Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of January 11,
2020, by and among MRI Interventions, Inc., a Delaware corporation with
headquarters located at 5 Musick, Irvine, California 92618 (the “Company”), each
investor identified on the signature pages hereto (each, an “Investor” and
collectively, the “Investors”), and Petrichor Opportunities Fund I LP, as
collateral agent (in such capacity, the “Collateral Agent”).

 

RECITALS

A.       The Company and each Investor are executing and delivering this
Agreement in reliance upon the exemption from registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

B.       Each First Closing Investor, severally and not jointly, wishes to
purchase, and the Company wishes to issue to each First Closing Investor, upon
the terms and conditions stated in this Agreement, at the First Closing, one or
more floating rate secured convertible notes of the Company in the form attached
hereto as Exhibit A-1 (collectively, the “First Closing Notes” and each,
individually, a “First Closing Note”) in the aggregate principal amount set
forth across from such First Closing Investor’s name under the heading
“Principal Amount of First Closing Note” on the Schedule of Investors, which
First Closing Notes shall be convertible on the terms stated therein into shares
of common stock, $0.01 par value, of the Company (the “Common Stock”) (the
shares of Common Stock issuable pursuant to the terms of the First Closing Notes
and, to the extent issued and sold hereunder at the Second Closing or Third
Closing, any Second Closing Notes and Third Closing Notes issued hereunder,
including, without limitation, upon conversion or otherwise, collectively, the
“Note Shares”).

C.       In the event that the Company and such Second Closing Investor agrees
on such future issuance, on the terms set forth herein, the Company may, at the
Second Closing, issue and sell to each Second Closing Investor additional
floating rate secured convertible notes of the Company in the form attached
hereto as Exhibit A-2 (collectively, the “Second Closing Notes” and each,
individually, a “Second Closing Note”) in the aggregate principal amount set
forth across from such Second Closing Investor’s name under the heading
“Principal Amount of Second Closing Note” on the Schedule of Investors.

D.       In the event that the Company and such Third Closing Investor agrees on
such future issuance, on the terms set forth herein, the Company may, at the
Third Closing, issue and sell to the each Third Closing Investor additional
floating rate secured convertible notes of the Company in the form attached
hereto as Exhibit A-3 (collectively, the “Third Closing Notes” and each,
individually, a “Third Closing Note”; the First Closing Notes, together with any
Second Closing Notes and Third Closing Notes issued hereunder, collectively, the
“Notes” and each, individually, a “Note”) in the aggregate principal amount set
forth across from such Third Closing Investor’s name under the heading
“Principal Amount of Third Closing Note” on the Schedule of Investors.

D.       The First Closing Notes, any Second Closing Notes and Third Closing
Notes issued hereunder, and the Note Shares are collectively referred to herein
as the “Securities.”

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 the Investors,
intending to be legally bound hereby, agree as follows:

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Article I
DEFINITIONS

1.1             Definitions. In addition to the terms defined elsewhere in this
Agreement, the following terms have the meanings indicated:

“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 144 under the
Securities Act.

“Agreement” has the meaning set forth in the Preamble.

“Applicable Closing Date” means (i) with respect to the First Closing, the First
Closing Date, (ii) with respect to the Second Closing, the Second Closing Date,
and (iii) with respect to the Third Closing, the Third Closing Date.

“Applicable Second Closing Notes” has the meaning set forth in Section
2.1(b)(iii).

“Applicable Third Closing Notes” has the meaning set forth in Section
2.1(c)(iii).

“BHCA” has the meaning set forth in Section 3.1(jj).

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

“Board Observer Agreement” has the meaning set forth in Section 2.2(a)(iv).

“Business Day” means any day other than Saturday, Sunday, any day which shall be
a federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

“Claims” has the meaning set forth in Section 6.1(a).

“Closing” means each of the First Closing, Second Closing and Third Closing, as
applicable.

“Collateral” means all property (whether real or personal and whether tangible
or intangible) with respect to which any security interests have been granted
(or purported to be granted) pursuant to any Security Document, including
Collateral as defined in the Security Agreement.

“Collateral Agent” has the meaning set forth in the Preamble.

“Common Stock” has the meaning set forth in the Recitals.

“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” has the meaning set forth in the Preamble.

“Company Counsel” means Bass, Berry & Sims PLC.

“Demand Notice” has the meaning set forth in Section 7.1(a).

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“Demand Receipt Notice” has the meaning set forth in Section 7.1(a).

“Demand Registration Statement” has the meaning set forth in Section 7.1(a).

“Domestic Subsidiary” means any Subsidiary of the Company that is incorporated,
organized or formed under the laws of the United States, any State of the United
States or the District of Columbia.

“Effectiveness Date” means, with respect to a Demand Registration Statement
required to be filed hereunder, the seventy-fifth (75th) calendar day following
receipt by the Company of the Demand Notice (or, in the event of a “full review”
by the SEC, the one hundredth (100th) calendar day following such date) and with
respect to any additional Registration Statements which may be required pursuant
to Section 7.1(e), the 45th calendar day following the date on which an
additional Registration Statement is required to be filed hereunder (or, in the
event of a “full review” by the SEC, the seventieth (70th) calendar day
following the date such additional Registration Statement is required to be
filed hereunder); provided, however, that in the event the Company is notified
by the SEC that one or more of the above Registration Statements will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the fifth Trading
Day following the date on which the Company is so notified if such date precedes
the dates otherwise required above; provided, further, if such Effectiveness
Date falls on a day that is not a Trading Day, then the Effectiveness Date shall
be the next succeeding Trading Day.

“Effectiveness Period” has the meaning set forth in Section 7.1(a).

“Election Notice” has the meaning set forth in Section 7.1(a).

“Event” has the meaning set forth in Section 7.1(h).

“Event Date” has the meaning set forth in Section 7.1(h).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“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 duly adopted for such purpose, by a majority of the non-employee members of
the Board 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 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 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.

“Exercising Second Closing Investor” has the meaning set forth in Section
2.1(b)(iii).

“Exercising Third Closing Investor” has the meaning set forth in Section
2.1(c)(iii).

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“Existing Indebtedness” means the amounts due under the Company’s outstanding
Junior Secured Promissory Notes Due 2020, as amended by that certain Omnibus
Amendment dated April 5, 2011, as further amended by that certain Second Omnibus
Amendment dated October 14, 2011, and as further amended by that certain Third
Omnibus Amendment dated March 25, 2014, and as further amended by the Fourth
Omnibus Amendment on or prior to the First Closing Date.

“Federal Reserve” has the meaning set forth in Section 3.1(jj).

“Filing Date” means, with respect to a Demand Registration Statement required
hereunder the thirtieth (30th) calendar day following the receipt by the Company
of the Demand Notice; provided that if such Filing Date falls on a day that is
not a Trading Day, then the Filing Date shall be the next succeeding Trading
Day, and, with respect to any additional Registration Statements which may be
required pursuant to Section 7.1(e), the earliest practical date on which the
Company is permitted by SEC Guidance to file such additional Registration
Statement related to the Registrable Securities.

“First Closing” means the closing of the purchase and sale of the First Closing
Notes pursuant to Section 2.1(a).

“First Closing Access Fee” has the meaning set forth in Section 4.9(a).

“First Closing Date” means the first (1st) Trading Day after the date on which
this Agreement has been executed and delivered by all parties hereto, unless on
such date the conditions set forth in Sections 2.2 and 5.1 (other than those to
be satisfied at the First Closing) shall not have been satisfied or waived in
writing, in which case the First Closing Date shall be on the first (1st)
Trading Day after the date on which the last to be satisfied or waived of the
conditions set forth in Sections 2.2 and 5.1 (other than those to be satisfied
at the First Closing) shall have been satisfied or waived.

“First Closing Investor” means each Investor set forth under the heading “First
Closing Investors” on the Schedule of Investors.

“First Closing Notes” has the meaning set forth in the Recitals.

“Fourth Omnibus Amendment” means, collectively, (x) that certain Fourth Omnibus
Amendment to be entered into by the Company and the Required Holders (as defined
in the Existing Indebtedness) on or prior to the First Closing Date, and (y)
that certain Fourth Amendment to Junior Security Agreement to be entered into by
the Company (with the consent of the Required Holders (as defined in the
Existing Indebtedness)) and Landmark Community Bank, as collateral agent in
respect of the Existing Indebtedness, on or prior to the First Closing Date.

“GAAP” means United States generally accepted accounting principles applied on a
consistent basis during the periods involved.

“Guaranty Agreement” has the meaning set forth in Section 2.2(a)(ii).

“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of any Registrable Securities or any other securities (including the
Notes) that are convertible into, or exercisable or exchangeable for, any
Registrable Securities.

“Indebtedness” means, with respect to any Person, without duplication (A) all
indebtedness for borrowed money, (B) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other
similar

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instruments, (D) all obligations evidenced by notes (including the Existing
Indebtedness, the First Closing Notes, the Second Closing Notes and the Third
Closing Notes), bonds, debentures or similar instruments, including obligations
so evidenced incurred in connection with the acquisition of property, assets or
businesses, (E) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case
with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or sale of
such property), (F) all monetary obligations under any leasing or similar
arrangement, which are required under generally accepted accounting principles
to be presented as liabilities, and (G) all indebtedness referred to in clauses
(A) through (F) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights) owned by such
Person, even though such Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness.

“Indemnified Damages” has the meaning set forth in Section 6.1(a).

“Indemnified Party” has the meaning set forth in Section 6.1(b).

“Indemnified Person” has the meaning set forth in Section 6.1(a).

“Intercreditor Agreement” has the meaning set forth in Section 2.2(b)(iii).

“Investor” has the meaning set forth in the Preamble.

“Lien” means any lien, security interest, pledge, encumbrance, right of first
refusal, preemptive right or other restriction.

“Major Investor” means (a) at all times from and after the date hereof until the
consummation of the First Closing, each of the Investors, and (b) from and after
the consummation of the First Closing, each of (x) until the later of (i) the
Trading Day after the Subsequent Closing Deadline and (ii) the date on which PTC
and its Affiliates shall cease to hold Notes in an aggregate principal amount
equal to at least 10% of the aggregate principal amount of all Notes originally
issued to PTC and its Affiliates hereunder on or prior to such date, PTC, and
(y) until the later of (i) the Trading Day after the Subsequent Closing Deadline
and (ii) the date on which Petrichor and its Affiliates shall cease to hold
Notes in an aggregate principal amount equal to at least 10% of the aggregate
principal amount of all Notes originally issued to Petrichor and its Affiliates
hereunder on or prior to such date, Petrichor.

“Material Adverse Effect” means any condition, circumstance, or situation that
may result in, or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of this Agreement or any of
the Transaction Documents, (ii) a material adverse effect on the results of
operations, assets, liabilities, business, prospects or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, (iii) a
material adverse effect on the Company’s authority or ability to perform its
obligations hereunder or under any of the Transaction Documents in any material
respect on a timely basis, or (iv) a material adverse effect on the rights or
remedies of the Investors or the Collateral Agent under any Transaction
Document; provided, that, any of the following, either alone or in combination,
shall not be deemed a Material Adverse Effect: (x) effects caused by changes or
circumstances affecting general market or other conditions in the U.S. economy
or which are generally applicable to the industry in which the Company operates
(provided, that such effects are not borne to a materially disproportionate
degree by the Company compared to other companies operating in the same industry
as the Company); (y) effects resulting from or relating to the announcement or
disclosure of the sale of the Notes or other transactions contemplated by the
Transaction Documents; or (z) effects caused

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by any event, occurrence or condition resulting from or relating to the taking
of any action required by this Agreement.

“Material Contract” means any contract of the Company that has been filed or was
required to have been filed as an exhibit to the SEC Reports pursuant to Item
601(b)(10) of Regulation S-K.

“Maximum Subsequent Closing Amount” means $15,000,000.

“Minimum Repayment Amount” means an amount of Existing Indebtedness equal to the
minimum amount of Existing Indebtedness that would be required to be repaid on
the First Closing Date such that the aggregate remaining outstanding amount of
such Existing Indebtedness, after giving effect to such repayment, together with
all other Indebtedness of the Company and its Subsidiaries not otherwise
constituting “Permitted Indebtedness” (as defined in the Notes) under clause
(i), (ii) or (iii) of the definition of “Permitted Indebtedness” (as defined in
the Notes) outstanding on the First Closing Date, does not exceed $600,000.

“Money Laundering Laws” has the meaning set forth in Section 3.1(kk).

“Nasdaq” means the Nasdaq Stock Market LLC.

“Note Shares” has the meaning set forth in the Recitals.

“Notes” has the meaning set forth in the Recitals.

“Observer” has the meaning set forth in Section 4.8.

“OFAC” has the meaning set forth in Section 3.1(hh).

“Participation Maximum” has the meaning set forth in Section 7.6(a).

“Permits” has the meaning set forth in Section 3.1(s).

“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, a
government or any department or agency thereof and any other legal entity.

“Petrichor” means Petrichor Opportunities Fund I LP.

“Pre-Notice” has the meaning set forth in Section 7.6(a).

“Press Release” has the meaning set forth in Section 4.3.

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

“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated by the SEC pursuant to the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

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“PTC” means PTC Therapeutics, Inc.

“Registrable Amount” shall mean a number of shares of Common Stock equal to one
percent (1%) of the outstanding Common Stock.

“Registrable Securities” means, as of any date of determination, (a) the Note
Shares, (b) any securities issued or issuable to any Investor in accordance with
a Subsequent Financing or otherwise after the date hereof, or (c) any securities
issued or then issuable to any Investor upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the
foregoing; provided, however, that any such Registrable Securities shall cease
to be Registrable Securities (and the Company shall not be required to maintain
the effectiveness of any, or file another, Registration Statement hereunder with
respect thereto) if (x) a Registration Statement with respect to the sale of
such Registrable Securities is declared effective by the SEC under the
Securities Act and such Registrable Securities have been disposed of by an
Investor in accordance with such effective Registration Statement, (y) such
Registrable Securities have been previously sold by an Investor in accordance
with Rule 144, or (z) such securities become eligible for resale without volume
or manner-of-sale restrictions and without current public information pursuant
to Rule 144 as set forth in a written opinion letter to such effect, addressed,
delivered and acceptable to the Transfer Agent and the Investors (assuming that
such securities and any securities issuable upon exercise, conversion or
exchange of which, or as a dividend upon which, such securities were issued or
are issuable, were at no time held by any Affiliate of the Company), as
reasonably determined by the Company, upon the advice of counsel to the Company.

“Registration Statement” means any registration statement required to be filed
hereunder pursuant to Article VII and any other registration statement covering
any Registrable Securities, including (in each case) the Prospectus, amendments
and supplements to any such registration statement or Prospectus, including pre-
and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in any such
registration statement.

“Required Approvals” has the meaning set forth in Section 3.1(p).

“Required Holders” means, as of any date, all of the Major Investors as of such
date; provided, that, in the event that, as of any date, there shall exist no
Major Investors, then the term “Required Holders” shall mean all of the
Investors.

“Requisite Stockholder Approval” means the stockholder approval contemplated by
Nasdaq Listing Standard Rule 5635(d) with respect to the issuance of Note Shares
upon conversion of all of the Notes (including the First Closing Notes, Second
Closing Notes and Third Closing Notes) issuable pursuant to this Agreement in
excess of the limitations imposed by such rule; provided, however, that the
Requisite Stockholder Approval will be deemed to be obtained if, due to any
amendment or binding change in the interpretation of the applicable listing
standards of Nasdaq, such stockholder approval is no longer required for the
Company to settle all conversions of all of the Notes (including the First
Closing Notes, Second Closing Notes and Third Closing Notes) issuable pursuant
to this Agreement by delivering Note Shares in respect thereof without
limitation or restriction under the applicable listing standards of Nasdaq.

“Requisite Stockholder Approval Deadline” means June 30, 2020.

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

“Schedule of Investors” means the list of Investors attached hereto as Annex A.

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

“SEC Guidance” means (i) any publicly-available written or oral guidance of the
SEC staff, or any comments, requirements or requests of the SEC staff and (ii)
the Securities Act.

“SEC Reports” has the meaning set forth in Section 3.1(g).

“Second Closing” means the closing of the purchase and sale of the Second
Closing Notes pursuant to Section 2.1(b).

“Second Closing Date” has the meaning set forth in Section 2.1(b)(ii).

“Second Closing Election Notice” has the meaning set forth in Section
2.1(b)(iii).

“Second Closing Investor” means each Investor set forth under the heading
“Second Closing Investors” on the Schedule of Investors.

“Second Closing Notes” has the meaning set forth in the Recitals.

“Second Closing Request” has the meaning set forth in Section 2.1(b)(ii).

“Securities Act” has the meaning set forth in the Recitals.

“Security Agreement” has the meaning set forth in Section 2.2(a)(iii).

“Security Documents” means, collectively, the Security Agreement and any other
security agreement, collateral access agreement, landlord waiver, account
control agreement or other agreement or instrument pursuant to or in connection
with which the Company or any of the Subsidiary Guarantors grants or perfects a
security interest to the Collateral Agent for the benefit of the Investors.

“Subsequent Access Fee” has the meaning set forth in Section 4.9(b).

“Subsequent Closing Deadline” means January 11, 2022.

“Subsequent Financing” has the meaning set forth in Section 7.6(a).

“Subsequent Financing Notice” has the meaning set forth in Section 7.6(a).

“Subsidiary” means any Person (including any Person formed or acquired after the
date hereof) in which the Company, directly or indirectly, (i) owns or controls
more than 50% of the outstanding capital stock or any equity or similar interest
of such Person, (ii) owns or controls more than 50% of any class or classes of
capital stock or other equity interests having ordinary voting power to elect a
majority of the board of directors (or other applicable governing body) of such
Person, or (iii) controls or operates all or any part of the business,
operations or administration of such Person.

“Subsidiary Guarantor” means each Subsidiary of the Company that is, or that
becomes, (i) a party to the Guaranty Agreement as a “Subsidiary Guarantor”
thereunder, and (ii) a party to the Security Agreement as a “Grantor”
thereunder.

“Termination Date” has the meaning set forth in Section 9.1(a)(ii).

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“Third Closing” means the closing of the purchase and sale of the Third Closing
Notes pursuant to Section 2.1(c).

“Third Closing Date” has the meaning set forth in Section 2.1(c)(ii).

“Third Closing Election Notice” has the meaning set forth in Section
2.1(c)(iii).

“Third Closing Investor” means each Investor set forth under the heading “Third
Closing Investors” on the Schedule of Investors.

“Third Closing Notes” has the meaning set forth in the Recitals.

“Third Closing Request” has the meaning set forth in Section 2.1(c)(ii).

“Total Purchase Price” means, with respect to any Investor, the aggregate price
paid by such Investor hereunder for all Notes purchased by such Investor at one
or more Closings hereunder.

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading
Market (other than the OTCBB), or (ii) if the Common Stock is not listed or
quoted on a Trading Market (other than the OTCBB), a day on which the Common
Stock is traded in the over-the-counter market, as reported by the OTCBB, or
(iii) if the Common Stock is not listed or quoted on any Trading Market, a day
on which the Common Stock is quoted in the over-the-counter market as reported
by the OTC Markets Group Inc. (or any similar organization or agency succeeding
to its functions of reporting prices); provided, that in the event that the
Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then Trading Day shall mean a Business Day.

“Trading Market” means whichever of the NYSE American, New York Stock Exchange,
the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Global Market, the
Nasdaq Capital Market or the OTCBB on which the Common Stock is listed or quoted
for trading on the date in question.

“Transaction Documents” means this Agreement, including the schedules, annexes
and exhibits attached hereto, the Notes, the Security Documents, the Guaranty
Agreement, the Board Observer Agreement, and each of the other agreements or
instruments entered into or executed by the parties hereto in connection with
the transactions contemplated by this Agreement.

“Transfer Agent” means Continental Stock Transfer & Trust Company, or any
successor transfer agent for the Company.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York; provided that if, with respect to any financing statement or
by reason of any provisions of law, the perfection or the effect of perfection
or non-perfection of the security interests granted to the Collateral Agent for
the benefit of the Investors pursuant to the applicable Transaction Document is
governed by the Uniform Commercial Code as in effect in a jurisdiction of the
United States other than New York, then “UCC” means the Uniform Commercial Code
as in effect from time to time in such other jurisdiction for purposes of the
provisions of each Transaction Document and any financing statement relating to
such perfection or effect of perfection or non-perfection.

“Violations” has the meaning set forth in Section 6.1(a).

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Article II
PURCHASE AND SALE

2.1             Closings.

(a)              First Closing. Subject to the terms and conditions set forth in
this Agreement, at the Closing, the Company shall issue and sell to each First
Closing Investor, and each First Closing Investor shall, severally and not
jointly, purchase from the Company, First Closing Notes in the principal amount
set forth across from such First Closing Investor’s name under the heading
“Principal Amount of First Closing Note” on the Schedule of Investors, at a
purchase price equal to the principal face amount thereof. The date and time of
the First Closing shall be 10:00 a.m. (New York time), on the First Closing
Date. The First Closing shall take place at the offices of the Company Counsel,
or at such other location as the parties determine. The First Closing may take
place by delivery of the items to be delivered at the First Closing by facsimile
or other electronic transmission.

(b)             Second Closing.

(i)               The Company shall have the right, but not the obligation, to
request that the Second Closing Investors agree to purchase $5,000,000 in
aggregate principal amount of Second Closing Notes at any time on or prior to
the Subsequent Closing Deadline in accordance with this Section 2.1(b).

(ii)             In the event that the Company desires to request that the
Second Closing Investors purchase the Second Closing Notes pursuant to this
Section 2.1(b), the Company shall deliver each Second Closing Investor written
notice of such request (a “Second Closing Request”) on or prior to the date that
is fifteen (15) Business Days prior to the Subsequent Closing Deadline, which
Second Closing Request shall (x) set forth the Company’s irrevocable offer to
sell the Second Closing Notes to the Second Closing Investors in accordance with
this Section 2.1(b), and (y) specify the closing date for such sale of Second
Closing Notes hereunder (the “Second Closing Date”), which Second Closing Date
(A) shall not be earlier than the fifteenth (15th) Business Day following the
delivery of the Second Closing Election Notice to the Company, and (B) shall not
be later than the Subsequent Closing Deadline.

(iii)           In the event that the Company shall timely deliver a Second
Closing Request to the Second Closing Investors in accordance with the
foregoing, each Second Closing Investor shall have the right, but not the
obligation, to purchase all, but not less than all, of Second Closing Notes in
principal amount equal to the amount set forth across from such Second Closing
Investor’s name under the heading “Principal Amount of Second Closing Note” on
the Schedule of Investors (with respect to any particular Second Closing
Investor, such Second Closing Notes are herein referred to as such Second
Closing Investor’s “Applicable Second Closing Notes”). In the event that any
Second Closing Investor desires to purchase such Second Closing Investor’s
Applicable Second Closing Notes, such Second Closing Investor must deliver
written notice to the Company of its election to purchase such Second Closing
Investor’s Applicable Second Closing Notes hereunder (a “Second Closing Election
Notice”) no later than five (5) Business Days after the Company’s request and in
no event later than ten (10) Business Days prior to the Subsequent Closing
Deadline, which Second Closing Election Notice shall specify that such Second
Closing Investor is exercising its right under this Section 2.1(b) to purchase
such Second Closing Investor’s Applicable Second Closing Notes (any Second
Closing Investor that shall so deliver a Second Closing Election Notice to the
Company in accordance with the foregoing is herein referred to as an “Exercising
Second Closing Investor”).

(iv)            Upon an Exercising Second Closing Investor’s delivery of a
Second Closing Election Notice to the Company pursuant to clause (iii) above,
the Company shall become irrevocably obligated to issue, sell and deliver to
such Exercising Second Closing Investor such

10 

 

Exercising Second Closing Investor’s Second Closing Notes on the Second Closing
Date on the terms and conditions set forth herein.

(v)             For the avoidance of doubt, unless and until a Second Closing
Investor delivers a Second Closing Election Notice to the Company in accordance
with the foregoing, such Second Closing Investor shall have no obligation
hereunder to purchase any or all of such Second Closing Investor’s Second
Closing Notes hereunder.

(vi)            Solely in the event that one or more Exercising Second Closing
Investors shall have delivered a Second Closing Election Notice to the Company
in accordance with the foregoing pursuant to which each such Exercising Second
Closing Investor shall have elected to purchase such Exercising Second Closing
Investor’s Second Closing Notes on the Second Closing Date, subject to the terms
and conditions set forth in this Agreement, at the Second Closing, the Company
shall issue and sell to each such Exercising Second Closing Investor, and each
such Exercising Second Closing Investor shall, severally and not jointly,
purchase from the Company, each such Exercising Second Closing Investor’s Second
Closing Notes in the principal amount set forth across from each such Exercising
Second Closing Investor’s name under the heading “Principal Amount of Second
Closing Note” on the Schedule of Investors, at a purchase price equal to the
principal face amount thereof. The date and time of the Second Closing shall be
10:00 a.m. (New York time) on the Second Closing Date. The Second Closing shall
take place at the offices of the Company Counsel, or at such other location as
the parties determine. The Second Closing may take place by delivery of the
items to be delivered at the Second Closing by facsimile or other electronic
transmission.

(c)              Third Closing.

(i)               The Company shall have the right, but not the obligation, to
request that the Third Closing Investors agree to purchase $10,000,000 in
aggregate principal amount of Third Closing Notes prior to the Subsequent
Closing Deadline in accordance with this Section 2.1(c).

(ii)             In the event that the Company desires to request that the Third
Closing Investors purchase the Third Closing Notes pursuant to this Section
2.1(c), the Company shall deliver each Third Closing Investor written notice of
such request (a “Third Closing Request”) after the Second Closing but on or
prior to the date that is fifteen (15) Business Days prior to the Subsequent
Closing Deadline, which Third Closing Request shall (x) set forth the Company’s
irrevocable offer to sell the Third Closing Notes to the Third Closing Investors
in accordance with this Section 2.1(c), and (y) specify the closing date for
such sale of Third Closing Notes hereunder (the “Third Closing Date”), which
Third Closing Date (A) shall not be earlier than the fifteenth (15th) Business
Day following the delivery of the Third Closing Election Notice to the Company,
and (B) shall not be later than the Subsequent Closing Deadline.

(iii)           In the event that the Company shall timely deliver a Third
Closing Request to the Third Closing Investors in accordance with the foregoing,
each Third Closing Investor shall have the right, but not the obligation, to
purchase all, but not less than all, of Third Closing Notes in principal amount
equal to the amount set forth across from such Third Closing Investor’s name
under the heading “Principal Amount of Third Closing Note” on the Schedule of
Investors (with respect to any particular Third Closing Investor, such Third
Closing Notes are herein referred to as such Third Closing Investor’s
“Applicable Third Closing Notes”). In the event that any Third Closing Investor
desires to purchase such Third Closing Investor’s Applicable Third Closing
Notes, such Third Closing Investor must deliver written notice to the Company of
its election to purchase such Third Closing Investor’s Applicable Third Closing
Notes hereunder (a “Third Closing Election Notice”) no later than five (5)
Business Days after the Company’s request and in no event later than five (5)
Business Days prior to the Subsequent Closing Deadline, which Third Closing
Election Notice shall specify that such Third Closing

11 

 

Investor is exercising its right under this Section 2.1(b) to purchase such
Third Closing Investor’s Applicable Third Closing Notes (any Third Closing
Investor that shall so deliver a Third Closing Election Notice to the Company in
accordance with the foregoing is herein referred to as an “Exercising Third
Closing Investor”).

(iv)            Upon an Exercising Third Closing Investor’s delivery of a Third
Closing Election Notice to the Company pursuant to clause (iii) above, the
Company shall become irrevocably obligated to issue, sell and deliver to such
Exercising Third Closing Investor such Exercising Third Closing Investor’s Third
Closing Notes on the Third Closing Date on the terms and conditions set forth
herein.

(v)             For the avoidance of doubt, unless and until a Third Closing
Investor delivers a Third Closing Election Notice to the Company in accordance
with the foregoing, such Third Closing Investor shall have no obligation
hereunder to purchase any or all of such Third Closing Investor’s Third Closing
Notes hereunder.

(vi)            Solely in the event that one or more Exercising Third Closing
Investors shall have delivered a Third Closing Election Notice to the Company in
accordance with the foregoing pursuant to which each such Exercising Third
Closing Investor shall have elected to purchase such Exercising Third Closing
Investor’s Third Closing Notes on the Third Closing Date, subject to the terms
and conditions set forth in this Agreement, at the Third Closing, the Company
shall issue and sell to each such Exercising Third Closing Investor, and each
such Exercising Third Closing Investor shall, severally and not jointly,
purchase from the Company, each such Exercising Third Closing Investor’s Third
Closing Notes in the principal amount set forth across from each such Exercising
Third Closing Investor’s name under the heading “Principal Amount of Third
Closing Note” on the Schedule of Investors, at a purchase price equal to the
principal face amount thereof. The date and time of the Third Closing shall be
10:00 a.m. (New York time) on the Third Closing Date. The Third Closing shall
take place at the offices of the Company Counsel, or at such other location as
the parties determine. The Third Closing may take place by delivery of the items
to be delivered at the Third Closing by facsimile or other electronic
transmission.

2.2             First Closing Deliverables.

(a)              At the First Closing, the Company shall:

(i)               deliver or cause to be delivered to each First Closing
Investor a duly executed Note in the principal amount set forth across from such
First Closing Investor’s name under the heading “Principal Amount of First
Closing Note” on the Schedule of Investors;

(ii)             deliver or cause to be delivered to each First Closing Investor
a duly executed Guaranty Agreement in the form attached hereto as Exhibit B (the
“Guaranty Agreement”), executed by each of the Domestic Subsidiaries, if any, of
the Company;

(iii)           deliver or cause to be delivered to each First Closing Investor
a duly executed Security Agreement in the form attached hereto as Exhibit C (the
“Security Agreement”), executed by the Company and each of the Domestic
Subsidiaries, if any, of the Company;

(iv)            deliver or cause to be delivered to Petrichor a duly executed
Board Observer Agreement in the form attached hereto as Exhibit D (the “Board
Observer Agreement”), executed by the Company;

12 

 

(v)             pay to Petrichor the First Closing Access Fee in accordance with
Section 4.9(a); and

(vi)            promptly upon receipt of the aggregate purchase price for the
First Closing Notes set forth in Section 2.2(b)(i) from the First Closing
Investors, pay to the holders of the Existing Indebtedness the amounts necessary
to repay at least the Minimum Repayment Amount of the Existing Indebtedness owed
to such holders by check or wire transfer of immediately available funds to the
account or accounts designated by such holders of Existing Indebtedness.

(b)             At the First Closing, the First Closing Investors (as
applicable) shall deliver or cause to be delivered to the Company the following:

(i)               the aggregate purchase price for the First Closing Notes
purchased by such First Closing Investor hereunder, as set forth across from
such First Closing Investor’s name under the heading “Aggregate First Closing
Purchase Price” on the Schedule of Investors, in U.S. dollars and in immediately
available funds, by wire transfer to an account designated in writing to such
First Closing Investor by the Company for such purpose;

(ii)             an executed Board Observer Agreement, executed by the
individual designated by Petrichor to serve as a board observer thereunder; and

(iii)           a duly executed intercreditor or similar agreement in form and
substance acceptable to the Investors (the “Intercreditor Agreement”).

2.3             Second Closing Deliverables. Solely in the event that one or
more Exercising Second Closing Investors shall have delivered a Second Closing
Election Notice to the Company in accordance with Section 2.1(b) pursuant to
which each such Exercising Second Closing Investor shall have elected to
purchase each such Exercising Second Closing Investor’s Second Closing Notes on
the Second Closing Date, at the Second Closing:

(a)              the Company shall deliver or cause to be delivered to each
Exercising Second Closing Investor a duly executed Second Closing Note in the
principal amount set forth across from such Exercising Second Closing Investor’s
name under the heading “Principal Amount of Second Closing Note” on the Schedule
of Investors; and

(b)             each Exercising Second Closing Investor shall deliver or cause
to be delivered to the Company the aggregate purchase price for the Second
Closing Notes purchased by such Exercising Second Closing Investor hereunder, as
set forth across from such Exercising Second Closing Investor’s name under the
heading “Aggregate Second Closing Purchase Price” on the Schedule of Investors,
in U.S. dollars and in immediately available funds, by wire transfer to an
account designated in writing to such Exercising Second Closing Investor by the
Company for such purpose.

2.4             Third Closing Deliverables. Solely in the event that one or more
Exercising Third Closing Investors shall have delivered a Third Closing Election
Notice to the Company in accordance with Section 2.1(c) pursuant to which each
such Exercising Third Closing Investor shall have elected to purchase each such
Exercising Third Closing Investor’s Third Closing Notes on the Third Closing
Date, at the Third Closing:

(a)              the Company shall deliver or cause to be delivered to each
Exercising Third Closing Investor a duly executed Third Closing Note in the
principal amount set forth across from such Exercising Third Closing Investor’s
name under the heading “Principal Amount of Third Closing Note” on the Schedule
of Investors; and

13 

 

(b)             each Exercising Third Closing Investor shall deliver or cause to
be delivered to the Company the aggregate purchase price for the Third Closing
Notes purchased by such Exercising Third Closing Investor hereunder, as set
forth across from such Exercising Third Closing Investor’s name under the
heading “Aggregate Third Closing Purchase Price” on the Schedule of Investors,
in U.S. dollars and in immediately available funds, by wire transfer to an
account designated in writing to such Exercising Third Closing Investor by the
Company for such purpose.

Article III
REPRESENTATIONS AND WARRANTIES

3.1             Representations and Warranties of the Company. The Company
hereby represents and warrants to the Investors, as of the date hereof and as
the date of each Closing, as follows:

(a)              Subsidiaries. The Company owns, directly or indirectly, all of
the capital stock or comparable equity interests of each Subsidiary free and
clear of any Lien (other than restrictions on transfer arising under applicable
securities laws), and all issued and outstanding shares of capital stock or
comparable equity interest of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights. The Company does
not own an equity or other ownership interest in any Person other than the
Subsidiaries.

(b)             Organization and Qualification. The Company and each Subsidiary
is an entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization, as applicable,
with the requisite power and legal authority to own and use its properties and
assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation of any of the provisions of its certificate
or articles of incorporation, bylaws or other organizational or charter
documents, as applicable. The Company and each Subsidiary is duly qualified to
do 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, would not, individually or
in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect and no Proceeding has been instituted seeking to revoke, limit or curtail
such power or authority or qualification.

(c)              Authorization; Enforcement. The Company and each of its
Domestic Subsidiaries has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by each of the Transaction
Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder and, in the case of the Company, to issue the
Securities in accordance with the terms hereof and thereof. The execution and
delivery by the Company and each of its Domestic Subsidiaries of each of the
Transaction Documents to which it is a party and the consummation by it of the
transactions contemplated hereby and thereby, including, in the case of the
Company, the issuance of the Notes and the reservation for issuance and issuance
of the Note Shares, have been duly authorized by all necessary action on the
part of the Company and each such Domestic Subsidiary, and (other than the
filing with the SEC of one or more Registration Statements in accordance with
Section 4.7, any filings as may be required by state securities agencies, and
any filings required pursuant to the Security Documents) no further consent,
filing, authorization or action is required from or with any United States
federal or state regulatory authority or governmental body or any Trading Market
by the Company or any Domestic Subsidiary. Each of the Transaction Documents to
which it is a party has been (or upon delivery will be) duly executed by the
Company and each of its Domestic Subsidiaries and is, or when delivered in
accordance with the terms hereof, will constitute, the valid and binding
obligation of the Company and each such Domestic Subsidiary enforceable against
the Company and each such Domestic Subsidiary 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

14 

 

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 provisions contained
herein may be limited by applicable law.

(d)             No Conflicts. Except as set forth on Schedule 3.1(d), the
execution, delivery and performance by the Company and each of its Domestic
Subsidiaries of the Transaction Documents to which it is a party, the
consummation by the Company and each of its Domestic Subsidiaries of the
transactions contemplated hereby and thereby, and, in the case of the Company,
the issuance and sale of the Notes and the reservation for issuance and issuance
of the Note Shares do not, and will not, (i) conflict with or violate any
provision of the Company’s or any Domestic Subsidiary’s certificate of
incorporation or bylaws, (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, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement (including any Material Contract), 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) 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 any Subsidiary is subject or by which any
property or asset of the Company or any Subsidiary is bound or affected, except,
in the case of clauses (ii) and (iii) above, to the extent that such conflict,
default, termination, amendment, acceleration, cancellation right or violation
would not have or reasonably be expected to result in a Material Adverse Effect.
The Company is not in violation of the listing requirements of the Trading
Market and has no knowledge of any facts that would reasonably lead to delisting
or suspension of the Common Stock in the foreseeable future. The issuance by the
Company of the Securities shall not have the effect of delisting or suspending
the Common Stock from the Trading Market.

(e)              Valid Issuance. The Notes 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, and, except as set forth
on Schedule 3.1(e), free and clear of all Liens (other than restrictions on
transfer arising under applicable securities laws) and will not be subject to
preemptive or similar rights of stockholders. Upon issuance or conversion in
accordance with the Notes, the Note Shares, when issued, will be validly issued,
fully paid and nonassessable, free and clear of all Liens (other than
restrictions on transfer arising under applicable securities laws) and will not
be subject to preemptive or similar rights of stockholders, with the holders
being entitled to all rights accorded to a holder of Common Stock.

(f)              Capitalization. As of December 31, 2019, the aggregate number
of shares and type of all authorized, issued and outstanding classes of capital
stock, options and other securities of the Company and each of its Subsidiaries
(whether or not presently convertible into or exercisable or exchangeable for
shares of capital stock of the Company or such Subsidiary, as applicable) is set
forth in Schedule 3.1(f) hereto. All outstanding shares of capital stock of the
Company and of each Subsidiary are duly authorized, validly issued, fully paid
and nonassessable and have been issued in compliance in all material respects
with all applicable securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase any capital stock of the Company or such Subsidiary. 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 that have not been effectively waived as of the date hereof and as of
each Applicable Closing Date. The issuance and sale of the Securities (including
the Note Shares) and the transactions contemplated by the Transaction Documents
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Investors) and will not result in a
right of any

15 

 

holder of Company securities to adjust the exercise, conversion, exchange or
reset price under any of such securities. 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 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. As of the First Closing, the Company
shall have reserved from its duly authorized capital stock not less than the
maximum number of Note Shares issuable upon conversion of the First Closing
Notes based on the initial Conversion Price (as defined in the Notes) of $6.00.
As of each Closing occurring after the First Closing, the Company shall have
reserved from its duly authorized capital stock not less than the maximum number
of Note Shares issuable upon conversion of all Notes then outstanding (including
the Notes issued at such Closing) based on the then effective Conversion Price
(as defined in the Notes).

(g)             SEC Reports; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it under the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof (the “SEC Reports”). As of their respective dates (or, if amended or
superseded by a filing prior to the First Closing Date, then on the date of such
filing), the SEC Reports filed by the Company complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder, and none of the SEC Reports, when filed (or, if
amended or superseded by a filing prior to the First Closing Date, then on the
date of such filing) by the Company, 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 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 SEC with respect thereto as in effect at the time of filing (or, if
amended or superseded by a filing prior to the First Closing Date, then on the
date of such filing). Such financial statements have been prepared in accordance
with 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 or may be condensed or summary statements, and
fairly present in all material respects the consolidated 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, year-end audit
adjustments. All Material Contracts to which the Company or any Subsidiary is a
party or to which the property or assets of the Company or any Subsidiary are
subject are included as part of or identified in the SEC Reports.

(h)             Absence of Litigation. Except as disclosed in the SEC Reports,
there is no action, suit, claim, or Proceeding pending, or, to the Company’s
knowledge, threatened, before or by any court, public board, government agency,
self-regulatory organization or body that adversely affect or challenge the
legality, validity or enforceability of any of the Transaction Documents or that
would, individually or in the aggregate, have or be reasonably likely to result
in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any
director or executive officer thereof, is or has within the past ten years been
the subject of any action, suit, notice of violation, proceeding (including any
partial proceeding such as a deposition) or investigation involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty. To the knowledge of the Company, within the past ten
years there has not been, and there is not pending or contemplated, any
investigation by the SEC involving the Company or any current director or
executive officer of the Company. The SEC 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.

(i)               Compliance. Except as would not, individually or in the
aggregate, have or be reasonably likely to result in a Material Adverse Effect,
(i) neither the Company nor any Subsidiary is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or

16 

 

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 written 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 (including any
Material Contract) 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) neither the Company nor any Subsidiary is in violation of any
order of any court, arbitrator or governmental body to which the Company or any
Subsidiary is subject or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) neither the Company nor any Subsidiary
is in violation of any law, statute, rule or regulation of any governmental
authority to which the Company or any Subsidiary is subject or by which any
property or asset of the Company or any Subsidiary is bound or affected.

(j)               Title to Assets. Neither the Company nor any Subsidiary owns
real property. The Company and each Subsidiary has good and marketable title in
all personal property owned by them that is material to the business of the
Company and each Subsidiary, in each case free and clear of all Liens, except
for Liens that do not, individually or in the aggregate, have or are reasonably
likely to result in a Material Adverse Effect or which do not materially affect
the value and do not materially interfere with the use of such property by the
Company. Any real property and facilities held under lease by the Company or any
Subsidiary is held by it under valid, subsisting and enforceable leases of which
the Company and each Subsidiary is in compliance in all material respects.

(k)             Intellectual Property. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and rights necessary to conduct their respective businesses as now
conducted. Except for matters described in the SEC Documents, or matters which
would not be reasonably likely to have a Material Adverse Effect, the Company
and its Subsidiaries do not have any knowledge of any violation or infringement
by the Company or its Subsidiaries of trademark, trade name rights, patents,
patent rights, copyrights, inventions, licenses, service names, service marks,
service mark registrations, trade secret or other similar rights of others, and,
to the knowledge of the Company, there is no claim, action or Proceeding being
made or brought against, or to the Company’s knowledge, being threatened
against, the Company or its Subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names, service
marks, service mark registrations, trade secret or other violation or
infringement; and the Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where
failure to do so would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

(l)               Insurance. The Company and each Subsidiary is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses and locations
in which the Company and each Subsidiary is engaged. Neither the Company nor any
Subsidiary has any reason to believe that it will be unable 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.

(m)            Internal Accounting Controls. The Company and each Subsidiary
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
generally accepted accounting principles 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

17 

 

assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.

(n)             Sarbanes-Oxley Act; Disclosure Controls. The Company is in
compliance in all material respects with applicable requirements of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and applicable rules and
regulations promulgated by the SEC thereunder, except where such noncompliance
would not have, individually or in the aggregate, a Material Adverse Effect. The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act).

(o)             Indebtedness. Except as disclosed in the SEC Reports, neither
the Company nor any Subsidiary (i) has any outstanding Indebtedness, or (ii) is
in violation of any term of and is not in default under any contract, agreement
or instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material
Adverse Effect.

(p)             Filings, Consents and Approvals. Except as set forth on Schedule
3(p), neither the Company nor any of its Subsidiaries is 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 or any of its Subsidiaries of the
Transaction Documents (including the issuance of the Securities), other than (i)
filings required by applicable state securities laws, (ii) the filing of any
requisite notices and/or application(s) to any Trading Market for the issuance
and sale of the Note Shares and the listing of the Note Shares for trading or
quotation, as the case may be, thereon in the time and manner required thereby,
and (iii) those that have been made or obtained prior to the date of this
Agreement (collectively, the “Required Approvals”).

(q)             Material Changes; Undisclosed Events, Liabilities or
Developments. Since December 31, 2019, there has been no event, occurrence or
development that has had or that would reasonably be expected to result in a
Material Adverse Effect. Since December 31, 2019, except as specifically
disclosed in an SEC Report filed subsequent to such date and prior to the date
hereof: (i) the Company and its Subsidiaries have 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 SEC, (ii) the
Company has not altered its method of accounting, (iii) 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, (iv) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant to existing
Company stock option plans, and (v) there has not been any material change or
amendment to, or any waiver of any material right by the Company under, any
Material Contract under which the Company or any of its Subsidiaries is bound or
subject. The Company does not have pending before the SEC any request for
confidential treatment of information. Except for the transactions contemplated
by the Transaction Documents, including the issuance of the Securities, 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, properties, operations,
assets or financial condition, that would be required to be disclosed by the
Company on a Current Report on Form 8-K at the time this representation is made
or deemed made that has not been publicly disclosed at least one Trading Day
prior to the date that this representation is made.

(r)              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
or any of its Subsidiaries, which would 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

18 

 

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 with the Company, or any restrictive covenant in favor
of any third party. 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 would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(s)              Consents and Permits. Except as disclosed in the SEC Reports,
each of the Company and its Subsidiaries has made all filings, applications and
submissions required by, possesses and is operating in compliance with, all
approvals, licenses, certificates, certifications, clearances, consents, grants,
exemptions, marks, notifications, orders, permits and other authorizations
issued by, the appropriate federal, state or foreign regulatory authorities
necessary for the ownership or lease of its respective properties or to conduct
its businesses as described in the SEC Reports (collectively, “Permits”), except
for such Permits for which the failure to possess, obtain or make would not have
a Material Adverse Effect; the Company and its Subsidiaries are in compliance
with the terms and conditions of all such Permits, except where the failure to
be in compliance would not have a Material Adverse Effect; all of the Permits
are valid and in full force and effect, except where any invalidity,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect; and neither the Company nor any of its Subsidiaries has
received any written notice relating to the limitation, revocation,
cancellation, suspension, modification or non-renewal of any such Permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, or has any reason to believe that
any such license, certificate, permit or authorization will not be renewed in
the ordinary course.

(t)               Regulatory Filings. Except as disclosed in the SEC Reports,
neither the Company nor any of its Subsidiaries has failed to file with the
applicable regulatory authorities any required filing, declaration, listing,
registration, report or submission, except for such failures that, individually
or in the aggregate, would not have a Material Adverse Effect.

(u)             Environmental Laws. Except as set forth in the SEC Reports, the
Company and its Subsidiaries (i) are in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations, decisions and orders
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as described in the
SEC Reports; and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except, in
the case of any of clauses (i), (ii) or (iii) above, for any such failure to
comply or failure to receive required permits, licenses, other approvals or
liability as would not, individually or in the aggregate, have a Material
Adverse Effect; and, to the knowledge of the Company, there is no pending
investigation or investigation threatened that could reasonably be expected to
lead to such a claim.

(v)             Transactions with Affiliates and Employees. Except as set forth
in the SEC Reports, 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

19 

 

directors), which would be required to be disclosed pursuant to Item 404 of
Regulation S-K under the Securities Act.

(w)            Certain Fees. Except as set forth on Schedule 3.1(w), no
brokerage or finder’s fees or commissions are or will be payable by the Company
or any Subsidiaries 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 Investors 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
3.1(w) that may be due in connection with the transactions contemplated by the
Transaction Documents. The Company shall pay, and hold each Investor harmless
against, any liability, loss or expense (including, without limitation,
attorney’s fees and out-of-pocket expenses) arising in connection with any such
fees or claims.

(x)             Private Placement. Assuming the accuracy of the Investors’
representations and warranties set forth in Section 3.2 and their compliance
with their agreements contained in this Agreement, no registration under the
Securities Act is required for the offer and sale of the Securities by the
Company to the Investors pursuant to the terms of this Agreement. The issuance
and sale of the Notes hereunder does not, and, subject to the receipt of the
Requisite Stockholder Approval, in the case of the Note Shares, when issued,
will not, contravene the rules and regulations of the Trading Market, which, for
the avoidance of doubt, as of the date hereof, is the Nasdaq Capital Market.

(y)             Investment Company. The Company is not, and is not an Affiliate
of, and immediately after receipt of payment for the Notes, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

(z)              Registration Rights. Other than (i) as disclosed in the SEC
Reports and (ii) as set forth in this Agreement, no Person has any right to
cause the Company to effect the registration under the Securities Act of any
securities of the Company.

(aa)           Disclosure. The Company understands and confirms that the
Investors 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 Investors regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the
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 light of the circumstances under
which they were made, not misleading. The Company acknowledges and agrees that
no Investor 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.

(bb)          No Integrated Offering. Assuming the accuracy of the Investors’
representations and warranties set forth in in Section 3.2 and their compliance
with their agreements contained in this Agreement, 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
the Securities Act which would require the registration of any such securities
under the Securities Act.

(cc)           Solvency. Based on the consolidated financial condition of the
Company as of the First Closing Date and any Applicable Closing Date occurring
after the First Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Notes hereunder on such Applicable Closing
Date: (i) the fair saleable value of the Company’s assets as a going concern
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other

20 

 

liabilities (including known contingent liabilities) as they mature and (ii) the
Company’s assets do not constitute unreasonably small capital to carry on its
business as now conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company. 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 First Closing Date or within one year from any
Applicable Closing Date occurring after the First Closing Date.

(dd)          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.

(ee)           No General Solicitation. Neither the Company nor any person
acting on behalf of the Company has offered or sold any of the Securities by any
form of general solicitation or general advertising. The Company has offered,
and may offer, the Securities for sale only to the Investors and other
“accredited investors” within the meaning of Rule 501 under the Securities Act.

(ff)            Foreign Corrupt Practices. Neither the Company nor any
Subsidiary, nor to the Company’s knowledge, 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, (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
Foreign Corrupt Practices Act of 1977, as amended.

(gg)          Accountants. Cherry Bekaert LLP (the “Accountant”), whose report
on the consolidated financial statements of the Company is filed with the SEC as
part of the Company’s most recent Annual Report on Form 10-K filed with the SEC,
is and, during the periods covered by their report, was an independent
registered public accounting firm within the meaning of the Securities Act and
the Public Company Accounting Oversight Board (United States). To the Company’s
knowledge, the Accountant is not in violation of the auditor independence
requirements of the Sarbanes-Oxley Act with respect to the Company.

(hh)          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”); and the Company will not directly or
indirectly use the proceeds of the sale of the Securities, or lend, contribute
or otherwise make available such proceeds to any joint venture partner or other
person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan or
any other country sanctioned by OFAC or for the purpose of financing the
activities of any person currently subject to any U.S. sanctions.

21 

 

(ii)             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 Investors’ request.

(jj)             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 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.

(kk)          Money Laundering. The operations of the Company and its
Subsidiaries are and, to the Company’s knowledge, have been conducted at all
times in material 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, suit 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 Company’s knowledge,
threatened.

(ll)             Acknowledgment Regarding Investor’s Purchase of Securities. The
Company acknowledges and agrees that each Investor is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby and that no Investor is (i)
an officer or director of the Company, (ii) an “affiliate” (as defined in Rule
144) of the Company or (iii) to its knowledge, a “beneficial owner” of more than
10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the
Exchange Act). The Company further acknowledges that no Investor 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 hereby
and thereby, and any advice given by an Investor or any of its representatives
or agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to such Investor’s purchase
of the Securities. The Company further represents to each Investor that the
Company’s decision to enter into the Transaction Documents to which it is a
party has been based solely on the independent evaluation by the Company and its
representatives.

(mm)       Acknowledgement Regarding Investors’ Trading Activity. It is
understood and acknowledged by the Company that, except as otherwise
specifically set forth in any written agreement between the Company and the
applicable Investor, (i) following the public disclosure of the transactions
contemplated by the Transaction Documents, in accordance with the terms thereof,
none of the Investors have been asked by the Company to agree, nor has any
Investor agreed with the Company, to refrain from effecting any transactions in
or with respect to (including, without limitation, purchasing or selling, long
and/or short) any securities of the Company, or “derivative” securities based on
securities issued by the Company or to hold any of the Securities for any
specified term; (ii) each Investor shall not be deemed to have any affiliation
with or control over any arm’s length counterparty in any “derivative”
transaction; and (iv) each Investor may rely on the Company’s obligation to
timely deliver shares of Common Stock upon conversion, exercise or exchange, as
applicable, of the Notes as and when required pursuant to the Transaction
Documents for purposes of effecting trading in the Common Stock of the Company.
The Company further understands and acknowledges that, except as otherwise
specifically set forth in any written agreement between the Company and the
applicable Investor, following the public disclosure of the transactions
contemplated by the Transaction Documents pursuant to the Press Release (as
defined

22 

 

below) one or more Investors may engage in hedging and/or trading activities
(including, without limitation, the location and/or reservation of borrowable
shares of Common Stock) at various times during the period that the Securities
are outstanding, including, without limitation, during the periods that the
value and/or number of the Note Shares deliverable with respect to the
Securities are being determined and such hedging and/or trading activities
(including, without limitation, the location and/or reservation of borrowable
shares of Common Stock), if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the
hedging and/or trading activities are being conducted. The Company acknowledges
that, except as otherwise specifically set forth in any written agreement
between the Company and the applicable Investor, such aforementioned hedging
and/or trading activities do not constitute a breach of this Agreement, the
Notes or any other Transaction Document or any of the documents executed in
connection herewith or therewith.

(nn)          Manipulation of Price. The Company has not, and, to the knowledge
of the Company, no Person acting on their behalf has, directly or indirectly,
(i) taken 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, (iii) paid or
agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company in connection with the transactions
contemplated by the Transaction Documents, or (iv) paid or agreed to pay any
Person for research services with respect to any securities of the Company.

(oo)          Ranking of Notes. Except as set forth on Schedule 3.1(oo), no
Indebtedness of the Company will be senior to, or pari passu with, the Notes in
right of payment, whether with respect to payment or redemptions, interest,
damages, upon liquidation or dissolution or otherwise.

(pp)          Security Interest in Collateral. The provisions of this Agreement
and the other Transaction Documents create legal, valid and enforceable Liens
on, and security interests in, all of the Company’s and each of the Subsidiary
Guarantor’s right, title and interest in and to all the Collateral in favor of
the Collateral Agent, for the benefit of the Collateral Agent and the Investors,
and upon (x) the making of the filings, recordings and other similar actions
specified in the Security Documents, and (y) the taking of possession or control
by the Collateral Agent of such Collateral with respect to which a security
interest may be perfected only by possession or control (which possession or
control shall be given to the Collateral Agent to the extent required by any
Security Document), such Liens shall constitute perfected and continuing Liens
on, and security interests in, the Collateral, securing the Secured Obligations
(as defined in the Security Agreement), enforceable against the Company, the
Subsidiary Guarantors and all third parties, and, except as set forth on
Schedule 3.1(pp), having priority over all other Liens on the Collateral.

(qq)          Existing Indebtedness. Prior to the First Closing Date and unless
the Existing Indebtedness can be repaid within one (1) Business Day following
the First Closing Date, the Company shall deliver to each Investor true and
correct copies of the Fourth Omnibus Amendment, which Fourth Omnibus Amendment
shall be effective to (i) cause all of the Notes issuable pursuant to this
Agreement to be designated and treated as “Senior Debt” pursuant to the terms of
the Existing Indebtedness and the Security Agreement (as defined in the Existing
Indebtedness), and (ii) cause all of the holders of the Notes issuable pursuant
to this Agreement to be designated and treated as a “Senior Lender” pursuant to
the terms of the Existing Indebtedness (as defined in the Existing
Indebtedness).

3.2             Representations and Warranties of the Investors. Each Investor
hereby, as to itself only and for no other Investor, represents and warrants to
the Company as follows:

(a)              Organization; Authority. Such Investor is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite

23 

 

corporate, limited liability company, partnership or other 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 purchase by such Investor of the Notes hereunder and the consummation of the
transactions contemplated by the Transaction Documents have been duly authorized
by all necessary corporate, partnership or other action on the part of such
Investor. This Agreement and the Transaction Documents to which such Investor is
a party or has or will execute have been duly executed and delivered by such
Investor and constitute the valid and binding obligations of such Investor,
enforceable against it in accordance with their 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
contained herein may be limited by applicable law.

(b)             No Public Sale or Distribution. Such Investor is acquiring the
Notes for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered under the Securities Act or under an exemption from such
registration and in compliance with applicable federal and state securities
laws, and such Investor does not have a present arrangement to effect any
distribution of the Securities to or through any person or entity; provided,
however, by making the representations herein, such Investor does not agree, or
make any representation or warranty, to hold any of the Securities for any
minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption from registration under the Securities Act.

(c)              Investor Status. Such Investor is an “accredited investor” as
defined in Rule 501(a) under the Securities Act. Such Investor is not a
registered broker dealer registered under Section 15(a) of the Exchange Act, or
a member of the Financial Industry Regulatory Authority, Inc. or an entity
engaged in the business of being a broker dealer.

(d)             Experience of Such Investor; Risk of Loss. Such Investor 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 Investor understands that it must bear the economic risk of its
investment in the Securities, and is able to bear such risk and is able to
afford a complete loss of such investment.

(e)              Access to Information. Such Investor acknowledges that it has
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities that have been requested by such Investor. Such Investor has been
afforded the opportunity to ask questions of the Company and receive answers
from representatives of the Company concerning the Company and the terms and
conditions of the offering of the Notes and the merits and risks of investing in
the Notes. Neither such inquiries nor any other due diligence investigations
conducted by such Investor or its advisors, if any, or its representatives shall
modify, amend or affect such Investor’s right to rely on the Company’s
representations and warranties contained herein or in any other Transaction
Document.

(f)              No Governmental Review. Such Investor understands that no U.S.
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

(g)             Reliance on Exemptions. Such Investor understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of U.S. federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and such

24 

 

Investor’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Investor set forth herein and in the
other Transaction Documents in order to determine the availability of such
exemptions and the eligibility of such Investor to acquire the Securities.

(h)             Residency. Such Investor is a resident of that jurisdiction
specified below its address on the Schedule of Investors.

(i)               Transfer or Resale. Such Investor understands that: (i) the
Securities have not been and are not being registered under the Securities Act,
any U.S. state securities laws or the laws of any foreign country or other
jurisdiction, and may not be offered for sale, sold, assigned or transferred
other than pursuant to Section 4.1; and (ii) except as set forth in Sections 7.1
through 7.5, neither the Company nor any other Person is under any obligation to
register the Securities under the Securities Act or any state securities laws or
to comply with the terms and conditions of any exemption thereunder.

(j)               Legends. Such Investor understands that each of the
certificates representing the Securities, except as set forth below, shall bear
any legend as required by the “blue sky” laws of any state and a restrictive
legend as set forth in Section 4.1(b), which shall only be removed as set forth
in Section 4.1(d).

Article IV
OTHER AGREEMENTS OF THE PARTIES

4.1             Transfer Restrictions.

(a)              The Investors covenant that the Securities will be disposed of
only pursuant to an effective registration statement under, and in compliance
with the requirements of, 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 compliance with applicable state
securities laws. In connection with any transfer of Securities other than (i)
pursuant to an effective registration statement, (ii) to the Company, (iii)
pursuant to Rule 144 (provided that the Investor provides the Company with
reasonable assurances (in the form of a seller representation letter) that the
Securities may be sold pursuant to such rule) or Rule 144A (as promulgated under
the Securities Act), or (iv) in connection with a bona fide pledge as
contemplated in Section 4.1(c), the Company may require the transferor to
provide to the Company an opinion of counsel selected by the transferor, 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 Securities under the Securities Act. Notwithstanding the foregoing,
the Company hereby consents to and agrees to register on the books of the
Company and with its Transfer Agent, without any such legal opinion, except to
the extent that the transfer agent requests such legal opinion, any transfer of
Securities by an Investor to an Affiliate of such Investor; provided further
that such transfer does not involve a “sale” within the meaning of Section
2(a)(3) of the Securities Act; and provided, further that such Affiliate does
not request any removal of any existing legends on any certificate evidencing
such Securities.

(b)             The Investors agree to the imprinting, until no longer required
by this Section 4.1(b), of the following legend on any certificate evidencing
any of the Securities:

THESE SECURITIES [for Notes, insert: AND THE SECURITIES ISSUABLE UPON CONVERSION
HEREOF] HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY

25 

 

APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED 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 COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

(c)              The Company acknowledges and agrees that an Investor 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 Securities to a
financial institution that is an “accredited investor” as defined in Rule 501(a)
under the Securities Act and who agrees to be bound by the provisions of this
Agreement and, if required under the terms of such arrangement, such Investor
may transfer pledged or secured Securities 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; provided, that an opinion of legal counsel to
the Company may be required by the Transfer Agent in connection with any such
transfer. Further, no notice shall be required of such pledge. At the
appropriate Investor’s expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of such Securities,
including, (i) the opinion of legal counsel to the Company, if required by the
Transfer Agent, as described above and (ii) if the Securities are subject to
registration pursuant to this Agreement, the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders.

(d)             Certificates evidencing the Securities shall not be required to
contain such legend or any other legend (i) following any sale of such
Securities pursuant to an effective registration statement under the Securities
Act, (ii) pursuant to Rule 144 if the holder provides the Company with a legal
opinion (and the documents upon which the legal opinion is based) reasonably
acceptable to the Company to the effect that the Securities can be sold under
Rule 144 or (iii) if the holder provides the Company with a legal opinion (and
the documents upon which the legal opinion is based) reasonably acceptable to
the Company to the effect that the legend is not required under applicable
requirements of the Securities Act (including controlling judicial
interpretations and pronouncements issued by the staff of the SEC. The Company,
at its expense, shall cause Company Counsel to issue any legal opinion to the
Transfer Agent in connection with any sale or transfer pursuant to Rule 144 in
compliance with this Section 4.1(d). The Company will no later than three (3)
Trading Days following the delivery by an Investor to the Company or the
Transfer Agent (if delivery is made to the Transfer Agent a copy shall be
contemporaneously delivered to the Company) of (x) a legended certificate
representing the applicable Securities and any necessary instruments of transfer
and (y) evidence reasonably satisfactory to the Company and its counsel of the
occurrence of any of (i) through (iii) above (including any applicable investor
and broker representation letters and the delivery of any legal opinion referred
to therein, as applicable), deliver or cause to be delivered to such Investor
(or a transferee of such Investor, as applicable) a certificate or book-entry
(including shares transferred via DWAC or similar methodology by DTC)
representing such Securities 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 expand the restrictions on transfer set
forth in this Section 4.1(d).

4.2             Use of Proceeds. The Company intends to use the net proceeds
from the sale of the Notes to repay at least the Minimum Repayment Amount of the
Existing Indebtedness, fund product commercialization, to fund internal research
and development, for general corporate purposes and to pay

26 

 

the fees and expenses incurred in connection with the transactions contemplated
by this Agreement. The Company shall not use such proceeds (x) in violation of
FCPA or OFAC regulations, (y) to make any dividend or distribution in respect
of, or to repurchase or redeem, any shares of its capital stock or (z) in
connection with the settlement of any litigation.

4.3             Securities Laws Disclosure; Publicity. The Company shall, on or
before 9:30 a.m. (New York time), on the first (1st) Business Day after the date
of this Agreement, issue a press release (the “Press Release”), the contents of
which shall be subject to prior review and reasonable approval of the Investors,
disclosing all the material terms of the transactions contemplated by the
Transaction Documents. On or before 9:30 a.m., New York time, on the first (1st)
Business Day after the date of this Agreement, the Company shall file a Current
Report on Form 8-K describing all the material terms of the transactions
contemplated by the Transaction Documents in the form required by the Exchange
Act and attaching all the material Transaction Documents (including, without
limitation, this Agreement and the form of Notes. Without the prior written
consent of an Investor, which consent shall not be unreasonably withheld,
conditioned or delayed, the Company shall not publicly disclose the name of such
Investor, or include the name of such Investor in any filing with the SEC or any
regulatory agency or Trading Market; provided, however, that without such
Investor’s consent, the Company may publicly disclose the name of such Investor,
or include the name of such Investor in any filing with the SEC or any
regulatory agency or Trading Market (a) as required by federal securities law in
connection with any registration statement contemplated by this Agreement or (b)
to the extent such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Investors with prior notice of such
disclosure permitted under this clause (b).

4.4             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
Investor 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 Investor could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents.

4.5             Non-Public Information. Except with respect to (i) the material
terms and conditions of the transactions contemplated by the Transaction
Documents and (ii) information provided to the Observer or any member of the
Board appointed by PTC, the Company covenants and agrees that neither it, nor
any other Person acting on its behalf, will provide any Investor or its agents
or counsel with any information that the Company believes constitutes material
non-public information from and after the filing of the Press Release, unless
prior thereto such Investor shall have entered into a written agreement with the
Company regarding the confidentiality and use of such information. The Company
understands and confirms that each Investor shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

4.6             Blue Sky. The Company, on or before each Applicable Closing
Date, shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for or to qualify the Notes for sale
to the Investors at such Closing pursuant to this Agreement under applicable
securities or “blue sky” laws of the states of the United States (or to obtain
an exemption from such qualification). The Company shall make all filings and
reports relating to the offer and sale of the Securities required under
applicable securities or “blue sky” laws of the states of the United States
following the Applicable Closing Date and shall provide copies to any Investor
who so requests.

4.7             Furnishing of Information. In order to enable the Investors to
sell the Securities under Rule 144 of the Securities Act, for a period of two
years from each Applicable Closing Date, the Company shall use its commercially
reasonable efforts 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

27 

 

the date hereof pursuant to the Exchange Act. During such two year period, if
the Company is not required to file reports pursuant to such laws, it will
prepare and furnish to the Investors and make publicly available in accordance
with Rule 144(c) such information as is required for the Investors to sell the
Note Shares under Rule 144.

4.8             Board Observer. For so long as Petrichor or any of its
Affiliates holds any Securities, the Company shall allow one (1) non-voting
representative designated by Petrichor (such representative, the “Observer”) to
attend, in the capacity of an observer and not a member, all meetings the Board.
The Company shall give the Observer prior written notice of all meetings of the
Board on the terms and conditions set forth in the Board Observer Agreement.

4.9             Access Fees.

(a)              On the First Closing Date, the Company shall pay to Petrichor,
for its own account, an access fee (the “First Closing Access Fee”) in an
aggregate amount equal to $300,000, in U.S. dollars and in immediately available
funds, which First Closing Access Fee shall be payable to Petrichor by wire
transfer to the account designated in writing to the Company by Petrichor for
such purpose.

(b)             On the first anniversary of the First Closing Date occurring
prior to the Subsequent Closing Deadline, the Company shall pay to Petrichor,
for its own account, an access fee (each a “Subsequent Access Fee”) in an
aggregate amount, in U.S. dollars and in immediately available funds, equal to
the product of (x) two (2.00%) percent, times (y) the difference of (i) the
Maximum Subsequent Closing Amount, minus (ii) the aggregate principal amount of
all Second Closing Notes and Third Closing Notes actually issued and sold by the
Company to the Investors pursuant to Sections 2.1(b) and 2.1(c) by wire transfer
to the account designated in writing to the Company by Petrichor for such
purpose; provided, however, that in no event shall the Subsequent Access Fee
exceed $300,000.

4.10          Drawing of Second Closing Notes and Third Closing Notes.
Notwithstanding anything to the contrary set forth herein or in any of the
Notes, from the date hereof until the earlier of (i) the date on which the
aggregate principal amount of all Second Closing Notes and Third Closing Notes
actually issued and sold by the Company to the Investors pursuant to Sections
2.1(b) and 2.1(c) shall equal the Maximum Subsequent Closing Amount, and (ii)
the Trading Day after the Subsequent Closing Deadline, neither the Company nor
any of its Subsidiaries shall incur Indebtedness other than Indebtedness in
respect of the Notes issued hereunder.

4.11          Nasdaq Consent; Requisite Stockholder Approval. The Company shall
take all actions necessary to obtain, and shall use its best efforts to obtain,
the Requisite Stockholder Approval on or prior to the Requisite Stockholder
Approval Deadline. Each Investor agrees with the Company (but not with each
other) that it shall vote or cause to be voted any shares of Common Stock over
which it has voting power as of the record date of the Company’s 2020 annual
meeting of stockholders in favor of the Requisite Stockholder Approval.

4.12          Waiver of Preemptive Rights. For the avoidance of doubt, PTC
hereby waives any and all preemptive, participation or other rights PTC may have
under Section 4.13 of that certain Securities Purchase Agreement, dated as of
May 9, 2019, between PTC and the Company, with respect to any Second Closing
Notes or Third Closing Notes from time to time issued and sold pursuant to this
Agreement.

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Article V
CONDITIONS To Closings

5.1             Conditions Precedent to the First Closing.

(a)              Conditions Precedent to the Obligations of the First Closing
Investors(b)             . The obligation of each First Closing Investor to
purchase the First Closing Notes at the First Closing is subject to the
satisfaction, unless waived in writing by such First Closing Investor, at or
before the First Closing, of each of the following conditions:

(i)               Representations and Warranties. The representations and
warranties of the Company and each Subsidiary contained herein and in each other
Transaction Document shall be true and correct in all respects (in the case of
any representation or warranty qualified by materiality or Material Adverse
Effect) or in all material respects (in the case of any representation or
warranty not qualified by materiality or Material Adverse Effect) as of the date
when made and as of the First Closing Date with the same effect as though made
on and as of the First Closing Date (except for those representations and
warranties that address matters only as of a specific date).

(ii)             Performance. The Company and each Subsidiary Guarantor shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by it at or prior to the First Closing;
provided, that, with respect to covenants, agreements and conditions that are
qualified by materiality, the Company shall have performed such covenants,
agreements and conditions, as so qualified, in all respects.

(iii)           Approvals. The Company shall have obtained all governmental,
regulatory or third party consents and approvals, if any, necessary for the sale
of the First Closing Notes (including all Required Approvals), all of which
shall be and remain so long as necessary in full force and effect.

(iv)            No Suspensions of Trading in Common Stock; Listing. Trading in
the Common Stock shall not have been suspended by the SEC or any Trading Market
at any time since the date of execution of this Agreement and, at any time prior
to the First 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 which, in each case, makes it impracticable
to purchase the First Closing Notes at the First Closing. The Company shall have
filed with Nasdaq a “Notification Form: Listing of Additional Shares” and
supporting documentation, if required, related to the all of the Securities and
Nasdaq shall have not raised any objection with respect thereto that has not
been withdrawn.

(v)             Absence of Litigation. No action, suit or proceeding by or
before any court or any governmental body or authority, against the Company or
any Subsidiary Guarantor or pertaining to the transactions contemplated by this
Agreement or their consummation, shall have been instituted on or before the
First Closing Date, which action, suit or proceeding would, if determined
adversely, have or reasonably be expected to result in, a Material Adverse
Effect.

(vi)            Transaction Documents. The Company and each Subsidiary Guarantor
shall have executed each of the Transaction Documents to which it is a party and
delivered the same to the First Closing Investors.

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(vii)          No Injunction. No Proceeding shall have been filed and no
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered or promulgated by any court or governmental authority
of competent jurisdiction that prohibits or seeks to prohibit or otherwise
challenges the consummation of any of the transactions contemplated by the
Transaction Documents.

(viii)        Adverse Changes. Since the execution of this Agreement, no event
or series of events shall have occurred that has had a Material Adverse Effect.

(ix)            Legal Opinion. Company Counsel shall have delivered to the First
Closing Investors a legal opinion of Company Counsel, addressed to the First
Closing Investors, in form and substance mutually agreed upon by the parties
hereto.

(x)             Officer’s Certificate. The Company shall have delivered to the
First Closing Investors a certificate executed by a duly authorized officer of
the Company certifying the fulfillment of the conditions specified in Sections
5.1(a)(i), 5.1(a)(ii), 5.1(a)(viii) and 5.1(a)(xvi).

(xi)            Secretary’s Certificate. The Company and each of the Subsidiary
Guarantors shall have delivered to the First Closing Investors a certificate
executed by the secretary of the Company or such Subsidiary Guarantor, as
applicable, dated as of the First Closing Date, as to (i) the resolutions
adopted by the Board of Directors of the Company or such Subsidiary Guarantor,
as applicable, approving the transactions contemplated hereby, (ii) the
certificate of incorporation of the Company or such Subsidiary Guarantor, as
applicable, as in effect on the First Closing Date, (iii) the bylaws of the
Company or such Subsidiary Guarantor, as applicable, as in effect on the First
Closing Date, (iv) the good standing of the Company or such Subsidiary
Guarantor, as applicable, not more than five (5) days prior to the First Closing
Date, and (v) the authority and incumbency of the officers of the Company or
such Subsidiary Guarantor, as applicable, executing the Transaction Documents.

(xii)          Collateral Items.

(A)            In accordance with the terms of the Security Documents, the
Company and each of the Subsidiary Guarantors shall have (1) delivered to the
Collateral Agent (i) original certificates (a) representing each Subsidiaries’
shares of capital stock to the extent such Subsidiary is a corporation or
otherwise has certificated equity and (b) representing all other equity
interests and all promissory notes required to be pledged thereunder, in each
case, accompanied by undated stock powers and allonges executed in blank and
other proper instruments of transfer and (B) authorized the Collateral Agent and
the First Closing Investors to file appropriate financing statements on Form
UCC-1 in such office or offices as may be necessary or, in the opinion of the
First Closing Investors, desirable to perfect the security interests purported
to be created by each Security Document.

(B)            Within two (2) Business Days prior to the Closing, the Company
shall have delivered or caused to be delivered to the First Closing Investors,
upon the First Closing Investors’ request (A) certified copies of requests for
copies of information on Form UCC-11, listing all effective financing statements
which name as debtor the Company or any of the Subsidiary Guarantors and which
are filed in such office or offices as may be necessary or, in the opinion of
the First Closing Investors, desirable to perfect the security interests
purported to be created by the Security Agreement, together with copies of such
financing statements, none of which, except as otherwise agreed in writing by
the First Closing Investors, shall cover any of the Collateral (as defined in
the Security Agreement), and the results of searches for any tax Lien and
judgment Lien filed against such Person or its property, which results, except
as otherwise agreed to in writing by the First Closing Investors, shall not show
any such Liens; and (B) a perfection certificate, duly completed and executed by
the Company and each of the

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Subsidiary Guarantors, in form and substance satisfactory to the First Closing
Investors (the “Perfection Certificate”).

(C)            Each document (including any UCC financing statement) required by
the Security Documents or reasonably requested by the First Closing Investors to
be filed, registered or recorded in order to create in favor of the Collateral
Agent, for the benefit of the Investors, a perfected Lien on the Collateral
described therein, prior and superior in right to any other Person (other than
with respect to Permitted Liens), shall be in proper form for filing,
registration or recordation.

(xiii)        Interim Compliance. From the date hereof through the First Closing
Date, neither the Company nor any of its Subsidiaries shall have engaged in any
transaction or action or permitted to exist any condition or circumstance
(including, without limitation, the incurrence or suffering to exist of any
Indebtedness or Liens) that would have constituted a breach or violation of any
of the covenants set forth in Section 13 of the First Closing Notes (determined
as though such covenants been effective commencing on the date hereof through
the Frist Closing Date), and the Company shall have delivered to the First
Closing Investors a certificate executed by a duly authorized officer of the
Company certifying the fulfillment of the condition set forth in this clause
(xiii).

(xiv)         Minimum Repayment Amount. The Company shall have delivered to the
First Closing Investors a certificate executed by a duly authorized officer of
the Company certifying that (i) immediately following the consummation of the
First Closing, the Company shall apply a portion of the net proceeds from the
sale of the First Closing Notes to repay at least the Minimum Repayment Amount
of the Existing Indebtedness on the First Closing Date and (ii) after giving
effect to the repayment of Existing Indebtedness on the First Closing Date, the
Company will be in compliance with the covenant set forth in Section 13.1 of the
First Closing Notes.

(xv)          Ability to Repay the Minimum Repayment Amount. The Company shall
have provided evidence to the First Closing Investors of the Company’s ability
to apply a portion of the net proceeds from the sale of the First Closing Notes
to repay at least the Minimum Repayment Amount of the Existing Indebtedness on
the First Closing Date and the First Closing Investors shall be satisfied, in
their sole discretion, with such evidence.

(xvi)         Fourth Omnibus Amendment. The Company shall have delivered to each
Investor true and correct copies of the Fourth Omnibus Amendment, and such
Fourth Omnibus Amendment shall be in form and substance acceptable to each such
Investor. Since the date of this Agreement, the Company shall have not effected
any amendment or modification to the Existing Indebtedness other than the Fourth
Omnibus Amendment. As of the date of the First Closing, (i) all of the Notes
issuable pursuant to this Agreement are designated and treated as “Senior Debt”
pursuant to the terms of the Existing Indebtedness and the Security Agreement
(as defined in the Existing Indebtedness), and (ii) all of the holders of the
Notes issuable pursuant to this Agreement are designated and treated as a
“Senior Lender” pursuant to the terms of the Existing Indebtedness (as defined
in the Existing Indebtedness).

(xvii)       First Closing Access Fee. The Company shall have paid and delivered
the First Closing Access Fee to Petrichor in accordance with Section 4.9(a).

(xviii)     Other Agreements. Solely with respect to any Investor other than
PTC, all agreements and instruments entered into between the Company or any of
its affiliates, on one hand, and PTC or any of its affiliates, on the other
hand, following the date hereof shall be in form and substance reasonably
acceptable to such Investor.

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(xix)         General. The Company and the Subsidiary Guarantors shall have
delivered to such First Closing Investor such other documents, instruments or
certificates relating to the transactions contemplated by this Agreement as such
Investor or its counsel may reasonably request.

(b)             Conditions Precedent to the Obligations of the Company. The
obligation of the Company to sell the First Closing Notes at the First Closing
is subject to the satisfaction or waiver by the Company, at or before the First
Closing, of each of the following conditions:

(i)               Representations and Warranties. The representations and
warranties of the Investors contained herein shall be true and correct in all
respects (in the case of any representation or warranty qualified by materiality
or Material Adverse Effect) or in all material respects (in the case of any
representation or warranty not qualified by materiality or Material Adverse
Effect) as of the date when made and as of the First Closing Date with the same
effect as though made on and as of the First Closing Date (except for those
representations and warranties that address matters only as of a specific date).

(ii)             Performance. The Investors shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by them at or prior to the First Closing.

(iii)           Deliverables. The Investors shall have executed each of the
Transaction Documents to which it is a party and delivered the same to the
Company. The Investors shall have delivered to the Company those items required
by Section 2.2(b).

5.2             Conditions Precedent to the Second Closing.

(a)              Conditions Precedent to the Obligations of the Second Closing
Investors. The obligation of each Exercising Second Closing Investor to purchase
such Exercising Second Closing Investor’s Second Closing Notes at the Second
Closing is subject to the satisfaction, unless waived in writing by such
Exercising Second Closing Investor, at or before the Second Closing, of each of
the following conditions:

(i)               Representations and Warranties. The representations and
warranties of the Company and each Subsidiary contained herein and in each other
Transaction Document shall be true and correct in all respects (in the case of
any representation or warranty qualified by materiality or Material Adverse
Effect) or in all material respects (in the case of any representation or
warranty not qualified by materiality or Material Adverse Effect) as of the date
when made and as of the Second Closing Date with the same effect as though made
on and as of the Second Closing Date (except for those representations and
warranties that address matters only as of a specific date).

(ii)             Performance. The Company and each Subsidiary Guarantor shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by it at or prior to the Second Closing;
provided, that, with respect to covenants, agreements and conditions that are
qualified by materiality, the Company shall have performed such covenants,
agreements and conditions, as so qualified, in all respects.

(iii)           Approvals. The Company shall have obtained all governmental,
regulatory or third party consents and approvals, if any, necessary for the sale
of the Second Closing Notes (including all Required Approvals), all of which
shall be and remain so long as necessary in full force and effect.

32 

 

(iv)            No Suspensions of Trading in Common Stock; Listing. Trading in
the Common Stock shall not have been suspended by the SEC or any Trading Market
at any time since the date of execution of this Agreement and, at any time prior
to the Second 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 which, in each case, makes it impracticable
to purchase the Second Closing Notes at the Second Closing.

(v)             Absence of Litigation. No action, suit or proceeding by or
before any court or any governmental body or authority, against the Company or
any Subsidiary Guarantor or pertaining to the transactions contemplated by this
Agreement or their consummation, shall have been instituted on or before the
Second Closing Date, which action, suit or proceeding would, if determined
adversely, have or reasonably be expected to result in, a Material Adverse
Effect.

(vi)            No Injunction. No Proceeding shall have been filed and no
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered or promulgated by any court or governmental authority
of competent jurisdiction that prohibits or seeks to prohibit or otherwise
challenges the consummation of any of the transactions contemplated by the
Transaction Documents.

(vii)          Adverse Changes. Since the execution of this Agreement, no event
or series of events shall have occurred that has had a Material Adverse Effect.

(viii)        Legal Opinion. Company Counsel shall have delivered to the
Exercising Second Closing Investors a legal opinion of Company Counsel,
addressed to the Exercising Second Closing Investors, in form and substance
reasonable satisfactory to the Exercising Second Closing Investors.

(ix)            Officer’s Certificate. The Company shall have delivered to the
Exercising Second Closing Investors a certificate executed by a duly authorized
officer of the Company certifying the fulfillment of the conditions specified in
Sections 5.2(a)(i), 5.2(a)(ii), 5.2(a)(vii) and 5.2(a)(xii).

(x)             Secretary’s Certificate. The Company and each of the Subsidiary
Guarantors shall have delivered to the Exercising Second Closing Investors a
certificate executed by the secretary of the Company or such Subsidiary
Guarantor, as applicable, dated as of the Second Closing Date, as to (i) the
resolutions adopted by the Board of Directors of the Company or such Subsidiary
Guarantor, as applicable, approving the transactions contemplated hereby, (ii)
the certificate of incorporation of the Company or such Subsidiary Guarantor, as
applicable, as in effect on the Second Closing Date, (iii) the bylaws of the
Company or such Subsidiary Guarantor, as applicable, as in effect on the Second
Closing Date, (iv) the good standing of the Company or such Subsidiary
Guarantor, as applicable, not more than five (5) days prior to the Second
Closing Date, and (v) the authority and incumbency of the officers of the
Company or such Subsidiary Guarantor, as applicable, executing the Transaction
Documents.

(xi)            Second Closing Election Notice. Such Exercising Second Closing
Investor shall have delivered a Second Closing Election Notice to the Company in
accordance with Section 2.1(b) pursuant to which such Exercising Second Closing
Investor shall have elected to purchase such Exercising Second Closing
Investor’s Second Closing Notes on the Second Closing Date.

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(xii)          Fourth Omnibus Amendment. The Company shall have not effected any
amendment or modification to the Existing Indebtedness following the Fourth
Omnibus Amendment. As of the date of the Second Closing, (i) all of the Notes
issuable pursuant to this Agreement are designated and treated as “Senior Debt”
pursuant to the terms of the Existing Indebtedness and the Security Agreement
(as defined in the Existing Indebtedness), and (ii) all of the holders of the
Notes issuable pursuant to this Agreement are designated and treated as a
“Senior Lender” pursuant to the terms of the Existing Indebtedness (as defined
in the Existing Indebtedness).

(xiii)        General. The Company and the Subsidiary Guarantors shall have
delivered to such Exercising Second Closing Investor such other documents,
instruments or certificates relating to the transactions contemplated by this
Agreement as such Exercising Second Closing Investor or its counsel may
reasonably request.

(b)             Conditions Precedent to the Obligations of the
Company(c)              . The obligation of the Company to sell the Second
Closing Notes to an Exercising Second Closing Investor at the Second Closing is
subject to the satisfaction or waiver by the Company, at or before the Second
Closing, of each of the following conditions:

(i)               Representations and Warranties. The representations and
warranties of such Exercising Second Closing Investor contained herein shall be
true and correct in all respects (in the case of any representation or warranty
qualified by materiality or Material Adverse Effect) or in all material respects
(in the case of any representation or warranty not qualified by materiality or
Material Adverse Effect) as of the date when made and as of the Second Closing
Date with the same effect as though made on and as of the Second Closing Date
(except for those representations and warranties that address matters only as of
a specific date).

(ii)             Performance. Such Exercising Second Closing Investor shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by them at or prior to the Second Closing.

(iii)           Deliverables. Such Exercising Second Closing Investor shall have
executed each of the Transaction Documents to which it is a party and delivered
the same to the Company. Such Exercising Second Closing Investor shall have
delivered to the Company those items required by Section 2.3(b).

5.3             Conditions Precedent to the Third Closing.

(a)              Conditions Precedent to the Obligations of the Third Closing
Investors. The obligation of each Exercising Third Closing Investor to purchase
such Exercising Third Closing Investor’s Third Closing Notes at the Third
Closing is subject to the satisfaction, unless waived in writing by such
Exercising Third Closing Investor, at or before the Third Closing, of each of
the following conditions:

(i)               Representations and Warranties. The representations and
warranties of the Company and each Subsidiary contained herein and in each other
Transaction Document shall be true and correct in all respects (in the case of
any representation or warranty qualified by materiality or Material Adverse
Effect) or in all material respects (in the case of any representation or
warranty not qualified by materiality or Material Adverse Effect) as of the date
when made and as of the Third Closing Date with the same effect as though made
on and as of the Third Closing Date (except for those representations and
warranties that address matters only as of a specific date).

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(ii)             Performance. The Company and each Subsidiary shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by it at or prior to the Third Closing; provided,
that, with respect to covenants, agreements and conditions that are qualified by
materiality, the Company shall have performed such covenants, agreements and
conditions, as so qualified, in all respects.

(iii)           Approvals. The Company shall have obtained all governmental,
regulatory or third party consents and approvals, if any, necessary for the sale
of the Third Closing Notes (including all Required Approvals), all of which
shall be and remain so long as necessary in full force and effect.

(iv)            No Suspensions of Trading in Common Stock; Listing. Trading in
the Common Stock shall not have been suspended by the SEC or any Trading Market
at any time since the date of execution of this Agreement and, at any time prior
to the Third 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 which, in each case, makes it impracticable
to purchase the Third Closing Notes at the Third Closing.

(v)             Absence of Litigation. No action, suit or proceeding by or
before any court or any governmental body or authority, against the Company or
any Subsidiary Guarantor or pertaining to the transactions contemplated by this
Agreement or their consummation, shall have been instituted on or before the
Third Closing Date, which action, suit or proceeding would, if determined
adversely, have or reasonably be expected to result in, a Material Adverse
Effect.

(vi)            No Injunction. No Proceeding shall have been filed and no
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered or promulgated by any court or governmental authority
of competent jurisdiction that prohibits or seeks to prohibit or otherwise
challenges the consummation of any of the transactions contemplated by the
Transaction Documents.

(vii)          Adverse Changes. Since the execution of this Agreement, no event
or series of events shall have occurred that has had a Material Adverse Effect.

(viii)        Legal Opinion. Company Counsel shall have delivered to the
Exercising Third Closing Investors a legal opinion of Company Counsel, addressed
to the Exercising Third Closing Investors, in form and substance reasonable
satisfactory to the Exercising Third Closing Investors.

(ix)            Officer’s Certificate. The Company shall have delivered to the
Exercising Third Closing Investors a certificate executed by a duly authorized
officer of the Company certifying the fulfillment of the conditions specified in
Sections 5.3(a)(i), 5.3(a)(ii), 5.3(a)(vii) and 5.3(a)(xii).

(x)             Secretary’s Certificate. The Company and each of the Subsidiary
Guarantors shall have delivered to the Exercising Third Closing Investors a
certificate executed by the secretary of the Company or such Subsidiary
Guarantor, as applicable, dated as of the Third Closing Date, as to (i) the
resolutions adopted by the Board of Directors of the Company or such Subsidiary
Guarantor, as applicable, approving the transactions contemplated hereby, (ii)
the certificate of incorporation of the Company or such Subsidiary Guarantor, as
applicable, as in effect on the Third Closing Date, (iii) the

35 

 

bylaws of the Company or such Subsidiary Guarantor, as applicable, as in effect
on the Third Closing Date, (iv) the good standing of the Company or such
Subsidiary Guarantor, as applicable, not more than five (5) days prior to the
Third Closing Date, and (v) the authority and incumbency of the officers of the
Company or such Subsidiary Guarantor, as applicable, executing the Transaction
Documents.

(xi)            Third Closing Election Notice. Such Exercising Third Closing
Investor shall have delivered a Third Closing Election Notice to the Company in
accordance with Section 2.1(c) pursuant to which such Exercising Third Closing
Investor shall have elected to purchase such Exercising Third Closing Investor’s
Third Closing Notes on the Third Closing Date.

(xii)          Fourth Omnibus Amendment. The Company shall have not effected any
amendment or modification to the Existing Indebtedness following the Fourth
Omnibus Amendment. As of the date of the Third Closing, (i) all of the Notes
issuable pursuant to this Agreement are designated and treated as “Senior Debt”
pursuant to the terms of the Existing Indebtedness and the Security Agreement
(as defined in the Existing Indebtedness), and (ii) all of the holders of the
Notes issuable pursuant to this Agreement are designated and treated as a
“Senior Lender” pursuant to the terms of the Existing Indebtedness (as defined
in the Existing Indebtedness).

(xiii)        General. The Company and the Subsidiary Guarantors shall have
delivered to such Exercising Third Closing Investor such other documents,
instruments or certificates relating to the transactions contemplated by this
Agreement as such Exercising Third Closing Investor or its counsel may
reasonably request.

(b)             Conditions Precedent to the Obligations of the Company. The
obligation of the Company to sell the Third Closing Notes to an Exercising Third
Closing Investor at the Third Closing is subject to the satisfaction or waiver
by the Company, at or before the Third Closing, of each of the following
conditions:

(i)               Representations and Warranties. The representations and
warranties of such Exercising Third Closing Investor contained herein shall be
true and correct in all respects (in the case of any representation or warranty
qualified by materiality or Material Adverse Effect) or in all material respects
(in the case of any representation or warranty not qualified by materiality or
Material Adverse Effect) as of the date when made and as of the Third Closing
Date with the same effect as though made on and as of the Third Closing Date
(except for those representations and warranties that address matters only as of
a specific date).

(ii)             Performance. Such Exercising Third Closing Investor shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by them at or prior to the Third Closing.

(iii)           Deliverables. Such Exercising Third Closing Investor shall have
executed each of the Transaction Documents to which it is a party and delivered
the same to the Company. Such Exercising Third Closing Investor shall have
delivered to the Company those items required by Section 2.3(c).

Article VI
INDEMNIFICATION

6.1             Indemnification.

36 

 

(a)              To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend the Collateral Agent and each
Investor and each of their respective directors, officers, shareholders,
members, partners, employees, agents, and representatives and each Person, if
any, who controls such Investor within the meaning of the Securities Act or the
Exchange Act and each of the directors, officers, shareholders, members,
partners, employees, agents, advisors, representatives of such controlling
Persons (each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs (including, without
limitation, court costs, reasonable attorneys’ fees and costs of defense and
investigation), amounts paid in settlement or expenses, joint or several
(collectively, “Claims”), incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened in writing
(“Indemnified Damages”), to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any breach of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents, (ii) any untrue statement or alleged untrue
statement of a material fact in any Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other “blue sky” laws of any jurisdiction
in which Registrable Securities are offered, or the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) any untrue statement or alleged untrue
statement of a material fact contained in any final prospectus relating to any
Registration Statement (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading, (iv) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any other law, including,
without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities pursuant
to any Registration Statement (the matters in the foregoing clauses (i) through
(iv) being, collectively, “Violations”), or (v) any Proceeding instituted
against such Indemnified Person in any capacity by any stockholder of the
Company who is not an Affiliate of such Indemnified Person, with respect to any
of the transactions contemplated by the Transaction Documents. Subject to
Section 6.1(c), the Company shall reimburse the Indemnified Persons for any
legal fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6.1(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
expressly for use in connection with the preparation of, or inclusion in, any
Registration Statement or any such amendment thereof or supplement thereto and
(ii) shall not be available to a particular Investor to the extent such Claim is
based on a failure of such Investor to deliver or to cause to be delivered the
prospectus made available by the Company (to the extent applicable), including,
without limitation, a corrected prospectus, if such prospectus or corrected
prospectus was made available by the Company; and (iii) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of any of the Registrable Securities by
any of the Investors.

(b)             In connection with any Registration Statement, each Investor
agrees to severally and not jointly indemnify, hold harmless and defend, to the
same extent and in the same manner as is set forth in Section 6.1(a), the
Company, each of its directors, officers, shareholders, members, partners,
employees, agents, and representatives and each Person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act (each, an
“Indemnified Party”), against any Claim or

37 

 

Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case,
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by such
Investor expressly for use in connection with the preparation of, or inclusion
in, (x) a Registration Statement or any such amendment thereof or supplement
thereto or (y) any final prospectus relating to any Registration Statement (as
amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC); and, subject to Section 6.1(c) and the below
provisos in this Section 6.1(b), such Investor will reimburse an Indemnified
Party for any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such Claim; provided,
however, the indemnity agreement contained in this Section 6.1(b) and the
agreement with respect to contribution contained in Section 6.2 shall not apply
to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed, provided, further, that such Investor shall be
liable under this Section 6.1(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a result of the
applicable sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of any of the Registrable Securities by any of the
Investors.

(c)              Promptly after receipt by an Indemnified Person or Indemnified
Party (as the case may be) under this Section 6.1 of notice of the commencement
of any action or proceeding (including, without limitation, any governmental
action or proceeding) involving a Claim, such Indemnified Person or Indemnified
Party (as the case may be) shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Section 6.1, deliver to the applicable
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party (as the case may be); provided, however, an Indemnified
Person or Indemnified Party (as the case may be) shall have the right to retain
its own counsel with the fees and expenses of such counsel to be paid by the
indemnifying party if: (i) the indemnifying party has agreed in writing to pay
such fees and expenses; (ii) the indemnifying party shall have failed promptly
to assume the defense of such Claim and to employ counsel reasonably
satisfactory to such Indemnified Person or Indemnified Party (as the case may
be) in any such Claim; or (iii) the named parties to any such Claim (including,
without limitation, any impleaded parties) include both such Indemnified Person
or Indemnified Party (as the case may be) and the indemnifying party, and such
Indemnified Person or such Indemnified Party (as the case may be) shall have
been advised by counsel that a conflict of interest is likely to exist if the
same counsel were to represent such Indemnified Person or such Indemnified Party
and the indemnifying party (in which case, if such Indemnified Person or such
Indemnified Party (as the case may be) notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, then the indemnifying party shall not have the right to
assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party); provided, further that in the case of clause (iii) above
the indemnifying party shall not be responsible for the reasonable fees and
expenses of more than one (1) separate legal counsel for such Indemnified Person
or Indemnified Party (as the case may be). The Indemnified Party or Indemnified
Person (as the case may be) shall reasonably cooperate with the indemnifying
party in connection with any negotiation or defense of any such action or Claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party or Indemnified Person
(as the case may be) which relates to such action or Claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person (as the case may
be) reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement

38 

 

of any action, claim or proceeding effected without its prior written consent;
provided, however, the indemnifying party shall not unreasonably withhold, delay
or condition its consent. No indemnifying party shall, without the prior written
consent of the Indemnified Party or Indemnified Person (as the case may be),
consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person (as
the case may be) of a release from all liability in respect to such Claim or
litigation, and such settlement shall not include any admission as to fault on
the part of the Indemnified Party. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person (as the case may be) with respect to all
third parties, firms or corporations relating to the matter for which
indemnification has been made. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party (as the case may be) under this Section
6.1, except to the extent that the indemnifying party is materially and
adversely prejudiced in its ability to defend such action.

(d)             No Person involved in the sale of Registrable Securities who is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) in connection with such sale shall be entitled to
indemnification from any Person involved in such sale of Registrable Securities
who is not guilty of fraudulent misrepresentation.

(e)              The indemnity and contribution agreements contained herein
shall be in addition to (i) any cause of action or similar right of the
Indemnified Party or Indemnified Person against the indemnifying party or
others, and (ii) any liabilities to which the indemnifying party may be subject
pursuant to the law.

6.2             Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6.1 to the fullest extent permitted by
law; provided, however: (i) no contribution shall be made under circumstances
where the maker would not have been liable for indemnification under the fault
standards set forth in Section 6.1; (ii) no Person involved in the sale of
Registrable Securities which Person is guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) in connection with
such sale shall be entitled to contribution from any Person involved in such
sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (iii) contribution by any seller of Registrable
Securities shall be limited in amount to the amount of net proceeds received by
such seller from the applicable sale of such Registrable Securities pursuant to
a Registration Statement. Notwithstanding the provisions of this Section 6.2, no
Investor shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the net proceeds actually received by such Investor from
the applicable sale of the Registrable Securities subject to the Claim exceeds
the amount of any damages that such Investor has otherwise been required to pay,
or would otherwise be required to pay under Section 6.1(b), by reason of such
untrue or alleged untrue statement or omission or alleged omission.

Article VII
REGISTRATION RIGHTS; PARTICIPATION RIGHTS

7.1             Demand Registration Statement.

(a)              If, at any time after the earlier of the date that (A) is the
twenty-four (24)-month anniversary of the Closing Date and (B) (i) with respect
to PTC, the Board does not contain an individual designated by PTC, or (ii) with
respect to Petrichor, Petrichor is not entitled to appoint an Observer pursuant
to the terms of the Board Observer Agreement, such Board Observer Agreement has
been terminated by the Company or Petrichor, or Petrichor shall otherwise cease
to appoint an Observer

39 

 

(provided, however, that Petrichor shall not be entitled to demand registration
rights under this Section 7.1 until the date which is nine (9) months following
the First Closing Date in the event that the Board Observer Agreement is
terminated by Petrichor, or Petrichor otherwise ceases to appoint an Observer),
there is not an effective Registration Statement covering the resale of all of
the Registrable Securities, any Investor may provide a notice (the “Demand
Notice”) to the Company requesting that the Company file a Registration
Statement with respect to all or a portion of the Registrable Securities held by
such Investor as specified in such notice (a “Demand Registration Statement”).
Within five (5) Trading Days of the Company’s receipt of a Demand Notice from
any Investor, the Company shall deliver written notice to each of the other
Holders of its receipt of such Demand Notice (a “Demand Receipt Notice”), which
Demand Receipt Notice shall inform each such Holder of its rights to include its
Registrable Securities in the applicable Demand Registration Statement. Any
Holder shall have the right to include all or any portion of such Investor’s
Registrable Securities in such Demand Registration Statement by delivering the
Company written notice of such election (an “Election Notice”) within ten (10)
Trading Days following such Holder’s receipt of the applicable Demand Receipt
Notice. Following the Company’s receipt of a Demand Notice from an Investor, the
Company shall use its best efforts to expeditiously effect the registration of
all of the Registrable Securities of such Investor and each of the other Holders
requested to be included therein in the Demand Notice and all Election Notices
for an offering to be made on a delayed or continuous basis pursuant to Rule 415
by the Filing Date. The Registration Statement shall be on Form S-3 (except if
the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be, at the
election of the Investor that shall have delivered the applicable Demand Notice,
on Form S-1 or another appropriate form for such purpose) and shall contain a
plan of distribution description and selling stockholder information description
as mutually agreed by the Company and the Holders that shall have elected to
include their Registrable Securities in such registration; provided, however,
that no Holder shall be required to be named as an “underwriter” without such
Holder’s express prior written consent. If the Company is a “well known seasoned
issuer” (as defined in Rule 405) as of the date the Registration Statement is
filed with the SEC, such Registration Statement shall be an “automatic shelf
registration statement” (as defined under Rule 405 under the Securities Act).
Subject to the terms of this Agreement, the Company shall use its best efforts
to cause a Registration Statement filed under this Agreement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof, but in any event no later than the applicable Effectiveness Date, and
shall use its best efforts to keep such Registration Statement continuously
effective under the Securities Act until the date that all Registrable
Securities covered by such Registration Statement (i) have been sold, thereunder
or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale
restrictions pursuant to Rule 144 and without the requirement for the Company to
be in compliance with the current public information requirement under Rule 144,
as determined by the counsel to the Company pursuant to a written opinion letter
to such effect, addressed and acceptable to the Transfer Agent and the affected
Holders (the “Effectiveness Period”). The Company shall request effectiveness of
a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The
Company shall notify the Holders via facsimile or by e-mail of the effectiveness
of a Demand Registration Statement by 9:00 a.m. (New York time) on the Trading
Day immediately following the effective date of such Registration Statement. The
Company shall, by 9:30 a.m. (New York time) on the Trading Day after the
effective date of such Registration Statement, file a final Prospectus with the
SEC as required by Rule 424. Failure to so notify the Holders within one (1)
Trading Day of such notification of effectiveness or failure to file a final
Prospectus as foresaid shall be deemed an Event under Section 7.1(h). Each
Investor shall be entitled to deliver Demand Notices hereunder with respect to
an unlimited number of Demand Registration Statements until such time as such
Investor beneficially owns less than a Registrable Amount.

(b)             Notwithstanding the registration obligations set forth
in Section 7.1(a), if the staff of the SEC informs the Company that all of the
Registrable Securities requested to be included in a Demand Registration
Statement cannot, as a result of the application of Rule 415, be registered for
resale as a secondary offering on a single registration statement, the Company
shall promptly inform each of the

40 

 

Holders thereof and use its commercially reasonable efforts to file amendments
to the Registration Statement as required by the staff of the SEC, covering the
maximum number of Registrable Securities permitted to be registered by the SEC,
on Form S-3 or such other form available to register for resale the Registrable
Securities as a secondary offering, subject to the provisions of Section 7.2;
provided, however, that prior to filing such amendment, the Company shall use
diligent efforts to advocate with the staff of the SEC for the registration of
all of the Registrable Securities in accordance with SEC Guidance, including
without limitation, Compliance and Disclosure Interpretation 612.09.

(c)              The Company shall not include in any Demand Registration
Statement any securities which are not Registrable Securities without the prior
written consent of each of the Investors.

(d)             Notwithstanding any other provision of this Agreement and
subject to the payment of liquidated damages pursuant to Section 7.1(h), if the
staff of the SEC or any SEC Guidance sets forth a limitation on the number of
Registrable Securities permitted to be registered on a particular Registration
Statement as a secondary offering (and notwithstanding that the Company used
diligent efforts to advocate with the staff of the SEC for the registration of
all or a greater portion of Registrable Securities), unless otherwise directed
in writing by a Holder as to its Registrable Securities, the number of
Registrable Securities to be registered on such Registration Statement will be
reduced as follows: (i) first, the Company shall reduce or eliminate any
securities to be included other than Registrable Securities; and (ii) second,
the Company shall reduce the Registrable Securities by removing such portion of
the Registrable Securities and/or agreeing to such restrictions and limitations
on the registration and resale of the Registrable Securities, in each case as
the SEC may require to assure the Company’s compliance with the requirements of
Rule 415 (it being acknowledged that, in the event that the SEC requires a
general cutback in the number of Registrable Securities included thereunder,
such cutback shall be implemented among the Holders on a pro rata basis based
upon the number of Registrable Securities each such Holder requested to include
therein). In the event of a cutback hereunder, the Company shall give the
applicable Holders at least five (5) Trading Days prior written notice along
with the calculations as to such Holders’ allotment. In the event the Company
amends the Registration Statement in accordance with the foregoing, the Company
will use its best efforts to file with the SEC, as promptly as allowed by the
staff of the SEC or SEC Guidance provided to the Company or to registrants of
securities in general, one or more registration statements on Form S-3 or such
other form available to register for resale those Registrable Securities that
were not registered for resale on the Registration Statement, as amended.

(e)              The Company may not cause any other registration of securities
for sale for its own account (other than a registration effected solely to
implement an employee benefit plan or a transaction to which Rule 145
promulgated by the SEC pursuant to the Securities Act is applicable) to become
effective within one hundred twenty (120) days following the effective date of
any Registration Statement required pursuant to this Section 7.1.

(f)              If Form S-3 is not available for the registration of the resale
of all Registrable Securities hereunder, the Company shall (i) register the
resale of all Registrable Securities on another appropriate form and (ii)
undertake to register all Registrable Securities on Form S-3 as soon as such
form is available; provided that the Company shall maintain the effectiveness of
the Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering all Registrable Securities has been declared
effective by the SEC.

(g)             Notwithstanding anything to the contrary contained herein, in no
event shall the Company be permitted to name any Holder or an Affiliate of any
Holder as any “underwriter” without the prior written consent of such Holder.

(h)             If: (i) a Registration Statement subject to Section 7.1(a) is
not filed on or prior to the applicable Filing Date (if the Company files the
Registration Statement without affording the Holders

41 

 

the opportunity to review and comment on the same as required by Section
7.3(a) herein, the Company shall be deemed to have not satisfied this clause
(i)), or (ii) the Company fails to file with the SEC a request for acceleration
of a Registration Statement in accordance with Rule 461 promulgated by the SEC
pursuant to the Securities Act, within five (5) Trading Days of the date that
the Company is notified (orally or in writing, whichever is earlier) by the SEC
that such Registration Statement will not be “reviewed” or will not be subject
to further review, or (iii) prior to the effective date of a Registration
Statement, the Company fails to file a pre-effective amendment and otherwise
respond in writing to comments made by the SEC in respect of such Registration
Statement within ten (10) calendar days after the receipt of comments by or
notice from the SEC that such amendment is required in order for such
Registration Statement to be declared effective, or (iv) a Registration
Statement registering for resale all of the Registrable Securities is not
declared effective by the SEC by the Effectiveness Date of the Registration
Statement, or (v) after the effective date of a Registration Statement, such
Registration Statement ceases for any reason to remain continuously effective as
to all Registrable Securities included in such Registration Statement, or the
Holders are otherwise not permitted to utilize the Prospectus therein to resell
such Registrable Securities, for more than ten (10) consecutive calendar days or
more than an aggregate of fifteen (15) calendar days (which need not be
consecutive calendar days) during any twelve (12)-month period (any such failure
or breach being referred to as an “Event”, and for purposes of clauses (i) and
(iv), the date on which such Event occurs, and for purpose of clause (ii) the
date on which such five (5) Trading Day period is exceeded, and for purpose of
clause (iii) the date which such ten (10) calendar day period is exceeded, and
for purpose of clause (v) the date on which such ten (10) or fifteen (15)
calendar day period, as applicable, is exceeded being referred to as “Event
Date”), then, in addition to any other rights the Holders may have hereunder or
under applicable law, on each such Event Date and on each monthly anniversary of
each such Event Date (if the applicable Event shall not have been cured by such
date) until the applicable Event is cured, the Company shall pay to each Holder
an amount in cash, as partial liquidated damages and not as a penalty, equal to
the product of two percent (2.0%) multiplied by the aggregate initial principal
amount of all Notes purchased by such Holder hereunder. If the Company fails to
pay any partial liquidated damages pursuant to this Section 7.1(h) in full
within seven (7) days after the date payable, the Company will pay interest
thereon at a rate of eighteen percent (18%) per year (or such lesser maximum
amount that is permitted to be paid by applicable law) to the applicable
Holders, accruing daily from the date such partial liquidated damages are due
until such amounts, plus all such interest thereon, are paid in full. The
partial liquidated damages pursuant to the terms hereof shall apply on a daily
pro rata basis for any portion of a month prior to the cure of an Event.
Notwithstanding anything to the contrary contained herein, any partial
liquidated damages under this Section 7.1(h) shall cease to accrue on the six
(6)-month anniversary or such later date as of which all Registrable Securities
may be transferred without volume or manner-of-sale restrictions pursuant to
Rule 144 and without the requirement for the Company to be in compliance with
the current public information requirement under Rule 144; and provided,
further, that partial liquidated damages under this Section 7.1(h) shall only be
calculated based on the amount of Registrable Securities not otherwise included
in an effective Registration Statement as of any applicable Event Date and any
applicable monthly anniversary thereafter. The Company hereby acknowledges and
agrees that the provisions of the immediately preceding sentence shall not limit
any liquidated damages provisions contained elsewhere in this Agreement or in
any other Transaction Document.

7.2             Piggy-Back Registrations. If, at any time there is not an
effective Registration Statement covering all of the Registrable Securities and
the Company determines to prepare and file with the SEC a registration statement
relating to the sale of securities of the Company or proposes or is required to
effect an underwritten or registered offering of equity securities, in each case
for its own account or the account of others, other than on Form S-4 or Form S-8
(each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with the Company’s stock option or other employee benefit plans, then
the Company shall deliver to each Holder a written notice of such

42 

 

determination and, if within fifteen (15) days after the date of the delivery of
such notice, any such Holder shall so request in writing, the Company shall
include in such registration statement or in such offering, as the case may be,
all of the Registrable Securities of such Holder that such Holder requests to be
registered or included in such offering; provided, however, that the Company
shall not be required to register or include in such offering any Registrable
Securities pursuant to this Section 7.2 that are the subject of a then effective
Registration Statement that is available for resales or other dispositions by
such Holder.

7.3             Registration Procedures. In connection with the Company’s
registration obligations hereunder, the Company shall:

(a)              Not less than five (5) Trading Days prior to the filing of each
Registration Statement and not less than one (1) Trading Day prior to the filing
of any related Prospectus or any amendment or supplement thereto (except for
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K and any similar or successor reports), the Company shall (i) furnish
to each Holder copies of all such documents proposed to be filed, which
documents (other than those incorporated or deemed to be incorporated by
reference) will be subject to the review of such Holders, and (ii) cause its
officers and directors, counsel and independent registered public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
respective counsel to each Holder, to conduct a reasonable investigation within
the meaning of the Securities Act. The Company shall not file a Registration
Statement or any such Prospectus or any amendments or supplements thereto to
which any Holder shall reasonably object in good faith; provided that, the
Company is notified of such objection in writing no later than five (5) Trading
Days after the Holders have been so furnished copies of a Registration Statement
or one (1) Trading Day after the Holders have been so furnished copies of any
related Prospectus or amendments or supplements thereto (except for Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K and any similar or successor reports). Each Holder agrees to furnish to the
Company a completed questionnaire in a form mutually agreed by the Company and
the Holder on a date that is not less than two (2) Trading Days prior to the
Filing Date or by the end of the fourth (4th) Trading Day following the date on
which such Holder receives draft materials in accordance with this Section
7.3(a).

(b)             (i) Prepare and file with the SEC such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the SEC such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities, (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and, as so supplemented or amended, to be filed
pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any
comments received from the staff of the SEC with respect to a Registration
Statement or any amendment thereto and provide as promptly as reasonably
possible to the Holders true and complete copies of all correspondence from and
to the staff of the SEC relating to a Registration Statement; provided that, the
Company shall excise any information contained therein which would constitute
material non-public information regarding the Company or any of its
Subsidiaries, and (iv) comply in all material respects with the applicable
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
during the applicable period in accordance (subject to the terms of this
Agreement) with the intended methods of disposition by the Holders thereof set
forth in such Registration Statement as so amended or in such Prospectus as so
supplemented.

(c)              Notify the Holders of Registrable Securities to be sold (which
notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by
an instruction to suspend the use of the Prospectus until the requisite changes
have been made) as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than one (1) Trading Day prior to such filing) and (if requested
by any such

43 

 

Person) confirm such notice in writing no later than one (1) Trading Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed,
(B) when the SEC notifies the Company whether there will be a “review” of such
Registration Statement and whenever the SEC comments in writing on such
Registration Statement, and (C) with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or Prospectus or for
additional information, (iii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of a
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose, (v) of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to a
Registration Statement, Prospectus or other documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it 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,
in light of the circumstances under which they were made, not misleading, and
(vi) of the occurrence or existence of any pending corporate development with
respect to the Company that the Company believes may be material and that, in
the determination of the Company, makes it not in the best interest of the
Company to allow continued availability of a Registration Statement or
Prospectus; provided, however, in no event shall any such notice contain any
information which would constitute material, non-public information regarding
the Company or any of its Subsidiaries.

(d)             Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

(e)              Furnish to each Holder, without charge, at least one conformed
copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the SEC; provided, that any such item which is available on the
EDGAR system (or successor thereto) need not be furnished in physical form.

(f)              Furnish to the selling Holders such number of copies of a
prospectus, including a preliminary Prospectus, as required by the Securities
Act, and such other documents as the Holders may reasonably request in order to
facilitate their disposition of their Registrable Securities.

(g)             Subject to the terms of this Agreement, the Company hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving of any notice pursuant to Section
7.3(c).

(h)             Prior to any resale of Registrable Securities by a Holder, use
its commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or “blue sky” laws of such
jurisdictions within

44 

 

the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, that, the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified, subject the Company to any material tax in
any such jurisdiction where it is not then so subject or file a general consent
to service of process in any such jurisdiction.

(i)               In connection with a Demand Registration Statement, enter into
customary agreements and use commercially reasonable efforts to take such other
actions as are reasonably requested by the Investor that shall have delivered
the applicable Demand Notice in respect thereof in order to expedite or
facilitate the disposition of such Registrable Securities in such Demand
Registration Statement, including preparing for and participating in a road show
and all such other customary selling efforts as the underwriters, if any,
reasonably request in order to expedite or facilitate such disposition.

(j)               In connection with a Demand Registration Statement, (i) make
available for inspection by the Holders’ representatives, any underwriter
participating in any disposition of such Registrable Securities, and any
attorney for the Holders or such underwriter and any accountant or other agent
retained by the Holders or such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company and its Subsidiaries
as will be reasonably necessary to enable them to conduct customary due
diligence with respect to the Company and its Subsidiaries and the related
Registration Statement and prospectus, and cause the representatives of the
Company and its Subsidiaries to be made available to the Holders and their
representatives for such diligence and supply all information reasonably
requested by them; provided, however, that (x) records and information obtained
hereunder will be used by such Person only to conduct such due diligence and (y)
records or information that the Company determines, in good faith, to be
confidential will not be disclosed by such Person unless (A) the disclosure of
such records or information is necessary to avoid or correct a material
misstatement or omission in a Registration Statement or related Prospectus, (B)
the release of such records or information is ordered pursuant to a subpoena or
other order from a court or governmental authority of competent jurisdiction or
(C) necessary for defense in a legal action and (ii) as soon as practicable
shall amend or supplement the Registration Statement and the related Prospectus
as necessary and provide the Holders’ representatives and its counsel with the
opportunity to participate in the preparation of such Registration Statement and
the related Prospectus.

(k)             In connection with a Demand Registration Statement, use its
commercially reasonable efforts to obtain and deliver to any underwriter and the
Holders a comfort letter from the independent registered public accounting firm
for the Company (and additional comfort letters from the independent registered
public accounting firm for any company acquired by the Company whose financial
statements are included or incorporated by reference in the Registration
Statement) in customary form and covering such matters as are customarily
covered by comfort letters or as such underwriter and the Investor may
reasonably request, including (x) that the financial statements included or
incorporated by reference in the Registration Statement or the prospectus, or
any amendment or supplement thereof, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and (y) as to
certain other financial information for the period ending no more than five (5)
Business Days prior to the date of such letter.

(l)               In connection with a Demand Registration Statement, use its
commercially reasonable efforts to obtain and deliver to any underwriter and the
Holders a 10b-5 statement and legal opinion from the Company’s counsel in
customary form and covering such matters as are customarily covered by 10b-5
statements and legal opinions as such underwriter and the Holders may reasonably
request.

45 

 

(m)            In connection with a Demand Registration Statement, enter into a
written agreement with any underwriter selected by the Holders in such form and
containing such provisions as are customary in the securities business for such
an arrangement between such underwriter and companies of the Company’s size and
investment stature and, to the extent practicable, on terms consistent with
underwriting agreements entered into by the Company (it being understood that,
unless required otherwise by the Securities Act or any other law, the Company
will not require any Holder to make any representation, warranty or agreement in
such agreement other than with respect to such Holder, the ownership of such
Holder’s securities being registered and such Holder’s intended method of
disposition).

(n)             If requested by a Holder, cooperate with such Holder to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the extent
permitted by this Agreement, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holder may request.

(o)             Upon the occurrence of any event contemplated by Section 7.3(c),
as promptly as reasonably possible under the circumstances taking into account
the Company’s good faith assessment of any adverse consequences to the Company
and its stockholders of the premature disclosure of such event, prepare a
supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither a Registration Statement nor
such Prospectus will contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with clauses
(iii) through (vi) of Section 7.3(c) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus. The Company will use its best efforts to
ensure that the use of the Prospectus may be resumed as promptly as is
practicable. The Company shall be entitled to exercise its right under
this Section 7.3(o) to suspend the availability of a Registration Statement and
Prospectus, subject to the payment of partial liquidated damages otherwise
required pursuant to Section 7.1(h), for a period not to exceed sixty (60)
calendar days (which need not be consecutive days) in any twelve (12)-month
period.

(p)             Otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC under the Securities Act and the
Exchange Act, including, without limitation, Rule 172, file any final
Prospectus, including any supplement or amendment thereof, with the SEC pursuant
to Rule 424, promptly inform the Holders in writing if, at any time during the
Effectiveness Period, the Company does not satisfy the conditions specified in
Rule 172 and, as a result thereof, the Holders are required to deliver a
Prospectus in connection with any disposition of Registrable Securities and take
such other actions as may be reasonably necessary to facilitate the registration
of the Registrable Securities hereunder.

(q)             Use its commercially reasonable efforts to cause all such
Registrable Securities covered by a Registration Statement to be listed on a
Trading Market on which similar securities issued by the Company are then
listed.

(r)              Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to this Agreement and provide a CUSIP number for
all such Registrable Securities, in each case not later than the effective date
of such registration.

(s)              The Company may require each selling Holder to furnish to the
Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and,

46 

 

if required by the SEC, the natural persons thereof that have voting and
dispositive control over the shares. During any periods that the Company is
unable to meet its obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish such
information within three (3) Trading Days of the Company’s request, any
liquidated damages that are accruing at such time as to such Holder only shall
be tolled and any Event that may otherwise occur solely because of such delay
shall be suspended as to such Holder only, until such information is delivered
to the Company.

7.4             Registration Expenses. All fees and expenses incident to the
performance of or compliance with, this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses of the Company’s counsel and
independent registered public accountants) (A) with respect to filings made with
the SEC, (B) with respect to filings required to be made with any Trading Market
on which the Common Stock is then listed for trading, and (C) in compliance with
applicable state securities or “blue sky” laws reasonably agreed to by the
Company in writing (including, without limitation, fees and disbursements of
counsel for the Company in connection with “blue sky” qualifications or
exemptions of the Registrable Securities), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable
Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder. In no
event shall the Company be responsible for any broker or similar commissions of
any Holder (including any underwriting discounts or commissions and fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals with respect to the Registrable Securities) or, except to the
extent provided for in the Transaction Documents, any legal fees or other costs
of the Holders.

7.5             Miscellaneous.

(a)              No Piggy-back by other Persons. Neither the Company nor any of
its security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in any Registration Statements.

(b)             Discontinued Disposition. By its acquisition of Registrable
Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 7.3(c)(iii)
through (vi), such Holder will forthwith discontinue disposition of such
Registrable Securities under a Registration Statement until it is advised in
writing by the Company that the use of the applicable Prospectus (as it may have
been supplemented or amended) may be resumed. The Company will use its best
efforts to ensure that the use of the Prospectus may be resumed as promptly as
is practicable. The Company agrees and acknowledges that any periods during
which the Holder is required to discontinue the disposition of the Registrable
Securities hereunder shall be subject to the provisions of Section 7.1(h).

7.6             Participation in Future Financing.

(a)              At any time prior to the later of (i) the date that is the
twenty-four (24)-month anniversary of the Closing Date, and (ii) the date as of
which an Investor beneficially owns less than 500,000 shares of Common Stock (as
adjusted for any stock split, stock dividend, combination or other

47 

 

recapitalization or reclassification effected after the date hereof), upon any
issuance by the Company or any of its Subsidiaries of Common Stock, Common Stock
Equivalents for cash consideration, Indebtedness or a combination of such
instruments (a “Subsequent Financing”), such Investor shall have the right to
participate in the Subsequent Financing, on the same terms, conditions and price
provided for in the Subsequent Financing, in an amount of the Subsequent
Financing equal to up to the Participation Maximum. The “Participation Maximum”
shall mean the greater of (x) such portion of the Subsequent Financing that is
equal to the number of shares of Common Stock deemed to be beneficially owned by
such Investor immediately prior to the closing of the Subsequent Financing
(based upon documentation or written representation reasonably satisfactory to
the Company), divided by the total number of shares of Common Stock outstanding
(including any shares of Common Stock issuable upon conversion or exercise of
outstanding Common Stock Equivalents deemed to be beneficially owned by the
Investor and included in the numerator) immediately prior to the closing of the
Subsequent Financing or (y) 10.5% of the Subsequent Financing, in the case of
PTC, and 5.0% of the Subsequent Financing, in the case of the other Investors.
At least five (5) Trading Days prior to the closing of the Subsequent Financing,
the Company shall deliver to the Investor a written notice of its intention to
effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask the
Investor if it wants to review the details of such financing (such additional
notice, a “Subsequent Financing Notice”). Upon the request of an Investor, and
only upon a request by such Investor, for a Subsequent Financing Notice, the
Company shall promptly, but no later than one (1) Trading Day after such
request, deliver a Subsequent Financing Notice to such Investor. The Subsequent
Financing Notice shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the amount of proceeds intended to be raised thereunder
and the Person or Persons through or with whom such Subsequent Financing is
proposed to be effected and shall include a term sheet or similar document
relating thereto as an attachment.

(b)             In the event an Investor desires to participate in such
Subsequent Financing, such Investor must provide written notice to the Company
by not later than 5:30 p.m. (New York time) on the third (3rd) Trading Day after
the Company has delivered the Pre-Notice that the Investor is willing to
participate in the Subsequent Financing, the amount of the Investor’s
participation, and representing and warranting that the Investor has such funds
ready, willing, and available for investment on the terms set forth in the
Subsequent Financing Notice. If the Company receives no such notice from such
Investor as of such third (3rd) Trading Day, such Investor shall be deemed to
have notified the Company that it does not elect to participate.

(c)              If by 5:30 p.m. (New York time) on the third (3rd) Trading Day
after the Company has delivered the Pre-Notice, notifications by the Investor of
its willingness to participate in the Subsequent Financing (or to cause their
designees to participate) is, in the aggregate, less than the total amount of
the Subsequent Financing, then the Company may effect the remaining portion of
such Subsequent Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice; provided, that for the avoidance of doubt, the
Investor shall not be entitled, without the consent of the Company, to
participate in a Subsequent Financing in an amount more than the Participation
Maximum.

(d)             The Company must provide the Investor with a second Subsequent
Financing Notice, and the Investor will again have the right of participation
set forth above in this Section 7.6, if the Subsequent Financing subject to the
initial Subsequent Financing Notice is not consummated for any reason on the
terms set forth in such Subsequent Financing Notice within thirty (30) Trading
Days after the date of the initial Subsequent Financing Notice.

(e)              The Company and the Investors agree that if an Investor elects
to participate in the Subsequent Financing, the transaction documents related to
the Subsequent Financing shall not include any term or provision whereby such
Investor shall be required to agree to any restrictions on trading as to any of
the Notes Shares issuable hereunder or be required to consent to any amendment
to or

48 

 

termination of, or grant any waiver, release or the like under or in connection
with, this Agreement, without the prior written consent of such Investor.

(f)              Notwithstanding anything to the contrary in this Section
7.6 and unless otherwise agreed to by the Investors, the Company shall either
confirm in writing to such Investors that the transaction with respect to the
Subsequent Financing has been abandoned or shall publicly disclose its intention
to issue the securities in the Subsequent Financing, in either case in such a
manner such that the Investors will not be in possession of any material,
non-public information, by the tenth (10th) Business Day following delivery of
the Subsequent Financing Notice. If by such tenth (10th) Business Day, no public
disclosure regarding a transaction with respect to the Subsequent Financing has
been made, and no notice regarding the abandonment of such transaction has been
received by an Investor, such transaction shall be deemed to have been abandoned
and such Investor shall not be deemed to be in possession of any material,
non-public information with respect to the Company or any of its Subsidiaries.

(g)             Notwithstanding the foregoing, this Section 7.6 shall not apply
in respect of an Exempt Issuance.

Article VIII
COLLATERAL AGENT

8.1             Appointment. Each of the Investors hereby irrevocably appoints
the Collateral Agent as its agent and authorizes the Collateral Agent to take
such actions on its behalf, including execution of the other Transaction
Documents, and to exercise such powers as are delegated to the Collateral Agent
by the terms of the Transaction Documents, together with such actions and powers
as are reasonably incidental thereto.

8.1             Duties. The Collateral Agent shall not have any duties or
obligations except those expressly set forth in the Transaction Documents.
Without limiting the generality of the foregoing, (a) the Collateral Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether
an Event of Default (as defined in the Notes) has occurred and is continuing,
(b) the Collateral Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Transaction Documents that the Collateral
Agent is required to exercise in writing as directed by the Required Holders (as
defined in the Notes), and (c) except as expressly set forth in the Transaction
Documents, the Collateral Agent shall not have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Company or any of its Subsidiaries that is communicated to or obtained by the
entity serving as Collateral Agent or any of its Affiliates in any capacity. The
Collateral Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Holders or in the absence of
its own gross negligence or willful misconduct. The Collateral Agent shall be
deemed not to have knowledge of any Event of Default unless and until written
notice thereof is given to the Collateral Agent by the Company or an Investor,
and the Collateral Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Transaction Document, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection with
any Transaction Document, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Transaction
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Transaction Document or any other agreement, instrument or document, (v) the
creation, perfection or priority of Liens on the Collateral or the existence of
the Collateral, or (vi) the satisfaction of any condition set forth in any
Transaction Document. The entity serving as the Collateral Agent may generally
engage in any kind of business with the Company or any Subsidiary of the Company
or other Affiliate thereof as if it were not the Collateral Agent hereunder. The
Collateral Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing

49 

 

believed by it to be genuine and to have been signed or sent by the proper
Person. The Collateral Agent also may rely upon any statement made to it orally
or by telephone and believed by it to be made by the proper Person, and shall
not incur any liability for relying thereon. The Collateral Agent may consult
with legal counsel (who may be counsel for the Company), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.

8.3             Sub-Agents. The Collateral Agent may perform any and all of its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Collateral Agent. The Collateral Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Affiliates. The exculpatory provisions of this Article
VIII shall apply to any such sub-agent and to the Affiliates of the Collateral
Agent and any such sub-agent, and shall apply to their activities as Collateral
Agent.

8.5             Successor Collateral Agent. Subject to the appointment and
acceptance of a successor Collateral Agent as provided in this paragraph, the
Collateral Agent may resign at any time by notifying the Investors and the
Company. Upon any such resignation, the Required Holders shall have the right to
appoint a successor. If no successor shall have been so appointed by the
Required Holders and shall have accepted such appointment within 30 days after
the retiring Collateral Agent gives notice of its resignation, then the retiring
Collateral Agent may, on behalf of the Investors, appoint a successor Collateral
Agent which shall be a commercial bank or an Affiliate of any such commercial
bank. Upon the acceptance of its appointment as Collateral Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
hereunder. After the Collateral Agent’s resignation hereunder, the provisions of
this Article VIII shall continue in effect for the benefit of such retiring
Collateral Agent, its sub agents and their respective Affiliates in respect of
any actions taken or omitted to be taken by any of them while it was acting as
Collateral Agent.

8.7             on-Reliance. Each Investor acknowledges that it has,
independently and without reliance upon the Collateral Agent or any other
Investor and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Investor also acknowledges that it will, independently and
without reliance upon the Collateral Agent or any other Investor and based on
such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Transaction Document or related agreement or any
document furnished hereunder or thereunder.

Article IX
MISCELLANEOUS

9.1             Termination.

(a)              Notwithstanding any other provision of this Agreement, this
Agreement may be terminated at any time prior to the Closing:

(i)               by the mutual written consent of the Company and the Required
Holders; and

(ii)             by the Company or any Investor, upon written notice to the
other parties hereto, if the transactions contemplated hereby have not been
consummated on or prior to February 29, 2020 or such later date, if any, as the
Company and the Required Holders agree upon in writing (the “Termination Date”);
provided, however, that the right to terminate this Agreement pursuant to this

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Section 9.1(a)(ii) is not available to any party whose breach of any provision
of this Agreement results in or causes the failure of the transactions
contemplated hereby to be consummated by such date;

(b)             In the event of a termination of this Agreement in accordance
with Section 9.1(a), this Agreement shall become void and there shall be no
liability on the part of any party hereto except that the provisions of this
Article IX shall survive such termination and nothing herein shall relieve any
party from liability for any willful breach of any provision of this Agreement.

9.2             Fees and Expenses. Except as expressly set forth in the
Transaction Documents to the contrary, the Company shall pay or otherwise
reimburse the Collateral Agent and the Investors for all reasonable and
documented fees and expenses incurred by or on behalf of the Collateral Agent
and the Investors in connection with the preparation, negotiation, execution and
delivery of this Agreement and the other Transaction Documents and the matters
contemplated herein and therein, including, without limitation, the reasonable
and documented fees and expenses of counsel to the Collateral Agent and the
Investors; provided, that the aggregate maximum amount of fees and expenses that
the Company shall be required to reimburse the Investors in connection with the
preparation, negotiation, execution and delivery of this Agreement and the other
Transaction Documents entered into in connection with the First Closing shall
not exceed $150,000 unless otherwise mutually agreed upon between the Company
and the Investors; provided, that the Investors shall notify the Company in
writing at such time that such fees and expenses exceed $75,000.

9.3             Entire Agreement; Further Assurances. The Transaction Documents,
together with the Exhibits, Annexes and Schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof 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. At or after the Closing, and without further
consideration, the Company and the Investors will execute and deliver to the
Investors such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.

9.4             Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and provided by email and by deposit with a nationally recognized courier
service and shall be deemed given and effective on the earliest of (a) the
Trading Date such notice or communication is delivered by such nationally
recognized courier service to the party to whom such notice is required to be
given, if such notice or communication is delivered at the address specified in
this Section 9.4 prior to 6:30 p.m. (New York time) on a Trading Day, or (b) the
next Trading Day after the date of delivery, if such notice or communication is
delivered by such nationally recognized courier service to the party to whom
such notice is required to be given at the address specified in this Section 9.4
on a day that is not a Trading Day or later than 6:30 p.m. (New York time) on
any Trading Day. The addresses and email addresses for such notices and
communications are those set forth on the signature pages hereof, or such other
address as may be designated in writing hereafter, in the same manner, by any
such Person.

9.5             Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed by the Company, the
Collateral Agent and the Required Holders; provided, that, notwithstanding the
foregoing, (i) the provisions of Sections 2.1(b), 2.3 and 5.2(b) may only be
waived or amended in a written instrument signed by the Company and each of the
Second Closing Investors, (ii) the provisions of Sections 2.1(c), 2.4 and 5.2(c)
may only be waived or amended in a written instrument signed by the Company and
each of the Third Closing Investors, (iii) the provisions of Sections 4.8 and
4.9 may only be waived or amended in a written instrument signed by the Company
and Petrichor, and (iv) the provisions of Section 4.10 may only be waived or
amended in a written instrument signed by the Company, each Second Closing
Investor and each Third Closing Investor. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be

51 

 

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.

9.6             Construction. 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. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

9.7             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 the Investors; provided, however this
Agreement shall be assigned to any corporation or association into which the
Company may be merged or converted or with which it may be consolidated, or any
corporation, association or other similar entity resulting from any merger,
conversion or consolidation to which the Company shall be a party without the
execution or filing of any paper with any party hereto or any further act on the
part of any of the parties to this Agreement except where an instrument of
transfer or assignment is required by law to effect such succession, anything
herein to the contrary notwithstanding. Any Investor may assign its rights under
this Agreement to any Person to whom such Investor assigns or transfers any
Securities; provided (i) such transferor agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company after such assignment, (ii) the Company is furnished with written
notice of the name and address of such transferee or assignee, (iii) following
such transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, (iv) such transferee agrees in writing to be bound, with
respect to the transferred Securities, by the provisions hereof that apply to
the “Investors” and (v) such transfer shall have been made in accordance with
the applicable requirements of this Agreement and with all laws applicable
thereto.

9.8             No Third-Party Beneficiaries. 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.

9.9             Governing Law; Venue; Waiver of Jury Trial. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware. The Company and Investors hereby irrevocably submit to the exclusive
jurisdiction of the Court of Chancery of the State of Delaware or to the extent
such court does not have subject matter jurisdiction, the Superior Court of the
State of Delaware or the United States District Court for the District of
Delaware for the adjudication of any dispute brought by the Company or any
Investor hereunder, 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 waive, and agree not to
assert in any suit, action or proceeding brought by the Company or any Investor,
any claim that it is not personally subject to the jurisdiction of any such
court, or that such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, 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 manner permitted by law. The Company
and Investors hereby waive all rights to a trial by jury.

9.10          Survival. Unless this Agreement is terminated under Section
9.1(a), the representations and warranties, agreements and covenants contained
herein shall survive indefinitely and shall not be

52 

 

merged in the consummation of the transactions contemplated by this Agreement or
any of the Transaction Documents.

9.11          Execution. This Agreement may be executed in counterparts, all of
which when taken together shall be considered one and the same agreement. In the
event that any signature is delivered by facsimile transmission or email
attachment, 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 email-attached signature page were an
original thereof.

9.12          Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

9.13          Independent Nature of Investors’ Obligations and Rights. The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Documents. The decision of each Investor to
purchase Securities pursuant to this Agreement has been made by such Investor
independently of any other Investor and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company which may have been made or given by any
other Investor or by any agent or employee of any other Investor, and no
Investor or any of its agents or employees shall have any liability to any other
Investor (or any other person) relating to or arising from any such information,
materials, statements or opinions. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors 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
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no other
Investor will be acting as agent of such Investor in connection with monitoring
its investment hereunder. Each Investor 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 Investor to be joined as an additional party in
any Proceeding for such purpose.

9.14          Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Collateral Agent, the Investors 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.

9.15          Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, then 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, but without any requirement to post a bond (unless required by the
Transfer Agent, in which case the cost of such bond shall be paid by the
Company).

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9.16          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.

[SIGNATURE PAGES FOLLOW]

54 

 

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

COMPANY:

MRI INTERVENTIONS, INC.

 

 

By /s/ Joseph M. Burnett              

Name:   Joseph M. Burnett Title:     Chief Executive Officer Address for Notice:

 

MRI Interventions, Inc.

5 Musick

Irvine, California 92618

Attn: Hal Hurwitz

Email: hhurwitz@mriinterventions.com

 

With a copy to, which shall not constitute notice:

 

Bass, Berry & Sims PLC

The Tower at Peabody Place

100 Peabody Place, Suite 1300

Memphis, Tennessee 38103-3672

Attn: Richard Mattern

Email: rmattern@bassberry.com

 

   

 

 

 

Signature Page to Securities Purchase Agreement

 

 

 

 

COLLATERAL AGENT:

Petrichor Opportunities Fund I LP

BY PETRICHOR OPPORTUNITIES FUND I GP LLC

 

 

By /s/ Tadd Wessel                    

Name:  Tadd Wessel Title:     Managing Member Address for Notice:

 

Petrichor Opportunities Fund I LP

885 Third Avenue, Suite 2403

New York, NY 10022

Attn: Michael Beecham

Email: mbeecham@petrichorcap.com

 

With a copy to, which shall not constitute notice:

 

Greenberg Traurig, LLP

MetLife Building

200 Park Avenue

New York, NY 10166

Attn: Todd E. Bowen

Email: bowent@gtlaw.com

 

 

   

 

 

 

 

 

Signature Page to Securities Purchase Agreement

 

 

Investor Signature Page

IN WITNESS WHEREOF, by its execution and delivery of this signature page, the
undersigned Investor hereby joins in and agrees to be bound by the terms and
conditions of that certain Securities Purchase Agreement, dated as of January
11, 2020 (the “Purchase Agreement”), by and among MRI Interventions, Inc., a
Delaware corporation, the Investors (as defined therein), and the Collateral
Agent (as defined therein), as to the principal amount of the Notes set forth
across from such Investor’s name on the Schedule of Investors, and authorizes
this signature page to be attached to the Purchase Agreement or counterparts
thereof.

 

NAME OF INVESTOR:

PTC Therapeutics, inc.

 

 

By: /s/ Emily Hill                     Name:  Emily Hill Title:     Chief
Financial Officer

Address: 100 Corporate Court                   

South Plainfield, NJ 07080                            

Telephone No.: 908-912-9327                    

Facsimile No.:                                               

Email Address: ehill@ptcbio.com             

   

 

Address for notices:

c/o: Mark Boulding, EVP & CLO                                 

Address: 100 Corporate Court                                   

South Plainfield, NJ 07080                                            

Telephone No.: 908-912-9103                                    

Email Address: mboulding@ptcbio.com; legal@ptcbio.com

 

With a copy to:

Brian A Johnson

Wilmer Cutler Pickering Hale and Dorr LLP

7 World Trade Center

250 Greenwich Street

New York, NY 10007

Brian@Johnson@wilmerhale.com

 

Delivery Instructions (if different than above):

c/o: ________________________________

Address: ____________________________

___________________________________

Telephone No.: _______________________

Facsimile No. : ________________________

Other Special Instructions: ________________

 

Signature Page to Securities Purchase Agreement

 

 

Investor Signature Page

IN WITNESS WHEREOF, by its execution and delivery of this signature page, the
undersigned Investor hereby joins in and agrees to be bound by the terms and
conditions of that certain Securities Purchase Agreement, dated as of January
11, 2020 (the “Purchase Agreement”), by and among MRI Interventions, Inc., a
Delaware corporation, the Investors (as defined therein), and the Collateral
Agent (as defined therein), as to the principal amount of the Notes set forth
across from such Investor’s name on the Schedule of Investors, and authorizes
this signature page to be attached to the Purchase Agreement or counterparts
thereof.

 

NAME OF INVESTOR:

Petrichor Opportunities Fund I LP

BY PETRICHOR OPPORTUNITIES FUND I GP LLC

 

 

By: /s/ Tadd Wessel                       Name:  Tadd Wessel Title:     Managing
Member Address for Notice:

 

Petrichor Opportunities Fund I LP

885 Third Avenue, Suite 2403

New York, NY 10022

Attn: Michael Beecham

Email: mbeecham@petrichorcap.com

 

With a copy to, which shall not constitute notice:

 

Greenberg Traurig, LLP

MetLife Building

200 Park Avenue

New York, NY 10166

Attn: Todd E. Bowen

Email: bowent@gtlaw.com

 

       

Delivery Instructions (if different than above):

c/o: ________________________________

Address: ____________________________

___________________________________

Telephone No.: _______________________

Facsimile No. : ________________________

Other Special Instructions: ________________

 

 

 

Signature Page to Securities Purchase Agreement

 

 

ANNEX a

SCHEDULE OF INVESTORS

I.       FIRST CLOSING INVESTORS

Name and Address of Investor

Principal Amount of First Closing Note

Aggregate First Closing Purchase Price

PTC Therapeutics, Inc.

100 Corporate Court

South Plainfield, NJ 07080

$10,000,000 $10,000,000

Petrichor Opportunities Fund I LP

885 Third Avenue

Suite 2403

New York, NY 10022

$7,500,000 $7,500,000 TOTAL: $17,500,000 $17,500,000

 

II.       SECOND CLOSING INVESTORS

Name and Address of Investor

Principal Amount of Second Closing Note

Aggregate Second Closing Purchase Price

Petrichor Opportunities Fund I LP

885 Third Avenue

Suite 2403

New York, NY 10022

$5,000,000 $5,000,000 TOTAL: $5,000,000 $5,000,000

 

III.       THIRD CLOSING INVESTORS

Name and Address of Investor

Principal Amount of Third Closing Note

Aggregate Third Closing Purchase Price

Petrichor Opportunities Fund I LP

885 Third Avenue

Suite 2403

New York, NY 10022

$10,000,000 $10,000,000 TOTAL: $10,000,000 $10,000,000

 

Annex A