------------------------------------
AMENDED CERTIFICATE OF DESIGNATION
OF SERIES H PREFERRED STOCK
OF
OBJECTSOFT CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
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It is hereby certified that:
1. The name of the corporation is ObjectSoft Corporation, a Delaware
corporation (hereinafter the "Company").
2. The Certificate of Designation of Series H Preferred Stock of the
Company was filed with the Secretary of State of the State of Delaware on
December 8, 2000.
3. No shares of Series H Preferred Stock have been issued.
4. The Certificate of Designation of Series H Preferred Stock of the
Company is hereby amended by deleting Section 1 of the resolution adopted by the
Board of Directors of the Company and substituting the following new Section 1:
"1. Designation and Amount. The shares of such series shall have a
par value of $0.0001 per share and shall be designated as "Series H Preferred
Stock" (the "Series H Preferred Stock") and the number of shares constituting
the Series H Preferred Stock shall be Three Hundred (300)."
5. The Certificate of Designation of Series H Preferred Stock of the
Company is hereby further amended by deleting all references to "$0.50" in
Section 6(f) of the resolution adopted by the Board of Directors of the Company
and substituting each reference with "$0.25."
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6. The amendment to the Certificate of Designation of Series H Preferred
Stock herein certified has been duly adopted in accordance with the provisions
of Section 151(g) of the General Corporation Law of the State of Delaware.
Signed as of December 29, 2000
ObjectSoft Corporation
By: /s/ DAVID E.Y. SARNA
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David E.Y. Sarna, Chairman
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CERTIFICATE OF DESIGNATION OF POWERS,
PREFERENCES AND RIGHTS OF THE
SERIES H CONVERTIBLE PREFERRED STOCK
OF
OBJECTSOFT CORPORATION
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ADOPTED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW
OBJECTSOFT CORPORATION, a Delaware corporation (the
"Corporation"), pursuant to Section 151 of the General Corporation Law of the
State of Delaware, certifies that:
FIRST: The Board of Directors of the Corporation has duly adopted
the resolutions attached hereto as Appendix I providing for the issuance of one
series of its Preferred Stock to be designated "Series H Preferred Stock" and to
consist of 214.5 shares.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
to be signed by David E. Y. Sarna, its Chairman, this 8th day of December,
2000.
/s/ DAVID E.Y. SARNA
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David E. Y. Sarna, Chairman
<PAGE>
APPENDIX I
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WHEREAS, the Certificate of Incorporation (the "Certificate") of
this Corporation, as amended, authorizes the issuance of Five Million
(5,000,000) shares of Preferred Stock, $0.0001 par value per share, and
expressly vests in the Board of Directors of the Corporation the authority
provided therein to issue all of said shares in one or more series and by
resolution or resolutions to establish the designation and number and to fix the
relative rights and preferences of each series to be issued; and
WHEREAS, it is now the desire of the Board of Directors, pursuant
to its authority as aforesaid, to fix the powers, preferences and rights of a
series of convertible preferred stock designated the "Series H Preferred Stock".
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors does
hereby provide for the issuance of one series of convertible preferred shares of
the Corporation, consisting of 214.5 shares designated as "Series H Preferred
Stock," and does hereby fix and determine the powers, preferences and rights
relating to said Series H Preferred Stock as hereinafter set forth.
The relative powers, preferences and rights granted to the Series
H Preferred Stock or the holders thereof are as follows:
1. Designation and Amount. The shares of such series shall have a
par value of $0.0001 per share and shall be designated as "Series H Preferred
Stock" (the "Series H Preferred Stock") and the number of shares constituting
the Series H Preferred Stock shall be Two Hundred Fourteen and One-Half (214.5).
2. Rank. The Series H Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up, corporate reorganization
and dissolution, rank senior to (i) the common stock, par value $0.0001 per
share, of the Corporation (the "Common Stock"), and (ii) all other classes and
series of stock of the Corporation now authorized, issued or outstanding, and to
all other classes and series of equity securities which by their terms do not
rank senior (as determined in Section 10 hereof) to the Series H Preferred Stock
(together with the Common Stock, the "Junior Securities").
3. Dividends. Subject to the rights of the holders of the
Corporation's Series G Convertible Preferred Stock (the "Series G Preferred
Stock"), the holders of the outstanding shares of Series H Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors, out
of funds legally available therefor, dividends at an annual rate of twelve
percent (12%) of the Series H Original Issue Price (as defined herein) of such
shares of Series H Preferred Stock. Such dividends shall be deemed to accrue on
the Series H Preferred Stock and be cumulative, whether or not there are
profits, surplus or other funds of the Corporation legally available for the
payment of dividends. All dividends declared upon the Series H Preferred Stock
shall be declared pro rata per share. Subject to the rights of the holders of
the Series G Preferred Stock, if there shall not have been a sum sufficient for
the payment therefor set apart, the deficiency shall first be paid before any
dividend or other distribution shall be paid or declared and set apart with
respect to any other class of the Corporation's capital stock, now or hereafter
outstanding. All accrued dividends shall be immediately due and payable on the
date such shares
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of Series H Preferred Stock are converted in accordance with Section 6 hereof.
Dividends may be paid in cash or additional registered shares of Common Stock of
the Corporation, as may be determined, from time to time, in the sole discretion
of the holders of the Series H Preferred Stock. The Corporation shall pay any
dividends to each holder of outstanding shares of Series H Preferred Stock on
either (i) the date such holder converts such shares pursuant hereto or (ii)
each anniversary of the Closing Date (as defined herein), at the sole discretion
of each holder of such shares.
For purposes of this Certificate, unless the context otherwise
requires, "distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, payable other than in
shares of Common Stock or other equity securities of the Corporation, or the
purchase or redemption of shares of Common Stock or other equity securities of
the Corporation (other than repurchases of Common Stock or other equity
securities held by employees or consultants of the Corporation upon termination
of their employment or services pursuant to agreements providing for such
repurchase) for cash or property payable other than in shares of Common Stock or
other equity securities of the Corporation.
4. Liquidation.
(a) In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary (a "Liquidation"),
holders of the Series H Preferred Stock shall be entitled to receive, prior and
in preference to any distribution of any of the assets of the Corporation to the
holders of Junior Securities, the Series H Liquidation Preference with respect
to each share of Series H Preferred Stock held by such holder. The term "Series
H Liquidation Preference" shall mean, as to each share of Series H Preferred
Stock, an amount equal to the Series H Original Issue Price per share of Series
H Preferred Stock, plus any accrued but unpaid dividends thereon. The term
"Series H Original Issue Price" shall mean $10,000.00.
If the assets of the Corporation available for distribution
are not sufficient to allow the foregoing distribution, such assets, if any,
shall be distributed solely to the holders of Series H Preferred Stock, pro rata
in proportion to their respective holdings of Series H Preferred Stock.
(b) After distribution of the Series H Liquidation
Preference per share with respect to each share of Series H Preferred Stock
outstanding in accordance with Subsection 4(a), all stockholders of the
Corporation other than holders of Series H Preferred Stock shall participate in
the distribution of any remaining assets, in accordance with any provisions of
the Corporation's Certificate of Incorporation or any other effective
certificate of designation other than this Certificate of Designation.
(c) For purposes of this Section 4, a Sale Transaction (as
hereinafter defined) shall be included within the meaning of, and shall be
deemed to be, a Liquidation, unless the holders of at least a majority of the
Series H Preferred Stock outstanding on the record date, or if there is no
record date, the effective date for such Sale Transaction, agree in writing that
such event shall not be deemed to be a Liquidation (a "Non-Liquidation
Election").
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For purposes hereof, the term "Sale Transaction" shall mean:
(A) any of the following transactions affected with a
Person not an Affiliate of the Corporation prior to the transaction: (i) the
merger or consolidation of the Corporation with or into another issuer; or (ii)
the exchange or sale of all or a portion of the outstanding shares of the
Corporation for securities of another issuer, or other consideration provided by
such issuer or another party to such transaction; and in the case of either (i)
or (ii), the Corporation's stockholders prior to the transaction, do not
possess, immediately after such transaction, more than 50% (not including the
holdings of the other issuer or affiliate thereof, if such Person was a
stockholder of the Corporation prior to the transaction) of the voting power of
the securities issued and outstanding of any one or more of the following: (x)
the Corporation; (y) such other issuer; or (z) other constituent party to the
transaction; or
(B) a sale of all or substantially all of the
Corporation's assets to a third party not an Affiliate of the Corporation
immediately prior to such transaction.
The Liquidation Preference prescribed herein shall be, in
the event of a Sale Transaction, payable in the same form (cash, property or
securities) and in the same proportion as is payable to the holders of Common
Stock as a result of such transaction, or in cash if no consideration is payable
to holders of Common Stock in such Sale Transaction.
(d) The Corporation shall give each holder of Series H
Preferred Stock written notice of any Liquidation not later than 30 days prior
to any meeting of stockholders to approve such dissolution, liquidation or
winding up or, if no meeting is to be held, not later than 60 days prior to the
date of such Liquidation .
(e) After payment of the Liquidation Preference specified
herein, a holder of Series H Preferred Stock shall not be entitled to
participate in any distribution with respect to equity shares of the remaining
net assets of, or consideration received by, stockholders of the Corporation. In
addition, upon payment of such Liquidation Preference, such shares of Series H
Preferred Stock that have been paid in full such Liquidation Preference, shall
no longer be deemed to be outstanding and such holder shall have no further
rights as a stockholder of the Corporation, or a stockholder of any other party
to a Sale Transaction; provided, however, the holder of Series H Preferred Stock
may, instead of receiving the Liquidation Preference, choose to receive the
consideration payable upon Liquidation (including upon a Sale Transaction)
payable to a holder of the number of shares of Common Stock as to which the
Series H Preferred Stock owned by such holder may be converted at the record
date of such event (or if there is no record date, then at time of such event),
plus, as previously set forth in Section 3, any accrued but unpaid dividends. In
such event, the holder of Series H Preferred Stock shall be deemed to have
effected an optional conversion of the Series H Preferred Stock to Common Stock,
immediately prior to the record date of such event, or if no record date is
specified, immediately prior to such event. Such election shall be made at least
fifteen (15) days prior to the event in question, and may be made conditional
upon the consummation of the Liquidation or closing of such Sale Transaction.
5. [RESERVED]
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6. Optional Conversion. The holders of Series H Preferred Stock
shall have conversion rights as follows:
(a) Optional Conversion Right. Each share of Series H
Preferred Stock outstanding shall be convertible, at the option of the holder
thereof, at the Conversion Price (as defined herein) into a number of Units (as
hereinafter described) determined by dividing the Series H Original Issue Price,
plus any accrued put unpaid dividends that the holder has elected to add to the
Series H Original Issue Price and not to receive in cash or shares of Common
Stock as provided in Section 3 hereof, by the Conversion Price (as hereinafter
defined) in effect on the Optional Conversion Date (as hereinafter defined) (the
"Optional Conversion Rights"). For purposes hereof, a "Unit" shall consist of
(i) one share of Common Stock, and (ii) the right to purchase one additional
share of Common Stock divided as follows: the right to purchase one-quarter
(1/4) of a share of Common Stock in the form of an "A" Warrant, the right to
purchase one-quarter (1/4) of a share of Common Stock in the form of an "B"
Warrant, the right to purchase one-quarter (1/4) of a share of Common Stock in
the form of an "C" Warrant, and the right to purchase one-quarter (1/4) of a
share of Common Stock in the form of an "D" Warrant (collectively, the
"Warrants"); and which Forms of A, B, C and D Warrant are set forth as Exhibit A
hereto. The Optional Conversion Rights shall become effective upon the earlier
of (x) the effective date of the registration statement covering the Common
Stock and the Common Stock underlying the Warrants comprising the Units or (y)
ninety (90) days following the closing date of the original issuance of the
Series H Preferred Stock (the "Closing Date"). The Corporation shall pay to the
holders of each share of Series H Preferred Stock, promptly following the
Optional Conversion Date, all accrued but unpaid dividends, in cash or shares of
Common Stock, as provided in Section 3 hereof, on the shares of Series H
Preferred Stock so converted to, and including, the Optional Conversion Date,
except for holders who have elected to add such accrued but unpaid dividend to
the Series H Original Issue Price in accordance with the first sentence of this
Section 6(a).
(b) Mechanics of Optional Conversion. Holders of Series H
Preferred Stock may exercise their respective Optional Conversion Rights by
telecopying an executed and completed notice of conversion in the form annexed
hereto as Exhibit B (the "Notice of Conversion") to the Corporation and
delivering the original Notice of Conversion and the certificate representing
the Series H Preferred Stock by express courier. Each business date on which a
Notice of Conversion is telecopied to and received by the Corporation along with
a copy of the originally executed Series H Preferred Stock certificates in
accordance with the provisions hereof shall be deemed an "Optional Conversion
Date". The Corporation will transmit, or instruct its transfer agent to
transmit, the certificates representing shares of Common Stock (the "Conversion
Shares") and the Warrants issuable upon conversion of any shares of Series H
Preferred Stock outstanding (together with the certificates representing the
shares of Series H Preferred Stock not so converted) to the holder thereof via
express courier, by electronic transfer or otherwise, within three (3) business
days after the Optional Conversion Date; provided the Corporation has received
the Notice of Conversion and Series H Preferred Stock certificate being so
converted on the Optional Conversion Date. In addition to any other remedies
which may be available to the holders of shares of Series H Preferred Stock, in
the event that the Corporation or its transfer agent fails to deliver such
shares of Common Stock within such three (3) business day period, the holder
will be entitled to revoke the relevant Notice of Conversion by delivering a
notice to such effect to the Corporation whereupon the Corporation and the
holder shall each be restored to their respective positions immediately prior to
delivery of such Notice of Conversion.
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The Notice of Conversion and Series H Preferred Stock certificates representing
the portion of the Series H Preferred Stock converted shall be delivered as
follows:
To the Corporation: ObjectSoft Corporation
Continental Plaza III
433 Hackensack Avenue
Hackensack, New Jersey 07601
Attention: David E. Y. Sarna, Chairman
Fax: (201) 343-0056
The contact information specified above may be changed by written notice being
given to the holders of Series H Preferred Stock, without the need to amend this
Certificate of Designation.
In the event that the Corporation fails to deliver the Conversion Shares
and Warrants within three (3) business days of the Optional Conversion Date, the
Corporation shall pay to the holders thereof, in immediately available funds,
upon demand, as liquidated damages for such failure and not as a penalty, for
each $100,000 of Series G Preferred Stock sought to be converted, $1,000 for
each of the first ten days and $2,000 per day thereafter that the Conversion
Shares and Warrants are not delivered, which liquidated damages shall run from
the fourth business day after the Optional Conversion Date provided that the
Corporation shall not be responsible for or required to pay such liquidated
damages if such failure to deliver or convert was not caused by any actions or
omissions of the Corporation or counsel to the Corporation. Any and all payments
required pursuant to this paragraph shall be payable in cash.
(c) No Fractional Shares. No fractional shares of Common
Stock or scrip shall be issued upon conversion of Series H Preferred Stock. In
lieu of any fractional share to which the holder would be entitled but for the
provisions of this Subsection 6(c), based on the full number of Series H
Preferred Stock held by such holder, the Corporation shall pay cash in an amount
equal to the same fraction of the Conversion Price of one share of Common Stock.
(d) Reservation of Stock. The Corporation shall, at all
times when any Series H Preferred Stock shall be outstanding, reserve and keep
available out of its authorized but unissued stock, such number of shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all shares of Series H Preferred Stock outstanding.
(e) Rights. Subject to the revocation right set forth in
Subsection 6(b), all shares of Series H Preferred Stock outstanding to be
converted pursuant to the Notice of Conversion shall, on the Optional Conversion
Date, be converted into Conversion Shares and Warrants for all purposes,
notwithstanding the failure of the holder thereof to surrender any certificate
representing such shares on or prior to such date. On and after the Optional
Conversion Date, (i) no such shares of Series H Preferred Stock shall be deemed
to be outstanding or be transferable on the books of the Corporation or the
stock transfer agent, if any, for the Series H Preferred Stock, and (ii) the
holder of such shares, as such, shall not be entitled to receive notices or to
vote such shares or to exercise or to enjoy any other powers, preferences or
rights thereof, other than the right, upon surrender of the certificate or
certificates representing such shares, to receive a certificate or certificates
for the number of shares of Conversion Shares and Warrants into which such
shares have been converted and cash paid for any fractional shares. If not all
shares of Series H Preferred Stock are being converted, then the holder shall
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also receive a certificate representing its remaining shares of Series H
Preferred Stock. Only whole shares (and no fractional shares) of Series H
Preferred Stock may be converted. On the Optional Conversion Date, all converted
shares of Series H Preferred Stock shall be retired and canceled and shall not
be reissued.
(f) Conversion Price; Adjustments. The "Conversion Price" of
each share of the Series H Preferred Stock shall equal $0.50, provided that such
Conversion Price shall be subject to further adjustment in the manner
hereinafter set forth.
(i) Sale of Securities Below Conversion Price. If at
any time after the filing of this Certificate of Designation, the Corporation
shall issue any shares of Common Stock, Convertible Securities (as hereinafter
defined), Rights (as hereinafter defined) or Related Rights (as hereinafter
defined) (for purposes hereof, collectively, "Securities") without consideration
or for a consideration per share or unit (as determined below) less than $0.50
per share, then the Conversion Price in effect immediately prior to each such
issuance shall forthwith be reduced to the lowest per share price paid for
Common Stock (or deemed paid for such Common Stock), unless a waiver of such
reduction is obtained from the holders of a majority of the shares of Series H
Preferred Stock outstanding at that time.
(ii) Certain Definitions and Procedures. For the
purpose of this Section 6, the following definitions and procedures shall be
applicable:
(A) Rights. In the case of the issuance of
options, warrants or other rights to purchase or otherwise acquire Common Stock,
whether or not at the time exercisable (for purposes hereof, collectively,
"Rights"), the total number of shares of Common Stock issuable upon exercise of
such Rights shall be deemed to have been issued at the time such Rights are
issued, for a consideration equal to the sum of the consideration, if any,
received by the Corporation upon the issuance of such Rights and the minimum
purchase or exercise price payable upon the exercise of such Rights for the
Common Stock to be issued upon the exercise thereof, which minimum purchase or
exercise price shall be the price payable as of the date of the adjustment
pursuant to this Section 6.
(B) Convertible Securities and Related Rights. In
the case of the issuance of any class or series of stock or any bonds,
debentures, notes or other securities or obligations convertible into or
exchangeable for Common Stock, whether or not then convertible or exchangeable
(for purposes hereof, collectively, "Convertible Securities"), or options,
warrants or other rights to purchase or otherwise acquire Convertible Securities
(for purposes hereof, collectively, "Related Rights"), the total number of
shares of Common Stock issuable upon the conversion or exchange of such
Convertible Securities or of Convertible Securities underlying such Related
Rights shall be deemed to have been issued at the time such Convertible
Securities or Related Rights are issued, for a consideration equal to the sum of
(I) the consideration, if any, received by the Corporation upon issuance of such
Convertible Securities or Related Rights (excluding any cash received on account
of accrued interest or dividends) and (II) (1) in the case of Convertible
Securities, the minimum additional consideration, if any, to be received by the
Corporation upon the conversion or exchange of such Convertible Securities or
(2) in the case of Related Rights, the sum of (x) the minimum purchase or
exercise price payable upon the exercise of such Related Rights for Convertible
Securities and (y) the minimum additional consideration, if any, to be received
by the Corporation upon the
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conversion or exchange of the Convertible Securities issuable upon the exercise
of such Related Rights.
(C) Changes. On any change in the number of shares
of Common Stock issuable upon the exercise of Rights or Convertible Securities
underlying the Related Rights or upon the conversion or exchange of Convertible
Securities or on any change in the minimum purchase or exercise price of Rights,
Related Rights or Convertible Securities, including, but not limited to, a
change resulting from the anti-dilution provisions of such Rights, Related
Rights or Convertible Securities, the Conversion Price to the extent in any way
affected by such Rights, Related Rights or Convertible Securities shall
forthwith be readjusted to be thereafter the Conversion Price that would have
been obtained had the adjustment, if any, which was made upon the issuance of
such Rights, Related Rights or Convertible Securities been made after giving
effect to such change. No further adjustment shall be made in respect of such
change upon the actual issuance of Common Stock or any payment of consideration
upon the exercise of any such Rights or Convertible Securities underlying the
Related Rights or the conversion or exchange of such Convertible Securities.
(D) Expiration or Cancellation. On the expiration
or cancellation of any such Rights, Related Rights or Convertible Securities, if
the Conversion Price shall have been adjusted upon the issuance thereof, the
Conversion Price shall forthwith be readjusted to such Conversion Price as would
have been obtained had the adjustment made upon the issuance of such Rights,
Related Rights or Convertible Securities been made upon the basis of the
issuance of only the number of shares of Common Stock actually issued upon the
exercise of such Rights or Related Rights or the conversion or exchange of such
Convertible Securities.
(E) Cash. In the case of the issuance of such
Securities for cash, the amount of consideration received by the Corporation
shall be deemed to be the amount of cash paid therefor before deducting any
reasonable discounts, commissions or other expenses paid or incurred by the
Corporation for any underwriting or otherwise in connection with the issuance
and sale thereof.
(F) Non-Cash Consideration. In the case of
issuance of such Securities other than for cash, (i) property shall be valued as
determined in the good faith discretion of the Board of Directors of the
Corporation; and (ii) securities shall be valued at their "Current Market Price"
as set forth below. The "Current Market Price", at the date of determination,
for any security shall be deemed to be the average of the daily closing prices
for the 30 consecutive business days commencing 45 business days before the day
in question. The closing price for each day shall be (i) if the security is
traded on a national securities exchange or listed on the Nasdaq National Market
System, the last reported sales price regular way or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices regular way, or (ii) if not listed or admitted to trading on a national
securities exchange or on the Nasdaq National Market System, then the price
shall be deemed the average of the highest reported bid price and lowest
reported asked price on each such business day, as furnished by the National
Association of Securities Dealers, Inc.'s Automated Quotation System ("NASDAQ"),
or the nearest comparable system, or, in the absence or either, as determined by
the Board of Directors in its good faith discretion.
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(G) If a state of facts shall occur which, without
being specifically controlled by the provisions of this Section 6(f), would not
fairly protect the conversion rights of the holders of the Series H Preferred
Stock in accordance with the essential intent and principles of such provisions,
then the Board of Directors of the Corporation shall make an adjustment in the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such conversion rights.
(g) Reorganization, Reclassification, Consolidation, Merger,
Sale, Etc. In case the Corporation shall effect a capital reorganization or
reclassification of its capital stock or any consolidation or merger of the
Corporation with another corporation, or the sale of all or substantially all of
its assets to another corporation in such a way (including, without limitation,
by way of consolidation or merger) that holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to or in exchange
for Common Stock (collectively for purposes of this Subsection 6(g), a "Covered
Event"), then as a condition of such Covered Event, lawful and adequate
provision shall be made whereby each share of Series H Preferred Stock
outstanding shall, after such Covered Event (but subject to the applicable
provisions of Section 4 hereof), be convertible into the kind and number of
shares of stock or other securities or property of the Corporation or of the
corporation resulting from such Covered Event, or to which assets shall have
been sold in such Covered Event, to which the holders of Series H Preferred
Stock would have been entitled if they had held the Common Stock issuable upon
the conversion of such Series H Preferred Stock on the record date, or, if there
is no such record date, then if they had held such Common Stock immediately
prior to such Covered Event, at the Conversion Price in effect on such date. The
provision of this Subsection 6(g) shall similarly apply to successive Covered
Events. If the Covered Event is a Sale Transaction, and there has not been a
Non-Liquidated Election with respect thereto, paragraph 4(e) shall control.
(h) Stock Dividends, Splits, Combinations and
Reclassifications. If the Corporation shall (i) declare a dividend or other
distribution payable in Common Stock to holders of Common Stock, (ii) split its
outstanding shares of Common Stock into a larger number, (iii) combine its
outstanding shares of Common Stock into a smaller number, or (iv) increase or
decrease the number of shares of its capital stock in a reclassification of the
Common Stock (including any such reclassification in connection with a merger,
consolidation or other business combination in which the Corporation is
surviving entity), then the Conversion Price in effect immediately prior to such
dividend or other distribution, split, combination or reclassification, as the
case may be, shall forthwith be proportionally adjusted so that each holder of
Series H Preferred Stock shall be entitled to receive the number of shares of
Common Stock which such holder would have owned or been entitled to receive had
such Series H Preferred Stock been converted immediately prior to the record
date for such dividend or other distribution, split, combination or
reclassification. Successive adjustments to the Conversion Price shall be made
upon each such dividend or other distribution, split, combination or
reclassification.
(i) No Impairment. The Corporation shall not, by amendment
of its certificate of incorporation or through any reorganization, sale,
exchange or other disposition of assets, merger, consolidation, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed under this Section 6 by the Corporation, but will at all times in good
faith carry out all the provisions of this Section 6 and take all such action as
may be necessary or appropriate in
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order to protect the conversion rights of the holders of Series H Preferred
Stock against impairment.
(j) Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of the Conversion Price pursuant to this Section
6, the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and cause its principal
financial officer to verify such computation and prepare and furnish to each
holder of Series H Preferred Stock a certificate setting forth such adjustment
or readjustment and setting forth in reasonable detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series H Preferred Stock, furnish or cause
to be furnished to such holder a like certificate setting forth: (i) such
adjustments and readjustments; (ii) the Conversion Price in effect at such time
for the shares of Series H Preferred Stock outstanding; and (iii) the number of
Units and the amount, if any, of other property that at such time would be
received upon the conversion of the shares of Series H Preferred Stock
outstanding.
(k) Notices of Record Date. In the event (i) any record date
is fixed for the purpose of determining the holders of any class or series of
stock or other securities who are entitled to receive any dividend or other
distribution or (ii) of any recapitalization or reorganization of the capital
stock of the Corporation, any merger or consolidation of the Corporation, or any
sale, exchange or other disposition of all or substantially all the assets of
the Corporation or any voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, the Corporation shall mail to each holder of
Series H Preferred Stock at least fifteen (15) days prior to the record date set
forth therein a notice setting forth: (i) such record date and a description of
such dividend or distribution; (ii) the date on which any such recapitalization,
reorganization, merger, consolidation, disposition, dissolution, liquidation or
winding up is expected to become effective; and (iii) the time, if any is to be
fixed, as to when the holders of record of Common Stock (or other securities)
shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such recapitalization,
reorganization, merger, consolidation, disposition, dissolution, liquidation or
winding up.
(l) Issue Taxes. The Corporation shall pay any and all issue
and other non-income taxes that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of any shares of Series H
Preferred Stock.
(m) Minimum Adjustment; No Increase. No adjustment of the
Conversion Price shall be made in an amount less than one cent, provided that
any adjustment which is not made by reason of this Subsection 6(m) shall be
carried forward and shall be taken into account in any subsequent adjustment.
Except to the limited extent provided for in Subsections 6(f)(ii)(C) or
6(f)(ii)(D) or 6(h), no adjustments of the Conversion Price in accordance with
Section 6 shall have the effect of increasing the Conversion Price above the
Conversion Price in effect immediately prior to such adjustment.
7. Automatic Conversion. In the event that the holders of the
Series H Preferred Stock have not exercised their respective Optional Conversion
Rights within three (3) years after the Closing Date, the Series H Preferred
Stock, including any accrued dividends
-10-
<PAGE>
thereon, shall automatically be converted into Units as if the holders have
exercised their respective Optional Conversion Rights on the anniversary of the
Closing Date.
8. Voting; Required Approval.
(a) Except as set forth in Section 8(b) hereof or as
required by applicable law, the holders of Series H Preferred Stock shall not be
entitled to vote upon any matter relating to the business or affairs of the
Corporation or for any other purpose.
(b) The consent of the holders of at least a majority (or
such greater number as may then be required by law) of all the shares of Series
H Preferred Stock at the time outstanding, given in person or by proxy, by a
vote at a meeting called for the purpose, or by consent in lieu thereof, at
which the holders of shares of Series H Preferred Stock shall vote together as a
separate class, shall be necessary for authorizing, effecting or validating:
(i) any action which alters in any manner the
designations, powers, rights, preferences or privileges of, or the
qualifications, limitations or restrictions of, the Series H Preferred Stock,
whether by amendment of this Certificate of Designation or otherwise, or any
waiver of any provision of this Certificate of Designation;
(ii) any amendment to or waiver of any provisions of
the certificate of incorporation or bylaws of the Corporation which would
adversely affect the Series H Preferred Stock; and
(iii) any authorization or issuance of securities other
than Junior Securities.
9. Certain Excluded Transactions. Anything herein to the contrary
notwithstanding, the Corporation shall not be required to make any adjustment to
the Conversion Price under paragraph 6(f) with respect to (a) the issuance of
shares of Common Stock upon conversion of the Series H Preferred Stock; (b) the
issuance of shares of Common Stock upon exercise of the Warrants; (c) any
issuance of Common Stock pursuant to the Series G Preferred Stock; (d) any
issuance for which adjustment is otherwise provided for hereunder; (e) any
dividends paid in shares of Common Stock to the holders of Series G Preferred
Stock or Series H Preferred Stock; (f) the granting of options or warrants, or
the issuance of securities, to then current or former employees, directors and
consultants pursuant to stock option plans or other agreements adopted by the
Board of Directors of the Corporation and the issuance of securities upon
exercise of such options or warrants; (g) the issuance of securities upon
conversion or exercise of any options, warrants or other agreements outstanding
prior to the Closing Date; (h) the issuance of securities by the Corporation for
redetermination of purchase price or otherwise under any agreement in effect
prior to the Closing Date; (i) securities issued in connection with the
acquisition by the Corporation of a business or another entity (whether through
merger, purchase of assets, purchase of stock or otherwise); and (j) the
issuance of any securities in connection with the establishment of a joint
venture, partnership, licensing or other strategic or business arrangement;
provided the transaction giving rise to such joint venture, partnership,
licensing or other strategic or business arrangement is not essentially a
financing transaction.
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<PAGE>
10. Definition of Certain Preferences. For purposes hereof, any
class or series of stock of the Corporation shall be deemed to rank:
(a) senior to the Series H Preferred Stock, either as to
dividends or upon liquidation, if the holders of shares of that class or series
of stock shall be entitled to receive dividends or amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may be,
in preference or priority to the holders of Series H Preferred Stock;
(b) on a parity with the Series H Preferred Stock, as to
dividends and as to rights upon liquidation, whether or not the dividend rates,
dividend payment dates, redemption or liquidation prices per share or conversion
or sinking fund provisions, if any, are different from those of the Series H
Preferred Stock, if the holders of shares of that class or series of stock shall
be entitled to receive dividends and amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in proportion
to their respective dividend preferences (whether based on their respective
dividend rates or the respective amounts of accumulated and unpaid dividends
thereon) or their respective liquidation preferences, without preference or
priority, one over the other, as between the holders of shares of that class or
series of stock and the holders of shares of Series H Preferred Stock; and
(c) junior to the Series H Preferred Stock, either as to
dividends or upon liquidation, if the holders of shares of Series H Preferred
Stock shall be entitled to receive dividends or amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may be,
in preference or priority to the holders of shares of that class or series of
stock; provided, however, if the class or series of stock is senior to the
Series H Preferred Stock, either as to dividends or upon liquidation, such class
or series of stock shall be considered senior to the Series H Preferred Stock.
11. Limitation on Number of Conversion Shares. On each Optional
Conversion Date, the number of shares of Common Stock underlying the Series H
Preferred Stock to be issued to each holder (not including the outstanding
shares of Series H Preferred Stock or the unissued shares of Common Stock
underlying the Series H Preferred Stock not to be issued on such Optional
Conversion Date) will not exceed the number of such shares which, when
aggregated with all other shares of Common Stock then owned of record by such
holder, would result in such holder owning more than 9.99% of all of such Common
Stock as would be outstanding on such Optional Conversion Date. The foregoing
limitation shall not apply in the event of an automatic conversion pursuant to
paragraph 7.
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<PAGE>
EXHIBIT A
FORMS OF A, B, C AND D WARRANT
------------------------------
<PAGE>
FORM OF "___" <F1>WARRANT
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), OR APPLICABLE STATE OR FOREIGN SECURITIES LAWS. NEITHER THIS WARRANT NOR
THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE UNITED STATES, OR TO A
U.S. PERSON, OR TO OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON (AS SUCH TERMS
ARE DEFINED IN RULE 902 OF REGULATION S UNDER THE 1933 ACT) AND THIS WARRANT MAY
NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON, UNLESS REGISTERED UNDER THE
1933 ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS THE HOLDER PROVIDES
OBJECTSOFT CORPORATION ("THE COMPANY") WITH AN OPINION FROM COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY STATING THAT AN EXEMPTION FROM REGISTRATION IS
AVAILABLE AT THE TIME OF SUCH TRANSFER. HEDGING TRANSACTIONS INVOLVING THIS
WARRANT OR THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. THE HOLDER OF THIS WARRANT IS
SUBJECT TO AND THE BENEFICIARY OF CERTAIN PROVISIONS SET FORTH IN A CONVERTIBLE
PREFERRED STOCK PURCHASE AGREEMENT DATED AS OF DECEMBER 29, 2000. A COPY OF THE
PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH OBLIGATIONS MAY BE OBTAINED
FROM THE COMPANY'S EXECUTIVE OFFICES.
"__" <F1>WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
OBJECTSOFT CORPORATION
Expires December ___, 2005<F2>
No.: W-___<F1>-___ Number of Shares: ________<F3>
Date of Issuance: __________________
----------
<F1>Insert A for A Warrant; B for B Warrant; C for C Warrant; and D for D
Warrant.
<F2>Insert fifth anniversary of initial Closing Date.
<F3>Insert one-quarter of the number of Units acquired on conversion.
<PAGE>
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, ObjectSoft Corporation, a Delaware corporation (together with its
successors and assigns, the "Issuer"), hereby certifies that
__________________________________________ or its registered assigns is entitled
to subscribe for and purchase, during the period specified in this Warrant, up
to _____________ shares (subject to adjustment as hereinafter provided) of the
duly authorized, validly issued, fully paid and non-assessable Common Stock of
the Issuer, at an exercise price per share equal to the Warrant Price then in
effect, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. Capitalized terms used in this Warrant and not otherwise
defined herein shall have the respective meanings specified in Section 7 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., eastern time, on December __, 2005 (such period being
the "Term").
2. Method of Exercise Payment; Issuance of New Warrant; Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such Holder's election (i) by certified or official bank
check or (ii) by surrender to the Issuer for cancellation of a portion of this
Warrant representing that number of unissued shares of Warrant Stock which is
equal to (A) the number of shares of Warrant Stock with respect to which the
Holder is exercising this Warrant minus (B) the number of shares of Warrant
Stock which is equal to the quotient obtained by dividing (x) the product of the
Warrant Price and the number of shares of Warrant Stock being purchased upon
such exercise by (y) the Per Share Market Value as of the date of such exercise,
or (iii) by a combination of the foregoing methods of payment selected by the
Holder of this Warrant. In any case where the consideration payable upon such
exercise is being paid in whole or in part pursuant to the provisions of clause
(ii) of this subsection (b), such exercise shall be accompanied by written
notice from the Holder of this Warrant specifying the manner of payment thereof
and containing a calculation showing the number of shares of Warrant Stock with
respect to which rights are being surrendered thereunder and the net number of
shares of Common Stock to be issued after giving effect to such surrender.
(c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three (3) Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any,
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<PAGE>
with respect to which this Warrant shall not then have been exercised (less any
amount thereof which shall have been canceled in payment or partial payment of
the Warrant Price as hereinabove provided) shall also be issued to the Holder
hereof at the Issuer's expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may
be transferred by a Holder without the consent of the Issuer. If transferred
pursuant to this subsection and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax imposed upon such transfer. This Warrant is
exchangeable at the principal office of the Issuer for Warrants for the purchase
of the same aggregate number of shares of Warrant Stock, each new Warrant to
represent the right to purchase such number of shares of Warrant Stock as the
Holder hereof shall designate at the time of such exchange. All Warrants issued
on transfers or exchanges shall be dated the Original Issue Date and shall be
identical with this Warrant except as to the number of shares of Warrant Stock
issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant and the shares of Warrant Stock to be issued upon
exercise hereof, are being acquired solely for the Holder's own account and
not as a nominee for any other party, and for investment, and that the
Holder will not offer, sell or otherwise dispose of this Warrant or any
shares of Warrant Stock to be issued upon exercise hereof except pursuant
to an effective registration statement (the "Registration Statement"), or
an exemption from registration, under the Securities Act and any applicable
state securities laws.
(ii) Except as provided in paragraph (iii) below, all certificates
representing shares of Warrant Stock issued upon exercise hereof shall be
stamped or imprinted with a legend in substantially the following form:
THESE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), OR APPLICABLE STATE OR FOREIGN SECURITIES LAWS. NEITHER THESE
SHARES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED HYPOTHECATED OR
OTHERWISE DISPOSED OF IN THE UNITED STATES, OR TO A U.S. PERSON, OR TO
OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON (AS SUCH TERMS ARE
DEFINED IN RULE 902 OF REGULATION S UNDER THE 1933 ACT), EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT OR
UNLESS REGISTERED UNDER THE 1933 ACT AND APPLICABLE STATE SECURITIES
LAWS OR UNLESS THE HOLDER PROVIDES OBJECTSOFT
-3-
<PAGE>
CORPORATION ("THE COMPANY") WITH AN OPINION FROM COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY STATING THAT AN EXEMPTION FROM REGISTRATION
IS AVAILABLE AT THE TIME OF SUCH TRANSFER. HEDGING TRANSACTIONS
INVOLVING THESE SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE 1933 ACT. THE HOLDER OF THIS CERTIFICATE IS THE BENEFICIARY OF
CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH IN A CONVERTIBLE
PREFERRED STOCK PURCHASE AGREEMENT DATED AS OF DECEMBER __, 2000. A
COPY OF THE PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH
OBLIGATIONS MAY BE OBTAINED FROM THE COMPANY'S EXECUTIVE OFFICES.
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased
upon exercise hereof shall terminate (A) when such securities shall have
been resold pursuant to being effectively registered under the Securities
Act, (B) upon the Issuer's receipt of an opinion of counsel, in form and
substance reasonably satisfactory to the Issuer, addressed to the Issuer to
the effect that such restrictions are no longer required to ensure
compliance with the Securities Act and state securities laws or (C) upon
the Issuer's receipt of other evidence reasonably satisfactory to the
Issuer that such registration and qualification under state securities laws
is not required. Whenever such restrictions shall cease and terminate as to
any such securities, the Holder thereof shall be entitled to receive from
the Issuer (or its transfer agent and registrar), without expense (other
than applicable transfer taxes, if any), new Warrants (or, in the case of
shares of Warrant Stock, new stock certificates) of like tenor not bearing
the legend currently borne by the Warrants or the legend referred to in
paragraph (ii) of this subsection (e) relating to the Securities Act and
applicable state securities laws.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant;
provided that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid: Reservation and Listing of Shares: Covenants.
(a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes and liens,
security interest, charges and encumbrances of any nature whatsoever created by
or through the Issuer. The Issuer further represents, warrants, covenants and
agrees that during the period within which this Warrant may be exercised, the
Issuer will at all times have authorized and reserved for the purpose of the
issue upon exercise of this Warrant a sufficient number of shares of Common
Stock to provide for the exercise of this Warrant.
-4-
<PAGE>
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange or market rules, all unissued shares of
Warrant Stock which are at any time issuable hereunder, so long as any shares of
Common Stock shall be so listed. The Issuer will also so list on each securities
exchange or market, and will maintain such listing of, any other securities
which the Holder of this Warrant shall be entitled to receive upon the exercise
of this Warrant if at the time any securities of the same class shall be listed
on such securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms or provisions of
this Warrant, but will at all times in good faith carry out all such terms or
provisions and take all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any, of its
Common Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Certificate of Incorporation or by-laws of the
Issuer in any manner that would adversely affect in any way the powers,
preferences or relative participating, optional or other special rights of the
Common Stock or which would adversely affect the rights of the Holders of the
Warrants (it being understood that this clause shall not be construed to
restrict the authorization or issuance of any class or series of preferred stock
of the Issuer), (iii) take all such action as may be reasonably necessary in
order that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, security interests,
charges, claims, encumbrances and restrictions (other than as provided herein)
upon the exercise of this Warrant, and (iv) obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Issuer to perform its obligations
under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
(e) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights
-5-
<PAGE>
Agreement dated as of even date herewith between the Issuer and the Holders
listed on the signature pages thereof (as amended from time to time, the
"Registration Rights Agreement"). The Issuer shall keep or cause to be kept a
copy of the Registration Rights Agreement, and any amendments thereto, at its
chief executive office and shall furnish, without charge, copies thereof to the
Holder upon request.
4. Adjustment of Warrant Price and Warrant Share Number. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of
the following (each, a "Triggering Event"): (a) consolidate with or merge
into any other Person and the Issuer shall not be the continuing or
surviving Person of such consolidation or merger, or (b) permit any other
Person to consolidate with or merge into the Issuer and the Issuer shall be
the continuing or surviving Person but, in connection with such
consolidation or merger, any Capital Stock of the Issuer shall be changed
into or exchanged for Securities of any other Person or cash or any other
property, or (c) transfer all or substantially all of its properties or
assets to any other Person, or (d) effect a capital reorganization or
reclassification of its Capital Stock, then, and in the case of each such
Triggering Event, proper provision shall be made so that, upon the basis
and the terms and in the manner provided in this Warrant, the Holder of
this Warrant shall be entitled, at the option of such Holder, (x) upon the
exercise hereof at any time after the consummation of such Triggering
Event, to the extent this Warrant is not exercised prior to such Triggering
Event, to receive at the Warrant Price in effect at the time immediately
prior to the consummation of such Triggering Event in lieu of the Common
Stock issuable upon such exercise of this Warrant prior to such Triggering
Event, the Securities, cash and property to which such Holder would have
been entitled upon the consummation of such Triggering Event if such Holder
had exercised the rights represented by this Warrant immediately prior
thereto, subject to adjustments (subsequent to such corporate action) as
nearly equivalent as possible to the adjustments provided for in Section 4
hereof or (y) to sell this Warrant (or, at such Holder's election, a
portion hereof) concurrently with the Triggering Event to the Person
continuing after or surviving such Triggering Event, or to the Issuer (if
Issuer is the continuing or surviving Person) at a sales price equal to the
amount of cash, property and/or Securities to which a holder of the number
of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective
date or closing of any such Triggering Event (the "Event Consideration"),
less the amount or portion of such Event Consideration having a fair value
equal to the aggregate Warrant Price applicable to this Warrant or the
portion hereof so sold.
(ii) Notwithstanding anything contained in this Warrant to the
contrary, the Issuer will not effect any Triggering Event unless, prior to
the consummation thereof, each Person (other than the Issuer) which may be
required to deliver any Securities, cash or property upon the exercise of
this Warrant as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the Holder of this Warrant,
(A)
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<PAGE>
the obligations of the Issuer under this Warrant (and if the Issuer shall
survive the consummation of such Triggering Event, such assumption shall be
in addition to, and shall not release the Issuer from, any continuing
obligations of the Issuer under this Warrant) and (B) the obligation to
deliver to such Holder such shares of Securities, cash or property as, in
accordance with the foregoing provisions of this subsection (a), such
Holder shall be entitled to receive, and such Person shall have similarly
delivered to such Holder an opinion of counsel for such Person, which
counsel shall be reasonably satisfactory to such Holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms
hereof (including, without limitation, all of the provisions of this
subsection (a)) shall be applicable to the Securities, cash or property
which such Person may be required to deliver upon any exercise of this
Warrant or the exercise of any rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this
Warrant has exercised its right as provided in clause (y) of subparagraph
(i) of this subsection (a) to sell this Warrant or a portion thereof, the
Issuer agrees that as a condition to the consummation of any such
Triggering Event the Issuer shall secure such right of Holder to sell this
Warrant to the Person continuing after or surviving such Triggering Event
and the Issuer shall not effect any such Triggering Event unless upon or
prior to the consummation thereof the amounts of cash, property and/or
Securities required under such clause (y) are delivered to the Holder of
this Warrant. The obligation of the Issuer to secure such right of the
Holder to sell this Warrant shall be subject to such Holder's cooperation
with the Issuer, including, without limitation, the giving of reasonable
and customary representations and warranties to the purchaser in connection
with any such sale. Prior notice of any Triggering Event shall be given to
the Holder of this Warrant in accordance with Section 11 hereof.
(b) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares, the
Warrant Price shall be proportionately increased (as at the effective date of
such combination or, if the Issuer shall take a record of holders of its Common
Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:
(i) Stock Dividends. Pay a dividend in, or make any other distribution
to its stockholders (without consideration therefor) of, shares of Common
Stock, the Warrant Price shall be adjusted, as at the date the Issuer shall
take a record of the holders of the Issuer's Capital Stock for the purpose
of receiving such dividend or other distribution (or if no such record is
taken, as at the date of such payment or other distribution), to that
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<PAGE>
price determined by multiplying the Warrant Price in effect immediately
prior to such record date (or if no such record is taken, then immediately
prior to such payment or other distribution), by a fraction (1) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (2) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution (plus in the
event that the Issuer paid cash for fractional shares, the number of
additional shares which would have been outstanding had the Issuer issued
fractional shares in connection with said dividends).
(ii) Other Dividends. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Company shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer
(d) Issuance of Additional Shares of Common Stock. If the Issuer, at any
time while this Warrant is outstanding, shall issue any Additional Shares of
Common Stock (otherwise than as provided in the foregoing subsections (a)
through (c) of this Section 4), at a price per share less than the Warrant Price
then in effect or without consideration, then the Warrant Price upon each such
issuance shall be adjusted to that price (rounded to the nearest cent)
determined by multiplying the Warrant Price then in effect by a fraction:
(i) the numerator of which shall be equal to the sum of (A) the number
of shares of Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock plus (B) the number of shares of Common Stock
(rounded to the nearest whole share) which the aggregate consideration for the
total number of such Additional Shares of Common Stock so issued would purchase
at a price per share equal to Warrant Price then in effect, and
(ii) the denominator of which shall be equal to the number of shares
of Common Stock outstanding immediately after the issuance of such Additional
Shares of Common Stock.
The provisions of this subsection (d) shall not apply under any of the
circumstances for which an adjustment is provided in subsections (a), (b) or (c)
of this Section 4. No adjustment of the Warrant Price shall be made under this
subsection (d) upon the issuance of any Additional Shares of Common Stock which
are issued pursuant to any Common Stock Equivalent if upon the issuance of such
Common Stock Equivalent (x) any adjustment shall have been made pursuant to
subsection (e) of this Section 4 or (y) no adjustment was required pursuant to
subsection (e) of this Section 4. No adjustment of the Warrant Price shall be
made under this
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<PAGE>
subsection (d) in an amount less than $.01 per share, but any such lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment, if any, which together with any adjustments
so carried forward shall amount to $.01 per share or more; provided that upon
any adjustment of the Warrant Price as a result of any dividend or distribution
payable in Common Stock or Convertible Securities or the reclassification,
subdivision or combination of Common Stock into a greater or smaller number of
shares, the foregoing figure of $.01 per share (or such figure as last adjusted)
shall be adjusted (to the nearest one-half cent) in proportion to the adjustment
in the Warrant Price.
(e) Issuance of Common Stock Equivalents. If the Issuer, at any time while
this Warrant is outstanding, shall issue any Common Stock Equivalent and the
price per share for which Additional Shares of Common Stock may be issuable
thereafter pursuant to such Common Stock Equivalent shall be less than the
Warrant Price then in effect, or if, after any such issuance of Common Stock
Equivalents, the price per share for which Additional Shares of Common Stock may
be issuable thereafter is amended or adjusted, and such price as so amended
shall be less than the Warrant Price in effect at the time of such amendment,
then the Warrant Price upon each such issuance or amendment shall be adjusted as
provided in the first sentence of subsection (d) of this Section 4 on the basis
that (1) the maximum number of Additional Shares of Common Stock issuable
pursuant to all such Common Stock Equivalents shall be deemed to have been
issued (whether or not such Common Stock Equivalents are actually then
exercisable, convertible or exchangeable in whole or in part) as of the earlier
of (A) the date on which the Issuer shall enter into a firm contract for the
issuance of such Common Stock Equivalent, or (B) the date of actual issuance of
such Common Stock Equivalent, and (2) the aggregate consideration for such
maximum number of Additional Shares of Common Stock shall be deemed to be the
minimum consideration received or receivable by the Issuer for the issuance of
such Additional Shares of Common Stock pursuant to such Common Stock Equivalent.
No adjustment of the Warrant Price shall be made under this subsection (e) upon
the issuance of any Convertible Security which is issued pursuant to the
exercise of any warrants or other subscription or purchase rights therefor, if
any adjustment shall previously have been made in the Warrant Price then in
effect upon the issuance of such warrants or other rights pursuant to this
subsection (e).
(f) [Intentionally omitted.]
(g) Other Provisions Applicable to Adjustments Under this Section 4. The
following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
(i) Computation of Consideration. The consideration received by the
Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are sold to underwriters or dealers for public offering without
a subscription offering, the public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any
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<PAGE>
compensation, discounts, commissions, or expenses paid or incurred by the
Issuer for or in connection with the underwriting thereof or otherwise in
connection with the issue thereof; to the extent that such issuance shall
be for a consideration other than cash, then, except as herein otherwise
expressly provided, the fair market value of such consideration at the,
time of such issuance as determined in good faith by the Board. The
consideration for any Additional Shares of Common Stock issuable pursuant
to any Common Stock Equivalents shall be the consideration received by the
Issuer for issuing such Common Stock Equivalents, plus the additional
consideration payable to the Issuer upon the exercise, conversion or
exchange of such Common Stock Equivalents. In case of the issuance at any
time of any Additional Shares of Common Stock or Common Stock Equivalents
in payment or satisfaction of any dividend upon any class of Capital Stock
of the Issuer other than Common Stock, the Issuer shall be deemed to have
received for such Additional Shares of Common Stock or Common Stock
Equivalents a consideration equal to the amount of such dividend so paid or
satisfied. In any case in which the consideration to be received or paid
shall be other than cash, the Board shall notify the Holder of this Warrant
of its determination of the fair market value of such consideration prior
to payment or accepting receipt thereof. If, within thirty days after
receipt of said notice, the Majority Holders shall notify the Board in
writing of their objection to such determination, a determination of the
fair market value of such consideration shall be made by an Independent
Appraiser selected by the Majority Holders with the approval of the Board
(which approval shall not be unreasonably withheld), whose fees and
expenses shall be paid by the Issuer.
(ii) Readjustment of Warrant Price. Upon the expiration or termination
of the right to convert, exchange or exercise any Common Stock Equivalent
the issuance of which effected an adjustment in the Warrant Price, if such
Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to
be issued and outstanding by reason of the fact that they were issuable
upon conversion, exchange or exercise of any such Common Stock Equivalent
shall no longer be computed as set forth above, and the Warrant Price shall
forthwith be readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant Price made
pursuant to the provisions of this Section 4 after the issuance of such
Common Stock Equivalent) had the adjustment of the Warrant Price been made
in accordance with the issuance or sale of the number of Additional Shares
of Common Stock actually issued upon conversion, exchange or issuance of
such Common Stock Equivalent and thereupon only the number of Additional
Shares of Common Stock actually so issued shall be deemed to have been
issued and only the consideration actually received by the Issuer (computed
as in clause (i) of this subsection (g)) shall be deemed to have been
received by the Issuer.
(iii) Outstanding Common Stock. The number of shares of Common Stock
at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of
Indebtedness, shares of Capital Stock (including, without limitation, the
Preferred
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<PAGE>
Stock) or other Securities which are or may be at any time convertible into
or exchangeable for shares of Common Stock or Other Common Stock.
(h) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (g) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.
(i) Adjustment of Warrant Share Number. Upon each adjustment in the Warrant
Price pursuant to any of the foregoing provisions of this Section 4, the Warrant
Share Number shall be adjusted, to the nearest one hundredth of a whole share,
to the product obtained by multiplying the Warrant Share Number immediately
prior to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately before giving effect to such
adjustment and the denominator of which shall be the Warrant Price immediately
after giving effect to such adjustment. If the Issuer shall be in default under
any provision contained in Section 3 of this Warrant so that shares issued at
the Warrant Price adjusted in accordance with this Section 4 would not be
validly issued, the adjustment of the Warrant Share Number provided for in the
foregoing sentence shall nonetheless be made and the Holder of this Warrant
shall be entitled to purchase such greater number of shares at the lowest price
at which such shares may then be validly issued under applicable law. Such
exercise shall not constitute a waiver of any claim arising against the Issuer
by reason of its default under Section 3 of this Warrant.
(j) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten (10) days after receipt of notice from
such Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty (30) days after submission
to it of such
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<PAGE>
dispute. Such opinion shall be final and binding on the parties hereto. The fees
and expenses of such accounting firm shall be paid by the Issuer.
6. Call. The Issuer, at its option, may call this Warrant by providing the
Holder of this Warrant written notice pursuant to Section 11 (the "Call Notice")
at any time or from time to time after: (i) the Per Share Market Value of the
Common Stock has been equal to or greater than $_____<F4> for twenty (20)
consecutive Trading Days immediately preceding the date of delivery of the Call
Notice (the "Call Notice Period"); (ii) the Registration Statement has been
declared effective and has been effective for a period of sixty (60) calendar
days and, if required and applicable to the Issuer under the rules of the Nasdaq
Stock Market, the shareholders of the Company have approved the issuance of
Common Stock in excess of 20% of the outstanding shares of Common Stock; and
(iii) the Registration Statement has been effective, without lapse or suspension
of any kind, for a period of forty (40) consecutive Trading Days. The Issuer may
not call A Warrants, B Warrants, C Warrants and D Warrants which are at the time
exerciseable into an aggregate of more than 500,000 shares of Common Stock
(appropriately adjusted to give effect to stock dividends, stock splits, reverse
stock splits, combinations of shares, and the like) in any thirty (30)
consecutive business days.
7. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"A Warrants" means the A Warrants issued in connection with the
conversion of Preferred Stock issued pursuant to the Purchase Agreement.
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
(a) the Warrant Stock and the shares of Common Stock issued upon exercise
of the A Warrants, B Warrants, C Warrants and D Warrants; (b) the shares
issued upon conversion of the Preferred Stock; (c) the granting of options
or warrants, or the issuance of securities, to then current or former
employees, directors and consultants pursuant to stock option plans or
other agreements adopted by the Board of Directors of the Issuer and the
issuance of securities upon exercise of such options or warrants; (d) the
issuance of securities upon conversion or exercise of any options, warrants
or other agreements outstanding prior to the Original Issue Date; (e) the
issuance of securities by the Issuer for redetermination of purchase price
or otherwise under any agreement in effect prior to the Original Issue
Date; (f) the securities issued in connection with the acquisition by the
Issuer of a business or another entity (whether through merger, purchase of
assets, purchase of stock or otherwise); (g) the issuance of any securities
in connection with the establishment of a joint venture, partnership,
licensing or other strategic or business arrangement; provided the
transaction giving rise to such joint venture, partnership, licensing or
other strategic or business arrangement is not essentially a financing
transaction.
----------
<F4> Insert $1.00 for A Warrant; $1.50 for B Warrant; $2.00 for C Warrant; and
$2.50 for D Warrant.
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<PAGE>
"B Warrants" means the B Warrants issued in connection with the
conversion of Preferred Stock issued pursuant to the Purchase Agreement.
"Board" shall mean the Board of Directors of the Issuer.
"C Warrants" means the C Warrants issued in connection with the
conversion of Preferred Stock issued pursuant to the Purchase Agreement.
"Capital Stock" means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Certificate of Incorporation,
as amended, of the Issuer as in effect on the Original Issue Date, and as
hereafter from time to time amended, modified, supplemented or restated in
accordance with the terms hereof and thereof and pursuant to applicable
law.
"Common Stock" means the Common Stock, $.0001 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"D Warrants" means the D Warrants issued in connection with the
conversion of Preferred Stock issued pursuant to the Purchase Agreement.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
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<PAGE>
"Issuer" means ObjectSoft Corporation, a Delaware corporation, and its
successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Original Issue Date" means December __, 2000.
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date, as reported by
Bloomberg Financial LP, (a) the closing bid price per share of the Common
Stock on such date the Nasdaq SmallCap Market, Nasdaq National Market or
other registered national stock exchange on which the Common Stock is then
listed or if there is no such price on such date, then the closing bid
price on such exchange or quotation system on the date nearest preceding
such date, or (b) if the Common Stock is not listed then on the Nasdaq
SmallCap Market, Nasdaq National Market or any registered national stock
exchange, the closing bid price for a share of Common Stock in the
over-the-counter market, as reported by NASDAQ or in the National Quotation
Bureau Incorporated or similar organization or agency succeeding to its
functions of reporting prices) at the close of business on such date, or
(c) if the Common Stock is not then reported by NASDAQ the National
Quotation Bureau Incorporated (or similar organization or agency succeeding
to its functions of reporting prices), then the average of the "Pink Sheet"
quotes for the relevant conversion period, as determined in good faith by
the holder, or (d) if the Common Stock is not then publicly traded the fair
market value of a share of Common Stock as determined by an Independent
Appraiser selected in good faith by the Majority Holders; provided,
however, that the Issuer, after receipt of the determination by such
Independent Appraiser, shall have the right to select an additional
Independent Appraiser, in which case, the fair market value shall be equal
to the average of the determinations by each such Independent Appraiser;
and provided, further that all determinations of the Per Share Market Value
shall be appropriately adjusted for any stock dividends, stock splits or
other similar transactions during such period. The determination of fair
market value by an Independent Appraiser shall be based upon the fair
market value of the Issuer determined on a going concern basis as between a
willing buyer and a willing seller and taking into account all relevant
factors determinative of value, and shall be final and binding on all
parties. In determining the fair market value of any shares of Common
Stock, no consideration shall be given to any restrictions on
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<PAGE>
transfer of the Common Stock imposed by agreement or by federal or state
securities laws, or to the existence or absence of, or any limitations on,
voting rights.
"Preferred Stock" means the Series H Convertible Preferred Stock,
$.0001 par value per share, of the Issuer.
"Purchase Agreement" means the Convertible Preferred Stock Purchase
Agreement dated as of December ___, 2000 among the Issuer and the
investors party thereto.
"Registration Rights Agreement" has the meaning specified in Section
3(e) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Term" has the meaning specified in Section 1 hereof.
"Trading Day" means (a) a day on which the Common Stock is traded on
the Nasdaq SmallCap Market, Nasdaq National Market or other registered
national stock exchange on which the Common Stock has been listed, or (b)
if the Common Stock is not listed on the Nasdaq SmallCap Market, Nasdaq
National Market or other registered national stock exchange on which the
Common Stock has been listed, a day on which the Common Stock is quoted in
the over-the-counter market, as reported by the OTC Bulletin Board, or (c)
if the Common Stock is not quoted on the OTC Bulletin Board, a day on which
the Common Stock is quoted in the over-the-counter market as reported by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, however,
that in the event that the Common Stock is not listed or quoted as set
forth in (a), (b) and (c) hereof, then Trading Day shall mean any day
except Saturday, Sunday and any day which shall be a legal holiday or a day
on which banking institutions in the State of New York are authorized or
required by law or other government action to close.
"Voting Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
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<PAGE>
"Warrants" means the A Warrants, B Warrants, C Warrants and D Warrants
issued as units with Common Stock upon conversion of the Preferred Stock in
connection with the sale and issuance of Common Stock pursuant to Purchase
Agreement, including, without limitation, this Warrant, and any other
warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
of such other Warrants.
"Warrant Price" means $____<F5> per share, as such price may be
adjusted from time to time as shall result from the adjustments specified
in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
8. Other Notices. In case at any time:
(A) the Issuer shall make any distributions to the holders of
Common Stock; or
(B) the Issuer shall authorize the granting to all holders of
its Common Stock of rights to subscribe for or purchase any
shares of Capital Stock of any class or of any Common Stock
Equivalents or Convertible Securities or other rights; or
(C) there shall be any reclassification of the Capital Stock of
the Issuer; or
(D) there shall be any capital reorganization by the Issuer; or
(E) there shall be any (i) consolidation or merger involving the
Issuer or (ii) sale, transfer or other disposition of all or
substantially all of the Issuer's property, assets or
business (except a merger or other reorganization in which
the Issuer shall be the surviving corporation and its shares
of Capital Stock shall continue to be outstanding and
unchanged and except a consolidation, merger, sale, transfer
or other disposition involving a wholly-owned Subsidiary);
or
(F) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Issuer or any partial
liquidation of the Issuer or distribution to holders of
Common Stock;
----------
<F5> Insert $0.50 for A Warrant; $0.60 for B Warrant; $0.70 for C Warrant;
$0.75 for D Warrant.
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<PAGE>
then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than twenty (20) days
prior to the record date or the date on which the Issuer's transfer books are
closed in respect thereto. The Issuer shall give to the Holder notice of all
meetings and actions by written consent of its stockholders, at the same time in
the same manner as notice of any meetings of stockholders is required to be
given to stockholders who do not waive such notice (or, if such actions require
no notice, then two (2) Trading Days written notice thereof describing the
matters upon which action is to be taken). The Holder shall have the right to
send two representatives selected by it to each meeting, who shall be permitted
to attend, but not vote at, such meeting and any adjournments thereof. This
Warrant entitles the Holder to receive copies of all financial and other
information distributed or required to be distributed generally to the holders
of the Common Stock.
9. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 9 without the consent of the Holder of this Warrant.
10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW. THIS WARRANT SHALL NOT BE INTERPRETED OR
CONSTRUED WITH ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS WARRANT TO BE
DRAFTED.
11. 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 earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern standard time,
on a Trading Day, (ii) the Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m., eastern standard time, on any
date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the
Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder
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<PAGE>
at its last known address or facsimile number appearing on the books of the
Issuer maintained for such purposes, or with respect to the Issuer, addressed
to:
ObjectSoft Corporation
Continental Plaza III
433 Hackensack Avenue
Hackensack, New Jersey 07601
Attn.: Chairman
Tel.: (201) 343-9100
Fax: (201) 343-0056
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer or the Company shall be sent to
Parker Chapin LLP, 405 Lexington Avenue, New York, New York 10174, Attention:
Martin E. Weisberg, Esq. And Melvin Weinberg, Esq., Facsimile no.: (212)
704-6288.
12. Warrant Agent. The Issuer may, by written notice to each Holder of this
Warrant, appoint an agent having an office in New York, New York for the purpose
of issuing shares of Warrant Stock on the exercise of this Warrant pursuant to
subsection (b) of Section 2 hereof, exchanging this Warrant pursuant to
subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.
13. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
14. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
party.
15. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
16. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
OBJECTSOFT CORPORATION
By:_______________________________________
Name:
Title:
<PAGE>
EXERCISE FORM
(To be signed only on exercise of Warrant)
TO: OBJECTSOFT CORPORATION
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, _______ shares
of Common Stock of OBJECTSOFT CORPORATION and herewith makes payment of $_______
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to whose address is ___________________________________.
The undersigned represents and warrants that it is not a U.S. Person (as
that term is defined in Regulation S under the Securities Act of 1933, as
amended (the "1933 Act")), and the within Warrant is not being exercised by or
on behalf of a U.S. Person, or else the undersigned has provided herewith an
opinion of counsel to the effect that the within Warrant and the shares of
Common Stock delivered upon exercise thereof have been registered under the 1933
Act or are exempt from registration thereunder. The undersigned represents and
warrants that the within Warrant is not being exercised within the United
States, and that the undersigned understands that the shares of Common Stock
issuable upon exercise of the within Warrant may not be delivered within the
United States, other than in offerings deemed to meet the definition of
"offshore transaction" pursuant to Rule 902(h) under Regulation S, unless
registered under the 1933 Act or an exemption from such registration is
available.
Dated:___________________
______________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
_____________________________________
(Address)
-20-
<PAGE>
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
TO: OBJECTSOFT CORPORATION
For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading "Transferees" the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of OBJECTSOFT CORPORATION to which the within Warrant
relates specified under the headings "Percentage Transferred" and "Number
Transferred," respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the books of
OBJECTSOFT CORPORATION, Inc. with full power of substitution in the premises.
================================================================================
Transferees Percentage Number
----------- Transferred Transferred
----------- -----------
--------------------------------------------------------------------------------
--------------------------- ------------------------- -------------------------
--------------------------- ------------------------- -------------------------
--------------------------- ------------------------- -------------------------
================================================================================
Dated: _________________ __________________________________________
(Signature must conform to name of holder as
specified on the face of the warrant)
Signed in the presence of:
_________________________________ _______________________________
(Name) (address)
_______________________________
ACCEPTED AND AGREED: (address)
[TRANSFEREE]
_________________________________
(Name)
-21-
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
--------------------
(To be Executed by the holder of Series H Preferred Stock in
order to Convert the Series H Preferred Stock)
All capitalized terms not defined herein shall have the meanings ascribed to
them in that certain Convertible Preferred Stock Purchase Agreement (the "Stock
Purchase Agreement") between the undersigned and ObjectSoft Corporation (the
"Corporation").
The undersigned hereby irrevocably elects to convert ___ shares of Series H
Preferred Stock, represented by Certificate No. ___ (the "Preferred Stock"),
into a corresponding number of Units according to the conditions hereof, as of
the date written below.
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock and Warrants issuable to the
undersigned upon conversion of the Series H Preferred Stock shall be made in
compliance with Regulation S, pursuant to an exemption from registration under
the Securities Act of 1933, as amended (the "Securities Act"), or pursuant to
registration of the Common Stock under the Securities Act.
_________________________________ ________________________________
Date of Conversion Applicable Conversion Price
_________________________________ ________________________________
Number of shares of Common Stock Total Number of Warrants
issuable upon Conversion issuable upon Conversion
_________________________________
$ Amount of Conversion
_________________________________ ________________________________
Signature Name
Address: Delivery of Shares to:
-14-
