Attached files
| file | filename |
|---|---|
| 8-K - DOCUMENT SECURITY SYSTEMS INC | v207306_8k.htm |
| EX-99.1 - DOCUMENT SECURITY SYSTEMS INC | v207306_ex99-1.htm |
| EX-99.3 - DOCUMENT SECURITY SYSTEMS INC | v207306_ex99-3.htm |
Warrant
Certificate No. 1
WARRANTS
TO PURCHASE
SHARES
OF COMMON STOCK
OF
DOCUMENT SECURITY SYSTEMS, INC.
Document
Security Systems, Inc., a New York corporation (together with its successors,
the “Company”),
for value received, hereby certifies that Fletcher International, Ltd., a
company domiciled in Bermuda (together with its successors, “Fletcher”), or its
assigns, the registered holder (the “Holder”), is entitled
to purchase from the Company up to the Warrant Amount (as defined below),
subject to the adjustments contained in this warrant certificate (this “Certificate”) or the
Agreement between the Company and Fletcher dated as of December [•], 2010 (the
“Agreement”),
of duly authorized, validly issued, fully paid and nonassessable shares of the
Company’s common stock, par value $0.02 per share (the “Common Stock”), at
the then-prevailing Warrant Price (as defined below) at any time or from time to
time during the Warrant Term (as defined below), all subject to the terms,
conditions and adjustments set forth below in this Certificate and in the
Agreement.
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1.
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Warrants.
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The
warrants represented hereby (the “Warrants”) have been
issued pursuant to the Agreement, and are subject to the terms and conditions
thereof. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings set forth in the Agreement. A copy of
the Agreement may be obtained at no cost by the Holder upon written request to
the Secretary of the Company at the principal executive offices of the
Company.
1.1 General; Warrant Price;
Warrant Term.
(a) The
Warrants entitle the Holder to purchase newly-issued shares of Common Stock at
the Warrant Price per share, up to an aggregate purchase price of Four Million
Dollars ($4,000,000) (the “Warrant
Amount”). The “Warrant Price” means
$5.289, subject to adjustment as set forth herein. The Warrants may
be exercised (in whole or in part) at any time or from time to time after
December 31, 2010 (the “Commencement Date”)
until 11:59 P.M., New York City time, on December 31, 2019, subject to extension
as set forth herein (the period of time from the Commencement Date to such date,
the “Warrant
Term”).
1.2 Manner of
Exercise.
(a) The
Warrants may be exercised by the Holder, in whole or in part, from time to time,
on any day during the Warrant Term, by delivery of a notice in substantially the
form attached to this Certificate (or a reasonable facsimile thereof) duly
executed by the Holder (a “Warrant Exercise
Notice”).
(b) The
Warrant Exercise Notice shall designate the number of shares of Common Stock to
be received upon such exercise and the aggregate Warrant Price to be paid (or
deemed paid in the case of Cashless Exercise). The closing of each
exercise (each a “Warrant Closing”)
shall take place (i) on the third (3rd)
Business Day after and excluding the date of the Warrant Exercise Notice or (ii)
any other date upon which the exercising Holder and the Company mutually agree
(the “Warrant Closing
Date”).
1.3 Conditions to
Closing.
(a) Conditions Precedent to
Holder’s Obligation to Close. It shall be a condition to each
Holder’s obligation to close on each Warrant Closing Date that each of the
following is satisfied, unless waived by such Holder(which waiver may be made or
not made in Holder's sole discretion, and any waiver shall apply solely to the
Warrant Closing or Warrant Closings specified by Holder and shall not obligate
Holder to make or not make any subsequent waiver):
(i) From
and after the date of the Agreement through and including each Warrant Closing
Date, the representations and warranties made by the Company in the Agreement
shall be, and have been, true and correct, except those representations and
warranties which address matters only as of a particular date, which shall be
true and correct as of such date;
(ii) From
and after the date of the Agreement through and including each Warrant Closing
Date, the Company shall be, and have been, in full compliance in all material
respects with all of the covenants and agreements in the Agreement and this
Certificate;
(iii) On
each Warrant Closing Date, the Company shall not possess any negative, material
non-public information other than as shall have been filed with the SEC at least
five (5) Business Days prior to and excluding such Warrant Closing
Date;
(iv) On
each Warrant Closing Date, Holder shall have received on the date of such
exercise a certificate of the Chief Executive Officer and the Chief Financial
Officer of the Company dated such Warrant Closing Date and to such
effect;
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(v) On
such Warrant Closing Date, the Company shall have delivered to Holder an opinion
of counsel, the form and substance of which shall be reasonably satisfactory to
Holder, dated the date of delivery; and
(vi) On
such Warrant Closing Date, no Registration Failure (as defined in the Agreement)
shall exist.
(b) Agreement to Cause
Conditions to be Satisfied. The Company shall use best efforts
to cause each of the foregoing conditions to be satisfied at the earliest
possible date.
(c) Withdrawal of
Notice. If the conditions set forth in Section 1.3(a) are not
satisfied or waived prior to the second (2nd) Business Day following and
excluding the Warrant Exercise Notice Date (except for those conditions which by
their terms can be satisfied only on the Warrant Closing Date) or if the Company
fails to perform its obligations on any Warrant Closing Date (including but not
limited to delivery of all shares of Common Stock issuable on such date), then
in addition to all remedies available to Holder at law or in equity, such Holder
may, at its sole option, and at any time, withdraw the Warrant Exercise Notice
by written notice to the Company regardless of whether such condition has been
satisfied or waived as of the withdrawal date and, after such withdrawal, shall
have no further obligations with respect to such Warrant Exercise Notice and may
submit an Warrant Exercise Notice on any future date with respect to such
Warrants and the Warrant Price for such subsequent Warrant Exercise Notice shall
be the lesser of (i) the Warrant Price in the withdrawn Warrant Exercise Notice
and (ii) the Warrant Price in effect as of the subsequent Warrant Exercise
Notice Date.
1.4 When Exercise
Effective.
Each
exercise of any Warrant shall be deemed to have been effected on the Warrant
Closing Date upon receipt of the relevant Warrant Price (or deemed to have been
received in connection with Cashless Exercises), and the Person (as defined in
the Agreement) or Persons in whose name or names any certificate or certificates
representing the Common Stock shall be issuable upon such exercise as provided
in Section 1.5 shall be deemed to have become the holder(s) of record
thereof.
1.5 Delivery of Common Stock and
Payment.
(a) Subject
to Section 1.3, on the Warrant Closing Date, the Holder shall deliver payment in
the amount designated as the “Designated Aggregate Exercise Price” by the Holder
in the Warrant Exercise Notice, and such Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock designated in the Warrant Exercise Notice,
delivered as set forth in Section 1.7.
(b) Notwithstanding
subsection (a) above, the exercising Holder may elect in any Warrant Exercise
Notice to receive an amount of Common Stock (the “Settlement Stock”)
equal to “X” where:
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X = [(N x
D) – (N x P)] / P
N = the
gross number of shares of Common Stock that would have been issuable on the
relevant Warrant Closing Date if the Holder had not elected Cashless
Exercise
D = Daily
Market Price (as defined in the Agreement) on the third (3rd) Business Day
before, and excluding, the date of the Warrant Exercise Notice
P =
Warrant Price with respect to such Warrant Exercise Notice
The
Settlement Stock shall be issued by the Company to Holder upon the Warrant
Closing Date in lieu of the number of shares of Common Stock otherwise issuable
upon exercise of the Warrants covered by such Warrant Exercise Notice, provided,
that the Holder shall not be required to tender the Warrant Price otherwise
payable (a “Cashless
Exercise”).
(c) Closing of Cashless
Exercise. The Company shall close each Cashless Exercise on
the relevant Warrant Closing Date. The Company shall issue and
deliver the Settlement Stock pursuant to Section 1.7 on the relevant Warrant
Closing Date. Upon receipt of the Settlement Stock in connection with
any Cashless Exercise, (i) that amount of Warrants as specified for exercise in
the Warrant Exercise Notice shall be deemed exercised and (ii) that amount of
cash that would have been paid by the Holder on the relevant Warrant Closing
Date if the Holder had not elected Cashless Exercise shall be deemed paid by the
Holder and received by the Company.
(d) Effect on Limit
Calculations. In determining whether the limitation described
in Section 7 of the Agreement has been reached, computation shall be made based
on the number of shares of Settlement Stock actually issued in the case of a
Cashless Exercise.
(e) Issuance of Additional
Shares. In the event that the Warrant Price set forth in any
earlier Warrant Exercise Notice submitted and not withdrawn is greater than the
Warrant Price set forth in a Warrant Exercise Notice submitted and not withdrawn
after the date of such earlier Warrant Exercise Notice, then the Company shall
promptly issue to Holder that number of shares of Common Stock equal to the
quotient of (x) the positive difference, if any, between (1) the aggregate
Warrant Price paid (or deemed paid in the case of Cashless Exercise) at the
earlier Warrant Closing and (2) the aggregate Warrant Price that would have
been paid (or deemed paid in the case of Cashless Exercise) at the earlier
Warrant Closing based on the Warrant Price set forth in the later Warrant
Exercise Notice, divided by (y) the Warrant Price set forth in the later Warrant
Exercise Notice.
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1.6 Extension of
Term.
(a) The
Warrant Term shall be extended: by two (2) Business Days for each Business
Day:
(i) that
a Registration Failure exists; or
(ii) occurring
during the period (x) commencing on the earlier of the day on which the Company
restates or announces its intention to restate any portion of the Company
Financial Statements, and (b) ending on the Restatement Filing Date (as defined
in the Agreement).
(b) To
the extent that the Company (A) restates or announces its intention to restate
any portion of the Company Financial Statements or (B) there exists a
Registration Failure, in either case, within sixty-five (65) Business Days of
the expiration of the Warrant Term, the Warrant Term shall be extended to a date
that is at least sixty-five (65) Business Days after the later of the
Restatement Filing Date or the remediation of the Registration
Failure.
1.7 Delivery of Common Stock and
Dividend Payment.
(a) On
the Warrant Closing Date, the Company at its expense (including payment by it of
any applicable issue taxes) shall cause to be issued in the name of and
delivered to the exercising Holder or as such Holder may direct, at the election
of such Holder:
(i) (x)
if in uncertificated form by book-entry transfer via the Depository Trust
Company’s Deposit and Withdrawal at Custodian (or DWAC) system and (y) if in
certificated form, as instructed by such Holder, the number of duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock to which
such Holder shall be entitled upon such exercise plus, in lieu of any fractional
share of Common Stock to which such Holder would otherwise be entitled, cash in
an amount equal to the same fraction of the Daily Market Price on the Business
Day immediately preceding the relevant Warrant Closing Date, and a certificate
from the Company stating the new Warrant Amount reflecting a reduction in each
of the dollar amounts in the definition of Warrant Amount, on a
dollar-for-dollar basis, for each dollar paid or deemed paid in the event of a
Cashless Exercise; and
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(ii) the
Dividend Amount multiplied by the number of shares of Common Stock required to
be delivered under this Section 1.7 (or, in the case of a Cashless Exercise, the
gross number of shares that would have been deliverable if Holder had not
elected Cashless Exercise) (the "Dividend
Payment"). To the extent that the Dividend Payment consists of
cash, the Company may pay such amount (a) by wire transfer of immediately
available funds to such Holder or (b) if the Daily Market Price on the date the
relevant Later Investment Notice is delivered is greater than the Floor Price,
by delivering shares of Common Stock equal to the cash portion of the Dividend
Payment divided by the Warrant Price. To the extent that the Dividend
Payment consists of securities or other non-cash property, the Company shall
deliver such securities or other non-cash property to such Holder; provided that if such
securities or other non-cash property would have a reduced value if delivery is
so delayed (for example only and not by way of limitation, a short-term right to
purchase securities), then proper provision shall be made to deliver to Holder
the sum of (i) the fair value of such securities or other non-cash property
measured as of the distribution date and (ii) the appreciation, if any, in value
of such securities through the date of delivery. For example only and
not by way of limitation, if the Company distributes a short-term right to
purchase securities to other equity holders, it shall deliver to Holder the
value Holder would have received had Holder exercised such right plus the
appreciation, if any, had Holder held the purchased securities through the date
on which such fair value is delivered to Holder. In the event that
Holder and the Company mutually agree that it would be impractical for the
Company to distribute identical securities or other non-cash property to Holder,
then Holder and the Company shall work together in good faith to determine a
fair and equivalently valued substitute therefor. "Dividend Amount"
means the aggregate per-share amount of dividends and distributions, whether in
cash, securities or otherwise, declared or paid on any class of equity security
of the Company on or after the date of the Agreement and on or before
the relevant Warrant Closing Date.
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2.
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Reservation of
Shares.
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For so
long as the Warrant Amount represented hereby has not been exercised in full,
the Company shall at all times prior to the end of the Warrant Term reserve and
keep available, free from pre-emptive rights, out of its authorized but unissued
capital stock, the number of shares available for exercise
hereunder. In the event the number of shares of Common Stock or other
securities issuable exceeds the authorized number of shares of Common Stock or
other securities, the Company shall promptly take all actions necessary to
increase the authorized number, including causing its board of directors to call
a special meeting of stockholders and recommend such increase.
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3.
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Accountants’ Report as
to Adjustments.
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In each
case of any adjustment or readjustment of the Warrant Amount, the Warrant Term,
the Warrant Price or any other adjustment or readjustment pursuant to the terms
of the Agreement or this Certificate, or upon the written request at any time of
any Holder, the Company at its expense will promptly compute such adjustment or
readjustment (the “Company Calculation”)
in accordance with the terms of this Certificate and the Agreement and cause the
Company’s Chief Financial Officer to verify such computation and prepare a
report setting forth such adjustment or readjustment and showing in reasonable
detail the method of calculation thereof and the facts upon which such
adjustment or readjustment is based, including a statement of (a) the Warrant
Amount, (b) the Warrant Term and (c) the Warrant Price in effect immediately
prior to such adjustment or readjustment (as adjusted and readjusted, as
applicable). The Company will forthwith deliver a copy of each such
report to each Holder and will also keep copies of all such reports at its
principal office and will cause the same to be available for inspection at such
office during normal business hours by any Holder. The Holder may
dispute the Company Calculation by providing its computation of such adjustment
or readjustment (the “Holder Calculation”)
and requesting in writing that independent certified public accountants of
recognized national standing (which shall not have provided services to the
Company in the preceding three (3) years) selected by the Company verify the
Company Calculation. The Holder shall be responsible for the costs
and expenses of such accountants if the difference between the computation of
the adjustment or readjustment by such accountants (the “Accountant
Calculation”) and the Holder Calculation is greater than the difference
between the Accountant Calculation and the Company Calculation, and otherwise
the Company shall bear such costs and expenses.
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4.
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Taxes.
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The
Company shall pay all documentary stamp taxes (if any) attributable to the
issuance of Common Stock upon each exercise of the Warrants by the Holder; provided, however, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the registration of any certificates for
Common Stock in a name other than that of a Holder upon each exercise of
Warrants, and the Company shall not be required to issue or deliver a
Certificate evidencing Warrants or certificates for Common Stock unless or until
the person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the reasonable
satisfaction of the Company that such tax has been paid.
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5.
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Treatment of Company
Stock Adjustment Events.
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In case
the Company may effect any subdivision or combination of the issued Common
Stock, whether by reason of any dividend or distribution of units, split,
recapitalization, reorganization, spin-off, combination or other similar change
(each a “Company Stock
Adjustment Event”), including a pro rata distribution of Common Stock to
all Holders of Common Stock, or a subdivision or combination of the outstanding
Common Stock, then (a) in the case of any such distribution, immediately after
the close of business on the record date for the determination of Holders of any
class of securities entitled to receive such distribution, or (b) in the case of
any such subdivision or combination, at the close of business on the Business
Day immediately prior to the Business Day upon which such Company action becomes
effective, the Warrant Price, the Average Price (as defined in the Agreement)
and, to the extent applicable, the Daily Market Price and each other price or
quantity in effect immediately prior to such Company Stock Adjustment Event
shall be proportionately changed.
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5.1 Change of
Control.
(a) If
after the date of the Agreement, a Change of Control (as defined below) or plan
or proposal with respect thereto is publicly announced or occurs, as part of
such Change of Control, proper provision shall be made as follows:
(i) Between
the date a Change of Control is announced and the effective date of the Change
of Control, each Holder at its sole option shall continue to have the right to
submit to the Company a Warrant Exercise Notice in accordance with the terms and
conditions of this Certificate. In addition, each Holder at its sole
option may elect to submit to the Company a special notice (a “Contingent Warrant Exercise
Notice”) to exercise all or part of its unexercised Warrants in
connection with such Change of Control; in which case, notwithstanding the
provisions of Section 1.4:
(A) the
effectiveness of such contingent exercise shall be conditional upon the
effectiveness of the Change of Control;
(B) such
Holder shall have the right to deliver a notice to withdraw such Contingent
Warrant Exercise Notice until the effective date of such Change of Control;
and
(C) if
such Contingent Warrant Exercise Notice shall not have been withdrawn, then on
the effective date of such Change of Control, the Holder of such Warrants shall
receive, upon payment of the Warrant Price designated in the Warrant Exercise
Notice, the same consideration, in the form of cash, securities or other assets
(the “Acquisition
Consideration”) per share of Common Stock issuable to any other holder of
shares of Common Stock in connection with such Change of Control based upon the
number of shares of Common Stock into which such Holder’s Warrants would be
exercisable if such Holder had exercised each Warrant on the Business Day
immediately preceding the date on which such Change of Control occurs. Upon
receipt of the Warrant Price, such Holder’s Warrants tendered for exercise
pursuant to a Warrant Exercise Notice or Contingent Warrant Exercise Notice
shall be fully exercised and shall no longer permit such Holder to exercise such
Warrants into Common Stock; provided, that if the Acquisition Consideration is
in the form of cash, the Holder shall not be required to tender the relevant
Warrant Price to exercise its Warrants, but shall receive an amount in
connection with such Change of Control equal to the Acquisition Consideration
applicable to such Holder based on the number of shares of Common Stock into
which such Holder’s Warrants would be exercisable if such Holder had exercised
each Warrant that it owns on the Business Day immediately preceding the date on
which such Change of Control occurs, less such Warrant Price.
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(b) In
the case of any Change of Control, the Company shall not enter into an agreement
with the Acquiring Person resulting in a Change of Control unless such Agreement
expressly obligates the Acquiring Person to assume all of the Company’s
obligations under any unexercised Warrants (the “Stock Assumption
Agreement”). In the event that any Warrant remains unexercised
upon consummation of the Change of Control, the Holder thereof shall thereafter
automatically have equivalent rights with respect to the Acquiring Person and
from and after the effective date of the Change of Control and regardless of
whether the Acquiring Person expressly assumes the Company’s
obligations:
(i) all
references to the Company in this Certificate shall be references to the
Acquiring Person,
(ii) all
references to Common Stock in this Certificate shall be references to the
securities for which the Common Stock are exchanged in the Change of Control (or
if none, the most widely-held class of voting securities of the Acquiring
Person),
(iii) all
references to the Warrant Price in this Certificate shall be references to the
Stock Adjustment Measuring Price (as defined below), and
(iv) all
references to the Average Price shall be references to such price with respect
to the Acquiring Person.
(c) “Acquiring Person”
means, in connection with any Change of Control (i) the continuing or surviving
Person of a consolidation or merger with the Company (if other than the
Company), (ii) the transferee of all or substantially all of the properties or
assets of the Company, (iii) the corporation consolidating with or merging into
the Company in a consolidation or merger in connection with which the Common
Stock is changed into or exchanged for stock or other securities of any other
Person or cash or any other property, (iv) the entity or group acting in concert
acquiring or possessing the power to cast the majority of the eligible votes at
a meeting of the Company’s stockholders at which directors are elected, or, (v)
in the case of a capital reorganization or reclassification, the Company, or
(vi) at Holder’s election, any Person that (A) controls the Acquiring Person
directly or indirectly through one or more intermediaries, (B) is required to
include the Acquiring Person in the consolidated financial statements contained
in such Person’s Annual Report on Form 10-K (if such Person is required to file
such a report) or would be required to so include the Acquiring Person in such
Person’s consolidated financial statements if they were prepared in accordance
with U.S. generally accepted accounting principles and (C) is not itself
included in the consolidated financial statements of any other Person (other
than its consolidated subsidiaries).
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(d) “Change of Control”
means (a) acquisition of the Company by means of merger or other form of
corporate reorganization in which outstanding shares of the Company are
exchanged for securities or other consideration issued, or caused to be issued,
by the Acquiring Person or its Parent, Subsidiary or Affiliate (each as defined
in Rule 12b-2 of the Exchange Act), other than a restructuring by the Company
where outstanding shares of the Company are exchanged for shares of the
Acquiring Person on a one-for-one basis and, immediately following the exchange,
former stockholders of the Company own all of the outstanding shares, (b) a sale
of all or substantially all of the assets of the Company (on a consolidated
basis) in a single transaction or series of related transactions, (c) any tender
offer, exchange offer, stock purchase or other transaction or series of related
transactions by the Company in which the power to cast the majority of the
eligible votes at a meeting of the Company’s stockholders at which directors are
elected is transferred to a single entity or group acting in concert, or (d) a
capital reorganization or reclassification of the Common Stock. Notwithstanding
anything contained herein to the contrary, a change in the state of
incorporation of the Company shall not in and of itself constitute a Change of
Control.
(e) “Stock Adjustment Measuring
Price” means the lower of (i) and (ii) below:
(i) an
amount equal to the Warrant Price multiplied by a fraction,
(1) the
numerator of which is the volume-weighted average price, calculated to the
nearest ten thousandth (i.e., four decimal places (.xxxx)), of the securities
for which Common Stock is exchanged in the Change of Control (or if none, the
most widely-held class of voting securities of the Acquiring Person);
and
(2) the
denominator of which is the Daily Market Price, in the case of (1) and (2)
determined as of the Business Day immediately preceding and excluding the date
on which the Change of Control is consummated; and
(ii) the
Average Price with respect to such Acquiring Person set forth in the first
Warrant Exercise Notice delivered to the Acquiring Person.
5.2 Adjustment for
Restatements.
From and
after the date that any Holder delivers a Restatement Adjustment Notice (as
defined in the Agreement) to the Company, each subsequent Warrant Price shall in
Holder’s sole discretion with respect to one or more exercises of the Warrants,
equal the lesser of (a) the Warrant Price calculated without regard to such
Restatement Adjustment Notice and (b) the Restatement Price (as defined in the
Agreement) specified in such Restatement Adjustment Notice.
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5.3 Adjustment for Future Equity
Issuances.
From and after the date that the
Company delivers any Equity Issuance Notice (as defined in the Agreement) to any
Holder (or from and after the date on which a disclosure or consummation
described in Section 9(b) of the Agreement has occurred that requires the
Company to deliver an Equity Issuance Notice), each subsequent Warrant Price
shall in Holder’s sole discretion with respect to one or more exercises of the
Warrants, equal the lesser of (a) the Warrant Price calculated without regard to
such Equity Issuance Notice and (b) the Later Issuance Price (as defined in the
Agreement).
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6.
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Lost or Stolen
Certificate.
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In case
this Certificate shall be mutilated, lost, stolen or destroyed, the Company may
in its discretion issue in exchange and substitution for and upon cancellation
of the mutilated Certificate, or in lieu of and substitution for the Certificate
lost, stolen or destroyed, a new Certificate of like tenor, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction of such Certificate and indemnity, if requested, reasonably
satisfactory to the Company. Applicants for a substitute Certificate
shall also comply with such other reasonable regulations and pay such other
reasonable charges as the Company may prescribe.
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7.
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Transfer
Agent.
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(a) Initially,
the Company (and upon a Change of Control, the Acquiring Person) shall serve as
the transfer agent (the “Transfer Agent”) for
the Warrants. The Transfer Agent shall at all times maintain a
register (the “Stock
Register”) of the Holders of the Warrants. The Company may
deem and treat each Holder of Warrants as set forth in the Stock Register as the
true and lawful owner thereof for all purposes, and the Company shall not be
affected by any notice to the contrary.
(b) The
Company may, at any time and from time to time, appoint another Person to serve
as the Transfer Agent, and shall upon acceptance by such Person, give notice to
each Holder of the change in Transfer Agent. Such new Transfer Agent
shall be (a) a Person doing business and in good standing under the laws of the
United States or any state thereof, and having a combined capital and surplus of
not less than Fifty Million Dollars ($50,000,000) or (b) an affiliate of such a
Person. The combined capital and surplus of any such new Transfer
Agent shall be deemed to be the combined capital and surplus as set forth in the
most recent report of its condition published by such Transfer Agent prior to
its appointment; provided that such reports are published at least annually
pursuant to law or to the requirements of a federal or state supervising or
examining authority. After acceptance in writing of such appointment
by the new Transfer Agent, it shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named herein as the
Transfer Agent, without any further assurance, conveyance, act or deed; but if
for any reason it shall be reasonably necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Company and shall be legally and validly executed and
delivered by the Company. Any Person into which any new Transfer Agent may be
merged or any Company resulting from any consolidation to which any new Transfer
Agent shall be a party or any Company to which any new Transfer Agent transfers
substantially all of its corporate trust or stockholders services business shall
be a successor Transfer Agent under this Certificate without any further act;
provided that such Person (a) would be eligible for appointment as successor to
the Transfer Agent under the provisions of this Section 7 or (b) is a wholly
owned subsidiary of the Transfer Agent. Any such successor Transfer Agent shall
promptly cause notice of its succession as Transfer Agent to be delivered via
reputable overnight courier to the Holders of the Warrants at such Holder’s last
address as shown on the Stock Register.
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8.
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Notices.
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(a) All
notices and other communications under this Certificate shall be in writing and
shall be delivered by either a nationally recognized overnight courier, postage
prepaid, or transmitted by facsimile, in each case to the addresses as provided
below:
(i) If
to the Company:
Document
Security Systems, Inc.
28 East
Main Street, Suite 1525
Rochester,
NY 14614
Attention: Philip
Jones
Telephone: (585)
325-3610
Facsimile: (585)
325-2977
(ii) If
to a Holder, at the address of such Holder as listed in the Stock Register, or
to such other address as the Holder shall have designated by notice similarly
given to the Transfer Agent.
(b) Any
such notice or communication shall be deemed received (i) when made, if by hand
delivery, and upon confirmation of receipt, if made by facsimile and in each
case if such notice is received on or before 11:59 p.m. New York City
time, otherwise, such notice shall be deemed to be received the following
Business Day, (ii) one (1) Business Day after being deposited with a next-day
courier, return receipt requested, postage prepaid or (iii) three (3) Business
Days after being sent by certified or registered mail, return receipt requested,
postage prepaid, in each case addressed as above (or to such other addresses as
the Company or a Holder may designate in writing from time to
time).
12
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9.
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Construction.
|
For
purposes of this Certificate, except as otherwise expressly provided or unless
the context otherwise requires: (a) the terms defined in this
Certificate have the meanings assigned to them in this Certificate and include
the plural as well as the singular, and the use of any gender herein shall be
deemed to include the other gender and neuter gender of such term; (b)
accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with U.S. generally accepted accounting principles; (c) references
herein to “Articles”, “Sections”, “Subsections”, “Paragraphs” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this Certificate,
unless the context shall otherwise require; (d) a reference to a Subsection
without further reference to a Section is a reference to such Subsection as
contained in the same Section in which the reference appears, and this rule
shall also apply to Paragraphs and other subdivisions; (e) the words “herein”,
“hereunder” and other words of similar import refer to this Certificate as a
whole and not to any particular provision; (f) the term “include” or “including”
shall mean without limitation; (g) the table of contents to this Certificate and
all section titles or captions contained in this Certificate or in any Exhibit
or Schedule hereto or referred to herein are for convenience only and shall not
be deemed a part of this Certificate and shall not affect the meaning or
interpretation of this Certificate; (h) any agreement, instrument or statute
defined or referred to herein means such agreement, instrument or statute as
amended, modified or supplemented from time to time, including (in the case of
agreements or instruments) by waiver or consent and (in the case of statutes) by
succession of comparable successor statutes and references to all attachments
thereto and instruments incorporated therein; and (i) references to a Person are
also to its permitted successors and assigns and, in the case of an individual,
to his or her heirs and estate, as applicable.
|
10.
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Severability of
Provisions.
|
If any
right, preference, or limitation of the Warrants set forth in this Certificate
(as such Certificate may be amended from time to time) is invalid, unlawful, or
incapable of being enforced by reason of any rule of law or public policy, all
other rights, preferences, and limitations set forth in this Certificate (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable right, preference, or limitation will, nevertheless, remain in
full force and effect, and no right, preference, or limitation set forth in this
Certificate shall be deemed dependent upon any other such right, preference, or
limitation unless so expressed in this Certificate.
This
Certificate shall not be valid unless signed by the Company.
[Remainder
of Page Left Blank Intentionally]
13
IN
WITNESS WHEREOF, Document Security Systems, Inc. has caused this Warrant to be
signed by its duly authorized officer.
|
Dated:
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12/31/2010
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|||
| DOCUMENT SECURITY SYSTEMS, INC. | ||||
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By:
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/s/ Patrick White
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|||
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Name:
Patrick White
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||||
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Title: CEO
|
||||
ATTEST: /s/
David Wicker
Secretary