c)          Take
any action reasonably required by a Secured Party with reference to the Federal Assignment of Claims Act; and

 

(d)          Keep
all of its books, records, documents and instruments relating to the Collateral in such manner as the Secured Parties may require.

 

SECTION
VII

MISCELLANEOUS

 

Section 7.1    Termination
and Release. This Security Agreement, and the Liens created by this Security Agreement shall automatically terminate in all
respects upon the full and final payment by the Company of the Secured Notes or the conversion of the Secured Notes into shares
of capital stock of the Company, in accordance with the terms of the Secured Notes. Further, the Liens created by this Security
Agreement on any of the Collateral shall be automatically released if the Company disposes of such Collateral pursuant to a transaction
permitted by the Secured Notes or otherwise consented to by the Majority in Interest. In connection with any termination or release
pursuant to this Section 8.1, the Majority in Interest shall promptly execute and deliver to the Company all documents that the
Company shall reasonably request to evidence such termination or release.

 

Section 7.2    Severability.
In the event that any provision of this Security Agreement becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Security Agreement shall continue in full force and effect without said provision; provided,
that in such case the parties shall negotiate in good faith to replace such provision with a new provision which is not illegal,
unenforceable or void, as long as such new provision does not materially change the economic benefits of this Security Agreement
to the parties.

 

    	 	12	 

    

    

 

Section 7.3    Continuing
Security Interest; Successors. This Security Agreement creates a continuing security interest in the Collateral and shall
(i) remain in full force and effect until the Obligations are paid and performed in full or this Security Agreement is sooner
terminated in accordance with Section 7.1; and (ii) inure to the benefit of and be enforceable by Secured Parties and their
successors, transferees, and assigns. Each Secured Party may assign its rights hereunder in connection with any private sale or
transfer of its Secured Note in accordance with the terms of the Exchange Agreement and applicable law, in which case the term
“Secured Party” shall be deemed to refer to such transferee as though such transferee was an original signatory
hereto.

 

Section 7.4    Governing
Law. This Security Agreement shall be governed by and construed under the laws of the State of Delaware applicable to contracts
made and to be performed entirely within the State of Delaware.

 

Section 7.5    Headings.
The headings used in this Security Agreement are used for convenience only and are not to be considered in construing or interpreting
this Security Agreement.

 

Section 7.6    Notices.  Any
notice to the Company or to a Secured Party shall be given in the manner set forth in the Exchange Agreement; provided
that a Secured Party, if not a party to such Exchange Agreement, shall provide the Company with its proper delivery instructions
for notices. Either party may, by notice given in accordance with the Exchange Agreement, change the address to which notices,
demands and requests shall be sent to such party. Any notice to be given by the Company to the Secured Parties shall be given
in the manner provided for in the Exchange Agreement, and delivered to such addresses as the Company is instructed by the Secured
Parties.

 

Section 7.7    Entire
Agreement; Amendments; Waivers. This Security Agreement constitutes the entire agreement between the parties with regard to
the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or
among the parties. Except as expressly provided herein, neither this Security Agreement nor any term hereof may be amended except
pursuant to a written instrument executed by Company and the Majority in Interest, and no provision hereof may be waived other
than by a written instrument signed by the party against whom enforcement of any such waiver is sought. The Secured Parties shall
not, by any act, any failure to act or any delay in acting be deemed to have (i) waived any right or remedy under this Security
Agreement, or (ii) acquiesced in any Event of Default or in any breach of any of the terms and conditions of this Security Agreement.
No failure to exercise, nor any delay in exercising, any right, power or privilege of the Secured Parties under this Security
Agreement shall operate as a waiver of any such right, power or privilege. No single or partial exercise of any right, power or
privilege under this Security Agreement shall preclude any other or further exercise of any other right, power or privilege. A
waiver by a Secured Party of any right or remedy under this Security Agreement on any one occasion shall not be construed as a
bar to any right or remedy that such Secured Party would otherwise have on any future occasion.

 

Section 7.8    Multiple
Counterparts. This Security Agreement has been executed in a number of identical counterparts, each of which shall be deemed
an original for all purposes and all of which constitute, collectively, one agreement; but, in making proof of this Security Agreement,
it shall not be necessary to produce or account for more than one such counterpart.

 

    	 	13	 

    

    

 

Section 7.9    Cumulative
Remedies. The rights and remedies provided in this Security Agreement are cumulative, may be exercised singly or concurrently,
and are not exclusive of any other rights or remedies provided by law.

 

Section 7.10 Waivers.
The Company acknowledges that the Obligations arose out of a commercial transaction and hereby knowingly waives any right to require
the Secured Parties to (i) proceed against any person or entity, (ii) proceed
against any other collateral under any other agreement, (iii) pursue any other remedy available to the Secured Parties, or (iv)
make presentment, demand, dishonor, notice of dishonor, acceleration and/or notice of non-payment.

 

Section 7.11 Release.
No transfer or renewal, extension, assignment or termination of this Security Agreement or of any instrument or document executed
and delivered by the Company to the Secured Parties, nor additional advances made by the Secured Parties to the Company, nor the
taking of further security, nor the retaking or re-delivery of the Collateral by the Secured Parties nor any other act of the
Secured Parties shall release the Company from any Obligation, except a release or discharge executed in writing by the Majority
in Interest with respect to such Obligation or upon full payment and satisfaction of all Obligations and termination of the Secured
Notes. At such time the Obligations have been satisfied in full, the Majority in Interest shall execute and deliver to the Company
all assignments and other instruments as may be reasonably necessary or proper to terminate the Secured Parties’ security
interest in the Collateral, subject to any disposition of the Collateral that may have been made by or on behalf of the Secured
Parties pursuant to this Security Agreement. For the purpose of this Security Agreement, the Obligations shall be deemed to continue
if the Company enters into any bankruptcy or similar proceeding at a time when any amount paid to the Secured Parties could be
ordered to be repaid as a preference or pursuant to a similar theory, and shall continue until it is finally determined that no
such repayment can be ordered.

 

Section 7.12  
Independent Representation. Each Secured Party expressly represents and warrants to the Company that (a) before executing
this Agreement, such Secured Party has fully informed himself or itself of the terms, contents, conditions and effects of this
Agreement; (b) such Secured Party has relied solely and completely upon his or its own judgment in executing this Agreement;
(c) such Secured Party has had the opportunity to seek the advice of his or its own counsel and advisors before executing
this Agreement; (d) such Secured Party has acted voluntarily and of his or its own free will in executing this Agreement;
(e) such Secured Party is not acting under duress, whether economic or physical, in executing this Agreement; (f) this
Agreement is the result of arm’s length negotiations conducted by and among the parties; and (g) such Secured Party
acknowledges that the law firm of Becker & Poliakoff, LLP has been retained by the Company to prepare this Agreement as legal
counsel for the Company, that Becker & Poliakoff, LLP does not represent any Secured Party in connection with the preparation
or execution of this Agreement, that such firm has not given any legal, investment or tax advice to any Secured Party regarding
this Agreement and that such Secured Party has not relied upon any legal advice except as provided by its own attorneys. Becker
& Poliakoff, LLP is expressly intended as a beneficiary of the representations and warranties of the Holders contained in
this Section 7.12.

 

 

[Signature Pages to Follow]

    	 	14	 

    

    

  

IN WITNESS WHEREOF,
the Company and the Secured Party have duly executed this Security Agreement as of the date first written above.

 

	 	AUTHENTIDATE HOLDING CORP.
	 	 	 
	 	By:	 
	 	 	Name: Hanif A. Roshan
	 	 	Title:  Chief Executive Officer

 

Signature
Page to Security Agreement

 

     

     

    

 

 

Signature
Page to Security Agreement

 

	 	SECURED PARTY:
	 	 
	 	[	]
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

 

     

     

    

 

Schedule I

 

List of Collateral Locations, Executive
Offices and 

Jurisdiction of Organization or Incorporation
of Obligors

 

	Company Name:	Authentidate Holding Corp.
	 	 
	Executive Officers:  	Hanif A. Roshan – Chief Executive Officer and interim Principal Accounting Officer
	 	 
	Jurisdiction of Incorporation:  	Delaware
	 	 
	Subsidiaries of Company:	Peachstate Health Management, LLC d/b/a AEON Clinical Laboratories
	 	2225 Centennial Drive
	 	Gainesville, GA  30504
	 	 
	 	Authentidate, Inc.
	 	300 Connell Drive, 5th Floor
	 	Berkeley Heights, NJ  07922
	 	 
	 	Express MD Solutions, LLC
	 	300 Connell Drive, 5th Floor
	 	Berkeley Heights, NJ  07922
	 	 
	 	Trac Medical Solutions, Inc.
	 	300 Connell Drive, 5th Floor
	 	Berkeley Heights, NJ  07922
	 	 
	Location of Collateral 	 
	and/or related records:	Authentidate Holding Corp. 
	 	2225 Centennial Drive
	 	Gainesville, GA  30504

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