Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of September
13, 2020, between ClearOne, Inc., a Delaware corporation (the “Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to (i) an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”) as to the Shares and (ii) an exemption
from the registration requirements of Section 5 of the Securities Act contained
in Section 4(a)(2) thereof and/or Regulation D thereunder as to the Warrants,
the Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, securities of
the Company as more fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:

ARTICLE I.

DEFINITIONS

1.1              DEFINITIONS.  IN ADDITION TO THE TERMS DEFINED ELSEWHERE IN
THIS AGREEMENT, FOR ALL PURPOSES OF THIS AGREEMENT, THE FOLLOWING TERMS HAVE THE
MEANINGS SET FORTH IN THIS SECTION 

                            “ACQUIRING PERSON” SHALL HAVE THE MEANING ASCRIBED
TO SUCH TERM IN SECTION 4.5.

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 405 under the
Securities Act. 

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day other than Saturday, Sunday or other day on which
commercial banks in The City of New York are authorized or required by law to
remain closed; provided, however, for clarification, commercial banks shall not
be deemed to be authorized or required by law to remain closed due to “stay at
home”, “shelter-in-place”, “non-essential employee” or any other similar orders
or restrictions or the closure of any physical branch locations at the direction
of any governmental authority so long as the electronic funds transfer systems
(including for wire transfers) of commercial banks in The City of New York
generally are open for use by customers on such day.

“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

“Closing Date” means the Trading Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Securities, in each
case, have been satisfied or waived, but in no event later than the second
(2nd) Trading Day following the date hereof.

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

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

“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

“Company Counsel” means Seyfarth Shaw LLP, with offices located at 700 Milam
Street, Suite 1400, Houston, Texas 77002.

“Disclosure Schedules” means the Disclosure Schedules of the Company
delivered concurrently herewith.

--------------------------------------------------------------------------------

 

“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a
Trading Day or after 9:00 a.m. (New York City time) and before midnight (New
York City time) on any Trading Day, 9:01 a.m. (New York City time) on the
Trading Day immediately following the date hereof, unless otherwise instructed
as to an earlier time by the Placement Agent, and (ii) if this Agreement is
signed between midnight (New York City time) and 9:00 a.m. (New York City time)
on any Trading Day, no later than 9:01 a.m. (New York City time) on the date
hereof, unless otherwise instructed as to an earlier time by the Placement
Agent.

“EGS” means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue
of the Americas, New York, New York 10105-0302.

“Evaluation Date” shall have the meaning ascribed to such term in Section
3.1(s).

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

 

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers or directors of the Company pursuant to any stock or option
plan or employee stock purchase plan duly adopted for such purpose, by a
majority of the non-employee members of the Board of Directors or a majority of
the members of a committee of non-employee directors established for such
purpose for services rendered to the Company, (b) securities upon the exercise
or exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common
Stock issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price
or conversion price of such securities (other than in connection with stock
splits or combinations) or to extend the term of such securities, and (c)
securities issued pursuant to acquisitions or strategic transactions approved by
a majority of the disinterested directors of the Company, provided that such
securities are issued as “restricted securities” (as defined in Rule 144) and
carry no registration rights that require or permit the filing of any
registration statement in connection therewith during the prohibition period in
Section 4.12(a) herein, and provided that any such issuance shall only be to a
Person (or to the equityholders of a Person) which is, itself or through its
subsidiaries, an operating company or an owner of an asset in a business
synergistic with the business of the Company and shall provide to the Company
additional benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for
the purpose of raising capital or to an entity whose primary business is
investing in securities.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).

“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(p).

“Legend Removal Date” shall have the meaning ascribed to such term in Section
4.1(c).

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.

“Material Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(b).

“Material Permits” shall have the meaning ascribed to such term in Section
3.1(n).

--------------------------------------------------------------------------------

 

“Per Share Purchase Price” equals $2.4925, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement.

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

“Placement Agent” means H.C. Wainwright & Co., LLC.

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.

“Prospectus” means the final prospectus filed for the Registration Statement.

“Prospectus Supplement” means the supplement to the Prospectus complying with
Rule 424(b) of the Securities Act that is filed with the Commission and
delivered by the Company to each Purchaser at the Closing.

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

“Registration Statement” means the effective registration statement with
Commission file No. 333-248412 which registers the sale of the Shares to the
Purchasers.

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

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities” means the Shares, the Warrants and the Warrant Shares.

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

“Shares” means the shares of Common Stock issued or issuable to each Purchaser
pursuant to this Agreement.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include locating and/or
borrowing shares of Common Stock). 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be
paid for Shares and Warrants purchased hereunder as specified below such
Purchaser’s name on the signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in immediately available
funds.

“Subsidiary” means any subsidiary of the Company as set forth on Schedule
3.1(a), and shall, where applicable, also include any direct or
indirect subsidiary of the Company formed or acquired after the date hereof.

--------------------------------------------------------------------------------

 

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

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

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

“Transfer Agent” means Colonial Stock Transfer, the current transfer agent of
the Company, with offices located at 66 Exchange Place, Ste 100, Salt Lake City,
UT 84111, and any successor transfer agent of the Company.

“Variable Rate Transaction” shall have the meaning ascribed to such term in
Section 4.12(b).

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date)
on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or
quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of
the Common Stock so reported, or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Purchasers of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

“Warrants” means, collectively, the Common Stock purchase warrants delivered to
the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which
Warrants shall be exercisable immediately and have a term of exercise equal to
five (5) years, in the form of Exhibit A attached hereto.

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

--------------------------------------------------------------------------------

ARTICLE II.
PURCHASE AND SALE

2.1              CLOSING.  ON THE CLOSING DATE, UPON THE TERMS AND SUBJECT TO
THE CONDITIONS SET FORTH HEREIN, SUBSTANTIALLY CONCURRENT WITH THE EXECUTION AND
DELIVERY OF THIS AGREEMENT BY THE PARTIES HERETO, THE COMPANY AGREES TO SELL,
AND THE PURCHASERS, SEVERALLY AND NOT JOINTLY, AGREE TO PURCHASE, UP TO AN
AGGREGATE OF $5,275,000 OF SHARES AND WARRANTS.  EACH PURCHASER’S SUBSCRIPTION
AMOUNT AS SET FORTH ON THE SIGNATURE PAGE HERETO EXECUTED BY SUCH PURCHASER
SHALL BE MADE AVAILABLE FOR “DELIVERY VERSUS PAYMENT” SETTLEMENT WITH THE
COMPANY OR ITS DESIGNEE. THE COMPANY SHALL DELIVER TO EACH PURCHASER ITS
RESPECTIVE SHARES AND A WARRANT AS DETERMINED PURSUANT TO SECTION 2.2(A), AND
THE COMPANY AND EACH PURCHASER SHALL DELIVER THE OTHER ITEMS SET FORTH IN
SECTION 2.2 DELIVERABLE AT THE CLOSING.  UPON SATISFACTION OF THE COVENANTS AND
CONDITIONS SET FORTH IN SECTIONS 2.2 AND 2.3, THE CLOSING SHALL OCCUR AT THE
OFFICES OF EGS OR SUCH OTHER LOCATION (INCLUDING REMOTELY BY FACSIMILE OR OTHER
ELECTRONIC TRANSMISSION) AS THE PARTIES SHALL MUTUALLY AGREE. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, IF AT ANY TIME ON OR AFTER THE TIME OF
EXECUTION OF THIS AGREEMENT BY THE COMPANY AND AN APPLICABLE PURCHASER, THROUGH,
AND INCLUDING THE TIME IMMEDIATELY PRIOR TO THE CLOSING (THE “PRE-SETTLEMENT
PERIOD”), IF SUCH PURCHASER SELLS TO ANY PERSON ALL, OR ANY PORTION, OF ANY
COMMON STOCK TO BE ISSUED HEREUNDER TO SUCH PURCHASER AT THE CLOSING
(COLLECTIVELY, THE “PRE-SETTLEMENT SHARES”), SUCH PURCHASER SHALL, AUTOMATICALLY
HEREUNDER (WITHOUT ANY ADDITIONAL REQUIRED ACTIONS BY SUCH PURCHASER OR THE
COMPANY), BE DEEMED TO BE UNCONDITIONALLY BOUND TO PURCHASE, AND THE COMPANY
SHALL BE DEEMED UNCONDITIONALLY BOUND TO SELL, SUCH PRE-SETTLEMENT SHARES TO
SUCH PURCHASER AT THE CLOSING; PROVIDED, THAT THE COMPANY SHALL NOT BE REQUIRED
TO DELIVER ANY PRE-SETTLEMENT SHARES TO SUCH PURCHASER PRIOR TO THE COMPANY’S
RECEIPT OF THE SUBSCRIPTION AMOUNT FOR SUCH PRE-SETTLEMENT SHARES HEREUNDER;
PROVIDED, FURTHER, THAT THE COMPANY HEREBY ACKNOWLEDGES AND AGREES THAT THE
FORGOING SHALL NOT CONSTITUTE A REPRESENTATION OR COVENANT BY SUCH PURCHASER AS
TO WHETHER OR NOT SUCH PURCHASER WILL ELECT TO SELL ANY PRE-SETTLEMENT SHARES
DURING THE PRE-SETTLEMENT PERIOD.  THE DECISION TO SELL ANY SHARES OF COMMON
STOCK WILL BE MADE IN THE SOLE DISCRETION OF SUCH PURCHASER FROM TIME TO TIME,
INCLUDING DURING THE PRE-SETTLEMENT PERIOD. UNLESS OTHERWISE DIRECTED BY THE
PLACEMENT AGENT, SETTLEMENT OF THE SHARES SHALL OCCUR VIA “DELIVERY VERSUS
PAYMENT” (“DVP”) (I.E., ON THE CLOSING DATE, THE COMPANY SHALL ISSUE THE SHARES
REGISTERED IN THE PURCHASERS’ NAMES AND ADDRESSES AND RELEASED BY THE TRANSFER
AGENT DIRECTLY TO THE ACCOUNT(S) AT THE PLACEMENT AGENT IDENTIFIED BY EACH
PURCHASER; UPON RECEIPT OF SUCH SHARES, THE PLACEMENT AGENT SHALL PROMPTLY
ELECTRONICALLY DELIVER SUCH SHARES TO THE APPLICABLE PURCHASER, AND PAYMENT
THEREFOR SHALL BE MADE BY THE PLACEMENT AGENT (OR ITS CLEARING FIRM) BY WIRE
TRANSFER TO THE COMPANY). 

2.2              DELIVERIES.

(A)                ON OR PRIOR TO THE CLOSING DATE, THE COMPANY SHALL DELIVER OR
CAUSE TO BE DELIVERED TO EACH PURCHASER THE FOLLOWING:

(I)                 THIS AGREEMENT DULY EXECUTED BY THE COMPANY;

(II)               A LEGAL OPINION OF COMPANY COUNSEL, SUBSTANTIALLY IN THE FORM
OF EXHIBIT B ATTACHED HERETO;

(III)            SUBJECT TO THE LAST SENTENCE OF SECTION 2.1, THE COMPANY SHALL
HAVE PROVIDED EACH PURCHASER WITH THE COMPANY’S WIRE INSTRUCTIONS, ON COMPANY
LETTERHEAD AND EXECUTED BY THE CHIEF EXECUTIVE OFFICER OR CHIEF FINANCIAL
OFFICER;

(IV)             SUBJECT TO THE LAST SENTENCE OF SECTION 2.1, A COPY OF THE
IRREVOCABLE INSTRUCTIONS TO THE TRANSFER AGENT INSTRUCTING THE TRANSFER AGENT TO
DELIVER ON AN EXPEDITED BASIS VIA THE DEPOSITORY TRUST COMPANY DEPOSIT OR
WITHDRAWAL AT CUSTODIAN SYSTEM (“DWAC”) SHARES EQUAL TO SUCH PURCHASER’S
SUBSCRIPTION AMOUNT DIVIDED BY THE PER SHARE PURCHASE PRICE, REGISTERED IN THE
NAME OF SUCH PURCHASER;

(V)               A WARRANT REGISTERED IN THE NAME OF SUCH PURCHASER TO PURCHASE
UP TO A NUMBER OF SHARES OF COMMON STOCK EQUAL TO 50% OF SUCH
PURCHASER’S SHARES, WITH AN EXERCISE PRICE EQUAL TO $2.43 PER SHARE OF COMMON
STOCK, SUBJECT TO ADJUSTMENT THEREIN; AND

(VI)             THE PROSPECTUS AND PROSPECTUS SUPPLEMENT (WHICH MAY BE
DELIVERED IN ACCORDANCE WITH RULE 172 UNDER THE SECURITIES ACT).

(B)               ON OR PRIOR TO THE CLOSING DATE, EACH PURCHASER SHALL DELIVER
OR CAUSE TO BE DELIVERED TO THE COMPANY THE FOLLOWING:

(I)                 THIS AGREEMENT DULY EXECUTED BY SUCH PURCHASER; AND

(II)               SUCH PURCHASER’S SUBSCRIPTION AMOUNT, WHICH SHALL BE MADE
AVAILABLE FOR “DELIVERY VERSUS PAYMENT” SETTLEMENT WITH THE COMPANY OR ITS
DESIGNEE.

--------------------------------------------------------------------------------

2.3              CLOSING CONDITIONS.

(A)              THE OBLIGATIONS OF THE COMPANY HEREUNDER IN CONNECTION WITH THE
CLOSING ARE SUBJECT TO THE FOLLOWING CONDITIONS BEING MET:

(I)                 THE ACCURACY IN ALL MATERIAL RESPECTS (OR, TO THE EXTENT
REPRESENTATIONS OR WARRANTIES ARE QUALIFIED BY MATERIALITY OR MATERIAL ADVERSE
EFFECT, IN ALL RESPECTS) ON THE CLOSING DATE OF THE REPRESENTATIONS AND
WARRANTIES OF THE PURCHASERS CONTAINED HEREIN (UNLESS AS OF A SPECIFIC DATE
THEREIN IN WHICH CASE THEY SHALL BE ACCURATE AS OF SUCH DATE);

(II)               ALL OBLIGATIONS, COVENANTS AND AGREEMENTS OF EACH PURCHASER
REQUIRED TO BE PERFORMED AT OR PRIOR TO THE CLOSING DATE SHALL HAVE BEEN
PERFORMED; AND

(III)            THE DELIVERY BY EACH PURCHASER OF THE ITEMS SET FORTH IN
SECTION 2.2(B) OF THIS AGREEMENT.

(B)               THE RESPECTIVE OBLIGATIONS OF THE PURCHASERS HEREUNDER IN
CONNECTION WITH THE CLOSING ARE SUBJECT TO THE FOLLOWING CONDITIONS BEING MET:

(I)                 THE ACCURACY IN ALL MATERIAL RESPECTS (OR, TO THE EXTENT
REPRESENTATIONS OR WARRANTIES ARE QUALIFIED BY MATERIALITY OR MATERIAL ADVERSE
EFFECT, IN ALL RESPECTS) WHEN MADE AND ON THE CLOSING DATE OF THE
REPRESENTATIONS AND WARRANTIES OF THE COMPANY CONTAINED HEREIN (UNLESS AS OF A
SPECIFIC DATE THEREIN IN WHICH CASE THEY SHALL BE ACCURATE AS OF SUCH DATE);

(II)               ALL OBLIGATIONS, COVENANTS AND AGREEMENTS OF THE COMPANY
REQUIRED TO BE PERFORMED AT OR PRIOR TO THE CLOSING DATE SHALL HAVE BEEN
PERFORMED;

(III)            THE DELIVERY BY THE COMPANY OF THE ITEMS SET FORTH IN SECTION
2.2(A) OF THIS AGREEMENT;

(IV)             THERE SHALL HAVE BEEN NO MATERIAL ADVERSE EFFECT WITH RESPECT
TO THE COMPANY SINCE THE DATE HEREOF; AND

(V)               FROM THE DATE HEREOF TO THE CLOSING DATE, TRADING IN THE
COMMON STOCK SHALL NOT HAVE BEEN SUSPENDED BY THE COMMISSION OR THE COMPANY’S
PRINCIPAL TRADING MARKET, AND, AT ANY TIME PRIOR TO THE CLOSING DATE, TRADING IN
SECURITIES GENERALLY AS REPORTED BY BLOOMBERG L.P. SHALL NOT HAVE BEEN SUSPENDED
OR LIMITED, OR MINIMUM PRICES SHALL NOT HAVE BEEN ESTABLISHED ON SECURITIES
WHOSE TRADES ARE REPORTED BY SUCH SERVICE, OR ON ANY TRADING MARKET, NOR SHALL A
BANKING MORATORIUM HAVE BEEN DECLARED EITHER BY THE UNITED STATES OR NEW YORK
STATE AUTHORITIES NOR SHALL THERE HAVE OCCURRED ANY MATERIAL OUTBREAK OR
ESCALATION OF HOSTILITIES OR OTHER NATIONAL OR INTERNATIONAL CALAMITY OF SUCH
MAGNITUDE IN ITS EFFECT ON, OR ANY MATERIAL ADVERSE CHANGE IN, ANY FINANCIAL
MARKET WHICH, IN EACH CASE, IN THE REASONABLE JUDGMENT OF SUCH PURCHASER, MAKES
IT IMPRACTICABLE OR INADVISABLE TO PURCHASE THE SECURITIES AT THE CLOSING.

--------------------------------------------------------------------------------

 

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

3.1              REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  EXCEPT AS SET
FORTH IN THE DISCLOSURE SCHEDULES, WHICH DISCLOSURE SCHEDULES SHALL BE DEEMED A
PART HEREOF AND SHALL QUALIFY ANY REPRESENTATION OR OTHERWISE MADE HEREIN TO THE
EXTENT OF THE DISCLOSURE CONTAINED IN THE CORRESPONDING SECTION OF THE
DISCLOSURE SCHEDULES, THE COMPANY HEREBY MAKES THE FOLLOWING REPRESENTATIONS AND
WARRANTIES TO EACH PURCHASER:

(A)                SUBSIDIARIES.  ALL OF THE MATERIAL DIRECT AND INDIRECT
SUBSIDIARIES OF THE COMPANY ARE SET FORTH ON SCHEDULE 3.1(A).  THE COMPANY OWNS,
DIRECTLY OR INDIRECTLY, ALL OF THE CAPITAL STOCK OR OTHER EQUITY INTERESTS OF
EACH SUBSIDIARY FREE AND CLEAR OF ANY LIENS, AND ALL OF THE ISSUED AND
OUTSTANDING SHARES OF CAPITAL STOCK OF EACH SUBSIDIARY ARE VALIDLY ISSUED AND
ARE FULLY PAID, NON-ASSESSABLE AND FREE OF PREEMPTIVE AND SIMILAR RIGHTS TO
SUBSCRIBE FOR OR PURCHASE SECURITIES.

(B)               ORGANIZATION AND QUALIFICATION.  THE COMPANY AND EACH OF THE
SUBSIDIARIES IS AN ENTITY DULY INCORPORATED OR OTHERWISE ORGANIZED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS
INCORPORATION OR ORGANIZATION, WITH THE REQUISITE POWER AND AUTHORITY TO OWN AND
USE ITS PROPERTIES AND ASSETS AND TO CARRY ON ITS BUSINESS AS CURRENTLY
CONDUCTED, EXCEPT WHERE THE FAILURE TO BE SO QUALIFIED OR IN GOOD STANDING, AS
THE CASE MAY BE, COULD NOT HAVE OR REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT AND NO PROCEEDING HAS BEEN INSTITUTED IN ANY SUCH
JURISDICTION REVOKING, LIMITING OR CURTAILING OR SEEKING TO REVOKE, LIMIT OR
CURTAIL SUCH POWER AND AUTHORITY OR QUALIFICATION.  NEITHER THE COMPANY NOR ANY
SUBSIDIARY IS IN VIOLATION NOR DEFAULT OF ANY OF THE PROVISIONS OF ITS
RESPECTIVE CERTIFICATE OR ARTICLES OF INCORPORATION, BYLAWS OR OTHER
ORGANIZATIONAL OR CHARTER DOCUMENTS.  EACH OF THE COMPANY AND THE SUBSIDIARIES
IS DULY QUALIFIED TO CONDUCT BUSINESS AND IS IN GOOD STANDING AS A FOREIGN
CORPORATION OR OTHER ENTITY IN EACH JURISDICTION IN WHICH THE NATURE OF THE
BUSINESS CONDUCTED OR PROPERTY OWNED BY IT MAKES SUCH QUALIFICATION NECESSARY,
EXCEPT WHERE THE FAILURE TO BE SO QUALIFIED OR IN GOOD STANDING, AS THE CASE MAY
BE, COULD NOT HAVE OR REASONABLY BE EXPECTED TO RESULT IN: (I) A MATERIAL
ADVERSE EFFECT ON THE LEGALITY, VALIDITY OR ENFORCEABILITY OF ANY TRANSACTION
DOCUMENT, (II) A MATERIAL ADVERSE EFFECT ON THE RESULTS OF OPERATIONS, ASSETS,
BUSINESS, PROSPECTS OR CONDITION (FINANCIAL OR OTHERWISE) OF THE COMPANY AND THE
SUBSIDIARIES, TAKEN AS A WHOLE, OR (III) A MATERIAL ADVERSE EFFECT ON THE
COMPANY’S ABILITY TO PERFORM IN ANY MATERIAL RESPECT ON A TIMELY BASIS ITS
OBLIGATIONS UNDER ANY TRANSACTION DOCUMENT (ANY OF (I), (II) OR (III), A
“MATERIAL ADVERSE EFFECT”) AND NO PROCEEDING HAS BEEN INSTITUTED IN ANY SUCH
JURISDICTION REVOKING, LIMITING OR CURTAILING OR SEEKING TO REVOKE, LIMIT OR
CURTAIL SUCH POWER AND AUTHORITY OR QUALIFICATION.

(C)                AUTHORIZATION; ENFORCEMENT.  THE COMPANY HAS THE REQUISITE
CORPORATE POWER AND AUTHORITY TO ENTER INTO AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION DOCUMENTS AND
OTHERWISE TO CARRY OUT ITS OBLIGATIONS HEREUNDER AND THEREUNDER.  THE EXECUTION
AND DELIVERY OF THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION DOCUMENTS BY
THE COMPANY AND THE CONSUMMATION BY IT OF THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY ACTION ON THE PART OF THE
COMPANY AND NO FURTHER ACTION IS REQUIRED BY THE COMPANY, THE BOARD OF DIRECTORS
OR THE COMPANY’S STOCKHOLDERS IN CONNECTION HEREWITH OR THEREWITH OTHER THAN IN
CONNECTION WITH THE REQUIRED APPROVALS.  THIS AGREEMENT AND EACH OTHER
TRANSACTION DOCUMENT TO WHICH IT IS A PARTY HAS BEEN (OR UPON DELIVERY WILL HAVE
BEEN) DULY EXECUTED BY THE COMPANY AND, WHEN DELIVERED IN ACCORDANCE WITH THE
TERMS HEREOF AND THEREOF, WILL CONSTITUTE THE VALID AND BINDING OBLIGATION OF
THE COMPANY ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE WITH ITS TERMS, EXCEPT
(I) AS LIMITED BY GENERAL EQUITABLE PRINCIPLES AND APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, MORATORIUM AND OTHER LAWS OF GENERAL APPLICATION
AFFECTING ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY, (II) AS LIMITED BY LAWS
RELATING TO THE AVAILABILITY OF SPECIFIC PERFORMANCE, INJUNCTIVE RELIEF OR OTHER
EQUITABLE REMEDIES AND (III) INSOFAR AS INDEMNIFICATION AND CONTRIBUTION
PROVISIONS MAY BE LIMITED BY APPLICABLE LAW.

--------------------------------------------------------------------------------

 

(D)               NO CONFLICTS.  THE EXECUTION, DELIVERY AND PERFORMANCE BY THE
COMPANY OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS TO WHICH IT IS A
PARTY, THE ISSUANCE AND SALE OF THE SECURITIES AND THE CONSUMMATION BY IT OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY DO NOT AND WILL NOT (I) CONFLICT
WITH OR VIOLATE ANY PROVISION OF THE COMPANY’S OR ANY SUBSIDIARY’S CERTIFICATE
OR ARTICLES OF INCORPORATION, BYLAWS OR OTHER ORGANIZATIONAL OR CHARTER
DOCUMENTS, OR (II) CONFLICT WITH, OR CONSTITUTE A DEFAULT (OR AN EVENT THAT WITH
NOTICE OR LAPSE OF TIME OR BOTH WOULD BECOME A DEFAULT) UNDER, RESULT IN THE
CREATION OF ANY LIEN UPON ANY OF THE PROPERTIES OR ASSETS OF THE COMPANY OR ANY
SUBSIDIARY, OR GIVE TO OTHERS ANY RIGHTS OF TERMINATION, AMENDMENT,
ANTI-DILUTION OR SIMILAR ADJUSTMENTS, ACCELERATION OR CANCELLATION (WITH OR
WITHOUT NOTICE, LAPSE OF TIME OR BOTH) OF, ANY AGREEMENT, CREDIT FACILITY, DEBT
OR OTHER INSTRUMENT (EVIDENCING A COMPANY OR SUBSIDIARY DEBT OR OTHERWISE) OR
OTHER UNDERSTANDING TO WHICH THE COMPANY OR ANY SUBSIDIARY IS A PARTY OR BY
WHICH ANY PROPERTY OR ASSET OF THE COMPANY OR ANY SUBSIDIARY IS BOUND OR
AFFECTED, OR (III) SUBJECT TO THE REQUIRED APPROVALS, CONFLICT WITH OR RESULT IN
A VIOLATION OF ANY LAW, RULE, REGULATION, ORDER, JUDGMENT, INJUNCTION, DECREE OR
OTHER RESTRICTION OF ANY COURT OR GOVERNMENTAL AUTHORITY TO WHICH THE COMPANY OR
A SUBSIDIARY IS SUBJECT (INCLUDING FEDERAL AND STATE SECURITIES LAWS AND
REGULATIONS), OR BY WHICH ANY PROPERTY OR ASSET OF THE COMPANY OR A SUBSIDIARY
IS BOUND OR AFFECTED; EXCEPT IN THE CASE OF EACH OF CLAUSES (II) AND (III), SUCH
AS COULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED
TO RESULT IN A MATERIAL ADVERSE EFFECT.

(E)                FILINGS, CONSENTS AND APPROVALS.  THE COMPANY IS NOT REQUIRED
TO OBTAIN ANY CONSENT, WAIVER, AUTHORIZATION OR ORDER OF, GIVE ANY NOTICE TO, OR
MAKE ANY FILING OR REGISTRATION WITH, ANY COURT OR OTHER FEDERAL, STATE, LOCAL
OR OTHER GOVERNMENTAL AUTHORITY OR OTHER PERSON IN CONNECTION WITH THE
EXECUTION, DELIVERY AND PERFORMANCE BY THE COMPANY OF THE TRANSACTION DOCUMENTS,
OTHER THAN: (I) THE FILINGS REQUIRED PURSUANT TO SECTION 4.4 OF THIS AGREEMENT,
(II) THE FILING WITH THE COMMISSION OF THE PROSPECTUS SUPPLEMENT, (III)
APPLICATION(S) TO EACH APPLICABLE TRADING MARKET FOR THE LISTING OF THE SHARES
AND WARRANT SHARES FOR TRADING THEREON IN THE TIME AND MANNER REQUIRED THEREBY,
AND (IV) THE FILING OF FORM D WITH THE COMMISSION AND SUCH FILINGS AS ARE
REQUIRED TO BE MADE UNDER APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE
“REQUIRED APPROVALS”).

(F)                ISSUANCE OF THE SECURITIES; REGISTRATION.  THE SECURITIES ARE
DULY AUTHORIZED AND, WHEN ISSUED AND PAID FOR IN ACCORDANCE WITH THE APPLICABLE
TRANSACTION DOCUMENTS, WILL BE DULY AND VALIDLY ISSUED, FULLY PAID AND
NONASSESSABLE, FREE AND CLEAR OF ALL LIENS IMPOSED BY THE COMPANY.  THE WARRANT
SHARES, WHEN ISSUED IN ACCORDANCE WITH THE TERMS OF THE WARRANTS, WILL BE
VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE, FREE AND CLEAR OF ALL LIENS
IMPOSED BY THE COMPANY.  THE COMPANY HAS RESERVED FROM ITS DULY AUTHORIZED
CAPITAL STOCK THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK ISSUABLE PURSUANT TO
THIS AGREEMENT AND THE WARRANTS. THE COMPANY HAS PREPARED AND FILED THE
REGISTRATION STATEMENT IN CONFORMITY WITH THE REQUIREMENTS OF THE SECURITIES
ACT, WHICH BECAME EFFECTIVE ON SEPTEMBER 1, 2020 (THE “EFFECTIVE DATE”),
INCLUDING THE PROSPECTUS, AND SUCH AMENDMENTS AND SUPPLEMENTS THERETO AS MAY
HAVE BEEN REQUIRED TO THE DATE OF THIS AGREEMENT.  THE REGISTRATION STATEMENT IS
EFFECTIVE UNDER THE SECURITIES ACT AND NO STOP ORDER PREVENTING OR SUSPENDING
THE EFFECTIVENESS OF THE REGISTRATION STATEMENT OR SUSPENDING OR PREVENTING THE
USE OF THE PROSPECTUS HAS BEEN ISSUED BY THE COMMISSION AND NO PROCEEDINGS FOR
THAT PURPOSE HAVE BEEN INSTITUTED OR, TO THE KNOWLEDGE OF THE COMPANY, ARE
THREATENED BY THE COMMISSION.  THE COMPANY, IF REQUIRED BY THE RULES AND
REGULATIONS OF THE COMMISSION, SHALL FILE THE PROSPECTUS WITH THE COMMISSION
PURSUANT TO RULE 424(B).  AT THE TIME THE REGISTRATION STATEMENT AND ANY
AMENDMENTS THERETO BECAME EFFECTIVE, AT THE DATE OF THIS AGREEMENT AND AT THE
CLOSING DATE, THE REGISTRATION STATEMENT AND ANY AMENDMENTS THERETO CONFORMED
AND WILL CONFORM IN ALL MATERIAL RESPECTS TO THE REQUIREMENTS OF THE SECURITIES
ACT AND DID NOT AND WILL NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR
OMIT TO STATE ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO
MAKE THE STATEMENTS THEREIN NOT MISLEADING; AND THE PROSPECTUS AND ANY
AMENDMENTS OR SUPPLEMENTS THERETO, AT THE TIME THE PROSPECTUS OR ANY AMENDMENT
OR SUPPLEMENT THERETO WAS ISSUED AND AT THE CLOSING DATE, CONFORMED AND WILL
CONFORM IN ALL MATERIAL RESPECTS TO THE REQUIREMENTS OF THE SECURITIES ACT AND
DID NOT AND WILL NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN, IN THE
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING. THE
COMPANY WAS AT THE TIME OF THE FILING OF THE REGISTRATION STATEMENT ELIGIBLE TO
USE FORM S-3. THE COMPANY IS ELIGIBLE TO USE FORM S-3 UNDER THE SECURITIES ACT
AND IT MEETS THE TRANSACTION REQUIREMENTS WITH RESPECT TO THE AGGREGATE MARKET
VALUE OF THE SHARES BEING SOLD PURSUANT TO THIS OFFERING AND DURING THE TWELVE
(12) MONTHS PRIOR TO THIS OFFERING, AS SET FORTH IN GENERAL INSTRUCTION I.B.6 OF
FORM S-3.

--------------------------------------------------------------------------------

 

(G)               CAPITALIZATION.  THE CAPITALIZATION OF THE COMPANY AS OF THE
DATE HEREOF IS AS SET FORTH ON SCHEDULE 3.1(G), WHICH SCHEDULE 3.1(G) SHALL ALSO
INCLUDE THE NUMBER OF SHARES OF COMMON STOCK THAT, TO THE KNOWLEDGE OF THE
COMPANY BASED SOLELY ON A REVIEW OF FILINGS BY AFFILIATES PURSUANT TO REGULATION
13D AND SECTION 16 OF THE EXCHANGE ACT, ARE OWNED BENEFICIALLY, AND OF RECORD,
BY AFFILIATES OF THE COMPANY AS OF THE DATE HEREOF.  THE COMPANY HAS NOT ISSUED
ANY CAPITAL STOCK SINCE ITS MOST RECENTLY FILED PERIODIC REPORT UNDER THE
EXCHANGE ACT, OTHER THAN PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS
UNDER THE COMPANY’S STOCK OPTION PLANS, THE ISSUANCE OF SHARES OF COMMON STOCK
TO EMPLOYEES PURSUANT TO THE COMPANY’S EMPLOYEE STOCK PURCHASE PLANS AND
PURSUANT TO THE CONVERSION AND/OR EXERCISE OF COMMON STOCK EQUIVALENTS
OUTSTANDING AS OF THE DATE OF THE MOST RECENTLY FILED PERIODIC REPORT UNDER THE
EXCHANGE ACT.  NO PERSON HAS ANY RIGHT OF FIRST REFUSAL, PREEMPTIVE RIGHT, RIGHT
OF PARTICIPATION, OR ANY SIMILAR RIGHT TO PARTICIPATE IN THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS.  EXCEPT AS A RESULT OF THE PURCHASE
AND SALE OF THE SECURITIES AND AS SET FORTH ON SCHEDULE 3.1(G), THERE ARE NO
OUTSTANDING OPTIONS, WARRANTS, SCRIP RIGHTS TO SUBSCRIBE TO, CALLS OR
COMMITMENTS OF ANY CHARACTER WHATSOEVER RELATING TO, OR SECURITIES, RIGHTS OR
OBLIGATIONS CONVERTIBLE INTO OR EXERCISABLE OR EXCHANGEABLE FOR, OR GIVING ANY
PERSON ANY RIGHT TO SUBSCRIBE FOR OR ACQUIRE, ANY SHARES OF COMMON STOCK OR THE
CAPITAL STOCK OF ANY SUBSIDIARY, OR CONTRACTS, COMMITMENTS, UNDERSTANDINGS OR
ARRANGEMENTS BY WHICH THE COMPANY OR ANY SUBSIDIARY IS OR MAY BECOME BOUND TO
ISSUE ADDITIONAL SHARES OF COMMON STOCK OR COMMON STOCK EQUIVALENTS OR CAPITAL
STOCK OF ANY SUBSIDIARY.  THE ISSUANCE AND SALE OF THE SECURITIES WILL NOT
OBLIGATE THE COMPANY OR ANY SUBSIDIARY TO ISSUE SHARES OF COMMON STOCK OR OTHER
SECURITIES TO ANY PERSON (OTHER THAN THE PURCHASERS). THERE ARE NO OUTSTANDING
SECURITIES OR INSTRUMENTS OF THE COMPANY OR ANY SUBSIDIARY WITH ANY PROVISION
THAT ADJUSTS THE EXERCISE, CONVERSION, EXCHANGE OR RESET PRICE OF SUCH SECURITY
OR INSTRUMENT UPON AN ISSUANCE OF SECURITIES BY THE COMPANY OR ANY SUBSIDIARY. 
THERE ARE NO OUTSTANDING SECURITIES OR INSTRUMENTS OF THE COMPANY OR ANY
SUBSIDIARY THAT CONTAIN ANY REDEMPTION OR SIMILAR PROVISIONS, AND THERE ARE NO
CONTRACTS, COMMITMENTS, UNDERSTANDINGS OR ARRANGEMENTS BY WHICH THE COMPANY OR
ANY SUBSIDIARY IS OR MAY BECOME BOUND TO REDEEM A SECURITY OF THE COMPANY OR
SUCH SUBSIDIARY. THE COMPANY DOES NOT HAVE ANY STOCK APPRECIATION RIGHTS OR
“PHANTOM STOCK” PLANS OR AGREEMENTS OR ANY SIMILAR PLAN OR AGREEMENT. ALL OF THE
OUTSTANDING SHARES OF CAPITAL STOCK OF THE COMPANY ARE DULY AUTHORIZED, VALIDLY
ISSUED, FULLY PAID AND NONASSESSABLE, HAVE BEEN ISSUED IN COMPLIANCE WITH ALL
FEDERAL AND STATE SECURITIES LAWS, AND NONE OF SUCH OUTSTANDING SHARES WAS
ISSUED IN VIOLATION OF ANY PREEMPTIVE RIGHTS OR SIMILAR RIGHTS TO SUBSCRIBE FOR
OR PURCHASE SECURITIES.  NO FURTHER APPROVAL OR AUTHORIZATION OF ANY
STOCKHOLDER, THE BOARD OF DIRECTORS OR OTHERS IS REQUIRED FOR THE ISSUANCE AND
SALE OF THE SECURITIES.  THERE ARE NO STOCKHOLDERS AGREEMENTS, VOTING AGREEMENTS
OR OTHER SIMILAR AGREEMENTS WITH RESPECT TO THE COMPANY’S CAPITAL STOCK TO WHICH
THE COMPANY IS A PARTY OR, TO THE KNOWLEDGE OF THE COMPANY, BETWEEN OR AMONG ANY
OF THE COMPANY’S STOCKHOLDERS.

(H)               SEC REPORTS; FINANCIAL STATEMENTS.  THE COMPANY HAS FILED ALL
REPORTS, SCHEDULES, FORMS, STATEMENTS AND OTHER DOCUMENTS REQUIRED TO BE FILED
BY THE COMPANY UNDER THE SECURITIES ACT AND THE EXCHANGE ACT, INCLUDING PURSUANT
TO SECTION 13(A) OR 15(D) THEREOF, FOR THE TWO YEARS PRECEDING THE DATE HEREOF
(OR SUCH SHORTER PERIOD AS THE COMPANY WAS REQUIRED BY LAW OR REGULATION TO FILE
SUCH MATERIAL) (THE FOREGOING MATERIALS, INCLUDING THE EXHIBITS THERETO AND
DOCUMENTS INCORPORATED BY REFERENCE THEREIN, TOGETHER WITH THE PROSPECTUS AND
THE PROSPECTUS SUPPLEMENT, BEING COLLECTIVELY REFERRED TO HEREIN AS THE “SEC
REPORTS”) ON A TIMELY BASIS OR HAS RECEIVED A VALID EXTENSION OF SUCH TIME OF
FILING AND HAS FILED ANY SUCH SEC REPORTS PRIOR TO THE EXPIRATION OF ANY SUCH
EXTENSION.  AS OF THEIR RESPECTIVE DATES, THE SEC REPORTS COMPLIED IN ALL
MATERIAL RESPECTS WITH THE REQUIREMENTS OF THE SECURITIES ACT AND THE EXCHANGE
ACT, AS APPLICABLE, AND NONE OF THE SEC REPORTS, WHEN FILED, CONTAINED ANY
UNTRUE STATEMENT OF A MATERIAL FACT OR OMITTED TO STATE A MATERIAL FACT REQUIRED
TO BE STATED THEREIN OR NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN, IN
THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING. THE
COMPANY HAS NEVER BEEN AN ISSUER SUBJECT TO RULE 144(I) UNDER THE SECURITIES
ACT. THE FINANCIAL STATEMENTS OF THE COMPANY INCLUDED IN THE SEC REPORTS COMPLY
IN ALL MATERIAL RESPECTS WITH APPLICABLE ACCOUNTING REQUIREMENTS AND THE RULES
AND REGULATIONS OF THE COMMISSION WITH RESPECT THERETO AS IN EFFECT AT THE TIME
OF FILING.  SUCH FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH
UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED ON A CONSISTENT
BASIS DURING THE PERIODS INVOLVED (“GAAP”), EXCEPT AS MAY BE OTHERWISE SPECIFIED
IN SUCH FINANCIAL STATEMENTS OR THE NOTES THERETO AND EXCEPT THAT UNAUDITED
FINANCIAL STATEMENTS MAY NOT CONTAIN ALL FOOTNOTES REQUIRED BY GAAP, AND FAIRLY
PRESENT IN ALL MATERIAL RESPECTS THE FINANCIAL POSITION OF THE COMPANY AND ITS
CONSOLIDATED SUBSIDIARIES AS OF AND FOR THE DATES THEREOF AND THE RESULTS OF
OPERATIONS AND CASH FLOWS FOR THE PERIODS THEN ENDED, SUBJECT, IN THE CASE OF
UNAUDITED STATEMENTS, TO NORMAL, IMMATERIAL, YEAR-END AUDIT ADJUSTMENTS.

--------------------------------------------------------------------------------

 

(I)                 MATERIAL CHANGES; UNDISCLOSED EVENTS, LIABILITIES OR
DEVELOPMENTS.  SINCE THE DATE OF THE LATEST AUDITED FINANCIAL STATEMENTS
INCLUDED WITHIN THE SEC REPORTS, EXCEPT AS SET FORTH ON SCHEDULE 3.1(I), (I)
THERE HAS BEEN NO EVENT, OCCURRENCE OR DEVELOPMENT THAT HAS HAD OR THAT COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, (II) THE COMPANY
HAS NOT INCURRED ANY LIABILITIES (CONTINGENT OR OTHERWISE) OTHER THAN (A) TRADE
PAYABLES AND ACCRUED EXPENSES INCURRED IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE AND (B) LIABILITIES NOT REQUIRED TO BE REFLECTED
IN THE COMPANY’S FINANCIAL STATEMENTS PURSUANT TO GAAP OR DISCLOSED IN FILINGS
MADE WITH THE COMMISSION, (III) THE COMPANY HAS NOT ALTERED ITS METHOD OF
ACCOUNTING, (IV) THE COMPANY HAS NOT DECLARED OR MADE ANY DIVIDEND OR
DISTRIBUTION OF CASH OR OTHER PROPERTY TO ITS STOCKHOLDERS OR PURCHASED,
REDEEMED OR MADE ANY AGREEMENTS TO PURCHASE OR REDEEM ANY SHARES OF ITS CAPITAL
STOCK AND (V) THE COMPANY HAS NOT ISSUED ANY EQUITY SECURITIES TO ANY OFFICER,
DIRECTOR OR AFFILIATE, EXCEPT PURSUANT TO EXISTING COMPANY STOCK OPTION PLANS. 
THE COMPANY DOES NOT HAVE PENDING BEFORE THE COMMISSION ANY REQUEST FOR
CONFIDENTIAL TREATMENT OF INFORMATION.  EXCEPT FOR THE ISSUANCE OF THE
SECURITIES CONTEMPLATED BY THIS AGREEMENT OR AS SET FORTH ON SCHEDULE 3.1(I), NO
EVENT, LIABILITY, FACT, CIRCUMSTANCE, OCCURRENCE OR DEVELOPMENT HAS OCCURRED OR
EXISTS OR IS REASONABLY EXPECTED TO OCCUR OR EXIST WITH RESPECT TO THE COMPANY
OR ITS SUBSIDIARIES OR THEIR RESPECTIVE BUSINESSES, PROSPECTS, PROPERTIES,
OPERATIONS, ASSETS OR FINANCIAL CONDITION THAT WOULD BE REQUIRED TO BE DISCLOSED
BY THE COMPANY UNDER APPLICABLE SECURITIES LAWS AT THE TIME THIS REPRESENTATION
IS MADE OR DEEMED MADE THAT HAS NOT BEEN PUBLICLY DISCLOSED AT LEAST 1 TRADING
DAY PRIOR TO THE DATE THAT THIS REPRESENTATION IS MADE.

(J)                 LITIGATION.  EXCEPT AS SET FORTH ON SCHEDULE 3.1(J), THERE
IS NO ACTION, SUIT, INQUIRY, NOTICE OF VIOLATION, PROCEEDING OR INVESTIGATION
PENDING OR, TO THE KNOWLEDGE OF THE COMPANY, THREATENED AGAINST OR AFFECTING THE
COMPANY, ANY SUBSIDIARY OR ANY OF THEIR RESPECTIVE PROPERTIES BEFORE OR BY ANY
COURT, ARBITRATOR, GOVERNMENTAL OR ADMINISTRATIVE AGENCY OR REGULATORY AUTHORITY
(FEDERAL, STATE, COUNTY, LOCAL OR FOREIGN) (COLLECTIVELY, AN “ACTION”).  EXCEPT
AS SET FORTH ON SCHEDULE 3.1(J), NONE OF THE ACTIONS SET FORTH ON SCHEDULE
3.1(J) (I) ADVERSELY AFFECTS OR CHALLENGES THE LEGALITY, VALIDITY OR
ENFORCEABILITY OF ANY OF THE TRANSACTION DOCUMENTS OR THE SECURITIES OR (II)
COULD, IF THERE WERE AN UNFAVORABLE DECISION, HAVE OR REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT.  NEITHER THE COMPANY NOR ANY SUBSIDIARY,
NOR ANY DIRECTOR OR OFFICER THEREOF, IS OR HAS BEEN THE SUBJECT OF ANY ACTION
INVOLVING A CLAIM OF VIOLATION OF OR LIABILITY UNDER FEDERAL OR STATE SECURITIES
LAWS OR A CLAIM OF BREACH OF FIDUCIARY DUTY SINCE JANUARY 1, 2015.  THERE HAS
NOT BEEN, AND TO THE KNOWLEDGE OF THE COMPANY, THERE IS NOT PENDING OR
CONTEMPLATED, ANY INVESTIGATION BY THE COMMISSION INVOLVING THE COMPANY OR ANY
CURRENT OR FORMER DIRECTOR OR OFFICER OF THE COMPANY.  THE COMMISSION HAS NOT
ISSUED ANY STOP ORDER OR OTHER ORDER SUSPENDING THE EFFECTIVENESS OF ANY
REGISTRATION STATEMENT FILED BY THE COMPANY OR ANY SUBSIDIARY UNDER THE EXCHANGE
ACT OR THE SECURITIES ACT. 

(K)               LABOR RELATIONS.  NO LABOR DISPUTE EXISTS OR, TO THE KNOWLEDGE
OF THE COMPANY, IS IMMINENT WITH RESPECT TO ANY OF THE EMPLOYEES OF THE COMPANY,
WHICH COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.  NONE
OF THE COMPANY’S OR ITS SUBSIDIARIES’ EMPLOYEES IS A MEMBER OF A UNION THAT
RELATES TO SUCH EMPLOYEE’S RELATIONSHIP WITH THE COMPANY OR SUCH SUBSIDIARY, AND
NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS A PARTY TO A COLLECTIVE
BARGAINING AGREEMENT, AND THE COMPANY AND ITS SUBSIDIARIES BELIEVE THAT THEIR
RELATIONSHIPS WITH THEIR EMPLOYEES ARE GOOD.  TO THE KNOWLEDGE OF THE COMPANY,
NO EXECUTIVE OFFICER OF THE COMPANY OR ANY SUBSIDIARY, IS, OR IS NOW EXPECTED TO
BE, IN VIOLATION OF ANY MATERIAL TERM OF ANY EMPLOYMENT CONTRACT,
CONFIDENTIALITY, DISCLOSURE OR PROPRIETARY INFORMATION AGREEMENT OR
NON-COMPETITION AGREEMENT, OR ANY OTHER CONTRACT OR AGREEMENT OR ANY RESTRICTIVE
COVENANT IN FAVOR OF ANY THIRD PARTY, AND THE CONTINUED EMPLOYMENT OF EACH SUCH
EXECUTIVE OFFICER DOES NOT SUBJECT THE COMPANY OR ANY OF ITS SUBSIDIARIES TO ANY
LIABILITY WITH RESPECT TO ANY OF THE FOREGOING MATTERS.  THE COMPANY AND ITS
SUBSIDIARIES ARE IN COMPLIANCE WITH ALL U.S. FEDERAL, STATE, LOCAL AND FOREIGN
LAWS AND REGULATIONS RELATING TO EMPLOYMENT AND EMPLOYMENT PRACTICES, TERMS AND
CONDITIONS OF EMPLOYMENT AND WAGES AND HOURS, EXCEPT WHERE THE FAILURE TO BE IN
COMPLIANCE COULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT.

(L)                 COMPLIANCE.  NEITHER THE COMPANY NOR ANY SUBSIDIARY: (I) IS
IN DEFAULT UNDER OR IN VIOLATION OF (AND NO EVENT HAS OCCURRED THAT HAS NOT BEEN
WAIVED THAT, WITH NOTICE OR LAPSE OF TIME OR BOTH, WOULD RESULT IN A DEFAULT BY
THE COMPANY OR ANY SUBSIDIARY UNDER), NOR HAS THE COMPANY OR ANY SUBSIDIARY
RECEIVED NOTICE OF A CLAIM THAT IT IS IN DEFAULT UNDER OR THAT IT IS IN
VIOLATION OF, ANY INDENTURE, LOAN OR CREDIT AGREEMENT OR ANY OTHER AGREEMENT OR
INSTRUMENT TO WHICH IT IS A PARTY OR BY WHICH IT OR ANY OF ITS PROPERTIES IS
BOUND (WHETHER OR NOT SUCH DEFAULT OR VIOLATION HAS BEEN WAIVED), (II) IS IN
VIOLATION OF ANY JUDGMENT, DECREE OR ORDER OF ANY COURT, ARBITRATOR
OR OTHER GOVERNMENTAL AUTHORITY OR (III) IS OR HAS BEEN IN VIOLATION OF ANY
STATUTE, RULE, ORDINANCE OR REGULATION OF ANY GOVERNMENTAL AUTHORITY, INCLUDING
WITHOUT LIMITATION ALL FOREIGN, FEDERAL, STATE AND LOCAL LAWS RELATING TO TAXES,
ENVIRONMENTAL PROTECTION, OCCUPATIONAL HEALTH AND SAFETY, PRODUCT QUALITY AND
SAFETY AND EMPLOYMENT AND LABOR MATTERS, EXCEPT IN EACH CASE AS COULD NOT
HAVE OR REASONABLY BE EXPECTED, INDIVIDUALLY OR IN THE AGGREGATE, TO RESULT IN A
MATERIAL ADVERSE EFFECT.

--------------------------------------------------------------------------------

 

(M)             ENVIRONMENTAL LAWS.  THE COMPANY AND ITS SUBSIDIARIES (I) ARE IN
COMPLIANCE WITH ALL FEDERAL, STATE, LOCAL AND FOREIGN LAWS RELATING TO POLLUTION
OR PROTECTION OF HUMAN HEALTH OR THE ENVIRONMENT (INCLUDING AMBIENT AIR, SURFACE
WATER, GROUNDWATER, LAND SURFACE OR SUBSURFACE STRATA), INCLUDING LAWS RELATING
TO EMISSIONS, DISCHARGES, RELEASES OR THREATENED RELEASES OF CHEMICALS,
POLLUTANTS, CONTAMINANTS, OR TOXIC OR HAZARDOUS SUBSTANCES OR WASTES
(COLLECTIVELY, “HAZARDOUS MATERIALS”) INTO THE ENVIRONMENT, OR OTHERWISE
RELATING TO THE MANUFACTURE, PROCESSING, DISTRIBUTION, USE, TREATMENT, STORAGE,
DISPOSAL, TRANSPORT OR HANDLING OF HAZARDOUS MATERIALS, AS WELL AS ALL
AUTHORIZATIONS, CODES, DECREES, DEMANDS, OR DEMAND LETTERS, INJUNCTIONS,
JUDGMENTS, LICENSES, NOTICES OR NOTICE LETTERS, ORDERS, PERMITS, PLANS OR
REGULATIONS, ISSUED, ENTERED, PROMULGATED OR APPROVED THEREUNDER (“ENVIRONMENTAL
LAWS”); (II) HAVE RECEIVED ALL PERMITS LICENSES OR OTHER APPROVALS REQUIRED OF
THEM UNDER APPLICABLE ENVIRONMENTAL LAWS TO CONDUCT THEIR RESPECTIVE BUSINESSES;
AND (III) ARE IN COMPLIANCE WITH ALL TERMS AND CONDITIONS OF ANY SUCH PERMIT,
LICENSE OR APPROVAL WHERE IN EACH CLAUSE (I), (II) AND (III), THE FAILURE TO SO
COMPLY COULD BE REASONABLY EXPECTED TO HAVE, INDIVIDUALLY OR IN THE AGGREGATE, A
MATERIAL ADVERSE EFFECT.

(N)               REGULATORY PERMITS.  THE COMPANY AND THE SUBSIDIARIES POSSESS
ALL CERTIFICATES, AUTHORIZATIONS AND PERMITS ISSUED BY THE APPROPRIATE FEDERAL,
STATE, LOCAL OR FOREIGN REGULATORY AUTHORITIES NECESSARY TO CONDUCT THEIR
RESPECTIVE BUSINESSES AS DESCRIBED IN THE SEC REPORTS, EXCEPT WHERE THE FAILURE
TO POSSESS SUCH PERMITS COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL
ADVERSE EFFECT (“MATERIAL PERMITS”), AND TO THE BEST OF THE COMPANY’S KNOWLEDGE,
NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS RECEIVED ANY NOTICE OF PROCEEDINGS
RELATING TO THE REVOCATION OR MODIFICATION OF ANY MATERIAL PERMIT.

(O)               TITLE TO ASSETS.  THE COMPANY AND THE SUBSIDIARIES HAVE GOOD
AND MARKETABLE TITLE IN FEE SIMPLE TO ALL REAL PROPERTY OWNED BY THEM AND GOOD
AND MARKETABLE TITLE IN ALL PERSONAL PROPERTY OWNED BY THEM THAT IS MATERIAL TO
THE BUSINESS OF THE COMPANY AND THE SUBSIDIARIES, IN EACH CASE FREE AND CLEAR OF
ALL LIENS, EXCEPT FOR (I) LIENS AS DO NOT MATERIALLY AFFECT THE VALUE OF SUCH
PROPERTY AND DO NOT MATERIALLY INTERFERE WITH THE USE MADE AND PROPOSED TO BE
MADE OF SUCH PROPERTY BY THE COMPANY AND THE SUBSIDIARIES AND (II) LIENS FOR THE
PAYMENT OF FEDERAL, STATE OR OTHER TAXES, FOR WHICH APPROPRIATE RESERVES HAVE
BEEN MADE THEREFOR IN ACCORDANCE WITH GAAP AND, THE PAYMENT OF WHICH IS NEITHER
DELINQUENT NOR SUBJECT TO PENALTIES.  ANY REAL PROPERTY AND FACILITIES HELD
UNDER LEASE BY THE COMPANY AND THE SUBSIDIARIES ARE HELD BY THEM UNDER VALID,
SUBSISTING AND ENFORCEABLE LEASES WITH WHICH THE COMPANY AND THE SUBSIDIARIES
ARE IN COMPLIANCE.

(P)               INTELLECTUAL PROPERTY.  THE COMPANY AND THE SUBSIDIARIES HAVE,
OR HAVE RIGHTS TO USE, OR CAN ACQUIRE ON REASONABLE TERMS, ALL PATENTS, PATENT
APPLICATIONS, TRADEMARKS, TRADEMARK APPLICATIONS, SERVICE MARKS, TRADE
NAMES, TRADE SECRETS, INVENTIONS, COPYRIGHTS, LICENSES AND OTHER INTELLECTUAL
PROPERTY RIGHTS AND SIMILAR RIGHTS NECESSARY OR REQUIRED FOR USE IN CONNECTION
WITH THEIR RESPECTIVE BUSINESSES AS DESCRIBED IN THE SEC REPORTS AND WHICH THE
FAILURE TO SO HAVE COULD HAVE A MATERIAL ADVERSE EFFECT (COLLECTIVELY,
THE “INTELLECTUAL PROPERTY RIGHTS”).  EXCEPT AS DISCLOSED IN THE SEC REPORTS,
NONE OF, AND NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS RECEIVED A NOTICE
(WRITTEN OR OTHERWISE) THAT ANY OF, THE INTELLECTUAL PROPERTY RIGHTS HAS
EXPIRED, TERMINATED OR BEEN ABANDONED, OR IS EXPECTED TO EXPIRE OR TERMINATE OR
BE ABANDONED, WITHIN TWO (2) YEARS FROM THE DATE OF THIS AGREEMENT, EXCEPT WHERE
SUCH EXPIRATION, TERMINATION OR ABANDONMENT COULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  TO THE
BEST OF THE COMPANY’S KNOWLEDGE, NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS
RECEIVED, SINCE THE DATE OF THE LATEST AUDITED FINANCIAL STATEMENTS INCLUDED
WITHIN THE SEC REPORTS, A WRITTEN NOTICE OF A CLAIM OR OTHERWISE HAS ANY
KNOWLEDGE THAT THE INTELLECTUAL PROPERTY RIGHTS VIOLATE OR INFRINGE UPON THE
RIGHTS OF ANY PERSON, EXCEPT AS COULD NOT HAVE OR REASONABLY BE EXPECTED TO NOT
HAVE A MATERIAL ADVERSE EFFECT.  EXCEPT AS DISCLOSED IN THE SEC REPORTS, TO THE
KNOWLEDGE OF THE COMPANY, ALL SUCH INTELLECTUAL PROPERTY RIGHTS ARE ENFORCEABLE
AND THE COMPANY HAS NOT ASSERTED ANY INFRINGEMENT BY ANOTHER PERSON OF ANY OF
THE INTELLECTUAL PROPERTY RIGHTS.  THE COMPANY AND ITS SUBSIDIARIES HAVE TAKEN
REASONABLE SECURITY MEASURES TO PROTECT THE SECRECY, CONFIDENTIALITY AND VALUE
OF ALL OF THEIR INTELLECTUAL PROPERTY RIGHTS, EXCEPT WHERE FAILURE TO DO SO
COULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

--------------------------------------------------------------------------------

 

(Q)               INSURANCE.  THE COMPANY AND THE SUBSIDIARIES ARE INSURED BY
INSURERS OF RECOGNIZED FINANCIAL RESPONSIBILITY AGAINST SUCH LOSSES AND RISKS
AND IN SUCH AMOUNTS AS ARE PRUDENT AND CUSTOMARY IN THE BUSINESSES IN WHICH THE
COMPANY AND THE SUBSIDIARIES ARE ENGAGED, INCLUDING, BUT NOT LIMITED TO,
DIRECTORS AND OFFICERS INSURANCE COVERAGE AT LEAST EQUAL TO THE AGGREGATE
SUBSCRIPTION AMOUNT.  NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS ANY REASON TO
BELIEVE THAT IT WILL NOT BE ABLE TO RENEW ITS EXISTING INSURANCE COVERAGE AS AND
WHEN SUCH COVERAGE EXPIRES OR TO OBTAIN SIMILAR COVERAGE FROM SIMILAR INSURERS
AS MAY BE NECESSARY TO CONTINUE ITS BUSINESS WITHOUT A SIGNIFICANT INCREASE IN
COST.

(R)                TRANSACTIONS WITH AFFILIATES AND EMPLOYEES.  EXCEPT AS SET
FORTH ON SCHEDULE 3.1(R), NONE OF THE OFFICERS OR DIRECTORS OF THE COMPANY OR
ANY SUBSIDIARY AND, TO THE KNOWLEDGE OF THE COMPANY, NONE OF THE EMPLOYEES OF
THE COMPANY OR ANY SUBSIDIARY IS PRESENTLY A PARTY TO ANY TRANSACTION WITH THE
COMPANY OR ANY SUBSIDIARY (OTHER THAN FOR SERVICES AS EMPLOYEES, OFFICERS AND
DIRECTORS), INCLUDING ANY CONTRACT, AGREEMENT OR OTHER ARRANGEMENT PROVIDING FOR
THE FURNISHING OF SERVICES TO OR BY, PROVIDING FOR RENTAL OF REAL OR PERSONAL
PROPERTY TO OR FROM, PROVIDING FOR THE BORROWING OF MONEY FROM OR LENDING OF
MONEY TO OR OTHERWISE REQUIRING PAYMENTS TO OR FROM ANY OFFICER, DIRECTOR OR
SUCH EMPLOYEE OR, TO THE KNOWLEDGE OF THE COMPANY, ANY ENTITY IN WHICH ANY
OFFICER, DIRECTOR, OR ANY SUCH EMPLOYEE HAS A SUBSTANTIAL INTEREST OR IS AN
OFFICER, DIRECTOR, TRUSTEE, STOCKHOLDER, MEMBER OR PARTNER, IN EACH CASE IN
EXCESS OF $120,000 OTHER THAN FOR (I) PAYMENT OF SALARY OR CONSULTING FEES FOR
SERVICES RENDERED, (II) REIMBURSEMENT FOR EXPENSES INCURRED ON BEHALF OF THE
COMPANY AND (III) OTHER EMPLOYEE BENEFITS, INCLUDING STOCK OPTION AGREEMENTS
UNDER ANY STOCK OPTION PLAN OF THE COMPANY.

(S)                SARBANES-OXLEY; INTERNAL ACCOUNTING CONTROLS.  THE
COMPANY AND THE SUBSIDIARIES ARE IN COMPLIANCE WITH ANY AND ALL APPLICABLE
REQUIREMENTS OF THE SARBANES-OXLEY ACT OF 2002 THAT ARE EFFECTIVE AS OF THE DATE
HEREOF, AND ANY AND ALL APPLICABLE RULES AND REGULATIONS PROMULGATED BY THE
COMMISSION THEREUNDER THAT ARE EFFECTIVE AS OF THE DATE HEREOF AND AS OF THE
CLOSING DATE.  THE COMPANY AND THE SUBSIDIARIES MAINTAIN A SYSTEM OF INTERNAL
ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE REASONABLE ASSURANCE THAT: (I)
TRANSACTIONS ARE EXECUTED IN ACCORDANCE WITH MANAGEMENT’S GENERAL OR SPECIFIC
AUTHORIZATIONS, (II) TRANSACTIONS ARE RECORDED AS NECESSARY TO PERMIT
PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH GAAP AND TO MAINTAIN
ASSET ACCOUNTABILITY, (III) ACCESS TO ASSETS IS PERMITTED ONLY IN ACCORDANCE
WITH MANAGEMENT’S GENERAL OR SPECIFIC AUTHORIZATION, AND (IV) THE RECORDED
ACCOUNTABILITY FOR ASSETS IS COMPARED WITH THE EXISTING ASSETS AT REASONABLE
INTERVALS AND APPROPRIATE ACTION IS TAKEN WITH RESPECT TO ANY DIFFERENCES. THE
COMPANY AND THE SUBSIDIARIES HAVE ESTABLISHED DISCLOSURE CONTROLS AND PROCEDURES
(AS DEFINED IN EXCHANGE ACT RULES 13A-15(E) AND 15D-15(E)) FOR THE COMPANY AND
THE SUBSIDIARIES AND DESIGNED SUCH DISCLOSURE CONTROLS AND PROCEDURES TO ENSURE
THAT INFORMATION REQUIRED TO BE DISCLOSED BY THE COMPANY IN THE REPORTS IT FILES
OR SUBMITS UNDER THE EXCHANGE ACT IS RECORDED, PROCESSED, SUMMARIZED AND
REPORTED, WITHIN THE TIME PERIODS SPECIFIED IN THE COMMISSION’S RULES AND
FORMS.  THE COMPANY’S CERTIFYING OFFICERS HAVE EVALUATED THE EFFECTIVENESS OF
THE DISCLOSURE CONTROLS AND PROCEDURES OF THE COMPANY AND THE SUBSIDIARIES AS OF
THE END OF THE PERIOD COVERED BY THE MOST RECENTLY FILED PERIODIC REPORT UNDER
THE EXCHANGE ACT (SUCH DATE, THE “EVALUATION DATE”).  THE COMPANY PRESENTED IN
ITS MOST RECENTLY FILED PERIODIC REPORT UNDER THE EXCHANGE ACT THE CONCLUSIONS
OF THE CERTIFYING OFFICERS ABOUT THE EFFECTIVENESS OF THE DISCLOSURE CONTROLS
AND PROCEDURES BASED ON THEIR EVALUATIONS AS OF THE EVALUATION DATE.  SINCE THE
EVALUATION DATE, THERE HAVE BEEN NO CHANGES IN THE INTERNAL CONTROL OVER
FINANCIAL REPORTING (AS SUCH TERM IS DEFINED IN THE EXCHANGE ACT) OF THE COMPANY
AND ITS SUBSIDIARIES THAT HAVE MATERIALLY AFFECTED, OR IS REASONABLY LIKELY TO
MATERIALLY AFFECT, THE INTERNAL CONTROL OVER FINANCIAL REPORTING OF THE COMPANY
AND ITS SUBSIDIARIES.

(T)                 CERTAIN FEES.  EXCEPT AS SET FORTH IN THE PROSPECTUS
SUPPLEMENT, NO BROKERAGE OR FINDER’S FEES OR COMMISSIONS ARE OR WILL BE PAYABLE
BY THE COMPANY OR ANY SUBSIDIARY TO ANY BROKER, FINANCIAL ADVISOR OR CONSULTANT,
FINDER, PLACEMENT AGENT, INVESTMENT BANKER, BANK OR OTHER PERSON WITH RESPECT TO
THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS.  THE PURCHASERS
SHALL HAVE NO OBLIGATION WITH RESPECT TO ANY FEES OR WITH RESPECT TO ANY CLAIMS
MADE BY OR ON BEHALF OF OTHER PERSONS FOR FEES OF A TYPE CONTEMPLATED IN THIS
SECTION THAT MAY BE DUE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THE
TRANSACTION DOCUMENTS.

(U)               INVESTMENT COMPANY. THE COMPANY IS NOT, AND IS NOT AN
AFFILIATE OF, AND IMMEDIATELY AFTER RECEIPT OF PAYMENT FOR THE SECURITIES, WILL
NOT BE OR BE AN AFFILIATE OF, AN “INVESTMENT COMPANY” WITHIN THE MEANING OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED.  THE COMPANY SHALL CONDUCT ITS
BUSINESS IN A MANNER SO THAT IT WILL NOT BECOME AN “INVESTMENT COMPANY” SUBJECT
TO REGISTRATION UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.

--------------------------------------------------------------------------------

 

(V)               REGISTRATION RIGHTS.  EXCEPT AS SET FORTH ON SCHEDULE 3.1(V),
NO PERSON HAS ANY RIGHT TO CAUSE THE COMPANY OR ANY SUBSIDIARY TO EFFECT THE
REGISTRATION UNDER THE SECURITIES ACT OF ANY SECURITIES OF THE COMPANY OR ANY
SUBSIDIARY.

(W)             LISTING AND MAINTENANCE REQUIREMENTS.  THE COMMON STOCK IS
REGISTERED PURSUANT TO SECTION 12(B) OR 12(G) OF THE EXCHANGE ACT, AND THE
COMPANY HAS TAKEN NO ACTION DESIGNED TO, OR WHICH TO ITS KNOWLEDGE IS LIKELY TO
HAVE THE EFFECT OF, TERMINATING THE REGISTRATION OF THE COMMON STOCK UNDER THE
EXCHANGE ACT NOR HAS THE COMPANY RECEIVED ANY NOTIFICATION THAT THE COMMISSION
IS CONTEMPLATING TERMINATING SUCH REGISTRATION.  THE COMPANY HAS NOT, IN THE 12
MONTHS PRECEDING THE DATE HEREOF, RECEIVED NOTICE FROM ANY TRADING MARKET ON
WHICH THE COMMON STOCK IS OR HAS BEEN LISTED OR QUOTED TO THE EFFECT THAT THE
COMPANY IS NOT IN COMPLIANCE WITH THE LISTING OR MAINTENANCE REQUIREMENTS OF
SUCH TRADING MARKET. THE COMPANY IS, AND HAS NO REASON TO BELIEVE THAT IT WILL
NOT IN THE FORESEEABLE FUTURE CONTINUE TO BE, IN COMPLIANCE WITH ALL SUCH
LISTING AND MAINTENANCE REQUIREMENTS. THE COMMON STOCK IS CURRENTLY ELIGIBLE FOR
ELECTRONIC TRANSFER THROUGH THE DEPOSITORY TRUST COMPANY OR ANOTHER ESTABLISHED
CLEARING CORPORATION AND THE COMPANY IS CURRENT IN PAYMENT OF THE FEES TO THE
DEPOSITORY TRUST COMPANY (OR SUCH OTHER ESTABLISHED CLEARING CORPORATION) IN
CONNECTION WITH SUCH ELECTRONIC TRANSFER.

(X)               APPLICATION OF TAKEOVER PROTECTIONS.  THE COMPANY AND THE
BOARD OF DIRECTORS HAVE TAKEN ALL NECESSARY ACTION, IF ANY, IN ORDER TO RENDER
INAPPLICABLE ANY CONTROL SHARE ACQUISITION, BUSINESS COMBINATION, POISON PILL
(INCLUDING ANY DISTRIBUTION UNDER A RIGHTS AGREEMENT) OR OTHER SIMILAR
ANTI‑TAKEOVER PROVISION UNDER THE COMPANY’S CERTIFICATE OF INCORPORATION (OR
SIMILAR CHARTER DOCUMENTS) OR THE LAWS OF ITS STATE OF INCORPORATION THAT IS OR
COULD BECOME APPLICABLE TO THE PURCHASERS AS A RESULT OF THE PURCHASERS AND THE
COMPANY FULFILLING THEIR OBLIGATIONS OR EXERCISING THEIR RIGHTS UNDER THE
TRANSACTION DOCUMENTS, INCLUDING WITHOUT LIMITATION AS A RESULT OF THE COMPANY’S
ISSUANCE OF THE SECURITIES AND THE PURCHASERS’ OWNERSHIP OF THE SECURITIES.

(Y)               DISCLOSURE.  EXCEPT WITH RESPECT TO THE MATERIAL TERMS AND
CONDITIONS OF THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS, THE
COMPANY CONFIRMS THAT NEITHER IT NOR ANY OTHER PERSON ACTING ON ITS BEHALF HAS
PROVIDED ANY OF THE PURCHASERS OR THEIR AGENTS OR COUNSEL WITH ANY INFORMATION
THAT IT BELIEVES CONSTITUTES OR MIGHT CONSTITUTE MATERIAL, NON-PUBLIC
INFORMATION WHICH IS NOT OTHERWISE DISCLOSED IN THE PROSPECTUS SUPPLEMENT. THE
COMPANY UNDERSTANDS AND CONFIRMS THAT THE PURCHASERS WILL RELY ON THE FOREGOING
REPRESENTATION IN EFFECTING TRANSACTIONS IN SECURITIES OF THE COMPANY. ALL OF
THE DISCLOSURE FURNISHED BY OR ON BEHALF OF THE COMPANY TO THE PURCHASERS
REGARDING THE COMPANY AND ITS SUBSIDIARIES, THEIR RESPECTIVE BUSINESSES AND THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THE DISCLOSURE SCHEDULES TO THIS
AGREEMENT, IS TRUE AND CORRECT AND DOES NOT CONTAIN ANY UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS MADE THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING. THE PRESS RELEASES DISSEMINATED BY THE COMPANY DURING THE
TWELVE MONTHS PRECEDING THE DATE OF THIS AGREEMENT TAKEN AS A WHOLE DO NOT
CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT
REQUIRED TO BE STATED THEREIN OR NECESSARY IN ORDER TO MAKE THE
STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE
AND WHEN MADE, NOT MISLEADING.  THE COMPANY ACKNOWLEDGES AND AGREES THAT NO
PURCHASER MAKES OR HAS MADE ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO
THE TRANSACTIONS CONTEMPLATED HEREBY OTHER THAN THOSE SPECIFICALLY SET FORTH IN
SECTION 3.2 HEREOF.

(Z)                NO INTEGRATED OFFERING. ASSUMING THE ACCURACY OF THE
PURCHASERS’ REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.2, NEITHER THE
COMPANY, NOR ANY OF ITS AFFILIATES, NOR ANY PERSON ACTING ON ITS OR THEIR BEHALF
HAS, DIRECTLY OR INDIRECTLY, MADE ANY OFFERS OR SALES OF ANY SECURITY OR
SOLICITED ANY OFFERS TO BUY ANY SECURITY, UNDER CIRCUMSTANCES THAT WOULD CAUSE
THIS OFFERING OF THE SECURITIES TO BE INTEGRATED WITH PRIOR OFFERINGS BY THE
COMPANY FOR PURPOSES OF (I) THE SECURITIES ACT WHICH WOULD REQUIRE THE
REGISTRATION OF THE WARRANTS OR WARRANT SHARES UNDER THE SECURITIES ACT, OR
(II) ANY APPLICABLE SHAREHOLDER APPROVAL PROVISIONS OF ANY TRADING MARKET ON
WHICH ANY OF THE SECURITIES OF THE COMPANY ARE LISTED OR DESIGNATED.

(AA)            SOLVENCY.  BASED ON THE CONSOLIDATED FINANCIAL CONDITION OF THE
COMPANY AS OF THE CLOSING DATE, AFTER GIVING EFFECT TO THE RECEIPT BY THE
COMPANY OF THE PROCEEDS FROM THE SALE OF THE SECURITIES HEREUNDER, (I) THE FAIR
SALEABLE VALUE OF THE COMPANY’S ASSETS EXCEEDS THE AMOUNT THAT WILL BE REQUIRED
TO BE PAID ON OR IN RESPECT OF THE COMPANY’S EXISTING DEBTS AND OTHER
LIABILITIES (INCLUDING KNOWN CONTINGENT LIABILITIES) AS THEY MATURE, (II) THE
COMPANY’S ASSETS DO NOT CONSTITUTE UNREASONABLY SMALL CAPITAL TO CARRY ON ITS
BUSINESS AS NOW CONDUCTED AND AS PROPOSED TO BE CONDUCTED INCLUDING ITS CAPITAL
NEEDS TAKING INTO ACCOUNT THE PARTICULAR CAPITAL REQUIREMENTS OF THE BUSINESS
CONDUCTED BY THE COMPANY, CONSOLIDATED AND PROJECTED CAPITAL REQUIREMENTS AND
CAPITAL AVAILABILITY THEREOF, AND (III) THE CURRENT CASH FLOW OF THE COMPANY,
TOGETHER WITH THE PROCEEDS THE COMPANY WOULD RECEIVE, WERE IT TO LIQUIDATE ALL
OF ITS ASSETS, AFTER TAKING INTO ACCOUNT ALL ANTICIPATED USES OF THE CASH, WOULD
BE SUFFICIENT TO PAY ALL AMOUNTS ON OR IN RESPECT OF ITS LIABILITIES WHEN SUCH
AMOUNTS ARE REQUIRED TO BE PAID.  THE COMPANY DOES NOT INTEND TO INCUR DEBTS
BEYOND ITS ABILITY TO PAY SUCH DEBTS AS THEY MATURE (TAKING INTO ACCOUNT THE
TIMING AND AMOUNTS OF CASH TO BE PAYABLE ON OR IN RESPECT OF ITS DEBT).  THE
COMPANY HAS NO KNOWLEDGE OF ANY FACTS OR CIRCUMSTANCES WHICH LEAD IT TO BELIEVE
THAT IT WILL FILE FOR REORGANIZATION OR LIQUIDATION UNDER THE BANKRUPTCY OR
REORGANIZATION LAWS OF ANY JURISDICTION WITHIN ONE YEAR FROM THE CLOSING DATE.

--------------------------------------------------------------------------------

 

  SCHEDULE 3.1(AA) SETS FORTH AS OF THE DATE HEREOF ALL OUTSTANDING SECURED AND
UNSECURED INDEBTEDNESS OF THE COMPANY OR ANY SUBSIDIARY, OR FOR WHICH THE
COMPANY OR ANY SUBSIDIARY HAS COMMITMENTS.  FOR THE PURPOSES OF THIS AGREEMENT,
“INDEBTEDNESS” MEANS (X) ANY LIABILITIES FOR BORROWED MONEY OR AMOUNTS OWED IN
EXCESS OF $50,000 (OTHER THAN TRADE ACCOUNTS PAYABLE INCURRED IN THE ORDINARY
COURSE OF BUSINESS), (Y) ALL GUARANTIES, ENDORSEMENTS AND OTHER CONTINGENT
OBLIGATIONS IN RESPECT OF INDEBTEDNESS OF OTHERS, WHETHER OR NOT THE SAME ARE OR
SHOULD BE REFLECTED IN THE COMPANY’S CONSOLIDATED BALANCE SHEET (OR THE NOTES
THERETO), EXCEPT GUARANTIES BY ENDORSEMENT OF NEGOTIABLE INSTRUMENTS FOR DEPOSIT
OR COLLECTION OR SIMILAR TRANSACTIONS IN THE ORDINARY COURSE OF BUSINESS; AND
(Z) THE PRESENT VALUE OF ANY LEASE PAYMENTS IN EXCESS OF $50,000 DUE UNDER
LEASES REQUIRED TO BE CAPITALIZED IN ACCORDANCE WITH GAAP.  NEITHER THE COMPANY
NOR ANY SUBSIDIARY IS IN DEFAULT WITH RESPECT TO ANY INDEBTEDNES

(BB)           TAX STATUS.  EXCEPT FOR MATTERS THAT WOULD NOT, INDIVIDUALLY OR
IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT, THE COMPANY AND ITS SUBSIDIARIES EACH (I) HAS MADE OR FILED ALL UNITED
STATES FEDERAL, STATE AND LOCAL INCOME AND ALL FOREIGN INCOME AND FRANCHISE TAX
RETURNS, REPORTS AND DECLARATIONS REQUIRED BY ANY JURISDICTION TO WHICH IT IS
SUBJECT, (II) HAS PAID ALL TAXES AND OTHER GOVERNMENTAL ASSESSMENTS AND CHARGES
THAT ARE MATERIAL IN AMOUNT, SHOWN OR DETERMINED TO BE DUE ON SUCH RETURNS,
REPORTS AND DECLARATIONS AND (III) HAS SET ASIDE ON ITS BOOKS PROVISION
REASONABLY ADEQUATE FOR THE PAYMENT OF ALL MATERIAL TAXES FOR PERIODS SUBSEQUENT
TO THE PERIODS TO WHICH SUCH RETURNS, REPORTS OR DECLARATIONS APPLY.  THERE ARE
NO UNPAID TAXES IN ANY MATERIAL AMOUNT CLAIMED TO BE DUE BY THE TAXING AUTHORITY
OF ANY JURISDICTION, AND THE OFFICERS OF THE COMPANY OR OF ANY SUBSIDIARY KNOW
OF NO BASIS FOR ANY SUCH CLAIM.

(CC)            FOREIGN CORRUPT PRACTICES.  NEITHER THE COMPANY NOR ANY
SUBSIDIARY, NOR TO THE KNOWLEDGE OF THE COMPANY OR ANY SUBSIDIARY, ANY AGENT OR
OTHER PERSON ACTING ON BEHALF OF THE COMPANY OR ANY SUBSIDIARY, HAS (I) DIRECTLY
OR INDIRECTLY, USED ANY FUNDS FOR UNLAWFUL CONTRIBUTIONS, GIFTS, ENTERTAINMENT
OR OTHER UNLAWFUL EXPENSES RELATED TO FOREIGN OR DOMESTIC POLITICAL ACTIVITY,
(II) MADE ANY UNLAWFUL PAYMENT TO FOREIGN OR DOMESTIC GOVERNMENT OFFICIALS OR
EMPLOYEES OR TO ANY FOREIGN OR DOMESTIC POLITICAL PARTIES OR CAMPAIGNS FROM
CORPORATE FUNDS, (III) FAILED TO DISCLOSE FULLY ANY CONTRIBUTION MADE BY THE
COMPANY OR ANY SUBSIDIARY (OR MADE BY ANY PERSON ACTING ON ITS BEHALF OF WHICH
THE COMPANY IS AWARE) WHICH IS IN VIOLATION OF LAW, OR (IV) VIOLATED IN ANY
MATERIAL RESPECT ANY PROVISION OF FCPA.

(DD)           ACCOUNTANTS.  THE COMPANY’S ACCOUNTING FIRM IS SET FORTH ON
SCHEDULE 3.1(DD) OF THE DISCLOSURE SCHEDULES.  TO THE KNOWLEDGE AND BELIEF OF
THE COMPANY, SUCH ACCOUNTING FIRM (I) IS A REGISTERED PUBLIC ACCOUNTING FIRM AS
REQUIRED BY THE EXCHANGE ACT AND (II) SHALL EXPRESS ITS OPINION WITH RESPECT TO
THE FINANCIAL STATEMENTS TO BE INCLUDED IN THE COMPANY’S ANNUAL REPORT FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2020.             

(EE)            ACKNOWLEDGMENT REGARDING PURCHASERS’ PURCHASE OF SECURITIES. 
THE COMPANY ACKNOWLEDGES AND AGREES THAT EACH OF THE PURCHASERS IS ACTING SOLELY
IN THE CAPACITY OF AN ARM’S LENGTH PURCHASER WITH RESPECT TO THE TRANSACTION
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED THEREBY.  THE COMPANY FURTHER
ACKNOWLEDGES THAT NO PURCHASER IS ACTING AS A FINANCIAL ADVISOR OR FIDUCIARY OF
THE COMPANY (OR IN ANY SIMILAR CAPACITY) WITH RESPECT TO THE TRANSACTION
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED THEREBY AND ANY ADVICE GIVEN BY ANY
PURCHASER OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR AGENTS IN CONNECTION
WITH THE TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED THEREBY IS
MERELY INCIDENTAL TO THE PURCHASERS’ PURCHASE OF THE SECURITIES.  THE COMPANY
FURTHER REPRESENTS TO EACH PURCHASER THAT THE COMPANY’S DECISION TO ENTER INTO
THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS HAS BEEN BASED SOLELY ON THE
INDEPENDENT EVALUATION OF THE TRANSACTIONS CONTEMPLATED HEREBY BY THE COMPANY
AND ITS REPRESENTATIVES.

(FF)              ACKNOWLEDGMENT REGARDING PURCHASER’S TRADING ACTIVITY. 
ANYTHING IN THIS AGREEMENT OR ELSEWHERE HEREIN TO THE CONTRARY NOTWITHSTANDING
(EXCEPT FOR SECTIONS 3.2(F) AND 4.14 HEREOF), IT IS UNDERSTOOD AND ACKNOWLEDGED
BY THE COMPANY THAT: (I) NONE OF THE PURCHASERS HAS BEEN ASKED BY THE COMPANY TO
AGREE, NOR HAS ANY PURCHASER AGREED, TO DESIST FROM PURCHASING OR SELLING, LONG
AND/OR SHORT, SECURITIES OF THE COMPANY, OR “DERIVATIVE” SECURITIES BASED ON
SECURITIES ISSUED BY THE COMPANY OR TO HOLD THE SECURITIES FOR ANY SPECIFIED
TERM; (II) PAST OR FUTURE OPEN MARKET OR OTHER TRANSACTIONS BY ANY PURCHASER,
SPECIFICALLY INCLUDING, WITHOUT LIMITATION, SHORT SALES OR “DERIVATIVE”
TRANSACTIONS, BEFORE OR AFTER THE CLOSING OF THIS OR FUTURE PRIVATE PLACEMENT
TRANSACTIONS, MAY NEGATIVELY IMPACT THE MARKET PRICE OF THE COMPANY’S
PUBLICLY-TRADED SECURITIES; (III) ANY PURCHASER, AND COUNTER-PARTIES IN
“DERIVATIVE” TRANSACTIONS TO WHICH ANY SUCH PURCHASER IS A PARTY, DIRECTLY OR
INDIRECTLY, PRESENTLY MAY HAVE A “SHORT” POSITION IN THE COMMON STOCK, AND (IV)
EACH PURCHASER SHALL NOT BE DEEMED TO HAVE ANY AFFILIATION WITH OR CONTROL OVER
ANY ARM’S LENGTH COUNTER-PARTY IN ANY “DERIVATIVE” TRANSACTION.  THE COMPANY
FURTHER UNDERSTANDS AND ACKNOWLEDGES THAT (Y) ONE OR MORE PURCHASERS MAY ENGAGE
IN HEDGING ACTIVITIES AT VARIOUS TIMES DURING THE PERIOD THAT THE SECURITIES ARE
OUTSTANDING, INCLUDING, WITHOUT LIMITATION, DURING THE PERIODS THAT THE VALUE OF
THE WARRANT SHARES DELIVERABLE WITH RESPECT TO SECURITIES ARE BEING DETERMINED,
AND (Z) SUCH HEDGING ACTIVITIES (IF ANY) COULD REDUCE THE VALUE OF THE EXISTING
STOCKHOLDERS' EQUITY INTERESTS IN THE COMPANY AT AND AFTER THE TIME THAT THE
HEDGING ACTIVITIES ARE BEING CONDUCTED.  THE COMPANY ACKNOWLEDGES THAT SUCH
AFOREMENTIONED HEDGING ACTIVITIES DO NOT CONSTITUTE A BREACH OF ANY OF THE
TRANSACTION DOCUMENTS.

--------------------------------------------------------------------------------

 

(GG)           REGULATION M COMPLIANCE.  THE COMPANY HAS NOT, AND TO ITS
KNOWLEDGE NO ONE ACTING ON ITS BEHALF HAS, (I) TAKEN, DIRECTLY OR INDIRECTLY,
ANY ACTION DESIGNED TO CAUSE OR TO RESULT IN THE STABILIZATION OR MANIPULATION
OF THE PRICE OF ANY SECURITY OF THE COMPANY TO FACILITATE THE SALE OR RESALE OF
ANY OF THE SECURITIES, (II) SOLD, BID FOR, PURCHASED, OR, PAID ANY COMPENSATION
FOR SOLICITING PURCHASES OF, ANY OF THE SECURITIES, OR (III) PAID OR AGREED TO
PAY TO ANY PERSON ANY COMPENSATION FOR SOLICITING ANOTHER TO PURCHASE ANY OTHER
SECURITIES OF THE COMPANY, OTHER THAN, IN THE CASE OF CLAUSES (II) AND (III),
COMPENSATION PAID TO THE COMPANY’S PLACEMENT AGENT IN CONNECTION WITH THE
PLACEMENT OF THE SECURITIES.

(HH)           [RESERVED]

(II)               STOCK OPTION PLANS. EACH STOCK OPTION GRANTED BY THE COMPANY
UNDER THE COMPANY’S STOCK OPTION PLAN WAS GRANTED (I) IN ACCORDANCE WITH THE
TERMS OF THE COMPANY’S STOCK OPTION PLAN AND (II) WITH AN EXERCISE PRICE AT
LEAST EQUAL TO THE FAIR MARKET VALUE OF THE COMMON STOCK ON THE DATE SUCH STOCK
OPTION WOULD BE CONSIDERED GRANTED UNDER GAAP AND APPLICABLE LAW. NO STOCK
OPTION GRANTED UNDER THE COMPANY’S STOCK OPTION PLAN HAS BEEN BACKDATED.  THE
COMPANY HAS NOT KNOWINGLY GRANTED, AND THERE IS NO AND HAS BEEN NO COMPANY
POLICY OR PRACTICE TO KNOWINGLY GRANT, STOCK OPTIONS PRIOR TO, OR OTHERWISE
KNOWINGLY COORDINATE THE GRANT OF STOCK OPTIONS WITH, THE RELEASE OR OTHER
PUBLIC ANNOUNCEMENT OF MATERIAL INFORMATION REGARDING THE COMPANY OR ITS
SUBSIDIARIES OR THEIR FINANCIAL RESULTS OR PROSPECTS.

(JJ)               OFFICE OF FOREIGN ASSETS CONTROL.  NEITHER THE COMPANY NOR
ANY SUBSIDIARY NOR, TO THE COMPANY'S KNOWLEDGE, ANY DIRECTOR, OFFICER, AGENT,
EMPLOYEE OR AFFILIATE OF THE COMPANY OR ANY SUBSIDIARY IS CURRENTLY SUBJECT TO
ANY U.S. SANCTIONS ADMINISTERED BY THE OFFICE OF FOREIGN ASSETS CONTROL OF THE
U.S. TREASURY DEPARTMENT (“OFAC”).

(KK)           U.S. REAL PROPERTY HOLDING CORPORATION.  THE COMPANY IS NOT AND
HAS NEVER BEEN A U.S. REAL PROPERTY HOLDING CORPORATION WITHIN THE MEANING OF
SECTION 897 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND THE COMPANY
SHALL SO CERTIFY UPON PURCHASER’S REQUEST.

(LL)               BANK HOLDING COMPANY ACT.  NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES OR AFFILIATES IS SUBJECT TO THE BANK HOLDING COMPANY ACT OF 1956,
AS AMENDED (THE “BHCA”) AND TO REGULATION BY THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM (THE “FEDERAL RESERVE”).  NEITHER THE COMPANY NOR ANY OF
ITS SUBSIDIARIES OR AFFILIATES OWNS OR CONTROLS, DIRECTLY OR INDIRECTLY, FIVE
PERCENT (5%) OR MORE OF THE OUTSTANDING SHARES OF ANY CLASS OF VOTING SECURITIES
OR TWENTY-FIVE PERCENT OR MORE OF THE TOTAL EQUITY OF A BANK OR ANY ENTITY THAT
IS SUBJECT TO THE BHCA AND TO REGULATION BY THE FEDERAL RESERVE.  NEITHER THE
COMPANY NOR ANY OF ITS SUBSIDIARIES OR AFFILIATES EXERCISES A CONTROLLING
INFLUENCE OVER THE MANAGEMENT OR POLICIES OF A BANK OR ANY ENTITY THAT IS
SUBJECT TO THE BHCA AND TO REGULATION BY THE FEDERAL RESERVE.

(MM)      MONEY LAUNDERING.  THE OPERATIONS OF THE COMPANY AND ITS
SUBSIDIARIES ARE AND HAVE BEEN CONDUCTED AT ALL TIMES IN COMPLIANCE WITH
APPLICABLE FINANCIAL RECORD-KEEPING AND REPORTING REQUIREMENTS OF THE CURRENCY
AND FOREIGN TRANSACTIONS REPORTING ACT OF 1970, AS AMENDED, APPLICABLE MONEY
LAUNDERING STATUTES AND APPLICABLE RULES AND REGULATIONS THEREUNDER
(COLLECTIVELY, THE “MONEY LAUNDERING LAWS”), AND NO ACTION OR PROCEEDING BY OR
BEFORE ANY COURT OR GOVERNMENTAL AGENCY, AUTHORITY OR BODY OR ANY ARBITRATOR
INVOLVING THE COMPANY OR ANY SUBSIDIARY WITH RESPECT TO THE MONEY LAUNDERING
LAWS IS PENDING OR, TO THE KNOWLEDGE OF THE COMPANY OR ANY SUBSIDIARY,
THREATENED.

(NN)           PRIVATE PLACEMENT. ASSUMING THE ACCURACY OF THE PURCHASERS’
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.2, NO REGISTRATION UNDER
THE SECURITIES ACT IS REQUIRED FOR THE OFFER AND SALE OF THE WARRANTS OR
THE WARRANT SHARES BY THE COMPANY TO THE PURCHASERS AS CONTEMPLATED HEREBY.

(OO)           NO GENERAL SOLICITATION.  NEITHER THE COMPANY NOR ANY PERSON
ACTING ON BEHALF OF THE COMPANY HAS OFFERED OR SOLD ANY OF THE WARRANT OR
WARRANT SHARES BY ANY FORM OF GENERAL SOLICITATION OR GENERAL ADVERTISING.  THE
COMPANY HAS OFFERED THE WARRANTS AND WARRANT SHARES FOR SALE ONLY TO THE
PURCHASERS AND CERTAIN OTHER “ACCREDITED INVESTORS” WITHIN THE MEANING OF RULE
501 UNDER THE SECURITIES ACT.

--------------------------------------------------------------------------------

 

(PP)           NO DISQUALIFICATION EVENTS.  WITH RESPECT TO THE WARRANT AND
WARRANT SHARES TO BE OFFERED AND SOLD HEREUNDER IN RELIANCE ON RULE 506 UNDER
THE SECURITIES ACT, NONE OF THE COMPANY, ANY OF ITS PREDECESSORS, ANY AFFILIATED
ISSUER, ANY DIRECTOR, EXECUTIVE OFFICER, OTHER OFFICER OF THE COMPANY
PARTICIPATING IN THE OFFERING HEREUNDER, ANY BENEFICIAL OWNER OF 20% OR MORE OF
THE COMPANY’S OUTSTANDING VOTING EQUITY SECURITIES, CALCULATED ON THE BASIS OF
VOTING POWER, NOR ANY PROMOTER (AS THAT TERM IS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) CONNECTED WITH THE COMPANY IN ANY CAPACITY AT THE TIME OF SALE
(EACH, AN “ISSUER COVERED PERSON”) IS SUBJECT TO ANY OF THE “BAD ACTOR”
DISQUALIFICATIONS DESCRIBED IN RULE 506(D)(1)(I) TO (VIII) UNDER THE SECURITIES
ACT (A “DISQUALIFICATION EVENT”), EXCEPT FOR A DISQUALIFICATION EVENT COVERED BY
RULE 506(D)(2) OR (D)(3). THE COMPANY HAS EXERCISED REASONABLE CARE TO DETERMINE
WHETHER ANY ISSUER COVERED PERSON IS SUBJECT TO A DISQUALIFICATION EVENT. THE
COMPANY HAS COMPLIED, TO THE EXTENT APPLICABLE, WITH ITS DISCLOSURE OBLIGATIONS
UNDER RULE 506(E), AND HAS FURNISHED TO THE PURCHASERS A COPY OF ANY DISCLOSURES
PROVIDED THEREUNDER.

(QQ)           OTHER COVERED PERSONS.  OTHER THAN THE PLACEMENT AGENT, THE
COMPANY IS NOT AWARE OF ANY PERSON (OTHER THAN ANY ISSUER COVERED PERSON) THAT
HAS BEEN OR WILL BE PAID (DIRECTLY OR INDIRECTLY) REMUNERATION FOR SOLICITATION
OF PURCHASERS IN CONNECTION WITH THE SALE OF ANY SECURITIES.

(RR)              NOTICE OF DISQUALIFICATION EVENTS.  THE COMPANY WILL NOTIFY
THE PURCHASERS IN WRITING, PRIOR TO THE CLOSING DATE OF (I) ANY DISQUALIFICATION
EVENT RELATING TO ANY ISSUER COVERED PERSON AND (II) ANY EVENT THAT WOULD, WITH
THE PASSAGE OF TIME, REASONABLY BE EXPECTED TO BECOME A DISQUALIFICATION EVENT
RELATING TO ANY ISSUER COVERED PERSON, IN EACH CASE OF WHICH IT IS AWARE.

3.2              REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.  EACH
PURCHASER, FOR ITSELF AND FOR NO OTHER PURCHASER, HEREBY REPRESENTS AND WARRANTS
AS OF THE DATE HEREOF AND AS OF THE CLOSING DATE TO THE COMPANY AS FOLLOWS
(UNLESS AS OF A SPECIFIC DATE THEREIN, IN WHICH CASE THEY SHALL BE ACCURATE AS
OF SUCH DATE):

(A)                ORGANIZATION; AUTHORITY.  SUCH PURCHASER IS EITHER AN
INDIVIDUAL OR AN ENTITY DULY INCORPORATED OR FORMED, VALIDLY EXISTING AND IN
GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION OR
FORMATION WITH FULL RIGHT, CORPORATE, PARTNERSHIP, LIMITED LIABILITY COMPANY OR
SIMILAR POWER AND AUTHORITY TO ENTER INTO AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS AND OTHERWISE TO CARRY OUT ITS
OBLIGATIONS HEREUNDER AND THEREUNDER. THE EXECUTION AND DELIVERY OF THE
TRANSACTION DOCUMENTS AND PERFORMANCE BY SUCH PURCHASER OF THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS HAVE BEEN DULY AUTHORIZED BY ALL
NECESSARY CORPORATE, PARTNERSHIP, LIMITED LIABILITY COMPANY OR SIMILAR ACTION,
AS APPLICABLE, ON THE PART OF SUCH PURCHASER.  EACH TRANSACTION DOCUMENT TO
WHICH IT IS A PARTY HAS BEEN DULY EXECUTED BY SUCH PURCHASER, AND WHEN DELIVERED
BY SUCH PURCHASER IN ACCORDANCE WITH THE TERMS HEREOF, WILL CONSTITUTE THE VALID
AND LEGALLY BINDING OBLIGATION OF SUCH PURCHASER, ENFORCEABLE AGAINST IT IN
ACCORDANCE WITH ITS TERMS, EXCEPT: (I) AS LIMITED BY GENERAL EQUITABLE
PRINCIPLES AND APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM AND
OTHER LAWS OF GENERAL APPLICATION AFFECTING ENFORCEMENT OF CREDITORS’ RIGHTS
GENERALLY, (II) AS LIMITED BY LAWS RELATING TO THE AVAILABILITY OF SPECIFIC
PERFORMANCE, INJUNCTIVE RELIEF OR OTHER EQUITABLE REMEDIES AND (III) INSOFAR AS
INDEMNIFICATION AND CONTRIBUTION PROVISIONS MAY BE LIMITED BY APPLICABLE LAW.

(B)               UNDERSTANDINGS OR ARRANGEMENTS.  SUCH PURCHASER IS ACQUIRING
THE SECURITIES AS PRINCIPAL FOR ITS OWN ACCOUNT AND HAS NO DIRECT OR INDIRECT
ARRANGEMENT OR UNDERSTANDINGS WITH ANY OTHER PERSONS TO DISTRIBUTE OR REGARDING
THE DISTRIBUTION OF SUCH SECURITIES (THIS REPRESENTATION AND WARRANTY NOT
LIMITING SUCH PURCHASER’S RIGHT TO SELL THE SECURITIES PURSUANT TO THE
REGISTRATION STATEMENT OR OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND
STATE SECURITIES LAWS).  SUCH PURCHASER IS ACQUIRING THE SECURITIES HEREUNDER IN
THE ORDINARY COURSE OF ITS BUSINESS.  SUCH PURCHASER UNDERSTANDS THAT THE
WARRANTS AND THE WARRANT SHARES ARE “RESTRICTED SECURITIES” AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW AND
IS ACQUIRING SUCH SECURITIES AS PRINCIPAL FOR HIS, HER OR ITS OWN ACCOUNT AND
NOT WITH A VIEW TO OR FOR DISTRIBUTING OR RESELLING SUCH SECURITIES OR ANY PART
THEREOF IN VIOLATION OF THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAW, HAS NO PRESENT INTENTION OF DISTRIBUTING ANY OF SUCH SECURITIES IN
VIOLATION OF THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW AND HAS
NO DIRECT OR INDIRECT ARRANGEMENT OR UNDERSTANDINGS WITH ANY OTHER PERSONS TO
DISTRIBUTE OR REGARDING THE DISTRIBUTION OF SUCH SECURITIES IN VIOLATION OF THE
SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW (THIS REPRESENTATION AND
WARRANTY NOT LIMITING SUCH PURCHASER’S RIGHT TO SELL SUCH SECURITIES PURSUANT TO
A REGISTRATION STATEMENT OR OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND
STATE SECURITIES LAWS).

(C)                PURCHASER STATUS.  AT THE TIME SUCH PURCHASER WAS OFFERED THE
SECURITIES, IT WAS, AND AS OF THE DATE HEREOF IT IS, AND ON EACH DATE ON WHICH
IT EXERCISES ANY WARRANTS, IT WILL BE EITHER: (I) AN “ACCREDITED INVESTOR” AS
DEFINED IN RULE 501(A)(1), (A)(2), (A)(3), (A)(7) OR (A)(8) UNDER THE SECURITIES
ACT OR (II) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A(A) UNDER
THE SECURITIES ACT. 

--------------------------------------------------------------------------------

(D)               EXPERIENCE OF SUCH PURCHASER.  SUCH PURCHASER, EITHER ALONE OR
TOGETHER WITH ITS REPRESENTATIVES, HAS SUCH KNOWLEDGE, SOPHISTICATION AND
EXPERIENCE IN BUSINESS AND FINANCIAL MATTERS SO AS TO BE CAPABLE OF EVALUATING
THE MERITS AND RISKS OF THE PROSPECTIVE INVESTMENT IN THE SECURITIES, AND HAS SO
EVALUATED THE MERITS AND RISKS OF SUCH INVESTMENT.  SUCH PURCHASER IS ABLE TO
BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE SECURITIES AND, AT THE PRESENT
TIME, IS ABLE TO AFFORD A COMPLETE LOSS OF SUCH INVESTMENT.

(E)                ACCESS TO INFORMATION. SUCH PURCHASER ACKNOWLEDGES THAT IT
HAS HAD THE OPPORTUNITY TO REVIEW THE TRANSACTION DOCUMENTS (INCLUDING ALL
EXHIBITS AND SCHEDULES THERETO) AND THE SEC REPORTS AND HAS BEEN AFFORDED, (I)
THE OPPORTUNITY TO ASK SUCH QUESTIONS AS IT HAS DEEMED NECESSARY OF, AND TO
RECEIVE ANSWERS FROM, REPRESENTATIVES OF THE COMPANY CONCERNING THE TERMS AND
CONDITIONS OF THE OFFERING OF THE SECURITIES AND THE MERITS AND RISKS OF
INVESTING IN THE SECURITIES; (II) ACCESS TO INFORMATION ABOUT THE COMPANY AND
ITS FINANCIAL CONDITION, RESULTS OF OPERATIONS, BUSINESS, PROPERTIES, MANAGEMENT
AND PROSPECTS SUFFICIENT TO ENABLE IT TO EVALUATE ITS INVESTMENT; AND (III) THE
OPPORTUNITY TO OBTAIN SUCH ADDITIONAL INFORMATION THAT THE COMPANY POSSESSES OR
CAN ACQUIRE WITHOUT UNREASONABLE EFFORT OR EXPENSE THAT IS NECESSARY TO MAKE AN
INFORMED INVESTMENT DECISION WITH RESPECT TO THE INVESTMENT.  SUCH PURCHASER
ACKNOWLEDGES AND AGREES THAT NEITHER THE PLACEMENT AGENT NOR ANY AFFILIATE OF
THE PLACEMENT AGENT HAS PROVIDED SUCH PURCHASER WITH ANY INFORMATION OR ADVICE
WITH RESPECT TO THE SECURITIES NOR IS SUCH INFORMATION OR ADVICE NECESSARY OR
DESIRED.  NEITHER THE PLACEMENT AGENT NOR ANY AFFILIATE HAS MADE OR MAKES ANY
REPRESENTATION AS TO THE COMPANY OR THE QUALITY OF THE SECURITIES AND THE
PLACEMENT AGENT AND ANY AFFILIATE MAY HAVE ACQUIRED NON-PUBLIC INFORMATION WITH
RESPECT TO THE COMPANY WHICH SUCH PURCHASER AGREES NEED NOT BE PROVIDED TO IT. 
IN CONNECTION WITH THE ISSUANCE OF THE SECURITIES TO SUCH PURCHASER, NEITHER THE
PLACEMENT AGENT NOR ANY OF ITS AFFILIATES HAS ACTED AS A FINANCIAL ADVISOR OR
FIDUCIARY TO SUCH PURCHASER.

(F)                CERTAIN TRANSACTIONS AND CONFIDENTIALITY.  OTHER THAN
CONSUMMATING THE TRANSACTIONS CONTEMPLATED HEREUNDER, SUCH PURCHASER HAS NOT,
NOR HAS ANY PERSON ACTING ON BEHALF OF OR PURSUANT TO ANY UNDERSTANDING WITH
SUCH PURCHASER, DIRECTLY OR INDIRECTLY EXECUTED ANY PURCHASES OR SALES,
INCLUDING SHORT SALES, OF THE SECURITIES OF THE COMPANY DURING THE PERIOD
COMMENCING AS OF THE TIME THAT SUCH PURCHASER FIRST RECEIVED A TERM SHEET
(WRITTEN OR ORAL) FROM THE COMPANY OR ANY OTHER PERSON REPRESENTING THE COMPANY
SETTING FORTH THE MATERIAL TERMS OF THE TRANSACTIONS CONTEMPLATED HEREUNDER AND
ENDING IMMEDIATELY PRIOR TO THE EXECUTION HEREOF.  NOTWITHSTANDING THE
FOREGOING, IN THE CASE OF A PURCHASER THAT IS A MULTI-MANAGED INVESTMENT VEHICLE
WHEREBY SEPARATE PORTFOLIO MANAGERS MANAGE SEPARATE PORTIONS OF SUCH PURCHASER’S
ASSETS AND THE PORTFOLIO MANAGERS HAVE NO DIRECT KNOWLEDGE OF THE INVESTMENT
DECISIONS MADE BY THE PORTFOLIO MANAGERS MANAGING OTHER PORTIONS OF SUCH
PURCHASER’S ASSETS, THE REPRESENTATION SET FORTH ABOVE SHALL ONLY APPLY WITH
RESPECT TO THE PORTION OF ASSETS MANAGED BY THE PORTFOLIO MANAGER THAT MADE THE
INVESTMENT DECISION TO PURCHASE THE SECURITIES COVERED BY THIS AGREEMENT.  OTHER
THAN TO OTHER PERSONS PARTY TO THIS AGREEMENT OR TO SUCH PURCHASER’S
REPRESENTATIVES, INCLUDING, WITHOUT LIMITATION, ITS OFFICERS, DIRECTORS,
PARTNERS, LEGAL AND OTHER ADVISORS, EMPLOYEES, AGENTS AND AFFILIATES, SUCH
PURCHASER HAS MAINTAINED THE CONFIDENTIALITY OF ALL DISCLOSURES MADE TO IT IN
CONNECTION WITH THIS TRANSACTION (INCLUDING THE EXISTENCE AND TERMS OF THIS
TRANSACTION). NOTWITHSTANDING THE FOREGOING, FOR THE AVOIDANCE OF DOUBT, NOTHING
CONTAINED HEREIN SHALL CONSTITUTE A REPRESENTATION OR WARRANTY, OR PRECLUDE ANY
ACTIONS, WITH RESPECT TO LOCATING OR BORROWING SHARES IN ORDER TO EFFECT SHORT
SALES OR SIMILAR TRANSACTIONS IN THE FUTURE.

(G)               GENERAL SOLICITATION.  SUCH PURCHASER IS NOT PURCHASING THE
SECURITIES AS A RESULT OF ANY ADVERTISEMENT, ARTICLE, NOTICE OR OTHER
COMMUNICATION REGARDING THE SECURITIES PUBLISHED IN ANY NEWSPAPER, MAGAZINE OR
SIMILAR MEDIA OR BROADCAST OVER TELEVISION OR RADIO OR PRESENTED AT ANY SEMINAR
OR, TO THE KNOWLEDGE OF SUCH PURCHASER, ANY OTHER GENERAL SOLICITATION OR
GENERAL ADVERTISEMENT.

THE COMPANY ACKNOWLEDGES AND AGREES THAT THE REPRESENTATIONS CONTAINED IN THIS
SECTION 3.2 SHALL NOT MODIFY, AMEND OR AFFECT SUCH PURCHASER’S RIGHT TO RELY ON
THE COMPANY’S REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT OR ANY
REPRESENTATIONS AND WARRANTIES CONTAINED IN ANY OTHER TRANSACTION DOCUMENT OR
ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND/OR DELIVERED IN CONNECTION WITH
THIS AGREEMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY. 
NOTWITHSTANDING THE FOREGOING, FOR THE AVOIDANCE OF DOUBT, NOTHING CONTAINED
HEREIN SHALL CONSTITUTE A REPRESENTATION OR WARRANTY, OR PRECLUDE ANY ACTIONS,
WITH RESPECT TO LOCATING OR BORROWING SHARES IN ORDER TO EFFECT SHORT SALES OR
SIMILAR TRANSACTIONS IN THE FUTURE.

--------------------------------------------------------------------------------

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

4.1              Removal of Legends.

 

(A)         THE WARRANTS AND WARRANT SHARES MAY ONLY BE DISPOSED OF IN
COMPLIANCE WITH STATE AND FEDERAL SECURITIES LAWS.  IN CONNECTION WITH ANY
TRANSFER OF WARRANTS OR WARRANT SHARES OTHER THAN PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR RULE 144, TO THE COMPANY OR TO AN AFFILIATE OF A
PURCHASER OR IN CONNECTION WITH A PLEDGE AS CONTEMPLATED IN SECTION 4.1(B), THE
COMPANY MAY REQUIRE THE TRANSFEROR THEREOF TO PROVIDE TO THE COMPANY AN OPINION
OF COUNSEL SELECTED BY THE TRANSFEROR AND REASONABLY ACCEPTABLE TO THE COMPANY,
THE FORM AND SUBSTANCE OF WHICH OPINION SHALL BE REASONABLY SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT SUCH TRANSFER DOES NOT REQUIRE REGISTRATION OF SUCH
TRANSFERRED WARRANT UNDER THE SECURITIES ACT.

(B)         THE PURCHASERS AGREE TO THE IMPRINTING, SO LONG AS IS REQUIRED BY
THIS SECTION 4.1, OF A LEGEND ON ANY OF THE WARRANTS OR WARRANT SHARES IN THE
FOLLOWING FORM:

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
“ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Warrants or Warrant Shares to
a financial institution that is an “accredited investor” as defined in Rule
501(a) under the Securities Act and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Warrants or Warrant
Shares to the pledgees or secured parties.  Such a pledge or transfer would not
be subject to approval of the Company and no legal opinion of legal counsel of
the pledgee, secured party or pledgor shall be required in connection
therewith.  Further, no notice shall be required of such pledge.  At the
appropriate Purchaser’s expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Warrants and Warrant
Shares may reasonably request in connection with a pledge or transfer of the
Warrants or Warrant Shares.

 

(C)                CERTIFICATES EVIDENCING THE WARRANT SHARES SHALL NOT CONTAIN
ANY LEGEND (INCLUDING THE LEGEND SET FORTH IN SECTION 4.1(B) HEREOF): (I) WHILE
A REGISTRATION STATEMENT COVERING THE RESALE OF SUCH SECURITY IS EFFECTIVE UNDER
THE SECURITIES ACT, OR (II) FOLLOWING ANY SALE OF SUCH WARRANT SHARES PURSUANT
TO RULE 144 (ASSUMING CASHLESS EXERCISE OF THE WARRANTS), OR (III) IF SUCH
WARRANT SHARES ARE ELIGIBLE FOR SALE UNDER RULE 144 (ASSUMING CASHLESS EXERCISE
OF THE WARRANTS), OR (IV) IF SUCH LEGEND IS NOT REQUIRED UNDER APPLICABLE
REQUIREMENTS OF THE SECURITIES ACT (INCLUDING JUDICIAL INTERPRETATIONS AND
PRONOUNCEMENTS ISSUED BY THE STAFF OF THE COMMISSION). THE COMPANY SHALL CAUSE
ITS COUNSEL TO ISSUE A LEGAL OPINION TO THE TRANSFER AGENT OR THE PURCHASER
PROMPTLY IF REQUIRED BY THE TRANSFER AGENT TO EFFECT THE REMOVAL OF THE LEGEND
HEREUNDER, OR IF REQUESTED BY A PURCHASER, RESPECTIVELY.  IF ALL OR ANY PORTION
OF A WARRANT IS EXERCISED AT A TIME WHEN THERE IS AN EFFECTIVE REGISTRATION
STATEMENT TO COVER THE RESALE OF THE WARRANT SHARES, OR IF SUCH WARRANT SHARES
MAY BE SOLD UNDER RULE 144 (ASSUMING CASHLESS EXERCISE OF THE WARRANTS) OR IF
SUCH LEGEND IS NOT OTHERWISE REQUIRED UNDER APPLICABLE REQUIREMENTS OF THE
SECURITIES ACT (INCLUDING JUDICIAL INTERPRETATIONS AND PRONOUNCEMENTS ISSUED BY
THE STAFF OF THE COMMISSION) THEN SUCH WARRANT SHARES SHALL BE ISSUED FREE OF
ALL LEGENDS.  THE COMPANY AGREES THAT FOLLOWING SUCH TIME AS SUCH LEGEND IS NO
LONGER REQUIRED UNDER THIS SECTION 4.1(C), THE COMPANY WILL, NO LATER THAN THE
EARLIER OF (I) TWO (2) TRADING DAYS AND (II) THE NUMBER OF TRADING DAYS
COMPRISING THE STANDARD SETTLEMENT PERIOD (AS DEFINED BELOW) FOLLOWING THE
DELIVERY BY A PURCHASER TO THE COMPANY OR THE TRANSFER AGENT OF A CERTIFICATE
REPRESENTING WARRANT SHARES, AS APPLICABLE, ISSUED WITH A RESTRICTIVE LEGEND
(SUCH DATE, THE “LEGEND REMOVAL DATE”), DELIVER OR CAUSE TO BE DELIVERED TO SUCH
PURCHASER A CERTIFICATE REPRESENTING SUCH SHARES THAT IS FREE FROM ALL
RESTRICTIVE AND OTHER LEGENDS.  THE COMPANY MAY NOT MAKE ANY NOTATION ON ITS
RECORDS OR GIVE INSTRUCTIONS TO THE TRANSFER AGENT THAT ENLARGE THE RESTRICTIONS
ON TRANSFER SET FORTH IN THIS SECTION 4.  WARRANT SHARES SUBJECT TO LEGEND
REMOVAL HEREUNDER SHALL BE TRANSMITTED BY THE TRANSFER AGENT TO THE PURCHASER BY
CREDITING THE ACCOUNT OF THE PURCHASER’S PRIME BROKER WITH THE DEPOSITORY TRUST
COMPANY SYSTEM AS DIRECTED BY SUCH PURCHASER.  AS USED HEREIN, “STANDARD
SETTLEMENT PERIOD” MEANS THE STANDARD SETTLEMENT PERIOD, EXPRESSED IN A NUMBER
OF TRADING DAYS, ON THE COMPANY’S PRIMARY TRADING MARKET WITH RESPECT TO THE
COMMON STOCK AS IN EFFECT ON THE DATE OF DELIVERY OF A CERTIFICATE REPRESENTING
WARRANT SHARES ISSUED WITH A RESTRICTIVE LEGEND.

--------------------------------------------------------------------------------

 

(D)               IN ADDITION TO SUCH PURCHASER’S OTHER AVAILABLE REMEDIES, THE
COMPANY SHALL PAY TO A PURCHASER, IN CASH, (I) AS PARTIAL LIQUIDATED DAMAGES AND
NOT AS A PENALTY, FOR EACH $1,000 OF WARRANT SHARES (BASED ON THE VWAP OF THE
COMMON STOCK ON THE DATE SUCH SECURITIES ARE SUBMITTED TO THE TRANSFER AGENT)
DELIVERED FOR REMOVAL OF THE RESTRICTIVE LEGEND AND SUBJECT TO SECTION 4.1(C),
$10 PER TRADING DAY (INCREASING TO $20 PER TRADING DAY FIVE (5) TRADING DAYS
AFTER SUCH DAMAGES HAVE BEGUN TO ACCRUE) FOR EACH TRADING DAY AFTER THE LEGEND
REMOVAL DATE UNTIL SUCH CERTIFICATE IS DELIVERED WITHOUT A LEGEND AND (II) IF
THE COMPANY FAILS TO (A) ISSUE AND DELIVER (OR CAUSE TO BE DELIVERED) TO A
PURCHASER BY THE LEGEND REMOVAL DATE A CERTIFICATE REPRESENTING THE SECURITIES
SO DELIVERED TO THE COMPANY BY SUCH PURCHASER THAT IS FREE FROM ALL RESTRICTIVE
AND OTHER LEGENDS AND (B) IF AFTER THE LEGEND REMOVAL DATE SUCH PURCHASER
PURCHASES (IN AN OPEN MARKET TRANSACTION OR OTHERWISE) SHARES OF COMMON STOCK TO
DELIVER IN SATISFACTION OF A SALE BY SUCH PURCHASER OF ALL OR ANY PORTION OF THE
NUMBER OF SHARES OF COMMON STOCK, OR A SALE OF A NUMBER OF SHARES OF COMMON
STOCK EQUAL TO ALL OR ANY PORTION OF THE NUMBER OF SHARES OF COMMON STOCK, THAT
SUCH PURCHASER ANTICIPATED RECEIVING FROM THE COMPANY WITHOUT ANY RESTRICTIVE
LEGEND, THEN AN AMOUNT EQUAL TO THE EXCESS OF SUCH PURCHASER’S TOTAL PURCHASE
PRICE (INCLUDING BROKERAGE COMMISSIONS AND OTHER OUT-OF-POCKET EXPENSES, IF ANY)
FOR THE SHARES OF COMMON STOCK SO PURCHASED (INCLUDING BROKERAGE COMMISSIONS AND
OTHER OUT-OF-POCKET EXPENSES, IF ANY) (THE “BUY-IN PRICE”) OVER THE PRODUCT OF
(A) SUCH NUMBER OF WARRANT SHARES THAT THE COMPANY WAS REQUIRED TO DELIVER TO
SUCH PURCHASER BY THE LEGEND REMOVAL DATE MULTIPLIED BY (B) THE LOWEST CLOSING
SALE PRICE OF THE COMMON STOCK ON ANY TRADING DAY DURING THE PERIOD COMMENCING
ON THE DATE OF THE DELIVERY BY SUCH PURCHASER TO THE COMPANY OF THE APPLICABLE
WARRANT SHARES (AS THE CASE MAY BE) AND ENDING ON THE DATE OF SUCH DELIVERY AND
PAYMENT UNDER THIS SECTION 4.1(D). 

(E)              THE SHARES SHALL BE ISSUED FREE OF LEGENDS.

4.2              FURNISHING OF INFORMATION.

(A)              UNTIL THE EARLIEST OF THE TIME THAT (I) NO PURCHASER OWNS
SECURITIES OR (II) THE WARRANTS HAVE EXPIRED, THE COMPANY COVENANTS TO TIMELY
FILE (OR OBTAIN EXTENSIONS IN RESPECT THEREOF AND FILE WITHIN THE APPLICABLE
GRACE PERIOD) ALL REPORTS REQUIRED TO BE FILED BY THE COMPANY AFTER THE DATE
HEREOF PURSUANT TO THE EXCHANGE ACT EVEN IF THE COMPANY IS NOT THEN SUBJECT TO
THE REPORTING REQUIREMENTS OF THE EXCHANGE ACT.

(B)              AT ANY TIME DURING THE PERIOD COMMENCING FROM THE SIX (6) MONTH
ANNIVERSARY OF THE DATE HEREOF AND ENDING AT SUCH TIME THAT ALL OF THE WARRANT
SHARES (ASSUMING CASHLESS EXERCISE) MAY BE SOLD WITHOUT THE REQUIREMENT FOR THE
COMPANY TO BE IN COMPLIANCE WITH RULE 144(C)(1) AND OTHERWISE WITHOUT
RESTRICTION OR LIMITATION PURSUANT TO RULE 144, IF THE COMPANY (I) SHALL FAIL
FOR ANY REASON TO SATISFY THE CURRENT PUBLIC INFORMATION REQUIREMENT UNDER RULE
144(C) OR (II) HAS EVER BEEN AN ISSUER DESCRIBED IN RULE 144(I)(1)(I) OR BECOMES
AN ISSUER IN THE FUTURE, AND THE COMPANY SHALL FAIL TO SATISFY ANY CONDITION SET
FORTH IN RULE 144(I)(2) (A “PUBLIC INFORMATION FAILURE”) THEN, IN ADDITION TO
SUCH PURCHASER’S OTHER AVAILABLE REMEDIES, THE COMPANY SHALL PAY TO A PURCHASER,
IN CASH, AS PARTIAL LIQUIDATED DAMAGES AND NOT AS A PENALTY, BY REASON OF ANY
SUCH DELAY IN OR REDUCTION OF ITS ABILITY TO SELL THE WARRANT SHARES, AN AMOUNT
IN CASH EQUAL TO ONE PERCENT (1.0%) OF THE AGGREGATE EXERCISE PRICE OF SUCH
PURCHASER’S WARRANTS ON THE DAY OF A PUBLIC INFORMATION FAILURE AND ON EVERY
THIRTIETH (30TH) DAY (PRO RATED FOR PERIODS TOTALING LESS THAN THIRTY DAYS)
THEREAFTER UNTIL THE EARLIER OF (A) THE DATE SUCH PUBLIC INFORMATION FAILURE IS
CURED AND (B) SUCH TIME THAT SUCH PUBLIC INFORMATION IS NO LONGER REQUIRED  FOR
THE PURCHASERS TO TRANSFER THE WARRANT SHARES PURSUANT TO RULE 144.  THE
PAYMENTS TO WHICH A PURCHASER SHALL BE ENTITLED PURSUANT TO THIS SECTION 4.2(B)
ARE REFERRED TO HEREIN AS “PUBLIC INFORMATION FAILURE PAYMENTS.”  PUBLIC
INFORMATION FAILURE PAYMENTS SHALL BE PAID ON THE EARLIER OF (I) THE LAST DAY OF
THE CALENDAR MONTH DURING WHICH SUCH PUBLIC INFORMATION FAILURE PAYMENTS ARE
INCURRED AND (II) THE THIRD (3RD) BUSINESS DAY AFTER THE EVENT OR FAILURE GIVING
RISE TO THE PUBLIC INFORMATION FAILURE PAYMENTS IS CURED.  IN THE EVENT THE
COMPANY FAILS TO MAKE PUBLIC INFORMATION FAILURE PAYMENTS IN A TIMELY MANNER,
SUCH PUBLIC INFORMATION FAILURE PAYMENTS SHALL BEAR INTEREST AT THE RATE OF 1.5%
PER MONTH (PRORATED FOR PARTIAL MONTHS) UNTIL PAID IN FULL. NOTHING HEREIN SHALL
LIMIT SUCH PURCHASER’S RIGHT TO PURSUE ACTUAL DAMAGES FOR THE PUBLIC INFORMATION
FAILURE, AND SUCH PURCHASER SHALL HAVE THE RIGHT TO PURSUE ALL REMEDIES
AVAILABLE TO IT AT LAW OR IN EQUITY INCLUDING, WITHOUT LIMITATION, A DECREE OF
SPECIFIC PERFORMANCE AND/OR INJUNCTIVE RELIEF.

4.3              INTEGRATION.  THE COMPANY SHALL NOT SELL, OFFER FOR SALE OR
SOLICIT OFFERS TO BUY OR OTHERWISE NEGOTIATE IN RESPECT OF ANY SECURITY (AS
DEFINED IN SECTION 2 OF THE SECURITIES ACT) THAT WOULD BE INTEGRATED WITH THE
OFFER OR SALE OF THE SECURITIES IN A MANNER THAT WOULD REQUIRE THE REGISTRATION
UNDER THE SECURITIES ACT OF THE SALE OF THE WARRANTS OR WARRANT SHARES OR THAT
WOULD BE INTEGRATED WITH THE OFFER OR SALE OF THE SECURITIES FOR PURPOSES OF THE
RULES AND REGULATIONS OF ANY TRADING MARKET SUCH THAT IT WOULD REQUIRE
SHAREHOLDER APPROVAL PRIOR TO THE CLOSING OF SUCH OTHER TRANSACTION UNLESS
SHAREHOLDER APPROVAL IS OBTAINED BEFORE THE CLOSING OF SUCH SUBSEQUENT
TRANSACTION.

--------------------------------------------------------------------------------

4.4              SECURITIES LAWS DISCLOSURE; PUBLICITY.  THE COMPANY SHALL (A)
BY THE DISCLOSURE TIME, ISSUE A PRESS RELEASE DISCLOSING THE MATERIAL TERMS OF
THE TRANSACTIONS CONTEMPLATED HEREBY, AND (B) FILE A CURRENT REPORT ON FORM 8-K,
INCLUDING THE TRANSACTION DOCUMENTS AS EXHIBITS THERETO, WITH THE COMMISSION
WITHIN THE TIME REQUIRED BY THE EXCHANGE ACT.  FROM AND AFTER THE ISSUANCE OF
SUCH PRESS RELEASE, THE COMPANY REPRESENTS TO THE PURCHASERS THAT IT SHALL HAVE
PUBLICLY DISCLOSED ALL MATERIAL, NON-PUBLIC INFORMATION DELIVERED TO ANY OF THE
PURCHASERS BY THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS.  IN ADDITION, EFFECTIVE UPON THE
ISSUANCE OF SUCH PRESS RELEASE, THE COMPANY ACKNOWLEDGES AND AGREES THAT ANY AND
ALL CONFIDENTIALITY OR SIMILAR OBLIGATIONS UNDER ANY AGREEMENT, WHETHER WRITTEN
OR ORAL, BETWEEN THE COMPANY, ANY OF ITS SUBSIDIARIES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES OR AFFILIATES ON THE ONE HAND, AND ANY OF
THE PURCHASERS OR ANY OF THEIR AFFILIATES ON THE OTHER HAND, SHALL TERMINATE.
THE COMPANY AND EACH PURCHASER SHALL CONSULT WITH EACH OTHER IN ISSUING ANY
OTHER PRESS RELEASES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND
NEITHER THE COMPANY NOR ANY PURCHASER SHALL ISSUE ANY SUCH PRESS RELEASE NOR
OTHERWISE MAKE ANY SUCH PUBLIC STATEMENT WITHOUT THE PRIOR CONSENT OF THE
COMPANY, WITH RESPECT TO ANY PRESS RELEASE OF ANY PURCHASER, OR WITHOUT THE
PRIOR CONSENT OF EACH PURCHASER, WITH RESPECT TO ANY PRESS RELEASE OF THE
COMPANY, WHICH CONSENT SHALL NOT UNREASONABLY BE WITHHELD OR DELAYED, EXCEPT IF
SUCH DISCLOSURE IS REQUIRED BY LAW, IN WHICH CASE THE DISCLOSING PARTY SHALL
PROMPTLY PROVIDE THE OTHER PARTY WITH PRIOR NOTICE OF SUCH PUBLIC STATEMENT OR
COMMUNICATION.  NOTWITHSTANDING THE FOREGOING, THE COMPANY SHALL NOT PUBLICLY
DISCLOSE THE NAME OF ANY PURCHASER, OR INCLUDE THE NAME OF ANY PURCHASER IN ANY
FILING WITH THE COMMISSION OR ANY REGULATORY AGENCY OR TRADING MARKET, WITHOUT
THE PRIOR WRITTEN CONSENT OF SUCH PURCHASER, EXCEPT (A) AS REQUIRED BY FEDERAL
SECURITIES LAW IN CONNECTION WITH THE FILING OF FINAL TRANSACTION DOCUMENTS WITH
THE COMMISSION AND (B) TO THE EXTENT SUCH DISCLOSURE IS REQUIRED BY LAW OR
TRADING MARKET REGULATIONS, IN WHICH CASE THE COMPANY SHALL PROVIDE THE
PURCHASERS WITH PRIOR NOTICE OF SUCH DISCLOSURE PERMITTED UNDER THIS CLAUSE (B).

4.5              SHAREHOLDER RIGHTS PLAN.  NO CLAIM WILL BE MADE OR ENFORCED BY
THE COMPANY OR, WITH THE CONSENT OF THE COMPANY, ANY OTHER PERSON, THAT ANY
PURCHASER IS AN “ACQUIRING PERSON” UNDER ANY CONTROL SHARE ACQUISITION, BUSINESS
COMBINATION, POISON PILL (INCLUDING ANY DISTRIBUTION UNDER A RIGHTS AGREEMENT)
OR SIMILAR ANTI-TAKEOVER PLAN OR ARRANGEMENT IN EFFECT OR HEREAFTER ADOPTED BY
THE COMPANY, OR THAT ANY PURCHASER COULD BE DEEMED TO TRIGGER THE PROVISIONS OF
ANY SUCH PLAN OR ARRANGEMENT, BY VIRTUE OF RECEIVING SECURITIES UNDER THE
TRANSACTION DOCUMENTS OR UNDER ANY OTHER AGREEMENT BETWEEN THE COMPANY AND THE
PURCHASERS.

4.6              NON-PUBLIC INFORMATION.  EXCEPT WITH RESPECT TO THE MATERIAL
TERMS AND CONDITIONS OF THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION
DOCUMENTS, WHICH SHALL BE DISCLOSED PURSUANT TO SECTION 4.4, THE COMPANY
COVENANTS AND AGREES THAT NEITHER IT, NOR ANY OTHER PERSON ACTING ON ITS BEHALF
WILL PROVIDE ANY PURCHASER OR ITS AGENTS OR COUNSEL WITH ANY INFORMATION THAT
CONSTITUTES, OR THE COMPANY REASONABLY BELIEVES CONSTITUTES, MATERIAL NON-PUBLIC
INFORMATION, UNLESS PRIOR THERETO SUCH PURCHASER SHALL HAVE CONSENTED TO THE
RECEIPT OF SUCH INFORMATION AND AGREED WITH THE COMPANY TO KEEP SUCH INFORMATION
CONFIDENTIAL.  THE COMPANY UNDERSTANDS AND CONFIRMS THAT EACH PURCHASER SHALL BE
RELYING ON THE FOREGOING COVENANT IN EFFECTING TRANSACTIONS IN SECURITIES OF THE
COMPANY.  TO THE EXTENT THAT THE COMPANY, ANY OF ITS SUBSIDIARIES, OR ANY OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS, EMPLOYEES OR AFFILIATES DELIVERS
ANY MATERIAL, NON-PUBLIC INFORMATION TO A PURCHASER WITHOUT SUCH PURCHASER’S
CONSENT, THE COMPANY HEREBY COVENANTS AND AGREES THAT SUCH PURCHASER SHALL NOT
HAVE ANY DUTY OF CONFIDENTIALITY TO THE COMPANY, ANY OF ITS SUBSIDIARIES, OR ANY
OF THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS, EMPLOYEES OR AFFILIATES, OR A
DUTY TO THE COMPANY, ANY OF ITS SUBSIDIARIES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES OR AFFILIATES NOT TO TRADE ON THE BASIS
OF, SUCH MATERIAL, NON-PUBLIC INFORMATION, PROVIDED THAT THE PURCHASER SHALL
REMAIN SUBJECT TO APPLICABLE LAW. TO THE EXTENT THAT ANY NOTICE PROVIDED
PURSUANT TO ANY TRANSACTION DOCUMENT CONSTITUTES, OR CONTAINS, MATERIAL,
NON-PUBLIC INFORMATION REGARDING THE COMPANY OR ANY SUBSIDIARIES, THE COMPANY
SHALL SIMULTANEOUSLY FILE SUCH NOTICE WITH THE COMMISSION PURSUANT TO A CURRENT
REPORT ON FORM 8-K.  THE COMPANY UNDERSTANDS AND CONFIRMS THAT EACH PURCHASER
SHALL BE RELYING ON THE FOREGOING COVENANT IN EFFECTING TRANSACTIONS IN
SECURITIES OF THE COMPANY.

4.7              USE OF PROCEEDS.  EXCEPT AS SET FORTH ON SCHEDULE 4.7 ATTACHED
HERETO, THE COMPANY SHALL USE THE NET PROCEEDS FROM THE SALE OF THE SECURITIES
HEREUNDER FOR WORKING CAPITAL PURPOSES AND SHALL NOT USE SUCH PROCEEDS: (A) FOR
THE SATISFACTION OF ANY PORTION OF THE OUTSTANDING PRINCIPAL AMOUNT OF ANY OF
THE COMPANY’S DEBT (OTHER THAN PAYMENT OF TRADE PAYABLES IN THE ORDINARY COURSE
OF THE COMPANY’S BUSINESS AND PRIOR PRACTICES), (B) FOR THE REDEMPTION OF ANY
COMMON STOCK OR COMMON STOCK EQUIVALENTS, (C) FOR THE SETTLEMENT OF ANY
OUTSTANDING LITIGATION OR (D) IN VIOLATION OF FCPA OR OFAC REGULATIONS.

--------------------------------------------------------------------------------

4.8              INDEMNIFICATION OF PURCHASERS.   SUBJECT TO THE PROVISIONS OF
THIS SECTION 4.8, THE COMPANY WILL INDEMNIFY AND HOLD EACH PURCHASER AND ITS
DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS, PARTNERS, EMPLOYEES AND AGENTS (AND
ANY OTHER PERSONS WITH A FUNCTIONALLY EQUIVALENT ROLE OF A PERSON HOLDING SUCH
TITLES NOTWITHSTANDING A LACK OF SUCH TITLE OR ANY OTHER TITLE), EACH PERSON WHO
CONTROLS SUCH PURCHASER (WITHIN THE MEANING OF SECTION 15 OF THE SECURITIES ACT
AND SECTION 20 OF THE EXCHANGE ACT), AND THE DIRECTORS, OFFICERS, SHAREHOLDERS,
AGENTS, MEMBERS, PARTNERS OR EMPLOYEES (AND ANY OTHER PERSONS WITH A
FUNCTIONALLY EQUIVALENT ROLE OF A PERSON HOLDING SUCH TITLES NOTWITHSTANDING A
LACK OF SUCH TITLE OR ANY OTHER TITLE) OF SUCH CONTROLLING PERSONS (EACH, A
“PURCHASER PARTY”) HARMLESS FROM ANY AND ALL LOSSES, LIABILITIES, OBLIGATIONS,
CLAIMS, CONTINGENCIES, DAMAGES, COSTS AND EXPENSES, INCLUDING ALL JUDGMENTS,
AMOUNTS PAID IN SETTLEMENTS, COURT COSTS AND REASONABLE ATTORNEYS’ FEES AND
COSTS OF INVESTIGATION THAT ANY SUCH PURCHASER PARTY MAY SUFFER OR INCUR AS A
RESULT OF OR RELATING TO (A) ANY BREACH OF ANY OF THE REPRESENTATIONS,
WARRANTIES, COVENANTS OR AGREEMENTS MADE BY THE COMPANY IN THIS AGREEMENT OR IN
THE OTHER TRANSACTION DOCUMENTS OR (B) ANY ACTION INSTITUTED AGAINST THE
PURCHASER PARTIES IN ANY CAPACITY, OR ANY OF THEM OR THEIR RESPECTIVE
AFFILIATES, BY ANY STOCKHOLDER OF THE COMPANY WHO IS NOT AN AFFILIATE OF SUCH
PURCHASER PARTY, WITH RESPECT TO ANY OF THE TRANSACTIONS CONTEMPLATED BY THE
TRANSACTION DOCUMENTS (UNLESS SUCH ACTION IS SOLELY BASED UPON A MATERIAL BREACH
OF SUCH PURCHASER PARTY’S REPRESENTATIONS, WARRANTIES OR COVENANTS UNDER THE
TRANSACTION DOCUMENTS OR ANY AGREEMENTS OR UNDERSTANDINGS SUCH PURCHASER PARTY
MAY HAVE WITH ANY SUCH STOCKHOLDER OR ANY VIOLATIONS BY SUCH PURCHASER PARTY OF
STATE OR FEDERAL SECURITIES LAWS OR ANY CONDUCT BY SUCH PURCHASER PARTY WHICH IS
FINALLY JUDICIALLY DETERMINED TO CONSTITUTE FRAUD, GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT) OR (C) IN CONNECTION WITH ANY REGISTRATION STATEMENT OF THE COMPANY
PROVIDING FOR THE RESALE BY THE PURCHASERS OF THE WARRANT SHARES ISSUED AND
ISSUABLE UPON EXERCISE OF THE WARRANTS, THE COMPANY WILL INDEMNIFY EACH
PURCHASER PARTY, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, FROM AND
AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES, COSTS (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES) AND EXPENSES, AS INCURRED,
ARISING OUT OF OR RELATING TO (I) ANY UNTRUE OR ALLEGED UNTRUE STATEMENT OF A
MATERIAL FACT CONTAINED IN SUCH REGISTRATION STATEMENT, ANY PROSPECTUS OR ANY
FORM OF PROSPECTUS OR IN ANY AMENDMENT OR SUPPLEMENT THERETO OR IN ANY
PRELIMINARY PROSPECTUS, OR ARISING OUT OF OR RELATING TO ANY OMISSION OR ALLEGED
OMISSION OF A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE
THE STATEMENTS THEREIN (IN THE CASE OF ANY PROSPECTUS OR SUPPLEMENT THERETO, IN
THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE) NOT MISLEADING,
EXCEPT TO THE EXTENT, BUT ONLY TO THE EXTENT, THAT SUCH UNTRUE STATEMENTS OR
OMISSIONS ARE BASED SOLELY UPON INFORMATION REGARDING SUCH PURCHASER PARTY
FURNISHED IN WRITING TO THE COMPANY BY SUCH PURCHASER PARTY EXPRESSLY FOR USE
THEREIN, OR (II) ANY VIOLATION OR ALLEGED VIOLATION BY THE COMPANY OF THE
SECURITIES ACT, THE EXCHANGE ACT OR ANY STATE SECURITIES LAW, OR ANY RULE OR
REGULATION THEREUNDER IN CONNECTION THEREWITH.  IF ANY ACTION SHALL BE BROUGHT
AGAINST ANY PURCHASER PARTY IN RESPECT OF WHICH INDEMNITY MAY BE SOUGHT PURSUANT
TO THIS AGREEMENT, SUCH PURCHASER PARTY SHALL PROMPTLY NOTIFY THE COMPANY IN
WRITING, AND THE COMPANY SHALL HAVE THE RIGHT TO ASSUME THE DEFENSE THEREOF WITH
COUNSEL OF ITS OWN CHOOSING REASONABLY ACCEPTABLE TO THE PURCHASER PARTY.  ANY
PURCHASER PARTY SHALL HAVE THE RIGHT TO EMPLOY SEPARATE COUNSEL IN ANY SUCH
ACTION AND PARTICIPATE IN THE DEFENSE THEREOF, BUT THE FEES AND EXPENSES OF SUCH
COUNSEL SHALL BE AT THE EXPENSE OF SUCH PURCHASER PARTY EXCEPT TO THE EXTENT
THAT (X) THE EMPLOYMENT THEREOF HAS BEEN SPECIFICALLY AUTHORIZED BY THE COMPANY
IN WRITING, (Y) THE COMPANY HAS FAILED AFTER A REASONABLE PERIOD OF TIME TO
ASSUME SUCH DEFENSE AND TO EMPLOY COUNSEL OR (Z) IN SUCH ACTION THERE IS, IN THE
REASONABLE OPINION OF COUNSEL, A MATERIAL CONFLICT ON ANY MATERIAL ISSUE BETWEEN
THE POSITION OF THE COMPANY AND THE POSITION OF SUCH PURCHASER PARTY, IN WHICH
CASE THE COMPANY SHALL BE RESPONSIBLE FOR THE REASONABLE FEES AND EXPENSES OF NO
MORE THAN ONE SUCH SEPARATE COUNSEL.  THE COMPANY WILL NOT BE LIABLE TO ANY
PURCHASER PARTY UNDER THIS AGREEMENT (1) FOR ANY SETTLEMENT BY A PURCHASER PARTY
EFFECTED WITHOUT THE COMPANY’S PRIOR WRITTEN CONSENT, WHICH SHALL NOT BE
UNREASONABLY WITHHELD OR DELAYED; OR (2) TO THE EXTENT, BUT ONLY TO THE EXTENT
THAT A LOSS, CLAIM, DAMAGE OR LIABILITY IS ATTRIBUTABLE TO ANY PURCHASER PARTY’S
BREACH OF ANY OF THE REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS MADE
BY SUCH PURCHASER PARTY IN THIS AGREEMENT OR IN THE OTHER TRANSACTION DOCUMENTS.
THE INDEMNIFICATION REQUIRED BY THIS SECTION 4.8 SHALL BE MADE BY PERIODIC
PAYMENTS OF THE AMOUNT THEREOF DURING THE COURSE OF THE INVESTIGATION OR
DEFENSE, AS AND WHEN BILLS ARE RECEIVED OR ARE INCURRED. THE INDEMNITY
AGREEMENTS CONTAINED HEREIN SHALL BE IN ADDITION TO ANY CAUSE OF ACTION OR
SIMILAR RIGHT OF ANY PURCHASER PARTY AGAINST THE COMPANY OR OTHERS AND ANY
LIABILITIES THE COMPANY MAY BE SUBJECT TO PURSUANT TO LAW.

4.9              RESERVATION OF COMMON STOCK. AS OF THE DATE HEREOF, THE COMPANY
HAS RESERVED AND THE COMPANY SHALL CONTINUE TO RESERVE AND KEEP AVAILABLE AT ALL
TIMES, FREE OF PREEMPTIVE RIGHTS, A SUFFICIENT NUMBER OF SHARES OF COMMON STOCK
FOR THE PURPOSE OF ENABLING THE COMPANY TO ISSUE SHARES PURSUANT TO THIS
AGREEMENT AND WARRANT SHARES PURSUANT TO ANY EXERCISE OF THE WARRANTS.

--------------------------------------------------------------------------------

4.10          LISTING OF COMMON STOCK. THE COMPANY HEREBY AGREES TO USE BEST
EFFORTS TO MAINTAIN THE LISTING OR QUOTATION OF THE COMMON STOCK ON THE TRADING
MARKET ON WHICH IT IS CURRENTLY LISTED, AND CONCURRENTLY WITH THE CLOSING, THE
COMPANY SHALL APPLY TO LIST OR QUOTE ALL OF THE SHARES AND WARRANT SHARES ON
SUCH TRADING MARKET AND PROMPTLY SECURE THE LISTING OF ALL OF THE SHARES AND
WARRANT SHARES ON SUCH TRADING MARKET. THE COMPANY FURTHER AGREES, IF THE
COMPANY APPLIES TO HAVE THE COMMON STOCK TRADED ON ANY OTHER TRADING MARKET, IT
WILL THEN INCLUDE IN SUCH APPLICATION ALL OF THE SHARES AND WARRANT SHARES, AND
WILL TAKE SUCH OTHER ACTION AS IS NECESSARY TO CAUSE ALL OF THE SHARES AND
WARRANT SHARES TO BE LISTED OR QUOTED ON SUCH OTHER TRADING MARKET AS PROMPTLY
AS POSSIBLE.  THE COMPANY WILL THEN TAKE ALL ACTION REASONABLY NECESSARY TO
CONTINUE THE LISTING AND TRADING OF ITS COMMON STOCK ON A TRADING MARKET AND
WILL COMPLY IN ALL RESPECTS WITH THE COMPANY’S REPORTING, FILING AND OTHER
OBLIGATIONS UNDER THE BYLAWS OR RULES OF THE TRADING MARKET. THE COMPANY AGREES
TO MAINTAIN THE ELIGIBILITY OF THE COMMON STOCK FOR ELECTRONIC TRANSFER THROUGH
THE DEPOSITORY TRUST COMPANY OR ANOTHER ESTABLISHED CLEARING CORPORATION,
INCLUDING, WITHOUT LIMITATION, BY TIMELY PAYMENT OF FEES TO THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER ESTABLISHED CLEARING CORPORATION IN CONNECTION WITH SUCH
ELECTRONIC TRANSFER.

4.11          [RESERVED]

4.12          SUBSEQUENT EQUITY SALES. 

(A)                FROM THE DATE HEREOF UNTIL THIRTY (30) DAYS FOLLOWING THE
CLOSING DATE, NEITHER THE COMPANY NOR ANY SUBSIDIARY SHALL ISSUE, ENTER INTO ANY
AGREEMENT TO ISSUE OR ANNOUNCE THE ISSUANCE OR PROPOSED ISSUANCE OF ANY SHARES
OF COMMON STOCK OR COMMON STOCK EQUIVALENTS.

(B)               FROM THE DATE HEREOF UNTIL THE ONE (1) YEAR ANNIVERSARY OF THE
CLOSING DATE, THE COMPANY SHALL BE PROHIBITED FROM EFFECTING OR ENTERING INTO AN
AGREEMENT TO EFFECT ANY ISSUANCE BY THE COMPANY OR ANY OF ITS SUBSIDIARIES OF
COMMON STOCK OR COMMON STOCK EQUIVALENTS (OR A COMBINATION OF UNITS THEREOF)
INVOLVING A VARIABLE RATE TRANSACTION.  “VARIABLE RATE TRANSACTION” MEANS A
TRANSACTION IN WHICH THE COMPANY (I) ISSUES OR SELLS ANY DEBT OR EQUITY
SECURITIES THAT ARE CONVERTIBLE INTO, EXCHANGEABLE OR EXERCISABLE FOR, OR
INCLUDE THE RIGHT TO RECEIVE ADDITIONAL SHARES OF COMMON STOCK EITHER (A) AT A
CONVERSION PRICE, EXERCISE PRICE OR EXCHANGE RATE OR OTHER PRICE THAT IS BASED
UPON AND/OR VARIES WITH THE TRADING PRICES OF OR QUOTATIONS FOR THE SHARES OF
COMMON STOCK AT ANY TIME AFTER THE INITIAL ISSUANCE OF SUCH DEBT OR EQUITY
SECURITIES, OR (B) WITH A CONVERSION, EXERCISE OR EXCHANGE PRICE THAT IS SUBJECT
TO BEING RESET AT SOME FUTURE DATE AFTER THE INITIAL ISSUANCE OF SUCH DEBT OR
EQUITY SECURITY OR UPON THE OCCURRENCE OF SPECIFIED OR CONTINGENT EVENTS
DIRECTLY OR INDIRECTLY RELATED TO THE BUSINESS OF THE COMPANY OR THE MARKET FOR
THE COMMON STOCK OR (II) ENTERS INTO, OR EFFECTS A TRANSACTION UNDER, ANY
AGREEMENT, INCLUDING, BUT NOT LIMITED TO, AN EQUITY LINE OF CREDIT, WHEREBY THE
COMPANY MAY ISSUE SECURITIES AT A FUTURE DETERMINED PRICE; PROVIDED, HOWEVER,
THAT, AFTER NINETY (90) DAYS FOLLOWING THE CLOSING DATE, THE ISSUANCE OF SHARES
OF COMMON STOCK IN AN “AT THE MARKET” OFFERING WITH H.C. WAINWRIGHT & CO., LLC
AS SALES AGENT SHALL NOT BE DEEMED A VARIABLE RATE TRANSACTION.  ANY PURCHASER
SHALL BE ENTITLED TO OBTAIN INJUNCTIVE RELIEF AGAINST THE COMPANY TO PRECLUDE
ANY SUCH ISSUANCE, WHICH REMEDY SHALL BE IN ADDITION TO ANY RIGHT TO COLLECT
DAMAGES.

(C)                NOTWITHSTANDING THE FOREGOING, THIS SECTION 4.12 SHALL NOT
APPLY IN RESPECT OF AN EXEMPT ISSUANCE, EXCEPT THAT NO VARIABLE RATE TRANSACTION
SHALL BE AN EXEMPT ISSUANCE.

4.13          EQUAL TREATMENT OF PURCHASERS.  NO CONSIDERATION (INCLUDING ANY
MODIFICATION OF THIS AGREEMENT) SHALL BE OFFERED OR PAID TO ANY PERSON TO AMEND
OR CONSENT TO A WAIVER OR MODIFICATION OF ANY PROVISION OF THIS AGREEMENT UNLESS
THE SAME CONSIDERATION IS ALSO OFFERED TO ALL OF THE PARTIES TO THIS AGREEMENT. 
FOR CLARIFICATION PURPOSES, THIS PROVISION CONSTITUTES A SEPARATE RIGHT GRANTED
TO EACH PURCHASER BY THE COMPANY AND NEGOTIATED SEPARATELY BY EACH PURCHASER,
AND IS INTENDED FOR THE COMPANY TO TREAT THE PURCHASERS AS A CLASS AND SHALL NOT
IN ANY WAY BE CONSTRUED AS THE PURCHASERS ACTING IN CONCERT OR AS A GROUP WITH
RESPECT TO THE PURCHASE, DISPOSITION OR VOTING OF SECURITIES OR OTHERWISE.

--------------------------------------------------------------------------------

 

4.14          CERTAIN TRANSACTIONS AND CONFIDENTIALITY. EACH PURCHASER,
SEVERALLY AND NOT JOINTLY WITH THE OTHER PURCHASERS, COVENANTS THAT NEITHER IT
NOR ANY AFFILIATE ACTING ON ITS BEHALF OR PURSUANT TO ANY UNDERSTANDING WITH IT
WILL EXECUTE ANY PURCHASES OR SALES, INCLUDING SHORT SALES OF ANY OF THE
COMPANY’S SECURITIES DURING THE PERIOD COMMENCING WITH THE EXECUTION OF THIS
AGREEMENT AND ENDING AT SUCH TIME THAT THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT ARE FIRST PUBLICLY ANNOUNCED PURSUANT TO THE INITIAL PRESS RELEASE AS
DESCRIBED IN SECTION 4.4.  EACH PURCHASER, SEVERALLY AND NOT JOINTLY WITH THE
OTHER PURCHASERS, COVENANTS THAT UNTIL SUCH TIME AS THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT ARE PUBLICLY DISCLOSED BY THE COMPANY PURSUANT TO
THE INITIAL PRESS RELEASE AS DESCRIBED IN SECTION 4.4, SUCH PURCHASER WILL
MAINTAIN THE CONFIDENTIALITY OF THE EXISTENCE AND TERMS OF THIS TRANSACTION AND
THE INFORMATION INCLUDED IN THE DISCLOSURE SCHEDULES.  NOTWITHSTANDING THE
FOREGOING AND NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY, THE COMPANY EXPRESSLY ACKNOWLEDGES AND AGREES THAT (I) NO PURCHASER
MAKES ANY REPRESENTATION, WARRANTY OR COVENANT HEREBY THAT IT WILL NOT ENGAGE IN
EFFECTING TRANSACTIONS IN ANY SECURITIES OF THE COMPANY AFTER THE TIME THAT THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE FIRST PUBLICLY ANNOUNCED
PURSUANT TO THE INITIAL PRESS RELEASE AS DESCRIBED IN SECTION 4.4, (II) NO
PURCHASER SHALL BE RESTRICTED OR PROHIBITED FROM EFFECTING ANY TRANSACTIONS IN
ANY SECURITIES OF THE COMPANY IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS FROM
AND AFTER THE TIME THAT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE
FIRST PUBLICLY ANNOUNCED PURSUANT TO THE INITIAL PRESS RELEASE AS DESCRIBED IN
SECTION 4.4 AND (III) NO PURCHASER SHALL HAVE ANY DUTY OF CONFIDENTIALITY OR
DUTY NOT TO TRADE IN THE SECURITIES OF THE COMPANY TO THE COMPANY OR ITS
SUBSIDIARIES AFTER THE ISSUANCE OF THE INITIAL PRESS RELEASE AS DESCRIBED IN
SECTION 4.4.  NOTWITHSTANDING THE FOREGOING, IN THE CASE OF A PURCHASER THAT IS
A MULTI-MANAGED INVESTMENT VEHICLE WHEREBY SEPARATE PORTFOLIO MANAGERS MANAGE
SEPARATE PORTIONS OF SUCH PURCHASER’S ASSETS AND THE PORTFOLIO MANAGERS HAVE NO
DIRECT KNOWLEDGE OF THE INVESTMENT DECISIONS MADE BY THE PORTFOLIO MANAGERS
MANAGING OTHER PORTIONS OF SUCH PURCHASER’S ASSETS, THE COVENANT SET FORTH ABOVE
SHALL ONLY APPLY WITH RESPECT TO THE PORTION OF ASSETS MANAGED BY THE PORTFOLIO
MANAGER THAT MADE THE INVESTMENT DECISION TO PURCHASE THE SECURITIES COVERED BY
THIS AGREEMENT.

4.15          EXERCISE PROCEDURES. THE FORM OF NOTICE OF EXERCISE INCLUDED IN
THE WARRANTS SET FORTH THE TOTALITY OF THE PROCEDURES REQUIRED OF THE PURCHASERS
IN ORDER TO EXERCISE THE WARRANTS.  NO ADDITIONAL LEGAL OPINION, OTHER
INFORMATION OR INSTRUCTIONS SHALL BE REQUIRED OF THE PURCHASERS TO EXERCISE
THEIR WARRANTS.  WITHOUT LIMITING THE PRECEDING SENTENCES, NO INK-ORIGINAL
NOTICE OF EXERCISE SHALL BE REQUIRED, NOR SHALL ANY MEDALLION GUARANTEE (OR
OTHER TYPE OF GUARANTEE OR NOTARIZATION) OF ANY NOTICE OF EXERCISE FORM BE
REQUIRED IN ORDER TO EXERCISE THE WARRANTS.  THE COMPANY SHALL HONOR EXERCISES
OF THE WARRANTS AND SHALL DELIVER WARRANT SHARES IN ACCORDANCE WITH THE TERMS,
CONDITIONS AND TIME PERIODS SET FORTH IN THE TRANSACTION DOCUMENTS.

4.16          FORM D; BLUE SKY FILINGS.  THE COMPANY AGREES TO TIMELY FILE A
FORM D WITH RESPECT TO THE WARRANT AND WARRANT SHARES AS REQUIRED UNDER
REGULATION D AND TO PROVIDE A COPY THEREOF, PROMPTLY UPON REQUEST OF ANY
PURCHASER. THE COMPANY SHALL TAKE SUCH ACTION AS THE COMPANY SHALL REASONABLY
DETERMINE IS NECESSARY IN ORDER TO OBTAIN AN EXEMPTION FOR, OR TO QUALIFY THE
WARRANT AND WARRANT SHARES FOR, SALE TO THE PURCHASERS AT THE CLOSING UNDER
APPLICABLE SECURITIES OR “BLUE SKY” LAWS OF THE STATES OF THE UNITED STATES, AND
SHALL PROVIDE EVIDENCE OF SUCH ACTIONS PROMPTLY UPON REQUEST OF ANY PURCHASER.

4.17          REGISTRATION STATEMENT.  AS SOON AS PRACTICABLE (AND IN ANY EVENT
WITHIN 45 CALENDAR DAYS OF THE DATE OF THIS AGREEMENT), THE COMPANY SHALL FILE A
REGISTRATION STATEMENT ON FORM S-1 (OR OTHER APPROPRIATE FORM IF THE COMPANY IS
NOT THEN S-1 ELIGIBLE) PROVIDING FOR THE RESALE BY THE PURCHASERS OF THE WARRANT
SHARES ISSUED AND ISSUABLE UPON EXERCISE OF THE WARRANTS.  THE COMPANY SHALL USE
COMMERCIALLY REASONABLE EFFORTS TO CAUSE SUCH REGISTRATION TO BECOME EFFECTIVE
WITHIN 90 DAYS FOLLOWING THE CLOSING DATE AND TO KEEP SUCH REGISTRATION
STATEMENT EFFECTIVE AT ALL TIMES UNTIL NO PURCHASER OWNS ANY WARRANTS OR WARRANT
SHARES ISSUABLE UPON EXERCISE THEREOF.

--------------------------------------------------------------------------------

ARTICLE V.
MISCELLANEOUS

5.1              TERMINATION.  THIS AGREEMENT MAY BE TERMINATED BY ANY
PURCHASER, AS TO SUCH PURCHASER’S OBLIGATIONS HEREUNDER ONLY AND WITHOUT ANY
EFFECT WHATSOEVER ON THE OBLIGATIONS BETWEEN THE COMPANY AND THE OTHER
PURCHASERS, BY WRITTEN NOTICE TO THE OTHER PARTIES, IF THE CLOSING HAS NOT BEEN
CONSUMMATED ON OR BEFORE THE FIFTH (5TH) TRADING DAY FOLLOWING THE DATE HEREOF;
PROVIDED, HOWEVER, THAT NO SUCH TERMINATION WILL AFFECT THE RIGHT OF ANY PARTY
TO SUE FOR ANY BREACH BY ANY OTHER PARTY (OR PARTIES).

5.2              FEES AND EXPENSES.  EXCEPT AS EXPRESSLY SET FORTH IN THE
TRANSACTION DOCUMENTS TO THE CONTRARY, EACH PARTY SHALL PAY THE FEES AND
EXPENSES OF ITS ADVISERS, COUNSEL, ACCOUNTANTS AND OTHER EXPERTS, IF ANY, AND
ALL OTHER EXPENSES INCURRED BY SUCH PARTY INCIDENT TO THE NEGOTIATION,
PREPARATION, EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT.  THE COMPANY
SHALL PAY ALL TRANSFER AGENT FEES (INCLUDING, WITHOUT LIMITATION, ANY FEES
REQUIRED FOR SAME-DAY PROCESSING OF ANY INSTRUCTION LETTER DELIVERED BY THE
COMPANY AND ANY EXERCISE NOTICE DELIVERED BY A PURCHASER), STAMP TAXES AND OTHER
TAXES AND DUTIES LEVIED IN CONNECTION WITH THE DELIVERY OF ANY SECURITIES TO THE
PURCHASERS.

5.3              ENTIRE AGREEMENT.  THE TRANSACTION DOCUMENTS, TOGETHER WITH THE
EXHIBITS AND SCHEDULES THERETO, THE PROSPECTUS AND THE PROSPECTUS SUPPLEMENT,
CONTAIN THE ENTIRE UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND THEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS,
ORAL OR WRITTEN, WITH RESPECT TO SUCH MATTERS, WHICH THE PARTIES ACKNOWLEDGE
HAVE BEEN MERGED INTO SUCH DOCUMENTS, EXHIBITS AND SCHEDULES.

5.4              NOTICES.  ANY AND ALL NOTICES OR OTHER COMMUNICATIONS OR
DELIVERIES REQUIRED OR PERMITTED TO BE PROVIDED HEREUNDER SHALL BE IN WRITING
AND SHALL BE DEEMED GIVEN AND EFFECTIVE ON THE EARLIEST OF: (A) THE TIME OF
TRANSMISSION, IF SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA FACSIMILE AT THE
FACSIMILE NUMBER OR EMAIL ATTACHMENT AT THE EMAIL ADDRESS AS SET FORTH ON THE
SIGNATURE PAGES ATTACHED HERETO AT OR PRIOR TO 5:30 P.M. (NEW YORK CITY TIME) ON
A TRADING DAY, (B) THE NEXT TRADING DAY AFTER THE TIME OF TRANSMISSION, IF SUCH
NOTICE OR COMMUNICATION IS DELIVERED VIA FACSIMILE AT THE FACSIMILE NUMBER OR
EMAIL ATTACHMENT AT THE EMAIL ADDRESS AS SET FORTH ON THE SIGNATURE PAGES
ATTACHED HERETO ON A DAY THAT IS NOT A TRADING DAY OR LATER THAN 5:30 P.M. (NEW
YORK CITY TIME) ON ANY TRADING DAY, (C) THE SECOND (2ND) TRADING DAY FOLLOWING
THE DATE OF MAILING, IF SENT BY U.S. NATIONALLY RECOGNIZED OVERNIGHT COURIER
SERVICE OR (D) UPON ACTUAL RECEIPT BY THE PARTY TO WHOM SUCH NOTICE IS REQUIRED
TO BE GIVEN.  THE ADDRESS FOR SUCH NOTICES AND COMMUNICATIONS SHALL BE AS SET
FORTH ON THE SIGNATURE PAGES ATTACHED HERETO.

5.5              AMENDMENTS; WAIVERS.  NO PROVISION OF THIS AGREEMENT MAY BE
WAIVED, MODIFIED, SUPPLEMENTED OR AMENDED EXCEPT IN A WRITTEN INSTRUMENT SIGNED,
IN THE CASE OF AN AMENDMENT, BY THE COMPANY AND PURCHASERS WHICH PURCHASED AT
LEAST 50.1% IN INTEREST OF THE SHARES BASED ON THE INITIAL SUBSCRIPTION AMOUNTS
HEREUNDER OR, IN THE CASE OF A WAIVER, BY THE PARTY AGAINST WHOM ENFORCEMENT OF
ANY SUCH WAIVED PROVISION IS SOUGHT, PROVIDED THAT IF ANY AMENDMENT,
MODIFICATION OR WAIVER DISPROPORTIONATELY AND ADVERSELY IMPACTS A PURCHASER (OR
GROUP OF PURCHASERS), THE CONSENT OF SUCH DISPROPORTIONATELY IMPACTED PURCHASER
(OR GROUP OF PURCHASERS) SHALL ALSO BE REQUIRED.  NO WAIVER OF ANY DEFAULT WITH
RESPECT TO ANY PROVISION, CONDITION OR REQUIREMENT OF THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTINUING WAIVER IN THE FUTURE OR A WAIVER OF ANY SUBSEQUENT
DEFAULT OR A WAIVER OF ANY OTHER PROVISION, CONDITION OR REQUIREMENT HEREOF, NOR
SHALL ANY DELAY OR OMISSION OF ANY PARTY TO EXERCISE ANY RIGHT HEREUNDER IN ANY
MANNER IMPAIR THE EXERCISE OF ANY SUCH RIGHT. ANY PROPOSED AMENDMENT OR WAIVER
THAT DISPROPORTIONATELY, MATERIALLY AND ADVERSELY AFFECTS THE RIGHTS AND
OBLIGATIONS OF ANY PURCHASER RELATIVE TO THE COMPARABLE RIGHTS AND OBLIGATIONS
OF THE OTHER PURCHASERS SHALL REQUIRE THE PRIOR WRITTEN CONSENT OF SUCH
ADVERSELY AFFECTED PURCHASER. ANY AMENDMENT EFFECTED IN ACCORDANCE WITH THIS
SECTION 5.5 SHALL BE BINDING UPON EACH PURCHASER AND HOLDER OF SECURITIES AND
THE COMPANY.

5.6              HEADINGS.  THE HEADINGS HEREIN ARE FOR CONVENIENCE ONLY, DO NOT
CONSTITUTE A PART OF THIS AGREEMENT AND SHALL NOT BE DEEMED TO LIMIT OR AFFECT
ANY OF THE PROVISIONS HEREOF.

5.7              SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL BE BINDING UPON
AND INURE TO THE BENEFIT OF THE PARTIES AND THEIR SUCCESSORS AND PERMITTED
ASSIGNS.  THE COMPANY MAY NOT ASSIGN THIS AGREEMENT OR ANY RIGHTS OR OBLIGATIONS
HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF EACH PURCHASER (OTHER THAN BY
MERGER).  ANY PURCHASER MAY ASSIGN ANY OR ALL OF ITS RIGHTS UNDER THIS AGREEMENT
TO ANY PERSON TO WHOM SUCH PURCHASER ASSIGNS OR TRANSFERS ANY SECURITIES,
PROVIDED THAT SUCH TRANSFEREE AGREES IN WRITING TO BE BOUND, WITH RESPECT TO THE
TRANSFERRED SECURITIES, BY THE PROVISIONS OF THE TRANSACTION DOCUMENTS THAT
APPLY TO THE “PURCHASERS.”

5.8              NO THIRD-PARTY BENEFICIARIES.  THE PLACEMENT AGENT SHALL BE THE
THIRD PARTY BENEFICIARY OF THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY IN
SECTION 3.1 AND THE REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS IN SECTION
3.2.  THIS AGREEMENT IS INTENDED FOR THE BENEFIT OF THE PARTIES HERETO AND THEIR
RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS AND IS NOT FOR THE BENEFIT OF, NOR
MAY ANY PROVISION HEREOF BE ENFORCED BY, ANY OTHER PERSON, EXCEPT AS OTHERWISE
SET FORTH IN SECTION 4.8 AND THIS SECTION 5.8.

--------------------------------------------------------------------------------

5.9              GOVERNING LAW.  ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THE TRANSACTION DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.  EACH PARTY AGREES THAT ALL LEGAL PROCEEDINGS CONCERNING THE
INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT AND ANY OTHER TRANSACTION DOCUMENTS (WHETHER BROUGHT AGAINST A
PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, SHAREHOLDERS,
PARTNERS, MEMBERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE
STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK.  EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY ACTION OR PROCEEDING, ANY CLAIM THAT IT
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH
ACTION OR PROCEEDING IS IMPROPER OR IS AN INCONVENIENT VENUE FOR SUCH
PROCEEDING.  EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH ACTION OR PROCEEDING BY MAILING
A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH
EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT
UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND
SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.   IF ANY PARTY SHALL COMMENCE AN ACTION OR PROCEEDING
TO ENFORCE ANY PROVISIONS OF THE TRANSACTION DOCUMENTS, THEN, IN ADDITION TO THE
OBLIGATIONS OF THE COMPANY UNDER SECTION 4.8, THE PREVAILING PARTY IN SUCH
ACTION OR PROCEEDING SHALL BE REIMBURSED BY THE NON-PREVAILING PARTY FOR ITS
REASONABLE ATTORNEYS’ FEES AND OTHER COSTS AND EXPENSES INCURRED WITH THE
INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH ACTION OR PROCEEDING.

5.10          SURVIVAL.  THE REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN
SHALL SURVIVE THE CLOSING AND THE DELIVERY OF THE SECURITIES.

5.11          EXECUTION.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE
COUNTERPARTS, ALL OF WHICH WHEN TAKEN TOGETHER SHALL BE CONSIDERED ONE AND THE
SAME AGREEMENT AND SHALL BECOME EFFECTIVE WHEN COUNTERPARTS HAVE BEEN SIGNED BY
EACH PARTY AND DELIVERED TO EACH OTHER PARTY, IT BEING UNDERSTOOD THAT THE
PARTIES NEED NOT SIGN THE SAME COUNTERPART.  IN THE EVENT THAT ANY SIGNATURE IS
DELIVERED BY FACSIMILE TRANSMISSION OR BY E-MAIL DELIVERY OF A “.PDF” FORMAT
DATA FILE, SUCH SIGNATURE SHALL CREATE A VALID AND BINDING OBLIGATION OF THE
PARTY EXECUTING (OR ON WHOSE BEHALF SUCH SIGNATURE IS EXECUTED) WITH THE SAME
FORCE AND EFFECT AS IF SUCH FACSIMILE OR “.PDF” SIGNATURE PAGE WERE AN ORIGINAL
THEREOF.

5.12          SEVERABILITY.  IF ANY TERM, PROVISION, COVENANT OR RESTRICTION OF
THIS AGREEMENT IS HELD BY A COURT OF COMPETENT JURISDICTION TO BE INVALID,
ILLEGAL, VOID OR UNENFORCEABLE, THE REMAINDER OF THE TERMS, PROVISIONS,
COVENANTS AND RESTRICTIONS SET FORTH HEREIN SHALL REMAIN IN FULL FORCE AND
EFFECT AND SHALL IN NO WAY BE AFFECTED, IMPAIRED OR INVALIDATED, AND THE PARTIES
HERETO SHALL USE THEIR COMMERCIALLY REASONABLE EFFORTS TO FIND AND EMPLOY AN
ALTERNATIVE MEANS TO ACHIEVE THE SAME OR SUBSTANTIALLY THE SAME RESULT AS THAT
CONTEMPLATED BY SUCH TERM, PROVISION, COVENANT OR RESTRICTION. IT IS HEREBY
STIPULATED AND DECLARED TO BE THE INTENTION OF THE PARTIES THAT THEY WOULD HAVE
EXECUTED THE REMAINING TERMS, PROVISIONS, COVENANTS AND RESTRICTIONS WITHOUT
INCLUDING ANY OF SUCH THAT MAY BE HEREAFTER DECLARED INVALID, ILLEGAL, VOID OR
UNENFORCEABLE.

5.13          RESCISSION AND WITHDRAWAL RIGHT.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN (AND WITHOUT LIMITING ANY SIMILAR PROVISIONS OF) ANY OF
THE OTHER TRANSACTION DOCUMENTS, WHENEVER ANY PURCHASER EXERCISES A RIGHT,
ELECTION, DEMAND OR OPTION UNDER A TRANSACTION DOCUMENT AND THE COMPANY DOES NOT
TIMELY PERFORM ITS RELATED OBLIGATIONS WITHIN THE PERIODS THEREIN PROVIDED, THEN
SUCH PURCHASER MAY RESCIND OR WITHDRAW, IN ITS SOLE DISCRETION FROM TIME TO TIME
UPON WRITTEN NOTICE TO THE COMPANY, ANY RELEVANT NOTICE, DEMAND OR ELECTION IN
WHOLE OR IN PART WITHOUT PREJUDICE TO ITS FUTURE ACTIONS AND RIGHTS; PROVIDED,
HOWEVER, THAT IN THE CASE OF A RESCISSION OF AN EXERCISE OF A WARRANT, THE
APPLICABLE PURCHASER SHALL BE REQUIRED TO RETURN ANY SHARES OF COMMON STOCK
SUBJECT TO ANY SUCH RESCINDED EXERCISE NOTICE CONCURRENTLY WITH THE RETURN TO
SUCH PURCHASER OF THE AGGREGATE EXERCISE PRICE PAID TO THE COMPANY FOR SUCH
SHARES AND THE RESTORATION OF SUCH PURCHASER’S RIGHT TO ACQUIRE SUCH SHARES
PURSUANT TO SUCH PURCHASER’S WARRANT (INCLUDING, ISSUANCE OF A REPLACEMENT
WARRANT CERTIFICATE EVIDENCING SUCH RESTORED RIGHT).

5.14          REPLACEMENT OF SECURITIES.  IF ANY CERTIFICATE OR INSTRUMENT
EVIDENCING ANY SECURITIES IS MUTILATED, LOST, STOLEN OR DESTROYED, THE COMPANY
SHALL ISSUE OR CAUSE TO BE ISSUED IN EXCHANGE AND SUBSTITUTION FOR AND UPON
CANCELLATION THEREOF (IN THE CASE OF MUTILATION), OR IN LIEU OF AND SUBSTITUTION
THEREFOR, A NEW CERTIFICATE OR INSTRUMENT, BUT ONLY UPON RECEIPT OF EVIDENCE
REASONABLY SATISFACTORY TO THE COMPANY OF SUCH LOSS, THEFT OR DESTRUCTION.  THE
APPLICANT FOR A NEW CERTIFICATE OR INSTRUMENT UNDER SUCH CIRCUMSTANCES SHALL
ALSO PAY ANY REASONABLE THIRD-PARTY COSTS (INCLUDING CUSTOMARY INDEMNITY)
ASSOCIATED WITH THE ISSUANCE OF SUCH REPLACEMENT SECURITIES.

--------------------------------------------------------------------------------

 

5.15          REMEDIES.  IN ADDITION TO BEING ENTITLED TO EXERCISE ALL RIGHTS
PROVIDED HEREIN OR GRANTED BY LAW, INCLUDING RECOVERY OF DAMAGES, EACH OF THE
PURCHASERS AND THE COMPANY WILL BE ENTITLED TO SPECIFIC PERFORMANCE UNDER THE
TRANSACTION DOCUMENTS.  THE PARTIES AGREE THAT MONETARY DAMAGES MAY NOT BE
ADEQUATE COMPENSATION FOR ANY LOSS INCURRED BY REASON OF ANY BREACH OF
OBLIGATIONS CONTAINED IN THE TRANSACTION DOCUMENTS AND HEREBY AGREE TO WAIVE AND
NOT TO ASSERT IN ANY ACTION FOR SPECIFIC PERFORMANCE OF ANY SUCH OBLIGATION THE
DEFENSE THAT A REMEDY AT LAW WOULD BE ADEQUATE.

5.16          PAYMENT SET ASIDE.  TO THE EXTENT THAT THE COMPANY MAKES A PAYMENT
OR PAYMENTS TO ANY PURCHASER PURSUANT TO ANY TRANSACTION DOCUMENT OR A PURCHASER
ENFORCES OR EXERCISES ITS RIGHTS THEREUNDER, AND SUCH PAYMENT OR PAYMENTS OR THE
PROCEEDS OF SUCH ENFORCEMENT OR EXERCISE OR ANY PART THEREOF ARE SUBSEQUENTLY
INVALIDATED, DECLARED TO BE FRAUDULENT OR PREFERENTIAL, SET ASIDE, RECOVERED
FROM, DISGORGED BY OR ARE REQUIRED TO BE REFUNDED, REPAID OR OTHERWISE RESTORED
TO THE COMPANY, A TRUSTEE, RECEIVER OR ANY OTHER PERSON UNDER ANY LAW
(INCLUDING, WITHOUT LIMITATION, ANY BANKRUPTCY LAW, STATE OR FEDERAL LAW, COMMON
LAW OR EQUITABLE CAUSE OF ACTION), THEN TO THE EXTENT OF ANY SUCH RESTORATION
THE OBLIGATION OR PART THEREOF ORIGINALLY INTENDED TO BE SATISFIED SHALL BE
REVIVED AND CONTINUED IN FULL FORCE AND EFFECT AS IF SUCH PAYMENT HAD NOT BEEN
MADE OR SUCH ENFORCEMENT OR SETOFF HAD NOT OCCURRED.

5.17          INDEPENDENT NATURE OF PURCHASERS’ OBLIGATIONS AND RIGHTS.  THE
OBLIGATIONS OF EACH PURCHASER UNDER ANY TRANSACTION DOCUMENT ARE SEVERAL AND NOT
JOINT WITH THE OBLIGATIONS OF ANY OTHER PURCHASER, AND NO PURCHASER SHALL BE
RESPONSIBLE IN ANY WAY FOR THE PERFORMANCE OR NON-PERFORMANCE OF THE OBLIGATIONS
OF ANY OTHER PURCHASER UNDER ANY TRANSACTION DOCUMENT.  NOTHING CONTAINED HEREIN
OR IN ANY OTHER TRANSACTION DOCUMENT, AND NO ACTION TAKEN BY ANY PURCHASER
PURSUANT HERETO OR THERETO, SHALL BE DEEMED TO CONSTITUTE THE PURCHASERS AS A
PARTNERSHIP, AN ASSOCIATION, A JOINT VENTURE OR ANY OTHER KIND OF ENTITY, OR
CREATE A PRESUMPTION THAT THE PURCHASERS ARE IN ANY WAY ACTING IN CONCERT OR AS
A GROUP WITH RESPECT TO SUCH OBLIGATIONS OR THE TRANSACTIONS CONTEMPLATED BY THE
TRANSACTION DOCUMENTS.  EACH PURCHASER SHALL BE ENTITLED TO INDEPENDENTLY
PROTECT AND ENFORCE ITS RIGHTS INCLUDING, WITHOUT LIMITATION, THE RIGHTS ARISING
OUT OF THIS AGREEMENT OR OUT OF THE OTHER TRANSACTION DOCUMENTS, AND IT SHALL
NOT BE NECESSARY FOR ANY OTHER PURCHASER TO BE JOINED AS AN ADDITIONAL PARTY IN
ANY PROCEEDING FOR SUCH PURPOSE.  EACH PURCHASER HAS BEEN REPRESENTED BY ITS OWN
SEPARATE LEGAL COUNSEL IN ITS REVIEW AND NEGOTIATION OF THE TRANSACTION
DOCUMENTS.  FOR REASONS OF ADMINISTRATIVE CONVENIENCE ONLY, EACH PURCHASER AND
ITS RESPECTIVE COUNSEL HAVE CHOSEN TO COMMUNICATE WITH THE COMPANY THROUGH EGS. 
EGS DOES NOT REPRESENT ANY OF THE PURCHASERS AND ONLY REPRESENTS THE PLACEMENT
AGENT.  THE COMPANY HAS ELECTED TO PROVIDE ALL PURCHASERS WITH THE SAME TERMS
AND TRANSACTION DOCUMENTS FOR THE CONVENIENCE OF THE COMPANY AND NOT BECAUSE IT
WAS REQUIRED OR REQUESTED TO DO SO BY ANY OF THE PURCHASERS.  IT IS EXPRESSLY
UNDERSTOOD AND AGREED THAT EACH PROVISION CONTAINED IN THIS AGREEMENT AND IN
EACH OTHER TRANSACTION DOCUMENT IS BETWEEN THE COMPANY AND A PURCHASER, SOLELY,
AND NOT BETWEEN THE COMPANY AND THE PURCHASERS COLLECTIVELY AND NOT BETWEEN AND
AMONG THE PURCHASERS.

5.18          LIQUIDATED DAMAGES.  THE COMPANY’S OBLIGATIONS TO PAY ANY PARTIAL
LIQUIDATED DAMAGES OR OTHER AMOUNTS OWING UNDER THE TRANSACTION DOCUMENTS IS A
CONTINUING OBLIGATION OF THE COMPANY AND SHALL NOT TERMINATE UNTIL ALL UNPAID
PARTIAL LIQUIDATED DAMAGES AND OTHER AMOUNTS HAVE BEEN PAID NOTWITHSTANDING THE
FACT THAT THE INSTRUMENT OR SECURITY PURSUANT TO WHICH SUCH PARTIAL LIQUIDATED
DAMAGES OR OTHER AMOUNTS ARE DUE AND PAYABLE SHALL HAVE BEEN CANCELED.

5.19          SATURDAYS, SUNDAYS, HOLIDAYS, ETC.  IF THE LAST OR APPOINTED DAY
FOR THE TAKING OF ANY ACTION OR THE EXPIRATION OF ANY RIGHT REQUIRED OR GRANTED
HEREIN SHALL NOT BE A BUSINESS DAY, THEN SUCH ACTION MAY BE TAKEN OR SUCH RIGHT
MAY BE EXERCISED ON THE NEXT SUCCEEDING BUSINESS DAY.

5.20          CONSTRUCTION.  THE PARTIES AGREE THAT EACH OF THEM AND/OR THEIR
RESPECTIVE COUNSEL HAVE REVIEWED AND HAD AN OPPORTUNITY TO REVISE THE
TRANSACTION DOCUMENTS AND, THEREFORE, THE NORMAL RULE OF CONSTRUCTION TO THE
EFFECT THAT ANY AMBIGUITIES ARE TO BE RESOLVED AGAINST THE DRAFTING PARTY SHALL
NOT BE EMPLOYED IN THE INTERPRETATION OF THE TRANSACTION DOCUMENTS OR ANY
AMENDMENTS THERETO. IN ADDITION, EACH AND EVERY REFERENCE TO SHARE PRICES AND
SHARES OF COMMON STOCK IN ANY TRANSACTION DOCUMENT SHALL BE SUBJECT TO
ADJUSTMENT FOR REVERSE AND FORWARD STOCK SPLITS, STOCK DIVIDENDS, STOCK
COMBINATIONS AND OTHER SIMILAR TRANSACTIONS OF THE COMMON STOCK THAT OCCUR AFTER
THE DATE OF THIS AGREEMENT.

5.21          WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

--------------------------------------------------------------------------------

(SIGNATURE PAGES FOLLOW)

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

CLEARONE, INC. 

 

Address for Notice:

By:/s/ Zeynep Hakimoglu

     Name: Zeynep Hakimoglu

     Title: Chief Executive Officer

With a copy to (which shall not constitute notice):

 

E-Mail: zee.hakimoglu@clearone.com

Fax:

 

Seyfarth Shaw LLP

700 Milam Street, Suite 1400

Houston, Texas 77002

Email: mdunn@seyfarth.com

Attention: Michael T. Dunn

 

 

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

[PURCHASER SIGNATURE PAGES TO CLRO SECURITIES PURCHASE AGREEMENT]

 

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

Name of Purchaser: ________________________________________________________

Signature of Authorized Signatory of Purchaser:
_________________________________

Name of Authorized Signatory: _______________________________________________

Title of Authorized Signatory: ________________________________________________

Email Address of Authorized Signatory:_________________________________________

Address for Notice to Purchaser:

 

 

Address for Delivery of Warrants to Purchaser (if not same as address for
notice):

 

Subscription Amount: $_________________

 

Shares: _________________

 

Warrant Shares: __________________

 

EIN Number: _______________________

   Notwithstanding anything contained in this Agreement to the contrary, by
checking this box (i) the obligations of the above-signed to purchase the
securities set forth in this Agreement to be purchased from the Company by the
above-signed, and the obligations of the Company to sell such securities to the
above-signed, shall be unconditional and all conditions to Closing shall be
disregarded, (ii) the Closing shall occur on the second (2nd) Trading Day
following the date of this Agreement and (iii) any condition to Closing
contemplated by this Agreement (but prior to being disregarded by clause (i)
above) that required delivery by the Company or the above-signed of any
agreement, instrument, certificate or the like or purchase price (as applicable)
shall no longer be a condition and shall instead be an unconditional obligation
of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or purchase price (as applicable) to such
other party on the Closing Date.

 

[SIGNATURE PAGES CONTINUE]

--------------------------------------------------------------------------------