Exhibit 10.1
 
 
 
 
 
 
NEULION, INC.
 

 
SUBSCRIPTION AGREEMENT
 

 
SALE OF 6,219,991 CLASS 4 PREFERENCE SHARES
 

 
June 29, 2011
 
 
 
 
 
 
 
 

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TERMS AND CONDITIONS OF SUBSCRIPTION
 
1.             Subscription.  The undersigned (the “Purchaser”) hereby tenders
to NeuLion, Inc. (the “Corporation”) this subscription offer which, upon
acceptance by the Corporation, will constitute an agreement (the “Subscription
Agreement”) of the Purchaser with the Corporation to purchase from the
Corporation and, on the part of the Corporation, to sell to the Purchaser, that
number of the Corporation’s Class 4 Preference Shares (“Preferred Shares”) set
out on the signature page below (the “Purchaser’s Shares”) at the price of
$0.4582 per Preferred Share and in the amount of the aggregate subscription
price set forth on the signature page of this Subscription Agreement (the
“Purchase Price”), all on the terms and subject to the conditions set forth in
this Subscription Agreement (the “Offering”).
 
                The rights, terms and conditions of the Preferred Shares are set
forth on Schedule B to this Subscription Agreement.
 
2.             Definitions.  In this Subscription Agreement, unless the context
otherwise requires:
 
“Accredited Investor Questionnaire” means the accredited investor questionnaire,
in the form of Schedule A attached hereto, required to be completed by the
Purchaser as a resident of the United States.
 
“Business Day” means a day which is not a Saturday, Sunday or holiday in New
York, New York.
 
“Bylaws” has the meaning ascribed to such term in Section 6(h) hereof.
 
“Certificate” means the Certificate of Incorporation of the Corporation, as
amended.
 
“Closing” means the completion of the issue and sale by the Corporation and the
purchase by the Purchaser of the Preferred Shares pursuant to this Subscription
Agreement.
 
“Closing Date” means June 29, 2011.
 
“Closing Time” means 10:00 a.m. (New York time) on the Closing Date or such
other time as the Corporation and the Purchaser may agree.
 
“Common Stock” means the common stock, par value $0.01, of the Corporation.
 
“Corporation” has the meaning ascribed to such term in Section 1 hereof.
 
“Material Adverse Effect” means an event, change or occurrence that
individually, or together with any other event, change or occurrence, has a
material adverse impact on the Corporation’s financial position, business or
results of operations; provided, however, that the term Material Adverse Effect
shall not include the impact of (i) changes in laws of general applicability or
interpretations thereof by courts or other governmental authorities, (ii)
changes in generally accepted accounting principles, (iii) seasonal fluctuations
in the Corporation’s performance due to general economic conditions that do not
have a disproportionately adverse effect on the Corporation, (iv) the
announcement of the transactions contemplated by this Subscription Agreement,
(v) any action taken at Purchaser’s request, or (vi) a change in the market
price of the Common Stock.
 
“Preferred Shares” has the meaning ascribed to such term in Section 1 hereof.
 
“Private Placement Exemption” means an exemption from the prospectus and
registration requirements under applicable Securities Laws.
 
“Purchase Price” has the meaning ascribed to such term in Section 1 hereof.
 
 
 

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“Purchaser” has the meaning ascribed to such term in Section 1 hereof.
 
“Purchaser’s Shares” has the meaning ascribed to such term in Section 1 hereof.
 
“SEC” means the United States Securities and Exchange Commission, or any
successor agency thereto.
 
“Securities Documents” has the meaning ascribed to such term in Section 6(j)
hereof.
 
“Securities Laws” means the securities laws of the United States and the
regulations and rules made and forms prescribed thereunder together with all
national and applicable multilateral instruments, blanket orders and rulings of
the SEC and together with all published policies, rules and regulations of the
Stock Exchange.
 
“Stock Exchange” means the Toronto Stock Exchange.
 
“Securities Act” means the United States Securities Act of 1933, as amended.
 
(a)           Gender and Number.  Words importing the singular number only shall
include the plural and vice versa, words importing the masculine gender shall
include the feminine gender and words importing persons shall include firms and
corporations and vice versa.
 
(b)           Currency.  Unless otherwise stated, all dollar amounts herein are
expressed in United States dollars.
 
(c)           Headings.  The division of the Subscription Agreement into
Sections and the use of headings are for convenience of reference only and shall
not affect the interpretation of this Subscription Agreement.
 
(d)           Description of Schedules.  The following are the Schedules
attached to and incorporated in this Subscription Agreement by reference and
deemed to be a part hereof:
 
Schedule A
Accredited Investor Questionnaire (for U.S. Investors only)
   
Schedule B
Rights, Terms and Conditions of Class 4 Preference Shares
   
Schedule C
Option Grants

 
3.             Delivery and Payment.  The Purchaser agrees that the following
shall be delivered to the Corporation at the address and by the Closing Time, or
such other time, date or place as the Corporation may advise:
 
(a)           a completed and duly signed copy of this Subscription Agreement;
 
(b)           a completed and duly signed copy of the Accredited Investor
Questionnaire in the form attached hereto as Schedule A; and
 
(c)           a certified check or bank draft made payable on or before the
Closing Date in same day immediately available U.S. funds in Plainview, NY to
the Corporation representing the aggregate Purchase Price payable by the
Purchaser for the Purchaser’s Shares, or by bank-wire transfer of immediately
available funds in accordance with the following:
 
 
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Bank:
Capital One Bank
ABA#:
021407912
Account Name:
NeuLion, Inc.
Account Number:
3124-07095-8
SWIFT Code:
NFBKUS33
Reference:
JK&B Capital V, L.P.

 
EACH PURCHASER MUST INSTRUCT ITS BANK TO MARK ALL WIRE TRANSFER CHARGES TO THE
REMITTING BANK, SO THAT THE FULL AMOUNT OF EACH CONTRIBUTION IS RECEIVED BY THE
CORPORATION PRIOR TO CLOSING.
 
, or such other method of payment of the same amount against delivery of the
Purchaser’s Shares as the Corporation may accept.
 
The Purchaser consents to and hereby authorizes the filing of such certificates
and other documents as may be required to be filed with the Stock Exchange or
other securities regulatory authority in connection with the transactions
contemplated hereby.
 
4.             Closing.  The Closing will be completed at the offices of Loeb &
Loeb LLP, counsel to the Corporation, at the Closing Time.  Subject to
satisfaction or waiver of the Closing conditions referred to herein, the
Purchaser acknowledges that the Purchaser’s Shares will be available for
delivery to it at the Closing against payment of the amount of the aggregate
Purchase Price (in immediately available US funds) for the Purchaser’s Shares.
 
5.             Conditions of Closing.
 
(a)           The Purchaser’s obligation to purchase the Purchaser’s Shares at
the Closing Time shall be conditional upon the fulfillment at or before the
Closing Time of the following conditions:
 
 
(i)
the Purchaser shall have received evidence that the conditional approval of the
Stock Exchange (subject to the fulfillment of customary post-closing conditions)
have been obtained by the Corporation in order to complete the Offering and the
issuance of the Preferred Shares;

 
 
(ii)
the Corporation shall have received disinterested approval of its Board of
Directors;

 
 
(iii)
this Subscription Agreement and the certificates representing the Preferred
Shares shall have been executed and delivered by the parties thereto in form and
substance satisfactory to the Purchaser, acting reasonably;

 
 
(iv)
the Purchaser shall have received a certificate, dated as of the Closing Date,
signed by the Secretary of the Corporation, or such other officer of the
Corporation as the Purchaser may agree, certifying for and on behalf of the
Corporation, to the best of the knowledge, information and belief of the person
so signing (without personal liability), that:

 
 
(1)
the representations and warranties of the Corporation contained herein are true
and correct as at the Closing Time, with the same force and effect as if made on
and as at the Closing Time after giving effect to the transactions contemplated
hereby;

 
 
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(2)
the Board of Directors has authorized the designation of the Preferred Shares
and approved the transaction contemplated herein and such resolutions are in
full force and effect as at the Closing Date; and

 
 
(3)
the holders of 66% of the Class 3 Preference Shares have approved the
designation and issuance of the Preferred Shares;

 
 
(v)
the Purchaser shall have received a customary opinion of counsel for the
Corporation in a form mutually agreeable to the parties; and

 
 
(vi)
the Corporation shall have waived all applicable anti-takeover measures under
the Corporation’s charter documents and applicable law.

 
(b)           The Corporation’s obligation to issue the Purchaser’s Shares at
the Closing Time shall be conditional upon the fulfillment at or before the
Closing Time of the following conditions:
 
 
(i)
this Subscription Agreement and the certificates representing the Preferred
Shares shall have been executed and delivered by the parties thereto in form and
substance satisfactory to the Corporation, acting reasonably;

 
 
(ii)
the Corporation shall have obtained conditional approval of the Stock Exchange
(subject to the fulfillment of customary post-closing conditions) in order to
complete the Offering and the issuance of the Preferred Shares; and

 
 
(iii)
the Corporation shall receive the Purchase Price in immediately available funds.

 
6.             Representations, Warranties and Covenants of the
Corporation.  The Corporation represents and warrants to the Purchaser as
follows:
 
(a)           the Corporation and each of its subsidiaries have been duly
incorporated and is validly existing and in good standing under the laws of its
jurisdiction of incorporation and the Corporation has all requisite corporate
power and capacity to enter into, and carry out its obligations under, this
Subscription Agreement;
 
(b)           the Corporation has taken all corporate steps necessary to approve
the transactions contemplated hereby, including the execution and delivery of
this Subscription Agreement and the certificates representing the Preferred
Shares, each of which will constitute a legal and binding obligation of the
Corporation enforceable in accordance with its terms;
 
(c)           the Corporation has complied with, or will comply with, all
applicable corporate and Securities Laws and regulations in connection with the
offer, sale and issuance of the Preferred Shares, including the filing of all
required forms and reports under the Securities Laws within the time periods
therein prescribed and payment of all required fees in connection therewith;
 
 
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(d)           each of the creation, issuance and sale of the Preferred Shares by
the Corporation does not and will not conflict with and does not and will not
result in a breach of any of the terms, conditions or provisions of the
Corporation’s constituent documents or any agreement or instrument to which the
Corporation is a party;
 
(e)           every consent, approval, authorization or order that is required
for the transactions herein contemplated to occur at the Closing have been
obtained and is in effect;
 
(f)            no order ceasing or suspending trading in the securities of the
Corporation nor prohibiting the sale of such securities or the Preferred Shares
has been issued to the Corporation or its directors or officers and, to the
knowledge of the Corporation’s Chief Executive Officer and Chief Financial
Officer, no investigations or proceedings for such purposes are pending or
threatened;
 
(g)           the Corporation has full corporate power and authority to
undertake the Offering and the Preferred Shares have been duly and validly
created, authorized and issued and the Common Stock has been duly allotted and
reserved for issuance and, upon the conversion of the Preferred Shares, will be
issued as fully paid and non-assessable Common Stock;
 
(h)           all of the issued and outstanding shares of the Corporation are
validly issued, fully paid, and nonassessable. Other than as set forth in the
Company’s publicly available documents or on Schedule C attached hereto, and as
contemplated herein, there are no outstanding options, warrants, rights to
subscribe to, or securities, rights or obligations convertible into or
exchangeable or exercisable for, or giving any person any right to subscribe for
or acquire, any capital shares of the Corporation or any options, warrants,
rights or other instruments convertible into or exchangeable for, capital shares
of the Corporation.  The Certificate, as in effect on the date hereof, and the
Corporation’s Bylaws (the “Bylaws”) as in effect on the date hereof, are
available at www.sedar.com and www.sec.gov. Other than as set forth in the
Corporation’s publicly available documents, there are no stockholder agreements,
voting agreements or other similar agreements with respect to the capital shares
to which the Corporation is a party;
 
(i)             the Corporation has filed all reports (including all exhibits
thereto) required to be filed by it under Securities Laws for the two years
preceding the date hereof (the “Securities Documents”) on a timely basis or has
received a valid extension of such time of filing and has filed any such
Securities Document prior to the expiration of any such extension.  As of their
respective dates, the Securities Documents complied in all material respects
with the requirements of the Securities Laws, as the case may be, and the rules
and regulations of the Securities Commission promulgated thereunder applicable
to the Securities Documents, and none of the Securities Documents, at the time
they were filed with the Securities Commission, 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 light of the
circumstances under which they were made, not misleading.  There are no
Securities Documents that are not available to the public, other than such
documents that are subject to confidential treatment under the SEC rules.  As of
their respective dates, the financial statements and the related notes, filed in
the Securities Documents, complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the Securities Commission with respect thereto.  Such financial statements and
related notes have been prepared in accordance with accounting principles
generally accepted in the U.S., consistently applied, during the periods
involved (except (i) as may be otherwise indicated in the financial statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may not include footnotes, may be condensed or summary
statements or may conform to the Securities Commission’s rules and instructions)
and fairly present in all material respects the consolidated financial position
of the Corporation as of the dates thereof and the consolidated results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).  No other written
information provided by or on behalf of the Corporation to the Purchaser by the
executive management of the Corporation which is not included in the Securities
Documents, to the knowledge of the Corporation’s executive management, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading;
 
 
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(j)           the Corporation and its subsidiaries maintain a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or specific
authorization, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain accountability for
assets, and (iii) access to assets is permitted only in accordance with
management’s general or specific authorization;
 
(k)          no brokerage commissions, placement agent’s fees or similar
payments are payable relating to this Subscription Agreement or the transactions
contemplated hereby;
 
(l)           the Corporation has filed (or has obtained an extension of time
within which to file) all necessary federal, provincial and foreign income and
franchise tax returns and has paid all taxes shown as due on such tax returns,
except where the failure to so file or the failure to so pay would not have a
Material Adverse Effect.  The Corporation has complied in all material respects
with all applicable legal requirements relating to the payment and withholding
of taxes and, within the time and in the manner prescribed by law, has withheld
from wages, fees and other payments and paid over to the proper governmental or
regulatory authorities all amounts required;
 
(m)          the Corporation has not taken, nor will it take, directly or
indirectly any action designed to stabilize or manipulate the price of the
Common Stock or any security of the Corporation to facilitate the sale or resale
of any of the Preferred Shares;
 
(n)           the books of account, minute books and other records of the
Corporation are complete and correct in all material respects.  The minute books
of the Corporation contain accurate and complete records of all meetings held
of, and corporate action taken by, the shareholders, the Corporation’s Board of
Directors and committees of the Corporation’s Board of Directors, and no meeting
of any of such shareholders, the Corporation’s Board of Directors or such
committees has been held for which minutes have not been prepared and are not
contained in such minute books, except for the minutes of the May 2011 meeting
of the Board of Directors and the Audit Committee, which will be prepared for
review and approval at the next Board of Directors meeting;
 
(o)           the Corporation and its subsidiaries are in compliance in all
material respects with all currently applicable laws and regulations respecting
employment, discrimination in employment, terms and conditions of employment,
wages, hours and occupational safety and health and employment practices, and is
not engaged in any unfair labor practice.  To the Corporation’s knowledge, no
employees of the Corporation or the subsidiaries are in violation of any term of
any material employment contract, patent disclosure agreement, noncompetition
agreement, or any restrictive covenant to a former employer relating to the
right of any such employee to be employed by the Corporation or its subsidiaries
because of the nature of the business conducted or presently proposed to be
conducted by the Corporation or to the use of trade secrets or proprietary
information of others; and
 
(p)           the Corporation and its subsidiaries are not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, violation of which would have a Material Adverse
Effect.
 
 
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7.             Purchaser’s Representations and Warranties.  The Purchaser
represents and warrants to the Corporation that:
 
(a)           The Purchaser has all requisite authority to execute and deliver
this Subscription Agreement and to observe and perform its covenants and
obligations hereunder and, upon acceptance by the Corporation, this Subscription
Agreement will constitute a legal, valid and binding agreement of the Purchaser
enforceable against the Purchaser in accordance with its terms and will not
result in a violation of or create a state of facts which, after notice, lapse
of time or both, would constitute a default or breach of any agreement to which
the Purchaser is a party or by which it is bound or any law applicable to the
Purchaser or any judgment, law applicable to the Purchaser or any decree, order,
statute, rule or regulation applicable to the Purchaser;
 
(b)           The Purchaser is a resident of the jurisdiction referred to under
“Name and Address of Purchaser” set out on the signature page hereto and is not
a resident of any other jurisdiction nor is it purchasing the Purchaser’s Shares
for the account or benefit of a resident of any other jurisdiction;
 
(c)           The Purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Purchaser’s Shares and that it is able to bear the economic
risk of such investment for an indefinite period of time.  The Purchaser is
purchasing the Preferred Shares for the Purchaser’s own account, for investment
purposes only and not with a view to any resale or distribution thereof and the
Purchaser does not have any contracts, understandings, agreements or
arrangements with any person or entity to sell, transfer or grant a
participation interest with respect to any of the Preferred Shares;
 
(d)           The Purchaser is an “accredited investor” within the meaning of
Regulation D under the Securities Act, and specifically represents and warrants
that one or more of the categories set forth in the Accredited Investor
Questionnaire attached hereto as Schedule A correctly, and in all respects,
describes the Purchaser and the Purchaser has so indicated by marking the box
next to the category which so describes it and executing and delivering a copy
of the Accredited Investor Questionnaire;
 
(e)           The Purchaser will execute and deliver within the applicable time
periods all documentation as may be required by applicable Securities Laws to
permit the purchase of the Preferred Shares on the terms herein set forth;
 
(f)            If required by applicable securities legislation, policy or order
of a securities regulatory authority, stock exchange or other regulatory
authority, the Purchaser will execute, deliver, file and otherwise assist the
Corporation in filing such reports, undertakings and other documents with
respect to the issuance of the Preferred Shares, as may be required;
 
(g)           The Purchaser acknowledges that the investment in the securities
of the Corporation may have tax consequences to the Purchaser under applicable
law, which the Purchaser is solely responsible for determining.  The Purchaser
acknowledges and agrees that the Purchaser is responsible for obtaining its own
legal and tax advice;
 
(h)           The Purchaser does not have knowledge of a material fact or
material change with respect to the Corporation that has not been generally
disclosed; and
 
(i)            No person has made any written or oral representation to the
Purchaser:
 
 
(i)
that any person will resell or repurchase the Preferred Shares;

 
 
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(ii)
that any person will refund the purchase price of the Preferred Shares other
than as provided in this Subscription Agreement; or

 
 
(iii)
relating to the future price or value of the Preferred Shares.

 
8.             Purchaser’s Acknowledgements.
 
(a)           Private Placement Exemptions.  The Purchaser hereby acknowledges
and agrees that the Offering is being made pursuant to a Private Placement
Exemption.  As a result of the Corporation’s reliance on the Private Placement
Exemption, the Preferred Shares will be subject to restrictions on resale and
transferability contained in applicable securities legislation, as well as any
restrictions on resale and transferability imposed by the Stock Exchange.  The
Preferred Shares may not be sold or otherwise transferred unless the sale or
transfer is made in accordance with the provisions of all applicable Securities
Laws and Stock Exchange requirements.
 
(b)           Securities Act of 1933.  The Purchaser acknowledges and agrees
that the securities underlying the Preferred Shares subscribed for have not been
and will not be registered under the United States Securities Act, or any
applicable state securities laws; accordingly, the securities underlying the
Preferred Shares will be “restricted securities” within the meaning of Rule
144(a)(3) of the Securities Act and may not be offered and sold, directly or
indirectly, in the United States or by or to U.S. Persons (as defined in
Regulation S promulgated under the Securities Act) without registration under
the Securities Act and any applicable state securities laws, unless an exemption
from registration is available.
 
(c)           Reliance.  The Corporation will rely on the acknowledgments,
representations and warranties made herein or otherwise provided by the
Purchaser to the Corporation in completing the sale and issue of the Preferred
Shares to the Purchaser.
 
(d)           Advisors.  The Purchaser acknowledges that it has been advised to
consult with the Purchaser’s own attorney regarding legal matters concerning the
Offering, to consult with the Purchaser’s tax advisor regarding the tax
consequences of participating in the Offering and any other advisor with which
the Purchaser regularly consults regarding investments of this type and nature.
 
9.             Purchaser’s Expenses.  At the Closing or promptly thereafter, the
Corporation shall reimburse Purchaser for all reasonable fees and expenses
associated with the negotiation and consummation of the Offering, including
legal expenses, accounting expenses and out-of-pocket due diligence expenses.
 
10.           Resale Restrictions.  The Purchaser acknowledges that it has been
advised to consult its own legal advisors with respect to applicable resale
restrictions and that it is responsible for complying with such restrictions.
 
For purposes of complying with the Securities Laws, the Purchaser understands
and acknowledges that upon the issuance of Preferred Shares, all the
certificates representing the Preferred Shares, as well as all certificates
issued in exchange for or in substitution of the foregoing securities, shall
bear the following legend:
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
APPLICABLE STATE OR FOREIGN SECURITIES LAWS, AND MAY NOT BE SOLD, MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR THE AVAILABILITY OF AN EXEMPTION
FROM SUCH REGISTRATION REQUIREMENTS. UNLESS PERMITTED UNDER SECURITIES
LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE
[INSERT DATE THAT IS 4 MONTHS AND ONE DAY FROM CLOSING DATE].”
 
 
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11.           Modification.  Subject to the terms hereof, neither this
Subscription Agreement nor any provision hereof shall be modified, changed,
discharged or terminated except by an instrument in writing signed by the party
against whom any waiver, change, discharge or termination is sought.
 
12.           Assignment.  The terms and provisions of this Subscription
Agreement shall be binding upon and inure to the benefit of the Purchaser and
the Corporation and their respective successors and assigns; provided that this
Subscription Agreement shall not be assignable by any party without the prior
written consent of the other party.
 
13.           Counterparts.  This Subscription Agreement may be executed in any
number of counterparts, each of which when delivered, either in original or
facsimile form, shall be deemed to be an original and all of which together
shall constitute one and the same document.
 
14.           Facsimile Subscriptions.  The Corporation shall be entitled to
rely on delivery by facsimile machine of an executed copy of this Subscription
Agreement, including the completed Schedules hereto, and acceptance by the
Corporation of such facsimile copy shall be legally effective to create a valid
and binding agreement between the Purchaser and the Corporation in accordance
with the terms hereof.
 
15.           Entire Agreement.  This Subscription Agreement (including the
Schedules hereto) contains the entire agreement of the parties hereto relating
to the subject matter hereof and there are no representations, covenants or
other agreements relating to the subject matter hereof.  This Subscription
Agreement may be amended or modified in any respect by written instrument only.
 
16.           Governing Law.  This Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable
therein.  The Purchaser on its own behalf and, if applicable, on behalf of
others for whom it is contracting hereunder, hereby irrevocably consents to the
jurisdiction of the courts of the State of New York with respect to any matters
arising out of this Subscription Agreement.
 
17.           Survival.  The Purchaser hereby agrees that this subscription,
once accepted by the Corporation, is irrevocable and that the Subscription
Agreement, including without limitation the representations, warranties and
covenants of the Purchaser, shall survive the Closing, notwithstanding the
completion of the purchase of the Purchaser’s Shares by the Purchaser pursuant
hereto, the completion of the Offering and any subsequent disposition in
accordance with the applicable Securities Law by the Purchaser of the
Purchaser’s Shares.
 
18.           Time of Essence.  Time shall be of the essence with respect to all
provisions of this Subscription Agreement.
 
19.           Effective Date.  This Subscription Agreement is intended to and
shall take effect on the Closing Date, notwithstanding its actual date of
execution or delivery by any of the parties.
 
[The remainder of this page has deliberately been left blank]
 
 
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SIGNATURE PAGE
 
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement and
applicable Accredited Investor Questionnaire as of the 29th day of June, 2011.
 
 
Security: Class 4 Preference Shares
Price Per Share:  USD$.4582
Number of Units Purchased:  6,219,991
Total Subscription Price:  USD$2,849,999.88
 
Name and Address of Purchaser:
 

INDIVIDUAL INVESTOR(S):*   PARTNERSHIP, CORPORATION, LIMITED       LIABILITY
CORPORATION, TRUST,       CUSTODIAL ACCOUNT, OTHER INVESTOR   (Print Name)  
 
      JK&B Capital V, L.P.       By: JK&B Management V, L.P., its General
Partner   (Signature)   By:
JK&B Capital V, L.L.C., its General Partner
              By:  /s/ Thomas Neustaetter   (Secondary Signature for Joint
Accounts)      

 

            Address:     Address: 2 Prudential Plaza, 180 N. Stetson Ave., Suite
4500     (Street Address)     (Street Address)           Chicago, IL     (City,
State/Province and Country)     (City, State/Province and Country)          
60611     (Postal code)     (Postal code)  

*If Purchasers are jointly subscribing for Preferred Shares, each Purchaser must
print and sign his, her or its name.

 
 
 
The Corporation hereby accepts the Purchaser’s subscription for the Preferred
Shares set out above.
 

NEULION, INC.         By:
/s/ Roy E. Reichbach   
          (Signature)                      Roy E. Reichbach, Secretary    
      (Print Name and Title)
 

 
 

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SCHEDULE A
ACCREDITED INVESTOR QUESTIONNAIRE
(FOR U.S. INVESTORS ONLY)
 
1.             Applicable to Individuals ONLY.  Please answer the following
questions concerning your financial condition as an “accredited investor”
(within the meaning of Rule 501 of Regulation D of the Act.  If the Purchaser is
more than one individual, each individual must initial an answer where the
question indicates a “yes” or “no” response and must answer any other question
fully, indicating to which individual such answer applies.  If the purchaser is
purchasing jointly with his or her spouse, one answer may be indicated for the
couple as a whole:
 
 
(a)
Does your net worth* (or joint net worth with your spouse) exceed $1,000,000?

 
_______
_______
Yes
No

 
 
(b)
Did you have an individual income** in excess of $200,000 or joint income
together with your spouse in excess of $300,000 in each of the two most recent
years (2009 and 2010) and do you reasonably expect to reach the same income
level in the current year (2011)?

 
_______
_______
Yes
No

 
 
(c)
Are you an executive officer of NeuLion, Inc.?

 
_______
_______
Yes
No

* For purposes hereof, net worth shall be deemed to include ALL of your assets,
liquid or illiquid (including such items as home, furnishings, automobile and
restricted securities) MINUS any liabilities (including such items as home
mortgages and other debts and liabilities).
 
** For purposes hereof, the term “income” is not limited to “adjusted gross
income” as that term is defined for federal income tax purposes, but rather
includes certain items of income which are deducted in computing “adjusted gross
income”.  For purchasers who are salaried employees, the gross salary of such
purchaser, minus any significant expenses personally incurred by such investor
in connection with earning the salary, plus any income from any other source
including unearned income, is a fair measure of “income” for purposes
hereof.  For purchasers who are self employed, “income” is generally construed
to mean total revenues received during the calendar year minus significant
expenses incurred in connection with earning such revenues.
 
2.           Applicable to Corporations, Partnerships, Limited Liability
Companies and other Entities ONLY:
 
The Purchaser is an accredited investor because the Purchaser falls within at
least one of the following categories (Check all appropriate lines):
 
 

 
___
a bank as defined in Section 3(a)(2) of the Act or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the Act
whether acting in its individual or fiduciary capacity;

 
 
 

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

 
 

 
___
a broker-dealer registered pursuant to Section 15 of the United States
Securities Exchange Act of 1934, as amended;
       
___
an insurance Partnership as defined in Section 2(13) of the Act;
       
___
an investment Partnership registered under the Investment Partnership Act of
1940, as amended (the “Investment Act”) or a business development Partnership as
defined in Section 2(a)(48) of the Investment Act;
       
___
a Small Business Investment Partnership licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958, as amended;
       
___
a plan established and maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, where such plan has total assets in excess of
$5,000,000;
       
___
an employee benefit plan within the meaning of Title 1 of the Employee
Retirement Income Security Act of 1974, as amended (the “Employee Act”), where
the investment decision is made by a plan fiduciary, as defined in Section 3(21)
of the Employee Act, which is either a bank, savings and loan association,
insurance Partnership, or registered investment adviser, or an employee benefit
plan that has total assets in excess of $5,000,000, or a self-directed plan the
investment decisions of which are made solely by persons that are accredited
investors;
       
___
a private business development Partnership, as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940, as amended;
       
___
an organization described in Section 501(c)(3) of the Internal Revenue Code, a
corporation, a Massachusetts or similar business trust, or a partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
       
___
a trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
“sophisticated” person, as described in Rule 506(b)(2)(ii) promulgated under the
Act, who has such knowledge and experience in financial and business matters
that he or she is capable of evaluating the merits and risks of the prospective
investment;
       
___
an entity in which all of the equity investors are persons or entities described
above (“accredited investors”).

 
 

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Dated:   June 29, 2011
  Signed:  
By: /s/ Thomas
Neustaetter                                                              
                JK&B Capital V, L.P. 
Witness (If Purchaser is an Individual)
 
Print the name of Purchaser
                 
Print Name of Witness
 
If Purchaser is a Corporation,
print name and title of Authorized Signing Officer

 
 
 
 

 
 
 

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SCHEDULE B
RIGHTS, TERMS AND CONDITIONS OF CLASS 4 PREFERENCE SHARES
 
1.             Dividends
 
(a)           Cumulative Dividends: The holders of the Class 4 Preference
Shares, in priority to the holders of Common Stock, Class 3 Preference Shares
and all other shares ranking junior to the Class 4 Preference Shares, will be
entitled to receive fixed preferential cumulative dividends at the rate of 8%
per annum on the Original Amount (as hereinafter defined) per share from the
date of issuance which shall automatically accrue.  Unless declared earlier by
the board of directors out of the assets of the Corporation properly applicable
to the payment of dividends, such dividends shall be payable only upon a
Liquidation Event (as hereinafter defined) or redemption by the Corporation
pursuant to Section 5 hereof. Dividends will be prorated for stub periods.
 
(b)           Dividends Preferential: Except with the consent in writing of the
holders of a majority of the Class 4 Preference Shares outstanding, no dividend
will at any time be declared and paid on or set apart for payment on the Common
Stock, Class 3 Preference Shares or on any other shares ranking junior to the
Class 4 Preference Shares in any financial year unless and until the cumulative
dividends stated in Section 1(a) on all the Class 4 Preference Shares
outstanding have been declared and paid or set apart for payment.
 
(c)           Equivalent Dividends on Common Stock: In addition to Section 1(a)
holders of Class 4 Preference Shares will also be entitled to receive pari passu
dividends paid to the holders of Common Stock if, as and when declared by the
board of directors out of the assets of the Corporation properly applicable to
the payment of dividends. A holder of a Class 4 Preference Share shall be
entitled to receive a dividend on such share equal to the product of the Common
Stock Equivalent multiplied by the per share dividend declared on each Common
Stock. The term "Common Stock Equivalent", at any particular time, refers to
that number of Common Stock(s) which would be received by a holder of a Class 4
Preference Shares upon a conversion at that time of such share(s) into Common
Stock.
 
2.             Liquidation, etc.
 
(a)           Participation upon Liquidation, Dissolution or Winding Up: In the
event of the liquidation, dissolution or winding up of the Corporation or other
distribution of assets of the Corporation among its shareholders for the purpose
of winding up its affairs (a “Liquidation Event”), the holders of the Class 4
Preference Shares will be entitled to receive from the assets of the Corporation
a sum equivalent to the aggregate Redemption Amount (as hereinafter defined) of
all Class 4 Preference Shares held by them respectively before any amount is
paid or any assets of the Corporation are distributed to the holders of any
Common Stock, Class 3 Preference Shares or shares of any other class ranking
junior to the Class 4 Preference Shares. After payment to the holders of the
Class 4 Preference Shares of the amount so payable to them as above provided
such holders shall not be entitled to any further distribution from the
Corporation.
 
3.             Voting
 
(a)           The holders of the Class 4 Preference Shares will be entitled to
receive notice of and to attend all annual and special meetings of the
shareholders of the Corporation and to one vote in respect of each Common Stock
Equivalent (determined for each Class 4 Preference Shares held by such holder)
at all such meetings.
 
 
 

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(b)           Except for matters where holders of the Class 4 Preference Shares
are by law required or permitted herein to vote as a class, holders of Class 4
Preference Shares shall vote together with the holders of Common Stock as a
single class.
 
4.             Retraction
 
(a)           Majority Holder Redemption: Holders of the majority of the Class 4
Preference Shares will be entitled to require the Corporation to redeem, subject
to the requirements of the General Corporation Law of the State of Delaware as
now enacted or as the same may from time to time be amended, re-enacted or
replaced, at any time all, but not less than all of the Class 4 Preference
Shares held by all holders by tendering to the Corporation at its registered
office the share certificates representing the Class 4 Preference Shares
together with a request in writing (a “Majority Redemption Request”) specifying
(i) that the holders desire to have all, but not less than all of the Class 4
Preference Shares represented by such certificates redeemed by the Corporation,
(ii) the business day (herein referred to as the "Redemption Date") on which the
holders desire to have the Corporation redeem such Class 4 Preference Shares,
and (iii) written authorization from holders holding not less than 50.1 % of the
Class 4 Preference Shares then outstanding supporting the Majority Redemption
Request or minutes from a duly convened meeting of the holders of the Class 4
Preference Shares at which a majority of such holders passed a resolution to
support the Majority Redemption Request. The Redemption Date will be not less
than 30 days (or such shorter period to which the Corporation may consent) after
the day on which the Majority Redemption Request is given to the Corporation.
Upon receipt of the share certificates representing all of the Class 4
Preference Shares being redeemed by a holder, the Corporation will on the
Redemption Date redeem such Class 4 Preference Shares by paying to such holder
the Original Amount (as hereinafter defined) for each such Class 4 Preference
Shares being redeemed. Such payment will be made by check or, with the consent
of a majority of the holders, by any other means of immediately available
funds.  If the funds available for redemption are insufficient to redeem all of
the issued and preferred stock of the Corporation requesting redemption, the
available funds shall be used to first redeem all shares of Class 4 Preference
Shares prior and in preference to the redemption of all other stock ranking
junior thereto.
 
(b)           Constraints: Notwithstanding the foregoing: (a) a Majority
Redemption Request may only be issued after June 29, 2016 (the “Fifth
Anniversary”) and (b) any payments to be made pursuant to this Section 4 shall
be subject to Section 10.
 
(c)           Seniority of Retraction:  The Corporation shall not, without the
express written consent from holders of a majority of the Class 4 Preference
Shares, retract any Class 3 Preference Shares.
 
5.             Redemption
 
(a)           Redemption by Corporation:  The Corporation may, upon giving
notice as hereinafter provided, redeem, subject to the requirements of the
General Corporation Law of the State of Delaware, at any time the whole or from
time to time (subject to subsection (c) below and the conversion provisions set
forth in Section 6 below) any part of the then outstanding Class 4 Preference
Shares from any one or more of the holders thereof as the board of directors may
in its sole discretion determine on payment of US$0.4582 for each share (the
“Original Amount”) to be redeemed, plus all accrued and unpaid dividends
thereon, the whole constituting and being herein referred to as the “Redemption
Amount”.
 
 
 

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(b)           In the case of redemption of Class 4 Preference Shares under the
provisions of Section 5 hereof, the Corporation will at least 21 days (or, if a
majority of the holders of the Class 4 Preference Shares to be redeemed consent,
such shorter period to which they may consent) before the date specified for
redemption mail (or, with the consent of any particular holder, otherwise
deliver) a notice in writing of the intention of the Corporation to redeem such
Class 4 Preference Shares to each person who at the record date for the
determination of shareholders entitled to receive notice is a holder of Class 4
Preference Shares to be redeemed. Such notice will (subject to the consent of
any particular holder referred to above) be mailed by letter, postage prepaid,
addressed to each such holder at the holder's address as it appears on the
records of the Corporation or in the event of the address of any such holder not
so appearing then to the last known address of such holder; provided, however,
that accidental failure to give any such notice to one or more of such holders
will not affect the validity of such redemption. Such notice will set out the
Redemption Amount and the date on which redemption is to take place and if part
only of the shares held by the person to whom it is addressed is to be redeemed
the number thereof so to be redeemed. On or after the date so specified for
redemption, the Corporation will pay or cause to be paid to or to the order of
the holders of the Class 4 Preference Shares to be redeemed the Redemption
Amount thereof on presentation and surrender at the registered office of the
Corporation or any other place designated in such notice of the certificates
representing the Class 4 Preference Shares called for redemption. Such payment
will be made by check or, with the consent of any particular holder, by any
other means of immediately available funds. If a part only of the shares
represented by any certificate are redeemed a new certificate for the balance
will be issued at the expense of the Corporation. From and after the date
specified for redemption in any such notice the holders of the Class 4
Preference Shares called for redemption will cease to be entitled to dividends
and will not be entitled to exercise any of the rights of holders of Class 4
Preference Shares in respect thereof unless payment of the Redemption Amount is
not made upon presentation of certificates in accordance with the foregoing
provisions, in which case the rights of the holders of the said Class 4
Preference Shares will remain unaffected. The Corporation will have the right at
any time after the mailing (or delivery, as the case may be) of notice of its
intention to redeem any Class 4 Preference Shares to deposit the Redemption
Amount of the shares so called for redemption or of such of the said shares
represented by certificates as have not at the date of such deposit been
surrendered by the holders thereof in connection with such redemption to a
special account in any chartered bank or in any trust company in Canada or in
the United States, named in such notice, to be paid without interest to or to
the order of the respective holders of such Class 4 Preference Shares called for
redemption upon presentation and surrender to such bank or trust company of the
certificates representing the same, and upon such deposit being made or upon the
date specified for redemption in such notice, whichever is the later, the Class
4 Preference Shares in respect whereof such deposit has been made will be
redeemed and the rights of the holders thereof after such deposit or such
redemption date, as the case may be, will be limited to receiving without
interest their proportionate part of the total Redemption Amount so deposited
against presentation and surrender of the said certificates held by them
respectively and any interest allowed on such deposit will belong to the
Corporation. 
 
(c)           Change of Control Redemption: In the event of a Change of Control
(as hereinafter defined), then subject to the conversion provisions set forth in
Section 6 below, the Corporation shall forthwith redeem at any time the whole of
the then outstanding Class 4 Preference Shares from the holders thereof on
payment of the Redemption Amount in respect of each such share.
 
(d)           For the purposes of this Certificate, a "Change of Control" means
any one of:
 
 
(i)
the consummation of a merger, amalgamation, plan of arrangement or other
transaction or series of related transactions resulting in the combination of
the Corporation with or into another entity, where the shareholders of the
Corporation immediately prior to any such transaction(s) directly or indirectly
do not continue to hold more than a 50% voting interest in the continuing or
surviving entity immediately following such transaction or series of related
transactions and no shareholder who held less than a 50% voting interest in the
Corporation before such event holds directly or indirectly more than a 50%
voting interest in the continuing or surviving entity immediately following such
event,

 
 
 

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(ii)
a sale or transfer of all or substantially all of the Corporation's assets
(other than a sale or transfer to a wholly-owned subsidiary of the Corporation),
or

 
 
(iii)
an exclusive license of all or substantially all of the Corporation's
intellectual property (other than a license to a wholly- owned subsidiary of the
Corporation);

 
provided, in each case, that the transaction is entered into at arm's length
with all shareholders of the Corporation and provided, however, that a
transaction will not constitute a Change of Control if:
 
 
(i)
its sole purpose is to change the jurisdiction of the Corporation's
incorporation; or

 
 
(ii)
it will create a holding company that will be owned in substantially the same
proportions by the persons who held the Corporation's securities immediately
prior to such transaction;

 
 
(iii)
the principal purpose of the transaction is a bona fide equity financing
transaction and no one Person will hold a majority of the Corporation's shares
after completion of the transaction; or

 
 
(iv)
a majority of the holders of the Class 4 Preference Shares and a majority of
each other class of shares of the Corporation (determined separately on a class
by class basis) determine that such event should not be treated as a Change of
Control for the purposes of this provision.

 
(e)           Constraints: Notwithstanding the foregoing: (i) the Corporation
may only give notice to redeem the Class 4 Preference Shares (other than
pursuant to subsection 5(c) above) after the Fifth Anniversary and (ii) any
payments to be made pursuant to this Section 4 shall be subject to Section 10.
 
(f)           Seniority of Retraction:  The Corporation shall not, without the
express written consent from holders of a majority of the Class 4 Preference
Shares, redeem any Class 3 Preference Shares.
 
 
 

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6.             Conversion
 
(a)           Conversion Privilege: Each issued Class 4 Preference Share may at
any time (including after a notice of redemption is received but prior to the
redemption date) be converted, at the option of the holder, into one share of
Common Stock (subject to variation in accordance with Section 7, the "Conversion
Ratio").  In the event of conversion, all declared, accrued and unpaid dividends
on the converted Class 4 Preference Shares shall be converted into shares of
Common Stock based on a conversion price equal to the trading price of the
Common Stock at the close of business on the last trading day prior to the date
of conversion.  The conversion privilege herein provided for may be exercised by
notice in writing given to the Corporation accompanied by a certificate or
certificates representing the Class 4 Preference Shares in respect of which the
holder thereof desires to exercise such right of conversion and such notice will
be signed by the holder of the Class 4 Preference Shares in respect of which
such right is being exercised and will specify the number of Class 4 Preference
Shares which the holder desires to have converted. Upon receipt of such notice
the Corporation will issue certificates representing fully paid Common Stock
upon the basis above prescribed and in accordance with the provisions hereof to
the holder of the Class 4 Preference Shares represented by the certificate or
certificates accompanying such notice.
 
(b)           All Common Stock resulting from any conversion of Class 4
Preference Shares into Common Stock pursuant to Section 6(a) hereof will be
deemed to be fully paid and non-assessable.
 
(c)           Automatic Conversion: In the event of a Liquidation Event all of
the issued and outstanding Class 4 Preference Shares shall automatically be
converted into Common Stock at the Conversion Ratio where it is determined by
the Corporation that the holder of a Class 4 Preference Shares would receive
greater consideration (based on the cash and or fair market value of publicly
traded securities to be received) from the Corporation if such holder held the
Common Stock Equivalent in lieu of such Class 4 Preference Shares. The
Corporation shall, where this Section is operative, take such steps as may be
required or are desirable to effect the conversion of the issued and outstanding
Class 4 Preference Shares into Common Stock.
 
(d)           Majority Conversion: Holders of a majority of the Class 4
Preference Shares will be entitled to require the holders of all Class 4
Preference Shares to convert their shares into Common Stock (at the Conversion
Ratio) on a specified conversion date, by giving notice ("Mandatory Conversion
Notice") to the Corporation. Upon receipt of a Mandatory Conversion Notice the
Corporation shall take such steps as may be required or are desirable (including
filing certificates of amendment) to convert the issued and outstanding Class 4
Preference Shares into Common Stock. Any Mandatory Conversion Notice delivered
to the Corporation shall be accompanied by written authorization from holders
holding not less than 50.1% of the Class 4 Preference Shares then outstanding
supporting the Mandatory Conversion Notice or minutes from a duly convened
meeting of the holders of the Class 4 Preference Shares at which a majority of
such holders passed a resolution to support the Mandatory Conversion Notice. 
 
7.             Antidilution
 
If the shares of Common Stock are subdivided, consolidated or if a stock
dividend is paid or if such shares of Common Stock are otherwise varied pursuant
to a share capital reorganization, an equivalent change, as the board of
directors may in its sole discretion determine, will be made to the Conversion
Ratio or otherwise to the Class 4 Preference Shares or if a stock dividend is
paid or if such Common Stock are otherwise varied pursuant to a share capital
reorganization.
 
8.             Special Protection
 
(a)           Protective Provisions: Subject to applicable law, the approval of
holders of 66 2/3rds of the Class 4 Preference Shares shall be required to:
 
 
 

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(i)
change the rights or terms of the Class 4 Preference Shares or increase the
authorized number thereof; or

 
 
(ii)
authorize, create or issue any security either preferential to or on parity with
the Class 4 Preference Shares.

 
(b)           Declaration of Dividends: The consent of holders of a majority of
the Class 4 Preference Shares shall be required to pay any dividend to or redeem
any preference shares (other than the Class 4 Preference Shares) or Common Stock
(other than the payment of dividends on the Class 3 Preference Shares and the
Class 4 Preference Shares as contemplated above and other than purchases of
Common Stock at no greater than cost from employees or other service providers
upon termination of service).
 
9.             Pre-Emptive Rights
 
(a)           Subject to applicable laws and the requirements of any stock
exchange on which the Corporation's securities may be listed and posted for
trading, if any additional shares of Common Stock are to be issued by the
Corporation, the Corporation will first offer (the "Offer") such Common Stock to
each of the holders of the Class 3 Preference Shares and the Class 4 Preference
Shares (individually, an "Investor" and collectively, the "Investors") by
providing such Investor with notice, sent to the last address of the Investor
shown on the books and records of the Corporation, of the Corporation's
intention to issue additional Common Stock and the number and class thereof to
be so issued, the purchase price for each Common Stock and the date of issuance
(to the extent such facts are known by the Corporation).
 
(b)           Each Investor will have the right to purchase that proportion of
the Common Stock so offered that is equal to the proportion of Class 4
Preference Shares owned beneficially or of record by the Investor to the
aggregate issued Common Stock then outstanding at the date notice is given of
such Offer. Such right will be exercisable by the Investor by giving notice to
the Corporation within five days of receipt of the notice from the Corporation.
 
(c)           In the event the Investor accepts the Offer, the Investor will
take up and pay for all or any of the Common Stock to which the Investor is
entitled on the closing of the transaction.
 
(d)           The rights of the Investors in this Section 9 will not apply to
issuances of:
 
(i)           Common Stock issued or issuable:
 
 
(1)
upon the conversion of Convertible Securities (as defined below);

 
 
(2)
upon the exercise of options granted pursuant to any stock option plan or other
equity incentive plan, in either case approved by the board of directors;

 
 
(3)
in conjunction with arm's length debt financing (including, without limitation,
commercial credit arrangements or equipment financing), acquisitions, joint
ventures or strategic investments of the Corporation and its subsidiaries;

 
 
 

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

 
 
 
(4)
as a dividend or distribution on any class of securities of the Corporation; or

 
(ii)           any Common Stock or Convertible Securities issued pursuant to a
bona fide arm's length business acquisition by the Corporation, whether by
merger, consolidation, purchase of assets, the sale or exchange of shares or
otherwise.
 
(e)           For the purposes of this Section 9 “Convertible Securities” means
any evidences of indebtedness, shares or other securities convertible into or
exchangeable for Common Stock.
 
10.           Taxes
 
(a)           Withholding Tax: Notwithstanding any other provision of these
Certificate, the Corporation shall be entitled to deduct and withhold (and/or
recover) from any amounts payable to holders of shares of the Corporation the
amount of all taxes which the Corporation may be required or permitted to deduct
and withhold in accordance with applicable law. All such withheld amounts shall
be timely remitted to the relevant governmental authority and all such remitted
amounts shall be treated as having been paid to the relevant holder. For
purposes hereof "Tax" means any local, domestic or foreign tax of any kind or
nature whatsoever, any levy, impost, duty or other charge of a similar nature,
and includes any sales tax, value-added tax, goods and services tax, transfer
tax or withholding tax (including any penalty, interest, or addition to tax).
 
(b)           Stockholder Certification: Each holder of shares of the
Corporation shall provide such tax representations, information, or other
documentation to the Corporation which may reasonably be considered by the
Corporation to be required or advantageous in the context of the payment of a
dividend, a transaction deemed to be a dividend for tax purposes, the conversion
of any shares or in the event of a Liquidation Event.
 
 
 

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Schedule C
 

 
The board of directors of the Corporation authorized the grant of 4,377,000
options to several of the Corporation’s employees.  The grants will be reported
on the Company’s 10-Q for the second quarter ending June 30, 2011.
 

 
 
 
 

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