EXHIBIT 10.22
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of this __ day of ______, 2002 by and among AUTHENTIDATE HOLDING
CORP., a Delaware corporation (the "Company") and the purchasers signing this
Agreement (the "Shareholders").
WHEREAS, the Company desires to grant registration rights to the
Shareholders in connection with its purchase of Units of the Company's
securities, each Unit consisting of one share of Common Stock (the "Shares") and
0.20 Common Stock Purchase Warrants (the "Warrants") under that certain Unit
Purchase Agreement, dated as of the __th day of _______, 2002, by and among the
Company and the Shareholders (the "Unit Purchase Agreement"); and
WHEREAS, the execution and delivery of this Agreement by the Company
and the Shareholders is a condition to the closing under the Unit Purchase
Agreement;
NOW THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Registration Rights.
1.1 Certain Definitions. As used in this Agreement, the terms set forth
below shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any other
Federal agency at the time administering the Securities Act.
"Common Stock" means the shares of Common Stock, par value $.001 per
share, of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 for the registration of
any option plan or Form S-4 in connection with a merger or acquisition, or their
successors, or any other form for a limited purpose (not including any issuance
of securities of the Company for cash consideration), or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
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"Registrable Shares" means (i) the Shares issued pursuant to the terms
of the Unit Purchase Agreement; (ii) any shares of Common Stock issuable upon
exercise of the Warrants; (iii) any other shares of Common Stock of the Company
issued to the Shareholders from time to time hereafter as contemplated under the
Unit Purchase Agreement, if any; (iv) shares of any class of capital stock or
other securities into which or for which any such shares of Common Stock held by
the Shareholders shall have been converted or exchanged pursuant to any
recapitalization, reorganization, merger or consolidation of the Company or sale
of all or substantially all of the assets of the Company; (v) any other shares
of Common Stock of the Company issued in respect of such shares described in
clauses (i) through (iv) of this definition (because of stock splits, stock
dividends, reclassification, recapitalization, or similar events); and (vi) any
shares of Common Stock issuable upon exercise of the common stock purchase
warrants issued to a Shareholder dated February 19, 2002; provided, however,
that shares of Common Stock that are Registrable Shares shall cease to be
Registrable Shares upon any sale pursuant to a Registration Statement or Rule
144 under the Securities Act or at such time that the Registrable Share ceases
to be outstanding.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
1.2 Sale or Transfer of Registrable Shares; Legend.
(a) The Registrable Shares and shares issued in respect of the
Registrable Shares shall not be sold or transferred, except as may be permitted
under the Unit Purchase Agreement or upon the receipt by the Company of an
opinion of legal counsel, reasonably satisfactory to the Company, to the effect
that such sale or transfer is exempt from the registration requirements of the
Securities Act.
(b) Each certificate representing the Registrable Shares and shares
issued in respect of the Registrable Shares shall have such legends as required
by the Unit Purchase Agreement. Such legends may be removed from the
certificates representing any Registrable Shares, at the request of the holder
thereof, at such time as such securities are registered under the Securities Act
or as otherwise permitted by the Securities Act or regulations promulgated
thereunder.
1.3 Required Registration.
(a) On or before October 15, 2002, the Company shall file a
Registration Statement with the Commission covering all of the Registrable
Shares issued to the Shareholders pursuant to the Unit Purchase Agreement. The
Company shall use its best efforts to effect the registration, qualification or
compliance (including, without limitation, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) of all Registrable Shares, and have
the Commission declare the Registration Statement effective on or before
November 1, 2002. Notwithstanding the foregoing, the Company may delay the
filing, amendment
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and/or the effectiveness of such Registration Statement, for a period not to
exceed 90 days in the aggregate during any 12 month period, if at the time the
Company is engaged in a material transaction and the filing, amendment and/ or
effectiveness of such Registration Statement would have a material adverse
effect on such transaction. Subject to the foregoing sentence, in the event (i)
the Company does not timely file the Registration Statement or is unable to have
the Registration Statement declared effective on or before the date set forth
above or (ii) the effectiveness of the Registration Statement is subsequently
suspended prior to the first anniversary of the effective date of the
Registration Statement, than the Company shall pay to the Shareholders an
aggregate amount of liquidated damages equal 2% of the Purchase Price paid by
such Shareholders (as defined in the Unit Purchase Agreement) per month for each
month that any of the above-defined events occur.
1.4 Registration Procedures. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) in connection with any registration of Registrable Securities
pursuant to Section 1.3 above, the Company shall furnish the Shareholders
included in a Registration Statement with such reasonable number of copies of
such Registration Statement, related preliminary prospectus and prospectus
meeting the requirements of the Act, and other documents necessary or incidental
to the registration and public offering of such Registrable Shares, as shall be
reasonably requested by the Shareholders to permit the Shareholders to make a
public distribution of such Registrable Securities;
(b) as expeditiously as reasonable, prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective until the earlier of the sale of all
Registrable Shares covered thereby or the date that the Shareholders of the
Registrable Shares receive an opinion of counsel to the Company that all of the
Registrable Shares may be freely traded (without limitation or restriction as to
quantity or timing and without registration under the Act) pursuant to Rule 144
or otherwise;
(c) as expeditiously as reasonable, furnish to each selling
Shareholders such reasonable numbers of copies of the Registration Statement,
each amendment and supplement thereto, the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act and each
prospectus filed under Rule 424 of the Securities Act, and such other documents
as the selling Shareholders may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Shares owned by the selling
Shareholders;
(d) as expeditiously as reasonable, use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Shareholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Shareholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Shareholders; provided,
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however, that the Company shall not be required in connection with this Section
1.4(d) to qualify as a foreign corporation or execute a general consent to
service of process in any jurisdiction; and
(e) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Shares included in such Registration Statement for sale in any
jurisdiction, the Company will use its best efforts promptly to obtain the
withdrawal of such order.
1.5 Allocation of Expenses. The Company will pay all Registration
Expenses (as defined herein) of all registrations under this Agreement. For
purposes of this Agreement, the term "Registration Expenses" shall mean all
expenses incurred by the Company in complying with this Section 1.5, including,
without limitation, all registration and filing fees, exchange listing fees,
printing expenses, messenger, telephone and delivery expenses, fees, and
expenses of counsel for the Company, state Blue Sky fees and expenses, and the
expense of any special audits incident to or required by any such registration
(including the expenses related to the preparation and delivery of any "cold
comfort" letters required by or incident to such registration). Provided,
however, that the Shareholders shall be solely responsible for the fees of any
counsel retained by the Shareholders in connection with such registration and
any transfer taxes or underwriting discounts, commissions or fees applicable to
the Registrable Securities sold by the Shareholders pursuant thereto.
1.6 Information by Holder. The Shareholders of Registrable Shares
included in any Registration Statement shall furnish to the Company such
information regarding such holder and the distribution proposed by such holder
as the Company may reasonably request in writing and as shall be required in
connection with any registration, qualification, or compliance referred to in
Sections 1.3.
1.7 Lawful Compliance. Notwithstanding anything to the contrary in this
Agreement, the Company shall not be required to violate or breach any applicable
federal or state security law, rule, or regulation.
2. Indemnification and Contribution. (a) In the event of any
registration of any the Registrable Securities under the Securities Act, the
Company shall indemnify and hold harmless the Shareholders, the affiliates of
the Shareholders, the directors, partners, officers, employees and agents of the
Shareholders and any person who controls the Shareholders within the meaning of
the Securities Act or the Exchange Act, against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or other Federal or
State statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) caused
by, arising out of or based on any untrue statement or alleged untrue statement
of a material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or arise out of or are based upon any omission or alleged
omission to state
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therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will not be liable
in any case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any such
Shareholders specifically for inclusion therein, (ii) the Company will not be
liable to any indemnified party under this indemnity agreement with respect to
any Registration Statement or Prospectus to the extent that any such loss,
claim, damage or liability of such indemnified party results from the use of the
Prospectus during a period when the use of the Prospectus has been suspended,
provided that the Shareholders received prior notice of such suspension, which
notice shall be deemed to have been received by the Shareholders within 48 hours
after the giving thereof; and (iii) the Company shall not be liable to any
indemnified party with respect to any preliminary Prospectus to the extent that
any such loss, claim, damage or liability of such indemnified party results from
the fact that such indemnified party sold Registrable Securities to a person as
to whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus or of the Prospectus as then amended or
supplemented in any case where such delivery is required by the Act, if the
loss, claim, damage or liability of such indemnified party results from an
untrue statement or omission of a material fact contained in the preliminary
Prospectus which was corrected in the Prospectus or in the Prospectus as then
amended or supplemented. This indemnity agreement will be in addition to any
liability which the Company may otherwise have. The Company also agrees to
indemnify and provide contribution to each person who may be deemed to be an
underwriter (for purposes of the Act) with respect to the Registrable Securities
("Underwriter" or "Underwriters"), their officers and directors, and each person
who controls each such Underwriter, on substantially the same basis as that of
the indemnification of and contribution to the Shareholders provided in this
Section 2.
(b) As a condition to including any of the Registrable Securities in
any registration statement filed pursuant to this Agreement, the Shareholders of
the Registrable Securities, as a prospective seller of the Registrable
Securities hereby agrees to indemnify and hold harmless (in the same manner and
to the same extent as set forth in subdivision (a) of this Section 2) the
Company, each director of the Company, each officer, employee or agent of the
Company and each Underwriter of the Registrable Securities and each other person
or entity, if any, which controls the Company or such Underwriter within the
meaning of the Securities Act, with respect to any statement or alleged
statement in, or omission or alleged omission from, such registration statement,
any preliminary Prospectus, Prospectus or summary Prospectus contained therein,
or any amendment or supplement thereto, if such statement or alleged statement
or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by the Shareholders for use in the
preparation of such registration statement, preliminary Prospectus, Prospectus,
summary Prospectus, amendment or supplement. Any such indemnity shall remain in
full force and effect, regardless of any investigation made by or on behalf of
the Company or any such director, officer or controlling person and shall
survive the transfer of such securities by the
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Shareholders. Anything in this Agreement contained to the contrary
notwithstanding, the liability of the Shareholders for indemnification or
contribution hereunder shall be limited to the amount of proceeds received by
such Shareholders in the Offering giving rise to such liability.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in the
preceding subdivisions of this Section 2, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 2, except to the extent that the indemnifying party
is materially prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified, to the extent that the
indemnifying party may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. Notwithstanding
the indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the right to
employ separate counsel (including local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate counsel (and
local counsel) if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnified party shall not settle or compromise
any action for which it seeks indemnification or contribution hereunder without
the prior written consent of the indemnifying party, which consent shall not be
unreasonably withheld. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in Section 2(a) or 2(b) is
unavailable to or insufficient to hold harmless an indemnified party for any
reason, then each applicable indemnifying
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party, in lieu of indemnifying such indemnified party, shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "losses") to which such indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received by such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, from the Registration Statement which resulted in such losses.
(e) The provisions of this Section 2 shall remain in full force and
effect regardless of any investigation made by or on behalf of any Shareholder
or the Company or any other persons who are entitled to indemnification pursuant
to the provisions of this Section 2, and shall survive the sale by a Shareholder
of Registrable Securities pursuant to the Registration Statement.
3 Miscellaneous.
3.1 Survival of Agreements. All agreements contained herein shall
survive the execution and delivery of this Agreement and the closing of the
transactions contemplated hereby.
3.2 Notices. All notices or other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by overnight
courier, or telecopy or on the third (3rd) business day after mailing if mailed
by prepaid registered or certified mail (return receipt requested), addressed as
follows:
(a) If to Company, to: Authentidate Holding Corp.
2165 Technology Drive
Schenectady, NY 12308
Attention: President
Facsimile: (518) 346-7799
Copies to: Goldstein & DiGioia, LLP
369 Lexington Avenue
New York, New York 10017
Attention: Victor J. DiGioia, Esq.
Facsimile: (212) 557-0295
(b) If to the Shareholders, at the address set forth on the
register of the Company.
3.3 Successors and Assigns. The provisions of this Agreement shall be
binding upon, and inure to the benefit of, the respective successors, assigns,
heirs, executors, and administrators of the parties hereto.
3.4 Amendments and Waivers. Except as otherwise expressly set forth in
this Agreement, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or
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prospectively), with the written consent of the Company and the holders of at
least fifty-one percent (51%) of the outstanding Registrable Shares only in a
manner that affects all Registrable Shares in the same fashion. Any amendment or
waiver effected in accordance with this Section 3.4 shall be binding upon each
holder of any Registrable Shares (including shares of Common Stock into which
such Registrable Shares have been converted), each future holder of all such
securities, and the Company. No waivers of or exceptions to any term, condition,
or provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition,
or provision.
3.5 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.6 Sections and Exhibits. The headings of sections in this Agreement
are provided for convenience only and will not affect the Agreement's
construction or interpretation. Unless otherwise indicated, all references to
"Section," "Sections," or "Exhibit" refer to the corresponding section,
sections, or exhibit, respectively, of this Agreement.
3.7 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision.
3.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within such state without regard to its conflict of
laws rules.
3.9 Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
Remainder of page intentionally left blank. Signature page follows.
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IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed by their signature as natural persons or by individuals
by their duly authorized officers as of the date first written above.
AUTHENTIDATE HOLDING CORP.
By:
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Name: John T. Botti
Title: President
THE PURCHASERS
By:
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Name:
Title:
By:
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Name:
Title:
By:
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Name:
Title:
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