Contract

Exhibit 10.12 THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR AN EXEMPTION THEREFROM. THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE. WARRANT TO PURCHASE SERIES C SENIOR CONVERTIBLE PREFERRED STOCK OF OPTIUM CORPORATION VOID AFTER JANUARY 31, 2013 This Warrant is issued to Eitan Gertel or his registered assigns (the”Employee”) by Optium Corporation, a Delaware corporation (including anysuccessors as provided herein, the “Company”), on May 1, 2003 (the “WarrantIssue Date”). This Warrant is issued to the Employee in connection with hisemployment by the Company. 1. NUMBER OF SHARES SUBJECT TO WARRANT; EXERCISE PRICE. Subject tothe terms and conditions hereinafter set forth, the Employee is entitled, uponsurrender of this Warrant at the principal office of the Company, to purchasefrom the Company 489,156 shares (the “Shares”) of Series C Senior ConvertiblePreferred Stock, par value $0.0001 per share (the “Series C Preferred Stock”),at a purchase price of $0.05036 per share (as may be adjusted herein, the”Exercise Price”). 2. VESTING; EXERCISE PERIOD. Except as otherwise provided forherein, this Warrant shall be exercisable, in whole or in part, at any time andfrom time to time beginning on the earlier of (i) December 31, 2003 or (ii) themoment in time that is immediately prior to the consummation of a Change inControl (as defined in the Company’s 2001 Stock Incentive Plan, as amended) andending at 5:00 p.m. eastern time on the tenth (10th) anniversary of the WarrantIssue Date (the “Warrant Termination Date”); PROVIDED, that if the employment bythe Company of the Employee is terminated for any reason or reasons prior tothis Warrant becoming exercisable, then this Warrant shall expire without everbecoming exercisable; and, PROVIDED FURTHER, that if the employment by theCompany of the Employee is terminated for any reason or reasons after thisWarrant first becomes exercisable, then this Warrant shall expire and no longerbe exercisable on the earlier of: the Warrant Termination Date or (ii) the datethat is ninety (90) days following the date of such termination. 3. NOTICE OF SALE OR CONVERSATION. The Company shall provide writtennotice to the Employee not less than thirty (30) days prior to the consummationof a Change inControl or any transaction that would cause the conversion of all outstandingshares of Series C Preferred Stock into Common Stock of the Company. 4. METHOD OF EXERCISE. While this Warrant remains outstanding andexercisable in accordance with SECTION 2 hereof, the purchase rights herebyrepresented may be exercised in whole but not in part, at the election of theEmployee, by the tender of the Notice of Exercise in substantially the formattached hereto as EXHIBIT A and the surrender of this Warrant at the principaloffice of the Company and by the payment to the Company in cash, by check,cancellation of indebtedness, shares of Series C Preferred Stock that have beenheld by the Employee for at least six (6) months (or shares previously issuedupon conversion thereof) or other form of payment acceptable to the Company, ofan amount equal to the then applicable Exercise Price multiplied by the numberof Shares then being purchased. For purposes of this SECTION 4, the fair marketvalue of a share of Series C Preferred Stock (or shares previously issued uponconversion thereof) as of a particular date shall be determined by the Company’sBoard of Directors in its reasonable discretion; PROVIDED that if such sharesissuable upon exercise of this Warrant are traded on a national securitiesexchange or admitted to quotation on the National Association of SecuritiesDealers Automated Quotation System, the fair market value on any given dateshall be the average of the closing sale prices on such exchange or system ofsuch shares issuable upon exercise of this Warrant for the 20 trading dayspreceding such date. 5. CERTIFICATES FOR SHARES. Upon the exercise of the purchase rightsevidenced by this Warrant, one or more certificates for the number of Shares sopurchased shall be issued as soon as practicable thereafter (with appropriaterestrictive legends, as applicable). 6. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number ofand kind of securities purchasable upon exercise of this Warrant and theExercise Price shall be subject to adjustment from time to time as follows: (a) SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES. If theCompany shall at any time prior to the exercise or expiration of this Warrantsubdivide its shares of Series C Preferred Stock (or any successor security asprovided for in SECTION 6(b)), by split-up or otherwise, or combine its sharesof Series C Preferred Stock (or any successor security as provided for inSECTION 6(b)), or issue additional Common Stock as a dividend with respect toany of its shares of Series C Preferred Stock (or any successor security asprovided for in SECTION 6(b)), the number of Shares issuable on the exercise ofthis Warrant shall forthwith be proportionately increased in the case of asubdivision or stock dividend, or proportionately decreased in the case of acombination. Appropriate adjustments shall also be made to the Exercise Price,provided that the aggregate exercise price payable hereunder for the totalnumber of Shares purchasable under this Warrant (as adjusted) shall remain thesame. Any adjustment under this SECTION 6(a) shall become effective at the closeof business on the date the subdivision or combination becomes effective, or asof the record date of such dividend, or in the event that no record date isfixed, upon the making of such dividend. -2- (b) RECLASSIFICATION, REORGANIZATION AND CONSOLIDATION. In theevent of any corporate reclassification, capital reorganization, consolidation,spin-off or change in the shares of Series C Preferred Stock (other than as aresult of a subdivision, combination, or dividend provided for in SECTION 6(a)above), then, as a condition of such event, lawful provision shall be made, andduly executed documents evidencing the same from the Company or its successorshall be delivered to the Employee, so that the Employee shall have the right atany time prior to the expiration of this Warrant to purchase, at a total priceequal to that payable upon the exercise of this Warrant, the kind and amount ofshares of stock and/or other securities and property receivable in connectionwith such event by a Employee of the same number of shares for which thisWarrant could have been exercised immediately prior to such event. In any suchcase appropriate provisions shall be made with respect to the rights andinterest of the Employee so that the provisions hereof shall thereafter beapplicable with respect to any shares of stock or other securities and propertydeliverable upon exercise hereof, and appropriate adjustments shall be made tothe Exercise Price, provided that the aggregate exercise price payable hereunderfor the total number of Shares purchasable under this Warrant (as adjusted)shall remain the same. (c) NOTICE OF ADJUSTMENT. When any adjustment is required to bemade to the Exercise Price or in the number or kind of Shares purchasable uponexercise of the Warrant, the Company shall promptly notify the Employee of suchevent and of the adjusted Exercise Price or number of Shares or other securitiesor property thereafter purchasable upon exercise of this Warrant. 7. ASSUMPTION OF WARRANT. If at any time while this Warrant, or anyportion thereof, is outstanding and unexpired there shall be an acquisition ofthe Company by another entity by means of a merger, reorganization orconsolidation of the Company or any other similar transaction, then, as a partof such acquisition, lawful provision shall be made so that the Employee shallthereafter be entitled to receive upon exercise of this Warrant, during theperiod specified herein and upon payment of the aggregate Exercise Price then ineffect, the number of shares of stock or other securities or property of thesuccessor corporation resulting from such acquisition which the Employee wouldhave been entitled to receive in such acquisition if this Warrant had beenexercised immediately before such acquisition. 8. NO FRACTIONAL SHARES OR SCRIP. No fractional Shares or scriprepresenting fractional Shares shall be issued upon the exercise of thisWarrant, but in lieu of such fractional Shares the Company shall make a cashpayment therefor on the basis of the fair market value determined in accordancewith SECTION 4. 9. NO SHAREHOLDER RIGHTS. Prior to exercise of this Warrant, theEmployee shall not be entitled to any rights of a shareholder with respect tothe Shares, including (without limitation) the right to vote such Shares,receive dividends or other distributions thereon, exercise preemptive rights orbe notified of shareholder meetings, and such Employee shall not be entitled toany notice or other communication concerning the business or affairs of theCompany. However, nothing in this SECTION 9 shall limit the right of theEmployee to be provided the notices required under this Warrant. -3- 10. COMPLIANCE WITH SECURITIES ACT; TRANSFERABILITY OF WARRANT ORSHARES. (a) COMPLIANCE WITH SECURITIES ACT. The Employee, by acceptancehereof, agrees that this Warrant, and the Shares issuable upon exercise of thisWarrant, are being acquired for investment and that such Employee will notoffer, sell or otherwise dispose of this Warrant, or any Shares issuable uponexercise of this Warrant, except under circumstances which will not result in aviolation of the Securities Act, or any applicable state securities laws. ThisWarrant and all Shares issued upon exercise of this Warrant (unless registeredunder the Securities Act and any applicable state securities laws) shall bestamped or imprinted with a legend in substantially the following form: “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD, OFFERED FOR SALE, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR AN EXEMPTION THEREFROM, AND, IF REQUESTED BY THE COMPANY, THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THAT EFFECT. THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE.” (b) TRANSFERABILITY. Subject to compliance with applicablefederal and state securities laws, the Shares issuable upon exercise of thisWarrant (but not this Warrant) are transferable in whole or in part by theEmployee to any person or entity upon written notice to the Company. 11. INVESTMENT STATUS. The Employee represents that he or she is an”accredited investor” within the meaning of Regulation D under the SecuritiesAct, as presently in effect. 12. SUCCESSORS AND ASSIGNS. The terms and provisions of this Warrantshall inure to the benefit of, and be binding upon, the Company and the holdershereof and their respective successors and assigns. 13. AMENDMENTS AND WAIVERS. Any term of this Warrant may be amendedand the observance of any term of this Warrant may be waived (either generallyor in a particular instance and either retroactively or prospectively), with thewritten consent of the Company and the Employee. 14. NOTICES. All notices required under this Warrant shall be deemedto have been given or made for all purposes (i) upon personal delivery, (ii)upon confirmation receipt that the communication was successfully sent to theapplicable number if sent by facsimile, (iii) -4-one day after being sent, when sent by professional overnight courier service,or (iv) five days after posting when sent by registered or certified mail.Notices to the Company shall be sent to the address of the Company set forthbelow (or at such other place as the Company shall notify the Employee hereof inwriting) and notices to the Employee shall be sent to the address of theEmployee set forth below (or at such other place as the Employee shall notifythe Company hereof in writing): To the Company: Optium Corporation 500 Horizon Drive Suite 505 Chalfont, PA 18914 Attn: Chief Executive Officer To the Employee: Eitan Gertel 1389 Lamplighter Lane Gwynedd, PA 19436 15. CAPTIONS. The section and subsection headings of this Warrantare inserted for convenience only and shall not constitute a part of thisWarrant in construing or interpreting any provision hereof. 16. GOVERNING LAW. This Warrant shall be governed by the laws of theState of Delaware, without regard to the choice or conflict of laws principlesthereof. -5- IN WITNESS WHEREOF, the undersigned have caused this Warrant to beduly executed as of the date first set forth above. COMPANY OPTIUM CORPORATION By: /s/ Paul G. Suchoski ——————————— Name: Paul G. Suchoski, Jr. Title: Chief Executive Officer EMPLOYEE /s/ Eitan Gertel ———————————— Name: Eitan Gertel -6- EXHIBIT A NOTICE OF EXERCISETo: Optium Corporation The undersigned hereby elects to [CHECK APPLICABLE SUBSECTION]:/ / Purchase _______________ Shares (as defined in the attached Warrant) of Optium Corporation, pursuant to the terms of the attached Warrant and payment of the Exercise Price per Share required under such Warrant accompanies this notice. The undersigned hereby represents and warrants that the undersigned isacquiring such shares for its own account for investment purposes only, and notfor resale or with a view to distribution of such shares or any part thereof.Date: WARRANT HOLDER: —————————– By: ——————————- Name: Address:Name in which shares should be registered: ________________ -7-