Exhibit 10.1

 

NOTE PURCHASE AGREEMENT

 

This NOTE PURCHASE AGREEMENT (the “Agreement”), dated as of September 6, 2019,
is by and among Plug Power Inc., a Delaware corporation with offices located at
968 Albany Shaker Road, Latham, New York 12110 (the “Company”), and each of the
investors listed on the Schedule of Buyers attached hereto (individually, a
“Buyer” and collectively, the “Buyers”).

 

RECITALS

 

A.                                    The Company and each Buyer is executing
and delivering this Agreement in reliance upon the exemption from securities
registration afforded by Section 4(a)(2) of the Securities Act of 1933, as
amended (the “1933 Act”), and Rule 506(b) of Regulation D (“Regulation D”) as
promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the 1933 Act.

 

B.                                    The Company has authorized a new series of
7.50% Convertible Senior Notes (the “Convertible Notes”), which Convertible
Notes shall be convertible into shares of the Company’s common stock, par value
$0.01 per share (the “Common Stock”) (such underlying shares of Common Stock
issuable pursuant to the terms of the Convertible Notes, including, without
limitation, upon conversion or otherwise, collectively, the “Conversion
Shares”).

 

C.                                    Each Buyer wishes to purchase, and the
Company wishes to sell, upon the terms and conditions stated in this Agreement,
the aggregate principal amount of Convertible Notes set forth opposite such
Buyer’s name in column (3) on the Schedule of Buyers.

 

E.                                     The Convertible Notes and the Conversion
Shares are collectively referred to herein as the “Securities.”

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each Buyer hereby
agree as follows:

 

1.                                      PURCHASE AND SALE OF CONVERTIBLE NOTES.

 

(a)                                 Purchase of Convertible Notes.  Subject to
the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7
below, the Company shall issue and sell to each Buyer, and each Buyer severally,
but not jointly, agrees to purchase from the Company on the Closing Date (as
defined below) the aggregate principal amount of Convertible Notes as is set
forth opposite such Buyer’s name in column (3) on the Schedule of Buyers.

 

(b)                                 Closing.  The closing (the “Closing”) of the
purchase of the Convertible Notes by the Buyers shall occur at the offices of
Latham & Watkins LLP, 885 Third Avenue, New York, NY 10022. The date and time of
the Closing (the “Closing Date”) shall be 10:00 a.m., New York time, on the
first (1st) Business Day on which the conditions to the Closing set forth in
Sections 6 and 7 below are satisfied or waived (or such other date as is
mutually agreed to by the Company and each Buyer).  As used herein “Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to
remain closed.

 

(c)                                  Purchase Price.  The aggregate purchase
price for the Convertible Notes to be purchased by each Buyer (the “Purchase
Price”) shall be the amount set forth opposite such Buyer’s name in column
(4) on the Schedule of Buyers.

 

(d)                                 Form of Payment.  On the Closing Date,
(i) each Buyer shall pay its respective Purchase Price to the Company for the
Convertible Notes to be issued and sold to such Buyer at the Closing, by wire
transfer of immediately available funds and (ii) the Company shall deliver to
each Buyer the aggregate principal amount of

 

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Convertible Notes as is set forth opposite such Buyer’s name in column (3) of
the Schedule of Buyers duly executed on behalf of the Company and registered in
the name of such Buyer or its designee.

 

(e)                                  Residency.  Such Buyer is a resident of
that jurisdiction specified below its address of the Schedule of Buyers.

 

2.                                      BUYER’S REPRESENTATIONS AND WARRANTIES.

 

Each Buyer, severally and not jointly, represents and warrants to the Company
with respect to only itself that, as of the date hereof and as of the Closing
Date:

 

(a)                                 Organization; Authority.  Such Buyer is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with the requisite power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out
its obligations hereunder and thereunder.

 

(b)                                 No Public Sale or Distribution.  Such Buyer
(i) is acquiring its Convertible Notes, and (ii) upon conversion of its
Convertible Notes will acquire the Conversion Shares issuable upon conversion
thereof, in each case, for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof in violation
of applicable securities laws, except pursuant to sales registered or exempted
under the 1933 Act; provided, however, by making the representations herein,
such Buyer 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 1933 Act. 
Such Buyer does not presently have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Securities in violation of
applicable securities laws.  For purposes of this Agreement, “Person” means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and any
Governmental Entity (as defined below) or any department or agency thereof.

 

(c)                                  Accredited Investor Status.  At the time
such Buyer was offered the Securities, it was and, as of the date hereof, such
Buyer is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D.

 

(d)                                 Reliance on Exemptions.  Such Buyer
understands that the Securities are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying in part upon the truth
and accuracy of, and such Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Buyer set
forth herein in order to determine the availability of such exemptions and the
eligibility of such Buyer to acquire the Securities.

 

(e)                                  Information.  Such Buyer and its advisors,
if any, have 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 Buyer.  Such Buyer and
its advisors, if any, have had (i) the opportunity to review the Transaction
Documents and the SEC Documents (as defined below) and has been afforded the
opportunity to ask such questions of the Company as it has deemed necessary of,
and to receive answers from, representatives of the Company concerning the terms
and conditions of the offering of the Securities and the merits and risks of
investing in the Securities; (ii) access to information about the Company and
its financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment.  Neither such
inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend or affect such
Buyer’s right to rely on the Company’s representations and warranties contained
herein.  Such Buyer understands that its investment in the Securities involves a
high degree of risk.  Such Buyer acknowledges that it can bear the economic risk
and complete loss of its investment in the Securities and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment contemplated hereby.  Such Buyer did not
learn of the investment in the Securities as a result of any general
solicitation or general advertising.  Such Buyer has sought such accounting,
legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the

 

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Securities.  Such Buyer is not relying upon, and has not relied upon, any
statement, representation or warranty made by any person, except for statements,
representations and warranties contained in this Agreement, in making its
investment or decision to invest in the Company.

 

(f)                                   No Governmental Review.  Such Buyer
understands that no United States 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)                                  Transfer or Resale.  Such Buyer understands
that except as provided in Section 4(h) hereof:  (i) the Securities have not
been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless
(A) subsequently registered thereunder, (B) such Buyer shall have delivered to
the Company (if requested by the Company) an opinion of counsel, in a form
reasonably acceptable to the Company, to the effect that such Securities to be
sold, assigned or transferred may be sold, assigned or transferred pursuant to
an exemption from such registration, or (C) such Buyer provides the Company with
reasonable assurance that such Securities can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor
rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made
in reliance on Rule 144 may be made only in accordance with the terms of
Rule 144, and further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the Person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC promulgated thereunder; and
(iii) neither the Company nor any other Person is under any obligation to
register the Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder.

 

(h)                                 Validity; Enforcement.  This Agreement has
been duly and validly authorized, executed and delivered on behalf of such Buyer
and shall constitute the legal, valid and binding obligation of such Buyer
enforceable against such Buyer in accordance with their respective terms, except
as such enforceability may be limited by general principles of equity or to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

 

(i)                                     No Conflicts.  The execution, delivery
and performance by such Buyer of this Agreement and the consummation by such
Buyer of the transactions contemplated hereby and thereby will not (i) result in
a violation of the organizational documents of such Buyer, or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Buyer is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses
(ii) and (iii) above, for such conflicts, defaults, rights or violations which
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of such Buyer to perform its obligations
hereunder.

 

(j)                                    Creditworthiness.  Such Buyer is a
creditworthy entity and has and will continue to have the financial capacity to
pay and perform its obligations under this Agreement, including its obligation
to purchase the Convertible Notes, and all funds necessary for such Buyer to
fulfill its obligations under this Agreement, including its obligation to
purchase the Convertible Notes will be available to it at all times.

 

(k)                                 No Bad Actor Disqualification Event. Such
Buyer represents, after reasonable inquiry, that none of the “Bad Actor”
disqualifying events described in Rule 506(d)(l)(i) to (viii) under the 1933 Act
(a “Disqualification Event”) is applicable to such Buyer or any of its
Rule 506(d) Related Parties (if any). “Rule 506(d) Related Party” means a person
or entity that is a beneficial owner of such Buyer’s securities for purposes of
Rule 506(d).

 

3.                                      REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.

 

The Company represents and warrants to each of the Buyers that, as of the date
hereof and as of the Closing Date:

 

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(a)                                 Organization and Qualification.  Each of the
Company and each of its Subsidiaries are entities duly organized and validly
existing and in good standing under the laws of the jurisdiction in which they
are formed, and have the requisite power and authority to own their properties
and to carry on their business as now being conducted.  Each of the Company and
each of its Subsidiaries is duly qualified as a foreign entity to do business
and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not reasonably be expected to have a Material Adverse Effect
(as defined below).  As used in this Agreement, “Material Adverse Effect” means
any material adverse effect on (i) the business, properties, assets,
liabilities, operations (including results thereof), condition (financial or
otherwise) or prospects of the Company or its Subsidiaries, taken as a whole,
(ii) the transactions contemplated hereby or in any of the other Transaction
Documents or any other agreements or instruments to be entered into in
connection herewith or therewith or (iii) the authority or ability of the
Company or any of its Subsidiaries to perform any of their respective
obligations under any of the Transaction Documents.  Other than the subsidiaries
listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the most
recently ended fiscal year, the Company has no significant Subsidiaries within
the meaning of Rule 1-02(w) of Regulation S-X.  “Subsidiaries” means the
Company’s subsidiaries as such term is defined in Rule 1-02 of Regulation S-X,
and each is individually referred to herein as a “Subsidiary.”

 

(b)                                 Authorization; Enforcement; Validity.  The
Company has the requisite power and authority to enter into and perform its
obligations under this Agreement and the other Transaction Documents and to
issue the Securities in accordance with the terms hereof and thereof.  Each
Subsidiary has the requisite power and authority to enter into and perform its
obligations under the Transaction Documents to which it is a party.  The
execution and delivery of this Agreement and the other Transaction Documents by
the Company, and the consummation by the Company and its Subsidiaries of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Convertible Notes and the reservation for issuance and issuance
of the Conversion Shares issuable upon conversion of the Convertible Notes) have
been duly authorized by the Company’s board of directors, and (other than
(i) any filings as may be required by any state securities agencies and (ii) a
Listing of Additional Shares Notification with the Principal Market (as defined
below) (collectively, the “Required Filings”)) no further filing, consent or
authorization is required by the Company, its Subsidiaries, their respective
boards of directors or their stockholders or other governing body.  This
Agreement has been, and the other Transaction Documents to which it is a party
will be prior to the Closing, duly executed and delivered by the Company, and
each constitutes the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its respective terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to
contribution may be limited by federal or state securities law.  “Transaction
Documents” means, collectively, this Agreement, the Convertible Notes, the
Irrevocable Transfer Agent Instructions (as defined below) and each of the other
agreements and instruments entered into or delivered by any of the parties
hereto in connection with the transactions contemplated hereby and thereby, as
may be amended from time to time.

 

(c)                                  Issuance of Securities.  The issuance of
the Convertible Notes are duly authorized and when issued and delivered in
accordance with the terms of the Transaction Documents shall be validly issued,
fully paid and non-assessable and free from all preemptive or similar rights,
mortgages, defects, claims, liens, pledges, charges, taxes, rights of first
refusal, encumbrances, security interests and other encumbrances (collectively
“Liens”) with respect to the issuance thereof.   Upon issuance or conversion in
accordance with the Convertible Notes, the Conversion Shares when issued, will
be validly issued, fully paid and nonassessable and free from all preemptive or
similar rights or Liens with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common Stock.  Subject to
the accuracy of the representations and warranties of the Buyers in this
Agreement, the offer and issuance by the Company of the Securities is exempt
from registration under the 1933 Act.

 

(d)                                 No Conflicts.  The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Convertible Notes and the Conversion
Shares and the reservation for issuance of the Conversion Shares) will not
(i) result in a violation of the Certificate of Incorporation (as defined
below), Bylaws (as defined below), certificate of formation, memorandum of
association, articles of association, bylaws or other organizational documents
of the Company or any of its Subsidiaries, or any capital stock or other
securities of the Company or any of its Subsidiaries, (ii) conflict with, or
constitute a default (or an event which with notice or

 

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lapse of time or both would become a default) in any respect under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) assuming the accuracy of the representations
and warranties in Section 2, result in a violation of any law, rule, regulation,
order, judgment or decree (including, without limitation, foreign, federal and
state securities laws and regulations and the rules and regulations of the
Nasdaq Capital Market (the “Principal Market”) and including all applicable
foreign, federal and state laws, rules and regulations) applicable to the
Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, assuming, with respect
to (ii) and (iii), the making of the Required Filings and except in the case of
(ii) and (iii), for such breaches, violations or conflicts as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

 

(e)                                  Consents.  Neither the Company nor any
Subsidiary is required to obtain any consent from, authorization or order of, or
make any filing or registration with (other than the Required Filings and such
consents, authorizations, filings or registrations the absence of which would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect), any Governmental Entity or any regulatory or self-regulatory
agency or any other Person in order for it to execute, deliver or perform any of
its respective obligations under or contemplated by the Transaction Documents,
in each case, in accordance with the terms hereof or thereof.  To the Company’s
knowledge, other than the Required Filings, all consents, authorizations,
orders, filings and registrations which the Company or any Subsidiary is
required to obtain pursuant to the preceding sentence have been or will be
obtained or effected on or prior to the Closing Date, and neither the Company
nor any of its Subsidiaries are aware of any facts or circumstances which might
prevent the Company or any of its Subsidiaries from obtaining or effecting any
of the registration, application or filings contemplated by the Transaction
Documents.  The Company is not in violation of the requirements of the Principal
Market and has no knowledge of any facts or circumstances which could reasonably
lead to delisting or suspension of the Common Stock.  “Governmental Entity”
means any nation, state, county, city, town, village, district, or other
political jurisdiction of any nature, federal, state, local, municipal, foreign,
or other government, governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature or
instrumentality of any of the foregoing, including any entity or enterprise
owned or controlled by a government or a public international organization or
any of the foregoing.

 

(f)                                   Acknowledgment Regarding Buyer’s Purchase
of Securities.  The Company acknowledges and agrees that each Buyer 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 Buyer is (i) an officer or director of the Company or any of its
Subsidiaries, (ii) an “affiliate” (as defined in Rule 144) of the Company or any
of its Subsidiaries 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
Securities Exchange Act of 1934, as amended (the “1934 Act”)).  The Company
further acknowledges that no Buyer is acting as a financial advisor or fiduciary
of the Company or any of its Subsidiaries (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated hereby
and thereby, and any advice given by a Buyer 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 Buyer’s purchase of
the Securities.  The Company further represents to each Buyer that the Company’s
and each Subsidiary’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, each Subsidiary and their respective representatives.

 

(g)                                  No General Solicitation.  Neither the
Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its
or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the offer or
sale of the Securities.  Neither the Company nor any of its Subsidiaries has
engaged any placement agent or other agent in connection with the offer or sale
of the Securities.

 

(h)                                 No Integrated Offering.  None of the
Company, its Subsidiaries or any of their affiliates, nor any Person acting on
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 require registration of the issuance of any of the Securities under the
1933 Act, whether through integration with prior offerings or otherwise, or
cause this offering of the Securities to require approval of stockholders of the
Company for purposes of the 1933 Act or under any

 

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applicable stockholder approval provisions, including, without limitation, under
the rules and regulations of any exchange or automated quotation system on which
any of the securities of the Company are listed or designated for quotation. 
None of the Company, its Subsidiaries, their affiliates nor any Person acting on
their behalf will take any action or steps that would require registration of
the issuance any of the Securities under the 1933 Act (other than pursuant to
the Transaction Agreement, dated as of July 20, 2017, by and between the Company
and Wal-Mart Stores, Inc. and the Transaction Agreement, dated as of April 4,
2017, by and between the Company and Amazon.com, Inc.) or cause the offering of
any of the Securities to be integrated with other offerings of securities of the
Company.

 

(i)                                     Dilutive Effect.  The Company
understands and acknowledges that the number of Conversion Shares will increase
in certain circumstances.  The Company further acknowledges that its obligation
to issue the Conversion Shares pursuant to the terms of the Convertible Notes in
accordance with this Agreement is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company.

 

(j)                                    Application of Takeover Protections.  The
Company and its board of directors have taken or will take prior to the Closing
Date all necessary action, if any, in order to render inapplicable any control
share acquisition, interested stockholder, business combination, poison pill,
stockholder rights plan or other similar anti-takeover provision under the
Certificate of Incorporation, Bylaws or other organizational documents or the
laws of the jurisdiction of its incorporation which is or could become
applicable to any Buyer as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company’s issuance of the
Securities and any Buyer’s ownership of the Securities.

 

(k)                                 Financial Statements.  During the one
(1) year prior to the date hereof, the Company has timely filed all reports,
schedules, forms, proxy statements, statements and other documents required to
be filed by it with the SEC (other than Section 16 ownership filings) pursuant
to the reporting requirements of the 1934 Act (reports filed in compliance with
the time period specified in Rule 12b-25 promulgated under the 1934 Act shall be
considered timely for this purpose) (all of the foregoing filed prior to the
date hereof and all exhibits and appendices included therein and financial
statements, notes and schedules thereto and documents incorporated by reference
therein being hereinafter referred to as the “SEC Documents”).  As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, 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.  As of
their respective dates, the financial statements of the Company included in the
SEC Documents complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto as in effect as of the time of filing.  Such financial statements have
been prepared in accordance with generally accepted accounting principles
(“GAAP”), consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments which will not be material, either individually or in the
aggregate).  No other material information has been provided by or on behalf of
the Company to any of the Buyers which is not included in the SEC Documents
(including, without limitation, information referred to in Section 2(e) of this
Agreement). The Company is not currently contemplating to amend or restate any
of the financial statements (including, without limitation, any notes or any
letter of the independent accountants of the Company with respect thereto)
included in the SEC Documents (the “Financial Statements”), nor is the Company
currently aware of facts or circumstances which would require the Company to
amend or restate any of the Financial Statements, in each case, in order for any
of the Financials Statements to be in material compliance with GAAP and the
rules and regulations of the SEC.  The Company has not been informed by its
independent accountants that they recommend that the Company amend or restate
any of the Financial Statements or that there is any need for the Company to
amend or restate any of the Financial Statements.

 

(l)                                     Absence of Certain Changes.  Since the
date of the Company’s most recent audited financial statements contained in a
Form 10-K, except as specifically set forth in a subsequent SEC Document filed
prior to

 

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the date hereof, there has been no material adverse change and no material
adverse development in the business, assets, liabilities, properties, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company or any of its Subsidiaries.  Since the date of the Company’s most
recent audited financial statements contained in a Form 10-K, except as
specifically set forth in a subsequent SEC Document filed prior to the date
hereof, neither the Company nor any of its Subsidiaries has (i) declared or paid
any dividends, (ii) sold any assets, individually or in the aggregate, outside
of the ordinary course of business or (iii) made any capital expenditures,
individually or in the aggregate, outside of the ordinary course of business. 
Neither the Company nor any of its Subsidiaries has taken any steps to seek
protection pursuant to any law or statute relating to bankruptcy, insolvency,
reorganization, receivership, liquidation or winding up, nor does the Company or
any Subsidiary have any knowledge or reason to believe that any of their
respective creditors intend to initiate involuntary bankruptcy proceedings or
any actual knowledge of any fact which would reasonably lead a creditor to do
so.  The Company and its Subsidiaries, individually and on a consolidated basis,
are not as of the date hereof, and after giving effect to the transactions
contemplated hereby to occur at the Closing, will not be Insolvent (as defined
below).  For purposes of this Section 3(l), “Insolvent” means, (i) with respect
to the Company and its Subsidiaries, on a consolidated basis, (A) the present
fair saleable value of the Company’s and its Subsidiaries’ assets is less than
the amount required to pay the Company’s and its Subsidiaries’ total
Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable
to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured or (C) the Company and
its Subsidiaries intend to incur or believe that they will incur debts that
would be beyond their ability to pay as such debts mature; and (ii) with respect
to the Company and each Subsidiary, individually, (A) the present fair saleable
value of the Company’s or such Subsidiary’s (as the case may be) assets is less
than the amount required to pay its respective total Indebtedness, (B) the
Company or such Subsidiary (as the case may be) is unable to pay its respective
debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured or (C) the Company or such Subsidiary
(as the case may be) intends to incur or believes that it will incur debts that
would be beyond its respective ability to pay as such debts mature.

 

(m)                             Regulatory Permits.  During the two years prior
to the date hereof, (i) the Common Stock has been listed or designated for
quotation on the Principal Market, (ii) trading in the Common Stock has not been
suspended by the SEC or the Principal Market and (iii) the Company has received
no communication, written or oral, from the SEC or the Principal Market
regarding the suspension or delisting of the Common Stock from the Principal
Market.  The Company and each of its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate regulatory authorities
necessary to conduct their respective businesses, except where the failure to
possess such certificates, authorizations or permits would not reasonably be
likely to have, individually or in the aggregate, a Material Adverse Effect, and
neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit.

 

(n)                                 Foreign Corrupt Practices.  Neither the
Company, the Company’s subsidiary or any director, officer, employee, nor, to
the Company’s knowledge, any agent or any other person acting for or on behalf
of the foregoing (individually and collectively, a “Company Affiliate”) have
violated the U.S. Foreign Corrupt Practices Act or any other applicable
anti-bribery or anti-corruption laws, nor, to the Company’s knowledge, has any
Company Affiliate offered, paid, promised to pay, or authorized the payment of
any money, or offered, given, promised to give, or authorized the giving of
anything of value, to any officer, employee or any other person acting in an
official capacity for any Governmental Entity to any political party or official
thereof or to any candidate for political office (individually and collectively,
a “Government Official”) or to any person under circumstances where such Company
Affiliate knew or was aware of a high probability that all or a portion of such
money or thing of value would be offered, given or promised, directly or
indirectly, to any Government Official, for the purpose of:

 

(i)                                     (A) influencing any act or decision of
such Government Official in his/her official capacity, (B) inducing such
Government Official to do or omit to do any act in violation of his/her lawful
duty, (C) securing any improper advantage, or (D) inducing such Government
Official to influence or affect any act or decision of any Governmental Entity,
or

 

(ii)                                  assisting the Company or its Subsidiaries
in obtaining or retaining business for or with, or directing business to, the
Company or its Subsidiaries.

 

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(o)                                 Sarbanes-Oxley Act.  The Company and each
Subsidiary is in material compliance with any and all applicable requirements of
the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and
regulations promulgated by the SEC thereunder.

 

(p)                                 Transactions With Affiliates.  Except as set
forth in the SEC Documents, no relationship, direct or indirect, exists between
or among the Company on the one hand, and the directors, officers, shareholders,
or any of its affiliates on the other hand.

 

(q)                                 Equity Capitalization.

 

(i)                                     “Common Stock” means (x) the Company’s
shares of common stock, $0.01 par value per share, and (y) any capital stock
into which such common stock shall have been changed or any share capital
resulting from a reclassification of such common stock.

 

(ii)                                  Authorized and Outstanding Capital Stock. 
As of the date hereof, the authorized capital stock of the Company consists of
(A) 750,000,000 shares of Common Stock, of which, 252,957,917 are issued and
outstanding and 202,718,431 shares are reserved for issuance pursuant to
Convertible Securities (as defined below) (other than the Convertible Notes)
exercisable or exchangeable for, or convertible into, shares of Common Stock and
(B) 5,000,000 shares of Preferred Stock, par value $0.01 per share, (1) 170,000
of which are designated as shares of Series A Junior Participating Cumulative
Preferred Stock, par value $0.01 per share, none of which are issued and
outstanding, (2) 10,431 of which are designated as shares of Series C Redeemable
Convertible Preferred Stock, par value $0.01 per share (“Series C Preferred
Stock”), 2,620 of which are issued and outstanding and (3) 35,000 of which are
designated as shares of Series E Redeemable Convertible Preferred Stock, par
value $0.01 per share (“Series E Preferred Stock”), 28,269 of which are issued
and outstanding. 861,139 shares of Common Stock are held in the treasury of the
Company.

 

(iii)                               Valid Issuance; Available Shares;
Affiliates.  All of such outstanding shares are duly authorized and have been,
or upon issuance will be, validly issued and are fully paid and nonassessable.  
To the Company’s knowledge, no Person owns 10% or more of the Company’s issued
and outstanding shares of Common Stock (calculated based on the assumption that
all Convertible Securities, whether or not presently exercisable or convertible,
have been fully exercised or converted (as the case may be) taking account of
any limitations on exercise or conversion (including “blockers”) contained
therein without conceding that such identified Person is a 10% stockholder for
purposes of federal securities laws).

 

(iv)                              Existing Securities; Obligations.  Except as
disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s
shares, interests or capital stock is subject to preemptive rights or any other
similar rights or Liens suffered or permitted by the Company or any Subsidiary;
(B) there are no outstanding options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, or exercisable or exchangeable for, any shares,
interests or capital stock of the Company or any of its Subsidiaries, or
contracts, commitments, understandings or arrangements by which the Company or
any of its Subsidiaries is or may become bound to issue additional shares,
interests or capital stock of the Company or any of its Subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any shares, interests or capital stock of the Company or
any of its Subsidiaries; (C) there are no agreements or arrangements under which
the Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the 1933 Act; (D) there are no outstanding securities
or instruments of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (E) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities; and (F) neither the Company nor any Subsidiary has any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement.

 

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(v)                                 Organizational Documents.  The Company has
furnished to the Buyers true, correct and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof
(the “Certificate of Incorporation”), and the Company’s bylaws, as amended and
as in effect on the date hereof (the “Bylaws”), and the terms of all Convertible
Securities and the material rights of the holders thereof in respect thereto;
provided that any of such items which is available on the EDGAR system need not
be furnished in physical form. (r)            Indebtedness and Other Contracts. 
Except as disclosed in the SEC Documents, neither the Company nor any of its
Subsidiaries (i) has any material outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or any of its Subsidiaries or by which
the Company or any of its Subsidiaries is or may become bound, (ii) is in
violation of any term of, or 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, or (iii) is a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse Effect. 
Neither the Company nor any of its Subsidiaries have any liabilities or
obligations required to be disclosed in the SEC Documents which are not so
disclosed in the SEC Documents, other than those incurred in the ordinary course
of the Company’s or its Subsidiaries’ respective businesses and which,
individually or in the aggregate, do not or could not have a Material Adverse
Effect.  For purposes of this Agreement:  (x) “Indebtedness” of any Person
means, without duplication, (A) all indebtedness for borrowed money, (B) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (including, without limitation, “capital leases” in
accordance with GAAP) (other than trade payables entered into in the ordinary
course of business consistent with past practice), (C) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by 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, in
connection with GAAP, consistently applied for the periods covered thereby, is
classified as a capital lease, (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 Lien upon
or in any property or assets (including accounts and contract rights) owned by
any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (A) through (G) above; and (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto.

 

(s)                                   Litigation.  Except as disclosed in the
SEC Documents, there is no material action, suit, arbitration, proceeding,
inquiry or investigation before or by the Principal Market, any court, public
board, other Governmental Entity, self-regulatory organization or body pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any of its Subsidiaries, the Common Stock or any of the Company’s or its
Subsidiaries’ officers or directors, whether of a civil or criminal nature or
otherwise, in their capacities as such.  To the knowledge of the Company, no
director, officer or employee of the Company or any of its subsidiaries has
willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable
anticipation of litigation.  Without limitation of the foregoing, there has not
been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the SEC involving the Company, any of its Subsidiaries or
any current or former director or officer of the Company or any of its
Subsidiaries.  The SEC has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company under the
1933 Act or the 1934 Act.  The Company is not aware of any fact which might
result in or form the basis for any such action, suit, arbitration,
investigation, inquiry or other proceeding.  Neither the Company nor any of its
Subsidiaries is subject to any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity.

 

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(t)                                    Insurance.  The Company and each of its
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged.

 

(u)                                 Employee Relations.  Neither the Company nor
any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union.  The Company and its Subsidiaries believe that
their relations with their employees are good.  No executive officer (as defined
in Rule 501(f) promulgated under the 1933 Act) or other key employee of the
Company or any of its Subsidiaries has notified the Company or any such
Subsidiary that such officer intends to leave the Company or any such Subsidiary
or otherwise terminate such officer’s employment with the Company or any such
Subsidiary.  To the knowledge of the Company, no executive officer or other key
employee of the Company or any of its Subsidiaries is in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer or other key employee (as the case may be) does
not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters.  The Company and its Subsidiaries are in
material compliance with all applicable federal, state, local and foreign laws
and regulations respecting labor, employment and employment practices and
benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

 

(v)                                 Title.  Each of the Company and its
Subsidiaries holds good title to all real property, leases in real property,
facilities or other interests in real property owned or held by the Company or
any of its Subsidiaries that is material to the business of the Company (the
“Real Property”).  The Real Property is free and clear of all Liens and is not
subject to any rights of way, building use restrictions, exceptions, variances,
reservations, or limitations of any nature except for (a) Liens for current
taxes not yet due, (b) zoning laws and other land use restrictions that do not
impair the present or anticipated use of the property subject thereto and
(c) those that are not likely to result in a Material Adverse Effect.  Any Real
Property held under lease by the Company or any of its Subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere in any material respect with the use made and
proposed to be made of such property and buildings by the Company or any of its
Subsidiaries.

 

(w)                               Intellectual Property Rights.  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, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
other intellectual property rights and all applications and registrations
therefor (“Intellectual Property Rights”) necessary to conduct their respective
businesses as now conducted.  The Company does not have any knowledge of any
infringement by the Company or its Subsidiaries of Intellectual Property Rights
of others.  There is no claim, action or proceeding being made or brought, or to
the knowledge of the Company or any of its Subsidiaries, being threatened,
against the Company or any of its Subsidiaries regarding its Intellectual
Property Rights, except where such claim, action or proceeding is not reasonably
likely to result in a Material Adverse Effect.  Neither the Company nor any of
its Subsidiaries has received any notice alleging any such infringement or
claim, action or proceeding.

 

(x)                                 Environmental Laws.  (i) The Company and its
Subsidiaries (A) are in compliance with any and all Environmental Laws (as
defined below), (B) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses and (C) are in compliance with all terms and conditions of any such
permit, license or approval where, except in each of the foregoing clauses (A),
(B) and (C), where the failure to so comply or having such permits, licenses or
other approval would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.  The term “Environmental Laws” means all
federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand

 

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letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations issued, entered, promulgated or approved
thereunder.

 

(ii)                                  No Hazardous Materials:

 

(A)                               to the Company’s knowledge, have been disposed
of or otherwise released from any Real Property of the Company or any of its
Subsidiaries in violation of any Environmental Laws; or

 

(B)                               to the Company’s knowledge, are present on,
over, beneath, in or upon any Real Property or any portion thereof in quantities
that would constitute a violation of any Environmental Laws.  No prior use by
the Company or any of its Subsidiaries of any Real Property has occurred that
violates any Environmental Laws, which violation would have a material adverse
effect on the business of the Company or any of its Subsidiaries.

 

(iii)                               To the Company’s knowledge, neither the
Company nor any of its Subsidiaries knows of any other person who or entity
which has stored, treated, recycled, disposed of or otherwise located on any
Real Property any Hazardous Materials, including, without limitation, such
substances as asbestos and polychlorinated biphenyls.

 

(iv)                              To the knowledge of the Company, none of the
Real Property is on any federal or state “Superfund” list or Liability
Information System (“CERCLIS”) list or any state environmental agency list of
sites under consideration for CERCLIS, nor subject to any environmental related
Liens.

 

(y)                                 Tax Status.  The Company and each of its
Subsidiaries (i) has timely made or filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject through the date of this Agreement or have requested
extensions thereof (except where the failure to file would not, individually or
in the aggregate, have a Material Adverse Effect) and (ii) has timely 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,
except those being contested in good faith and for which reserves required by
GAAP have been created in the financial statements of the Company or for cases
in which the failure to pay would not have a Material Adverse Effect.  There is
no tax deficiency that has been determined adversely to the Company or any of
its Subsidiaries which has had a Material Adverse Effect, nor does the Company
and its Subsidiaries have any knowledge or notice of any tax deficiency which
could reasonably be expected to be determined adversely to the Company and its
Subsidiaries and which could reasonably be expected to have a Material Adverse
Effect.

 

(z)                                  Internal Accounting and Disclosure
Controls.  The Company and each of its Subsidiaries maintains internal control
over financial reporting (as such term is defined in Rule 13a-15(f) under the
1934 Act) that is effective to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP, including that (i) transactions
are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management’s general or specific authorization and
(iv) the recorded accountability for assets and liabilities is compared with the
existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference.  The Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) under the
1934 Act) that are effective in ensuring that information required to be
disclosed by the Company in the reports that it files or submits under the 1934
Act is recorded, processed, summarized and reported, within the time periods
specified in the rules and forms of the SEC, including, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the 1934
Act is accumulated and communicated to the Company’s management, including its
principal executive officer or officers and its principal financial officer or
officers, as appropriate, to allow timely decisions regarding required
disclosure.  Since the filing of the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2018, neither the Company nor any of its
Subsidiaries has received any notice or correspondence from any accountant,
Governmental Entity or other Person relating to any potential material

 

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weakness or significant deficiency in any part of the internal controls over
financial reporting of the Company or any of its Subsidiaries.

 

(aa)                          Off Balance Sheet Arrangements.  There is no
transaction, arrangement, or other relationship between the Company or any of
its Subsidiaries and an unconsolidated or other off balance sheet entity that is
required to be disclosed by the Company in its 1934 Act filings and is not so
disclosed or that otherwise could be reasonably likely to have a Material
Adverse Effect.

 

(bb)                          Investment Company Status.  The Company is not,
and upon consummation of the sale of the Securities will not be, an “investment
company,”  or a company controlled by an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended.

 

(cc)                            Manipulation of Price.  Neither the Company nor
any of its Subsidiaries has, 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 or any of its Subsidiaries 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 or any of its Subsidiaries or (iv) paid or
agreed to pay any Person for research services with respect to any securities of
the Company or any of its Subsidiaries.

 

(dd)                          U.S. Real Property Holding Corporation.  Neither
the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by any of the Buyers, shall become, a U.S. real
property holding corporation within the meaning of Section 897 of the Code, and
the Company and each Subsidiary shall so certify upon any Buyer’s request.

 

(ee)                            Transfer Taxes.  All stock transfer or other
taxes (other than income or similar taxes) which are required to be paid in
connection with the issuance, sale and transfer of the Securities to be sold to
each Buyer hereunder will be, or will have been, fully paid or provided for by
the Company, and all laws imposing such taxes will be or will have been complied
with; provided that the Company shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of any
Conversion Shares upon conversion in a name other than that of the Buyer of such
Convertible Notes and the Company shall not be required to issue or deliver such
Conversion Shares unless or until the Person or Persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

 

(ff)                              Bank Holding Company Act.  Neither the Company
nor any of its Subsidiaries 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 owns or controls, directly or indirectly, five percent (5%) or
more of the outstanding shares of any class of voting securities or twenty-five
percent (25%) 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 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.

 

(gg)                            Shell Company Status.  The Company is not, and
has never been, an issuer identified in, or subject to, Rule 144(i).

 

(hh)                          Illegal or Unauthorized Payments; Political
Contributions.  Neither the Company nor any of its Subsidiaries nor, to the
Company’s knowledge, any of the officers, directors, employees, agents or other
representatives of the Company or any of its Subsidiaries or affiliates, has,
directly or indirectly, made or authorized any payment, contribution or gift of
money, property, or services, whether or not in contravention of applicable law,
(i) as a kickback or bribe to any Person or (ii) to any political organization,
or the holder of or any aspirant to any elective or appointive public office to
influence official action or secure an improper advantage, except for personal
political contributions not involving the direct or indirect use of funds of the
Company or any of its Subsidiaries.

 

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(ii)                                  Money Laundering.  The operations of the
Company and its Subsidiaries are and have been conducted at all times in
material compliance with the USA Patriot Act of 2001 and all other applicable
U.S. and non-U.S. anti-money laundering laws and regulations, including, without
limitation, the laws, regulations and Executive Orders and sanctions programs
administered by the U.S. Office of Foreign Assets Control, including, but not
limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any
regulations contained in 31 CFR, Subtitle B, Chapter V.

 

(jj)                                Management.  During the past five year
period, no current or former officer or director, to the knowledge of the
Company, has been the subject of:

 

(i)                                     a petition under bankruptcy laws or any
other insolvency or moratorium law or the appointment by a court of a receiver,
fiscal agent or similar officer for such Person, or any partnership in which
such person was a general partner at or within two years before the filing of
such petition or such appointment, or any corporation or business association of
which such person was an executive officer at or within two years before the
time of the filing of such petition or such appointment;

 

(ii)                                  a conviction in a criminal proceeding or a
named subject of a pending criminal proceeding (excluding traffic violations
that do not relate to driving while intoxicated or driving under the influence);

 

(iii)                               any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining any such person from, or
otherwise limiting, the following activities:

 

(1)                                 Acting as a futures commission merchant,
introducing broker, commodity trading advisor, commodity pool operator, floor
broker, leverage transaction merchant, any other person regulated by the United
States Commodity Futures Trading Commission or an associated person of any of
the foregoing, or as an investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any investment
company, bank, savings and loan association or insurance company, or engaging in
or continuing any conduct or practice in connection with such activity;

 

(2)                                 Engaging in any particular type of business
practice; or

 

(3)                                 Engaging in any activity in connection with
the purchase or sale of any security or commodity or in connection with any
violation of securities laws or commodities laws;

 

(iv)                              any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any authority barring,
suspending or otherwise limiting for more than sixty (60) days the right of any
such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;

 

(v)                                 a finding by a court of competent
jurisdiction in a civil action or by the SEC or other authority to have violated
any securities law, regulation or decree and the judgment in such civil action
or finding by the SEC or any other authority has not been subsequently reversed,
suspended or vacated; or

 

(vi)                              a finding by a court of competent jurisdiction
in a civil action or by the Commodity Futures Trading Commission to have
violated any federal commodities law, and the judgment in such civil action or
finding has not been subsequently reversed, suspended or vacated.

 

(kk)                          Stock Option Plans.  Each stock option granted by
the Company was granted (i) in accordance with the terms of the applicable stock
option plan of the Company and (ii) with an exercise price at least equal to the
fair market value of the Common Stock on the date such stock option would be
considered granted under GAAP and applicable law.  To the Company’s knowledge,
no stock option granted under the Company’s stock option plan has been
backdated.  The Company has not knowingly granted, and there is no and has been
no policy or practice of the

 

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Company to knowingly grant, stock options prior to, or otherwise knowingly
coordinate the grant of stock options with, the release or other public
announcement of material information regarding the Company or its Subsidiaries
or their financial results or prospects.

 

(ll)                                  No Disqualification Events.  With respect
to Securities to be offered and sold hereunder in reliance on Rule 506(b) under
the 1933 Act (“Regulation D Securities”), none of the Company, any of its
predecessors, any affiliated issuer, any director, executive officer, other
officer of the Company participating in the offering contemplated hereby, or, to
the Company’s knowledge, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power,
nor any promoter (as that term is defined in Rule 405 under the 1933 Act)
connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of
the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the 1933 Act (a “Disqualification Event”), except for a Disqualification Event
covered by Rule 506(d)(2) or (d)(3).  The Company has exercised reasonable care
to determine whether any Issuer Covered Person is subject to a Disqualification
Event.  The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e).

 

(mm)                  Other Covered Persons.  The Company is not aware of any
Person that has been or will be paid (directly or indirectly) remuneration for
solicitation of Buyers or potential purchasers in connection with the sale of
any Regulation D Securities.

 

(nn)                          No Additional Agreements.  The Company does not
have any agreement or understanding with any Buyer with respect to the
transactions contemplated by the Transaction Documents other than as specified
in the Transaction Documents.

 

(oo)                          Public Utility Holding Act.  None of the Company
nor any of its Subsidiaries is a “holding company,” or an “affiliate” of a
“holding company,” as such terms are defined in the Public Utility Holding Act
of 2005.

 

(pp)                          Federal Power Act.  None of the Company nor any of
its Subsidiaries is subject to regulation as a “public utility” under the
Federal Power Act, as amended.

 

(qq)                          Disclosure.  The Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Buyers or
their agents or counsel with any information that constitutes or could
reasonably be expected to constitute material, non-public information concerning
the Company or any of its Subsidiaries, other than the existence of the
transactions contemplated by this Agreement and the other Transaction
Documents.  The Company understands and confirms that each of the Buyers will
rely on the foregoing representations in effecting transactions in securities of
the Company.  All disclosure provided to the Buyers regarding the Company and
its Subsidiaries, their businesses and the transactions contemplated hereby
furnished by or on behalf of the Company or any of its Subsidiaries is true and
correct and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.  
All of the written information furnished after the date hereof by or on behalf
of the Company or any of its Subsidiaries to each Buyer pursuant to or in
connection with this Agreement and the other Transaction Documents, taken as a
whole, will be true and correct in all material respects as of the date on which
such information is so provided and will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.  The Company acknowledges and agrees that no Buyer makes
or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 2.

 

4.                                      COVENANTS.

 

(a)                                 Best Efforts.  Each Buyer shall use its best
efforts to timely satisfy each of the covenants hereunder and conditions to be
satisfied by it as provided in Section 6 of this Agreement.  The Company shall
use its best efforts to timely satisfy each of the covenants hereunder and
conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

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(b)                                 Blue Sky.  The Company shall, on or before
the Closing Date, take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to, qualify the Securities for
sale to the Buyers at the 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), and shall provide evidence of any such
action so taken to the Buyers on or prior to the Closing Date.  Without limiting
any other obligation of the Company under this Agreement, the Company shall
timely make all filings and reports relating to the offer and sale of the
Securities required under all applicable securities laws (including, without
limitation, all applicable federal securities laws and all applicable “Blue Sky”
laws), and the Company shall comply with all applicable foreign, federal, state
and local laws, statutes, rules, regulations and the like relating to the
offering and sale of the Securities to the Buyers.

 

(c)                                  Reporting Status.  For so long as the
Buyers beneficially own any of the Conversion Shares, and until such time as all
the Conversion Shares are saleable by the Buyers under Rule 144 under the 1933
Act without regard to volume and manner of sale limitations  (the “Reporting
Period”), the Company shall timely file all reports required to be filed with
the SEC pursuant to the 1934 Act (reports filed in compliance with the time
period specified in Rule 12b-25 promulgated under the 1934 Act shall be
considered timely for this purpose), and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act or the rules and regulations thereunder would no longer require or otherwise
permit such termination.

 

(d)                                 Use of Proceeds.  The Company will use the
net proceeds from the sale of the Securities for general corporate purposes and
for the potential redemption of Series E Preferred Stock, but not, directly or
indirectly, for  the settlement of any outstanding litigation.

 

(e)                                  Financial Information.  The Company agrees
to send the following to each Buyer during the Reporting Period (i) unless the
following are filed with the SEC through EDGAR and are available to the public
through the EDGAR system, within one (1) Business Day after the filing thereof
with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on
Form 10-Q, any Current Reports on Form 8-K and any registration statements
(other than on Form S-8 or Form S-4) or amendments filed pursuant to the 1933
Act, (ii) unless the following are either filed with the SEC through EDGAR or
are otherwise widely disseminated via a recognized news release service (such as
PR Newswire), on the same day as the release thereof, facsimile copies of all
press releases issued by the Company or any of its Subsidiaries and (iii) unless
the following are filed with the SEC through EDGAR, copies of any notices and
other information made available or given to the common stockholders of the
Company generally, contemporaneously with the making available or giving thereof
to the common stockholders.

 

(f)                                   Listing.  The Company shall promptly
secure the listing or designation for quotation (as the case may be) of all of
the Conversion Shares upon each national securities exchange and automated
quotation system, if any, upon which the Common Stock is then listed or
designated for quotation (as the case may be) (subject to official notice of
issuance) and shall maintain such listing or designation for quotation (as the
case may be) of all Conversion Shares from time to time issuable under the terms
of the Transaction Documents on such national securities exchange or automated
quotation system.  The Company shall maintain the Common Stock’s listing or
authorization for quotation (as the case may be) on the Principal Market, The
New York Stock Exchange, the NYSE American, the Nasdaq Global Market or the
Nasdaq Global Select Market (each, an “Eligible Market”).  Neither the Company
nor any of its Subsidiaries shall take any action which could be reasonably
expected to result in the delisting or suspension of the Common Stock on an
Eligible Market.  The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 4(f).

 

(g)                                  Fees.  The Company shall be responsible for
the payment of any placement agent’s fees, financial advisory fees, transfer
agent fees, DTC (as defined below) fees or broker’s commissions (other than for
Persons engaged by any Buyer) relating to or arising out of the transactions
contemplated hereby.  The Company shall pay, and hold each Buyer harmless
against, any liability, loss or expense (including, without limitation,
reasonable attorneys’ fees and reasonable and documented out-of-pocket expenses)
arising in connection with any claim relating to any such payment.  Except as
otherwise set forth in the Transaction Documents, each party to this Agreement
shall bear its own expenses in connection with the sale of the Securities by the
Company to the Buyers.

 

(h)                                 Pledge of Securities.  Notwithstanding
anything to the contrary contained in this Agreement, the Company acknowledges
and agrees that the Securities may be pledged by an Buyer in connection with a
bona fide margin agreement or other loan or financing arrangement that is
secured by the Securities.  The pledge of Securities

 

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shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to
provide the Company with any notice thereof or otherwise make any delivery to
the Company pursuant to this Agreement or any other Transaction Document,
including, without limitation, Section 2(g) hereof; provided that an Buyer and
its pledgee shall be required to comply with the provisions of
Section 2(g) hereof in order to effect a sale, transfer or assignment of
Securities to such pledgee.  The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by a Buyer.

 

(i)                                     Disclosure of Transactions and Other
Material Information.

 

(i)                                     Disclosure of Transaction.  The Company
shall, on or before 9:15 a.m., New York time, on the first (1st) Business Day
after the date of this Agreement file a Current Report on Form 8-K reasonably
acceptable to the Buyers describing all the material terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act
and attaching all the material Transaction Documents (the “8-K Filing”).  From
and after the issuance of the 8-K Filing, the Company shall have disclosed all
material, non-public information (if any) provided to any of the Buyers by the
Company or any of its Subsidiaries or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents. In addition, the Company and the Buyers
acknowledge and agree that there are no confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its
Subsidiaries or any of their respective officers, directors, affiliates,
employees or agents, on the one hand, and any of the Buyers or any of their
affiliates, on the other hand.

 

(ii)                                  Limitations on Disclosure.  Other than as
required under the Transaction Documents (but subject to any other disclosure
obligations of the Company with respect thereto), the Company shall not, and the
Company shall cause each of its Subsidiaries and each of its and their
respective officers, directors, employees and agents not to, provide any Buyer
with any material, non-public information regarding the Company or any of its
Subsidiaries from and after the date hereof unless prior thereto such Buyer
shall have consented in writing to the receipt of such information and agreed
with the Company to keep such information confidential.  To the extent that the
Company delivers any material, non-public information to a Buyer without such
Buyer’s prior written consent, the Company hereby covenants and agrees that such
Buyer shall not have any duty of confidentiality with respect to such material,
non-public information, provided that the Buyer shall remain subject to
applicable law.  None of the Company, its Subsidiaries or any Buyer shall issue
any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, the Company shall be
entitled, without the prior approval of any Buyer, to make any press release or
other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations (provided that in the case of clause
(i) each Buyer shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release).  Without the
prior written consent of the applicable Buyer (which may be granted or withheld
in such Buyer’s sole discretion), the Company shall not (and shall cause each of
its Subsidiaries and affiliates to not) disclose the name of such Buyer in any
filing, announcement, release or otherwise, except in the 8-K Filing and as
otherwise may be required by applicable law.

 

(k)                                 Additional Issuance of Securities.  So long
as any Buyer beneficially owns any Convertible Notes, the Company will not,
without the prior written consent of the Required Holders (as defined below),
issue any Convertible Notes (other than to the Buyers as contemplated hereby)
and the Company shall not issue any other securities that would cause a breach
or default under the Convertible Notes.  The Company agrees that for the period
commencing on the date hereof and ending on the date immediately following the
60th calendar day after the Closing Date (the “Restricted Period”), neither the
Company nor any of its Subsidiaries shall directly or indirectly issue, offer,
sell, grant any option or right to purchase, or otherwise dispose of (or
announce any issuance, offer, sale, grant of any option or right to purchase or
other disposition of) any equity security or any equity-linked or related
security (including, without limitation, any “equity security” (as that term is
defined under Rule 405 promulgated under the 1933 Act), any Convertible
Securities, any preferred stock or any purchase rights) (any such issuance,
offer, sale, grant, disposition or announcement (whether occurring during the
Restricted Period or at any time thereafter) is referred to as a “Subsequent
Placement”).  Notwithstanding the foregoing, this Section 4(k) shall not apply
in

 

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respect of the issuance of (i) shares of Common Stock or standard options to
purchase Common Stock or other incentive equity awards issued to directors,
officers, consultants or employees of the Company in their capacity as such
pursuant to an Approved Stock Plan (as defined below), provided that (1) all
such issuances (taking into account the shares of Common Stock issuable upon
exercise of such options) after the date hereof pursuant to this clause (i) do
not, in the aggregate, exceed more than 5% of the Common Stock issued and
outstanding immediately prior to the date hereof and (2) the exercise price of
any such options is not lowered, none of such options are amended to increase
the number of shares issuable thereunder and none of the terms or conditions of
any such options are otherwise materially changed in any manner that adversely
affects any of the Buyers; (ii) shares of Common Stock issued upon the
conversion, exercise, or settlement of (or otherwise pursuant to the terms of)
Convertible Securities (other than standard options to purchase Common Stock or
other incentive equity awards issued pursuant to an Approved Stock Plan that are
covered by clause (i) above) issued prior to the date hereof, provided that the
conversion, exercise or other method of issuance (as the case may be) of any
such Convertible Security is made solely pursuant to the conversion, exercise or
other method of issuance (as the case may be) provisions of such Convertible
Security that were in effect on the date immediately prior to the date of this
Agreement  and none of the terms or conditions of any such Convertible
Securities (other than standard options to purchase Common Stock or other
incentive equity awards issued pursuant to an Approved Stock Plan that are
covered by clause (i) above) are otherwise materially changed in any manner that
adversely affects any of the Buyers; (iii) shares of the Company’s capital stock
issuable pursuant to shareholder rights plans; (iv) shares of Common Stock
issued as matching contributions under the Company’s 401(k) plan; (v) the
Conversion Shares; and (vi) securities issuable as payment in satisfaction of
accrued dividends payable on the Series C Preferred Stock.  In addition,
notwithstanding the foregoing, the Company may (i) file one or more registration
statements on Form S-8 or Form S-4 or amendments thereto with the SEC, (ii) file
a shelf registration statement on Form S-3 with the SEC, provided that no sales
under such registration statement shall take place during the Restricted Period,
or (iii) file a prospectus supplement with the SEC relating to an at-the-market
offering program, provided that no shares may be offered or sold pursuant to
such at-the-market offering during the Restricted Period.  “Approved Stock Plan”
means any stock option plans, director compensation plans or employee benefit
plans which have been approved by the board of directors of the Company prior to
or subsequent to the date hereof pursuant to which shares of Common Stock and
standard options to purchase Common Stock and other incentive equity awards may
be issued to any employee, officer, consultant or director for services provided
to the Company in their capacity as such.  “Convertible Securities” means any
capital stock or other security of the Company or any of its Subsidiaries that
is at any time and under any circumstances directly or indirectly convertible
into, exercisable or exchangeable for, or which otherwise entitles the holder
thereof to acquire, any capital stock or other security of the Company
(including, without limitation, Common Stock) or any of its Subsidiaries.  In
addition, during the Restricted Period, the Company and each Subsidiary shall be
prohibited from effecting or entering into an agreement to effect any Subsequent
Placement involving a Variable Rate Transaction  or any Convertible Notes issued
hereunder). “Variable Rate Transaction” means a transaction in which the Company
or any Subsidiary (i) issues or sells any Convertible Securities either (A) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such Convertible Securities, or
(B) with a conversion, exercise or exchange price that is subject to being reset
at some future date after the initial issuance of such Convertible Securities or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock, other
than pursuant to a customary “weighted average” anti-dilution provision or
customary adjustments for stock splits, stock dividends, stock combinations,
recapitalizations and similar events or (ii) enters into any agreement
(including, without limitation, an equity line of credit or an “at-the-market”
offering) whereby the Company or any Subsidiary may sell securities at a future
determined price (other than standard and customary “preemptive” or
“participation” rights).

 

(l)                                     Reservation of Shares.  So long as any
of the Convertible Notes remain outstanding, the Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, a number of shares of Common Stock that is sufficient to permit the
conversion of all the Convertible Notes then outstanding (the “Required Reserve
Amount”); provided that at no time shall the number of shares of Common Stock
reserved pursuant to this Section 4(l) be reduced other than in connection with
any stock combination, reverse stock split or other similar transaction or
proportionally in connection with any conversion and/or redemption, as
applicable, of the Convertible Notes.  If at any time the number of shares of
Common Stock authorized and reserved for issuance is not sufficient to meet the
Required Reserve Amount, the Company will promptly take all corporate action
necessary to authorize and reserve a sufficient number of shares, including,
without limitation, calling a special

 

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meeting of stockholders to authorize additional shares to meet the Company’s
obligations pursuant to the Transaction Documents, in the case of an
insufficient number of authorized shares, obtain stockholder approval (if
required) of an increase in such authorized number of shares, and voting the
management shares of the Company in favor of an increase in the authorized
shares of the Company to ensure that the number of authorized shares is
sufficient to meet the Required Reserve Amount.

 

(m)                             Conduct of Business.  The business of the
Company and its Subsidiaries shall not be conducted in violation of any law,
ordinance or regulation of any Governmental Entity, except where such violations
would not reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect.

 

(n)                                 Passive Foreign Investment Company.  The
Company shall conduct its business, and shall cause its Subsidiaries to conduct
their respective businesses, in such a manner as will ensure that the Company
will not be deemed to constitute a passive foreign investment company within the
meaning of Section 1297 of the Code.

 

(o)                                 Restriction on Redemption and Cash
Dividends.  So long as any of the Convertible Notes are outstanding, the Company
shall not, directly or indirectly, redeem, or declare or pay any cash dividend
or distribution on, any securities of the Company without the prior express
written consent of the Buyers (other than as required by the Convertible
Securities (including for the avoidance of doubt, the Series C Preferred Stock
and the Series E Preferred Stock), the Convertible Notes or as required by the
terms thereof as in effect on the date hereof).

 

(p)                                 Corporate Existence.  So long as any Buyer
beneficially owns any of the Convertible Notes, the Company shall not be party
to any Fundamental Change (as defined in the Convertible Notes) unless the
Company is in compliance with the applicable provisions governing Fundamental
Changes set forth in the Convertible Notes.

 

(r)                                    Conversion Procedures.  The form of
conversion notice included in the Convertible Notes sets forth the totality of
the procedures required of the Buyers in order to convert the Convertible
Notes.  Except as provided in Section 5(d), no additional legal opinion, other
information or instructions shall be required of the Buyers to convert their
Convertible Notes.  The Company shall honor conversions of the Convertible Notes
and shall deliver the Conversion Shares in accordance with the terms, conditions
and time periods set forth in the Convertible Notes.

 

(s)                                   Regulation M.  The Company will not take
any action prohibited by Regulation M under the 1934 Act, in connection with the
distribution of the Securities contemplated hereby.

 

(t)                                    General Solicitation.  None of the
Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or
any person acting on behalf of the Company or such affiliate will solicit any
offer to buy or offer or sell the Securities by means of any form of general
solicitation or general advertising within the meaning of Regulation D,
including:  (i) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar medium or broadcast over
television or radio; and (ii) any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising.

 

(u)                                 Integration.  None of the Company, any of
its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person
acting on behalf of the Company or such affiliate will sell, offer for sale, or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the 1933 Act) which will be integrated with the sale of the
Securities in a manner which would require the registration of the Securities
under the 1933 Act or require stockholder approval under the rules and
regulations of the Principal Market and the Company will take all action that is
appropriate or necessary to assure that its offerings of other securities will
not be integrated for purposes of the 1933 Act or the rules and regulations of
the Principal Market, with the issuance of Securities contemplated hereby.

 

(v)                                 Notice of Disqualification Events.  The
Company will notify the Buyers in writing, prior to the Closing Date, of (i) any
Disqualification Event relating to any Issuer Covered Person and (ii) any event
that would, with the passage of time, become a Disqualification Event relating
to any Issuer Covered Person.

 

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5.                                      REGISTER; TRANSFER AGENT INSTRUCTIONS;
LEGEND.

 

(a)                                 Register.  The Company shall maintain at its
principal executive offices (or such other office or agency of the Company as it
may designate by notice to each holder of Securities), a register for the
Convertible Notes in which the Company shall record the name and address of the
Person in whose name the Convertible Notes have been issued (including the name
and address of each transferee), the aggregate number of the Convertible Notes
held by such Person, and the number of Conversion Shares issuable pursuant to
the terms of the Convertible Notes held by such Person.  The Company shall keep
the register open and available at all times during business hours for
inspection of any Buyer or its legal representatives.

 

(a)                                 (b)                                 Transfer
Agent Instructions.  The Company shall issue irrevocable instructions to its
transfer agent and any subsequent transfer agent (as applicable) (the “Transfer
Agent”) in a form acceptable to each of the Buyers (the “Irrevocable Transfer
Agent Instructions”) to issue certificates or credit shares to the applicable
balance accounts at The Depository Trust Company (“DTC”), registered in the name
of each Buyer or its respective nominee(s), for the Conversion Shares in such
amounts as specified from time to time by each Buyer to the Company upon
conversion of the Convertible Notes.  The Company represents and warrants that
no instruction other than the Irrevocable Transfer Agent Instructions referred
to in this Section 5(b), and stop transfer instructions to give effect to
Section 2(g) hereof, will be given by the Company to the Transfer Agent with
respect to the Securities, and that the Securities shall otherwise be freely
transferable on the books and records of the Company, as applicable, to the
extent provided in this Agreement and the other Transaction Documents.  If a
Buyer effects a sale, assignment or transfer of the Securities in accordance
with Section 2(g), the Company shall permit the transfer and shall promptly
instruct Transfer Agent to issue one or more certificates or credit shares to
the applicable balance accounts at DTC in such name and in such denominations as
specified by such Buyer to effect such sale, transfer or assignment.  In the
event that such sale, assignment or transfer involves Conversion Shares sold,
assigned or transferred pursuant to an effective registration statement or in
compliance with Rule 144, the Transfer Agent shall issue such shares to such
Buyer, assignee or transferee (as the case may be) without any restrictive
legend in accordance with Section 5(d) below.  The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to a
Buyer.  Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 5(b) will be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions
of this Section 5(b), that a Buyer shall be entitled, in addition to all other
available remedies, to an order and/or injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required.  The
Company shall cause its counsel to issue the legal opinion referred to in the
Irrevocable Transfer Agent Instructions to the Transfer Agent on the date that a
registration statement registering the Conversion Shares has been declared
effective by the SEC.  .  Any fees (with respect to the Transfer Agent, counsel
to the Company or otherwise) associated with the issuance of such opinion or the
removal of any legends on any of the Securities shall be borne by the Company.

 

(c)                                  Legends.  Each Buyer understands that the
Securities have been issued (or will be issued in the case of the Conversion
Shares) pursuant to an exemption from registration or qualification under the
1933 Act and applicable state securities laws, and except as set forth below,
the Securities shall bear any legend as required by the “blue sky” laws of any
state and a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock certificates):

 

Convertible Note Legend

 

THE ISSUANCE AND SALE OF NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR APPLICABLE STATE SECURITIES LAWS.  UNTIL THE DATE THAT IS ONE (1) YEAR AFTER
THE ISSUE DATE (AS DEFINED ON THE REVERSE OF THIS NOTE), THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION AND
PROSPECTUS-DELIVERY REQUIREMENTS OF THE SECURITIES ACT.

 

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Conversion Shares Legend

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. 
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE
HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE
COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR
ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. 
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 

(d)                                 Removal of Legends.  Certificates evidencing
Securities shall not be required to contain the legend set forth in
Section 5(c) above or any other legend (i) while a registration statement
covering the resale of such Securities is effective under the 1933 Act,
(ii) following any sale of such Securities pursuant to Rule 144 (assuming the
transferor is not an affiliate of the Company), (iii) if such Securities are
eligible to be sold, assigned or transferred under Rule 144 (provided that a
Buyer provides the Company with reasonable assurances that such Securities are
eligible for sale, assignment or transfer under Rule 144 which shall not include
an opinion of Buyer’s counsel), (iv) in connection with a sale, assignment or
other transfer (other than under Rule 144), provided that such Buyer provides
the Company with an opinion of counsel to such Buyer, in a generally acceptable
form, to the effect that such sale, assignment or transfer of the Securities may
be made without registration under the applicable requirements of the 1933 Act
or (v) if such legend is not required under applicable requirements of the 1933
Act (including, without limitation, controlling judicial interpretations and
pronouncements issued by the SEC).  If a legend is not required pursuant to the
foregoing, the Company shall no later than two (2) Business Days (or such
earlier date as required pursuant to the 1934 Act or other applicable law,
rule or regulation for the settlement of a trade initiated on the date such
Buyer delivers such legended certificate representing such Securities to the
Company) following the delivery by a Buyer to the Company or the Transfer Agent
(with notice to the Company) of a legended certificate representing such
Securities (endorsed or with stock powers attached, signatures guaranteed, and
otherwise in form necessary to affect the reissuance and/or transfer, if
applicable), together with any other deliveries from such Buyer as may be
reasonably required above in this Section 5(d), as directed by such Buyer,
either:  (A) provided that the Transfer Agent is participating in the DTC Fast
Automated Securities Transfer Program and such Securities are Conversion Shares,
credit the aggregate number of shares of Common Stock to which such Buyer shall
be entitled to such Buyer’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian system or (B) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, issue and
deliver (via reputable overnight courier) to such Buyer, a certificate
representing such Securities that is free from all restrictive and other
legends, registered in the name of such Buyer or its designee.  The Company
shall be responsible for any transfer agent fees or DTC fees with respect to any
issuance of Securities or the removal of any legends with respect to any
Securities in accordance herewith.

 

(e)                                  FAST Compliance.  While any Convertible
Notes remain outstanding, the Company shall maintain a transfer agent that
participates in the DTC Fast Automated Securities Transfer Program.

 

6.                                      CONDITIONS TO THE COMPANY’S OBLIGATION
TO SELL.

 

(a)                                 The obligation of the Company hereunder to
issue and sell the Convertible Notes to each Buyer at the Closing is subject to
the satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof:

 

(i)                                     Such Buyer shall have executed each of
the other Transaction Documents to which it is a party and delivered the same to
the Company.

 

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(ii)                                  Such Buyer and each other Buyer shall have
delivered to the Company the Purchase Price for the Convertible Notes being
purchased by such Buyer at the Closing by wire transfer of immediately available
funds.

 

(iii)                               The representations and warranties of such
Buyer shall be true and correct in all material respects (except for such
representations and warranties that are qualified by materiality or material
adverse effect, which shall be true and correct in all respects) as of the date
when made and as of the Closing Date as though originally made at that time
(except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date), and such Buyer shall
have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by such Buyer at or prior to the Closing Date.

 

7.                                      CONDITIONS TO EACH BUYER’S OBLIGATION TO
PURCHASE.

 

(a)                                 The obligation of each Buyer hereunder to
purchase its aggregate principal amount of Convertible Notes at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for each Buyer’s sole
benefit and may be waived by such Buyer at any time in its sole discretion by
providing the Company with prior written notice thereof:

 

(i)                                     The Company and each Subsidiary (as the
case may be) shall have duly executed and delivered to such Buyer each of the
Transaction Documents to which it is a party and the Company shall have duly
executed and delivered to such Buyer such aggregate principal amount of
Convertible Notes as set forth across from such Buyer’s name in column (3) of
the Schedule of Buyers as being purchased by such Buyer at the Closing pursuant
to this Agreement.

 

(ii)                                  Such Buyer shall have received the opinion
of Goodwin Procter LLP, the Company’s counsel, dated as of the Closing Date, in
the form acceptable to such Buyer.

 

(iii)                               The Company shall have delivered to such
Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form
acceptable to such Buyer, which instructions shall have been delivered to and
acknowledged in writing by the Transfer Agent.

 

(iv)                              The Company shall have delivered to such Buyer
a certificate evidencing the formation and good standing of the Company in such
entity’s jurisdiction of formation issued by the Secretary of State (or
comparable office) of such jurisdiction of formation as of a date within ten
(10) days of the Closing Date.

 

(v)                                 The Company shall have delivered to such
Buyer a certified copy of the Certificate of Incorporation as certified by the
Delaware Secretary of State within ten (10) days of the Closing Date.

 

(vi)                              The Company shall have delivered to such Buyer
a certificate, in the form acceptable to such Buyer, executed by the Secretary
of the Company and dated as of the Closing Date, as to (i) the resolutions
consistent with Section 3(b) as adopted by the Company’s board of directors in a
form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation
of the Company and (iii) the Bylaws of the Company, each as in effect at the
Closing.

 

(vii)                           Each and every representation and warranty of
the Company shall be true and correct in all material respects (except for such
representations and warranties that are qualified by materiality or material
adverse effect, which shall be true and correct in all respects) as of the date
when made and as of the Closing Date as though originally made at that time
(except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date) and the Company shall
have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with
by the Company at or prior to the Closing Date.  Such Buyer shall have received
a certificate, duly executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, to the foregoing effect and as to such other
matters as may be reasonably requested by such Buyer in the form acceptable to
such Buyer.

 

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(viii)                        The Common Stock (A) shall be designated for
quotation or listed (as applicable) on the Principal Market and (B) shall not
have been suspended, as of the Closing Date, by the SEC or the Principal Market
from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the Closing Date, either (1) in
writing by the SEC or the Principal Market or (2) by falling below the minimum
maintenance requirements of the Principal Market.

 

(ix)                              The Company shall have obtained all
governmental, regulatory or third party consents and approvals, if any,
necessary for the sale of the Securities, including without limitation, those
required by the Principal Market, if any.

 

(x)                                 No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or Governmental Entity of competent
jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

(xi)                              Since the date of execution of this Agreement,
no event or series of events shall have occurred that reasonably would have or
result in a Material Adverse Effect.

 

(xii)                           The Company shall have obtained approval of the
Principal Market to list or designate for quotation (as the case may be) the
Conversion Shares and confirmation from the Principal Market that no stockholder
vote or other conditions under the rules of the Principal Market shall apply to
the sale of the Securities or the issuance of the Conversion Shares.

 

(xiii)                        The Company and its Subsidiaries shall have
delivered to such Buyer such other documents, instruments or certificates
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.

 

8.                                      TERMINATION.

 

In the event that the Closing shall not have occurred with respect to a Buyer
within five (5) days of the date hereof, then such Buyer shall have the right to
terminate its obligations under this Agreement with respect to itself at any
time on or after the close of business on such date without liability of such
Buyer to any other party; provided, however, (i) the right to terminate this
Agreement under this Section 8 shall not be available to such Buyer if the
failure of the transactions contemplated by this Agreement to have been
consummated by such date is the result of such Buyer’s breach of this Agreement
and (ii) the abandonment of the sale and purchase of the Convertible Notes shall
be applicable only to such Buyer providing such written notice.  Nothing
contained in this Section 8 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this
Agreement or the other Transaction Documents.

 

9.                                      MISCELLANEOUS.

 

(a)                                 Governing Law; Jurisdiction; Jury Trial. 
All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.  The Company hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or under any of the other Transaction Documents or with any
transaction contemplated hereby or thereby, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of 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 to such party at the
address for such 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. Nothing contained herein

 

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shall be deemed or operate to preclude any Buyer from bringing suit or taking
other legal action against the Company in any other jurisdiction to collect on
the Company’s obligations to such Buyer or to enforce a judgment or other court
ruling in favor of such Buyer.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

(b)                                 Counterparts.  This Agreement may be
executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party.  In the event that
any signature is delivered by facsimile transmission or by an e-mail which
contains a portable document format (.pdf) file of an executed signature page,
such signature page 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 signature page were an original thereof.

 

(c)                                  Headings; Gender.  The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.  Unless the context clearly indicates
otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof.  The terms “including,”
“includes,” “include” and words of like import shall be construed broadly as if
followed by the words “without limitation.”  The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just
the provision in which they are found.

 

(d)                                 Severability; Maximum Payment Amounts.  If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as
possible to that of the prohibited, invalid or unenforceable provision(s). 
Notwithstanding anything to the contrary contained in this Agreement or any
other Transaction Document (and without implication that the following is
required or applicable), it is the intention of the parties that in no event
shall amounts and value paid by the Company and/or any of its Subsidiaries (as
the case may be), or payable to or received by any of the Buyers, under the
Transaction Documents (including without limitation, any amounts that would be
characterized as “interest” under applicable law) exceed amounts permitted under
any applicable law.  Accordingly, if any obligation to pay, payment made to any
Buyer, or collection by any Buyer pursuant the Transaction Documents is finally
judicially determined to be contrary to any such applicable law, such obligation
to pay, payment or collection shall be deemed to have been made by mutual
mistake of such Buyer, the Company and its Subsidiaries and such amount shall be
deemed to have been adjusted with retroactive effect to the maximum amount or
rate of interest, as the case may be, as would not be so prohibited by the
applicable law.  Such adjustment shall be effected, to the extent necessary, by
reducing or refunding, at the option of such Buyer, the amount of interest or
any other amounts which would constitute unlawful amounts required to be paid or
actually paid to such Buyer under the Transaction Documents.  For greater
certainty, to the extent that any interest, charges, fees, expenses or other
amounts required to be paid to or received by such Buyer under any of the
Transaction Documents or related thereto are held to be within the meaning of
“interest” or another applicable term to otherwise be violative of applicable
law, such amounts shall be pro-rated over the period of time to which they
relate.

 

(e)                                  Entire Agreement; Amendments.  This
Agreement, the other Transaction Documents and the schedules and exhibits
attached hereto and thereto and the instruments referenced herein and therein
supersede all other prior oral or written agreements between the Buyers, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf,
including, without limitation, any transactions by any Buyer with respect to
Common Stock or the Securities, and the other matters contained herein and
therein, and this Agreement, the other Transaction Documents, the schedules and
exhibits attached hereto and thereto and the instruments referenced herein and
therein

 

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contain the entire understanding of the parties solely with respect to the
matters covered herein and therein; provided, however, nothing contained in this
Agreement or any other Transaction Document shall (or shall be deemed to)
(i) have any effect on any agreements any Buyer has entered into with, or any
instruments any Buyer has received from, the Company or any of its Subsidiaries
prior to the date hereof with respect to any prior investment made by such Buyer
in the Company or (ii) waive, alter, modify or amend in any respect any
obligations of the Company or any of its Subsidiaries, or any rights of or
benefits to any Buyer or any other Person, in any agreement entered into prior
to the date hereof between or among the Company and/or any of its Subsidiaries
and any Buyer, or any instruments any Buyer received from the Company and/or any
of its Subsidiaries prior to the date hereof, and all such agreements and
instruments shall continue in full force and effect.  Except as specifically set
forth herein or therein, neither the Company nor any Buyer makes any
representation, warranty, covenant or undertaking with respect to such matters. 
For clarification purposes, the Recitals are part of this Agreement.  No
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Required Holders, and any amendment to any
provision of this Agreement made in conformity with the provisions of this
Section 9(e) shall be binding on all Buyers and holders of Securities, as
applicable; provided that no such amendment shall be effective to the extent
that it (A) applies to less than all of the holders of the Securities then
outstanding or (B) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s
sole discretion).  No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party, provided that the
Required Holders may waive any provision of this Agreement, and any waiver of
any provision of this Agreement made in conformity with the provisions of this
Section 9(e) shall be binding on all Buyers and holders of Securities, as
applicable, provided that no such waiver shall be effective to the extent that
it (1) applies to less than all of the holders of the Securities then
outstanding (unless a party gives a waiver as to itself only) or (2) imposes any
obligation or liability on any Buyer without such Buyer’s prior written consent
(which may be granted or withheld in such Buyer’s sole discretion).  No
consideration (other than reimbursement of legal fees) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision
of any of the Transaction Documents unless the same consideration also is
offered to all of the parties to the Transaction Documents, all holders of the
Convertible Notes.  From the date hereof and while any Convertible Notes are
outstanding, the Company shall not be permitted to receive any consideration
from a Buyer or a holder of Convertible Notes that is not otherwise contemplated
by the Transaction Documents in order to, directly or indirectly, induce the
Company or any Subsidiary (i) to treat such Buyer or holder of Convertible Notes
in a manner that is more favorable than to other similarly situated Buyers or
holders of Convertible Notes, or (ii) to treat any Buyer(s) or holder(s) of
Convertible Notes in a manner that is less favorable than the Buyer or holder of
Convertible Notes that is paying such consideration; provided, however, that the
determination of whether a Buyer has been treated more or less favorably than
another Buyer shall disregard any securities of the Company purchased or sold by
any Buyer.  The Company has not, directly or indirectly, made any agreements
with any Buyers relating to the terms or conditions of the transactions
contemplated by the Transaction Documents except as set forth in the Transaction
Documents.  Without limiting the foregoing, the Company confirms that, except as
set forth in this Agreement, no Buyer has made any commitment or promise or has
any other obligation to provide any financing to the Company, any Subsidiary or
otherwise.  As a material inducement for each Buyer to enter into this
Agreement, the Company expressly acknowledges and agrees that (x) no due
diligence or other investigation or inquiry conducted by a Buyer, any of its
advisors or any of its representatives shall affect such Buyer’s right to rely
on, or shall modify or qualify in any manner or be an exception to any of, the
Company’s representations and warranties contained in this Agreement or any
other Transaction Document and (y) unless a provision of this Agreement or any
other Transaction Document is expressly preceded by the phrase “except as
disclosed in the SEC Documents,” nothing contained in any of the SEC Documents
shall affect such Buyer’s right to rely on, or shall modify or qualify in any
manner or be an exception to any of, the Company’s representations and
warranties contained in this Agreement or any other Transaction Document. 
“Required Holders” means (I) prior to the Closing Date, each Buyer entitled to
purchase Convertible Notes at the Closing and (II) on or after the Closing Date,
holders of a majority of the Conversion Shares as of such time (excluding any
Conversion Shares held by the Company or any of its Subsidiaries as of such
time) issued or issuable hereunder or pursuant to the Convertible Notes.

 

(f)                                   Notices.  Any notices, consents, waivers
or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered: 
(i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party) or electronic
mail (provided that such sent email is kept on file (whether electronically or
otherwise) by the sending party and the sending party does not

 

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receive an automatically generated message from the recipient’s email server
that such e-mail could not be delivered to such recipient); or (iii) one
(1) Business Day after deposit with an overnight courier service with next day
delivery specified, in each case, properly addressed to the party to receive the
same.  The addresses, facsimile numbers and e-mail addresses for such
communications shall be:

 

If to the Company:

 

Plug Power Inc.
968 Albany Shaker Road
Latham, New York 12110

 

Telephone:  (518) 738-0970
Facsimile:  (518) 782-7884
Attention:  General Counsel
E-Mail:  gconway@plugpower.com

 

With a copy (for informational purposes only) to:

 

Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
Telephone:  (617) 570-1394
Facsimile:  (617) 801-8906
Attention:  Robert P. Whalen, Jr.
E-Mail:  RWhalen@goodwinlaw.com

 

If to the Transfer Agent:

 

Broadridge Corporate Issuer Solutions, Inc.,
1717 Arch Street, Suite 1300
Philadelphia, Pennsylvania 19103

 

Telephone:  (201) 714-3169

 

Attention:  Kayur Patel
E-Mail:  Kayur.Patel@broadridge.com

 

If to a Buyer, to its e-mail address and facsimile number set forth on the
Schedule of Buyers, with copies to such Buyer’s representatives as set forth on
the Schedule of Buyers,

 

with a copy (for informational purposes only) to:

 

Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
Telephone:  (212) 906-1200
Facsimile:  (212) 751-4864
Attention:  Peter N. Handrinos, Esq.
E-mail:  peter.handrinos@lw.com

 

or to such other address, e-mail address and/or facsimile number and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine or e-mail containing
the time, date, recipient facsimile number and, with respect to each facsimile
transmission, an image of the first page of such transmission or (C) provided by
an overnight courier service shall be rebuttable evidence of personal

 

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service, receipt by facsimile or receipt from an overnight courier service in
accordance with clause (i), (ii) or (iii) above, respectively.

 

(g)                                  Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns, including any purchasers of any of the
Convertible Notes.  The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Required Holders,
including, without limitation, by way of a Fundamental Change (as defined in the
Convertible Notes) (unless the Company is in compliance with the applicable
provisions governing Fundamental Changes set forth in the Convertible Notes).  A
Buyer may assign some or all of its rights hereunder in connection with any
transfer of any of its Securities without the consent of the Company, provided
such assignee agrees in writing to be bound by the provisions hereof that apply
to Buyers in which event such assignee shall be deemed to be a Buyer hereunder
with respect to such assigned rights.

 

(h)                                 No Third Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, other than the Indemnitees
referred to in Section 9(k).

 

(i)                                     Survival.  The representations,
warranties, agreements and covenants shall survive the Closing.  Each Buyer
shall be responsible only for its own representations, warranties, agreements
and covenants hereunder.

 

(j)                                    Further Assurances.  Each party shall do
and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as any other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

(k)                                 Indemnification.

 

(i)                                     In consideration of each Buyer’s
execution and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company’s other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless each Buyer and each holder of any Securities and all of their
stockholders, partners, members, officers, directors, employees and direct or
indirect investors and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to
(i) any misrepresentation or breach of any representation or warranty made by
the Company or any Subsidiary in any of the Transaction Documents, (ii) any
breach of any covenant, agreement or obligation of the Company or any Subsidiary
contained in any of the Transaction Documents or (iii) any cause of action,
suit, proceeding or claim brought or made against such Indemnitee by a third
party (including for these purposes a derivative action brought on behalf of the
Company or any Subsidiary) or which otherwise involves such Indemnitee that
arises out of or results from (A) the execution, delivery, performance or
enforcement of any of the Transaction Documents, or (B) the status of such Buyer
or holder of the Securities either as an investor in the Company pursuant to the
transactions contemplated by the Transaction Documents or as a party to this
Agreement (including, without limitation, as a party in interest or otherwise in
any action or proceeding for injunctive or other equitable relief); provided,
however, that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arise primarily out of or is
based upon the inaccuracy of any representations and warranties made by such
Buyer herein.  To the extent that the foregoing undertaking by the Company may
be unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.

 

(ii)                                  Promptly after receipt by an Indemnitee 
under this Section 9(k) of notice of the commencement of any action or
proceeding (including, without limitation, any governmental action or

 

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proceeding) involving an Indemnified Liability, such Indemnitee shall, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 9(k), deliver to the 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 Indemnitee; provided, however, that an Indemnitee 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 Indemnified Liability and to employ
counsel reasonably satisfactory to such Indemnitee in any such Indemnified
Liability; or (iii) the named parties to any such Indemnified Liability
(including, without limitation, any impleaded parties) include both such
Indemnitee and the indemnifying party, and such Indemnitee shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnitee and the indemnifying party (in which
case, if such Indemnitee 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 Indemnitee.  The Indemnitee 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 Indemnitee
which relates to such Indemnified Liability.  The indemnifying party shall keep
the Indemnitee 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 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 Indemnitee,
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 Indemnitee of a release from all liability in
respect to such Indemnified Liability , and such settlement shall not include
any admission as to fault on the part of the Indemnitee.  Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnitee 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 Indemnitee under this Section 9(k),
except to the extent that the indemnifying party is materially and adversely
prejudiced in its ability to defend such action.  The indemnification required
by this Section 9(k) shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or Indemnified Liabilities are incurred.  The indemnity and
contribution agreements contained herein shall be in addition to (i) any cause
of action or similar right of the Indemnitees against the indemnifying party or
others, and (ii) any liabilities the indemnifying party may be subject to
pursuant to the law.

 

(l)                                     Construction.  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.  No specific representation or warranty shall limit the generality or
applicability of a more general representation or warranty.  Each and every
reference to share prices, shares of Common Stock and any other numbers in this
Agreement that relate to the Common Stock shall be automatically adjusted for
any stock splits, stock dividends, stock combinations, recapitalizations or
other similar transactions that occur with respect to the Common Stock after the
date of this Agreement.  Notwithstanding anything in this Agreement to the
contrary, for the avoidance of doubt, nothing contained herein shall constitute
a representation or warranty against, or a prohibition of, any actions with
respect to the borrowing of, arrangement to borrow, identification of the
availability of, and/or securing of, securities of the Company in order for such
Buyer (or its broker or other financial representative) to effect short sales or
similar transactions in the future.

 

(m)                             Remedies.  Each Buyer and in the event of
assignment by Buyer of its rights and obligations hereunder, each holder of
Securities, shall have all rights and remedies set forth in the Transaction
Documents and all rights and remedies which such holders have been granted at
any time under any other agreement or contract and

 

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all of the rights which such holders have under any law.  Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such
rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.  Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of
its obligations under the Transaction Documents, any remedy at law would be
inadequate relief to the Buyers.  The Company therefore agrees that the Buyers
shall be entitled to specific performance and/or temporary, preliminary and
permanent injunctive or other equitable relief from any court of competent
jurisdiction in any such case without the necessity of proving actual damages
and without posting a bond or other security.  The remedies provided in this
Agreement and the other Transaction Documents shall be cumulative and in
addition to all other remedies available under this Agreement and the other
Transaction Documents, at law or in equity (including a decree of specific
performance and/or other injunctive relief).

 

(n)                                 Withdrawal Right.  Notwithstanding anything
to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Buyer exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its obligations within the periods therein provided, then such Buyer may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.

 

(o)                                 Payment Set Aside; Currency.  To the extent
that the Company makes a payment or payments to any Buyer hereunder or pursuant
to any of the other Transaction Documents or any of the Buyers enforce or
exercise their rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred.  Unless otherwise
expressly indicated, all dollar amounts referred to in this Agreement and the
other Transaction Documents are in United States Dollars (“U.S. Dollars”), and
all amounts owing under this Agreement and all other Transaction Documents shall
be paid in U.S. Dollars.  All amounts denominated in other currencies (if any)
shall be converted into the U.S. Dollar equivalent amount in accordance with the
Exchange Rate on the date of calculation.  “Exchange Rate” means, in relation to
any amount of currency to be converted into U.S. Dollars pursuant to this
Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal
on the relevant date of calculation.

 

(p)                                 Judgment Currency.

 

(i)                                     If for the purpose of obtaining or
enforcing judgment against the Company in connection with this Agreement or any
other Transaction Document in any court in any jurisdiction it becomes necessary
to convert into any other currency (such other currency being hereinafter in
this Section 9(p) referred to as the “Judgment Currency”) an amount due in U.S.
Dollars under this Agreement, the conversion shall be made at the Exchange Rate
prevailing on the Business Day immediately preceding:

 

(1)                                 the date actual payment of the amount due,
in the case of any proceeding in the courts of New York or in the courts of any
other jurisdiction that will give effect to such conversion being made on such
date; or

 

(2)                                 the date on which the foreign court
determines, in the case of any proceeding in the courts of any other
jurisdiction (the date as of which such conversion is made pursuant to this
Section 9(p)(i)(2) being hereinafter referred to as the “Judgment Conversion
Date”).

 

(ii)                                  If in the case of any proceeding in the
court of any jurisdiction referred to in Section 9(p)(i)(2)  above, there is a
change in the Exchange Rate prevailing between the Judgment Conversion Date and
the date of actual payment of the amount due, the applicable party shall pay
such

 

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

 

adjusted amount as may be necessary to ensure that the amount paid in the
Judgment Currency, when converted at the Exchange Rate prevailing on the date of
payment, will produce the amount of U.S. Dollars which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
order at the Exchange Rate prevailing on the Judgment Conversion Date.

 

(iii)                               Any amount due from the Company under this
provision shall be due as a separate debt and shall not be affected by judgment
being obtained for any other amounts due under or in respect of this Agreement
or any other Transaction Document.

 

(q)                                 Performance Date.  If the date by which any
obligation under any of the Transaction Documents must be performed occurs on a
day other than a Business Day, then the date by which such performance is
required shall be the next Business Day following such date.

 

[signature pages follow]

 

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

 

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Agreement to be duly executed as of the date first
written above.

 

 

COMPANY:

 

 

 

PLUG POWER INC.

 

 

 

 

By:

/s/ Andrew Marsh

 

 

Name:

Andrew Marsh

 

 

Title:

President and Chief Executive Officer

 

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

 

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Agreement to be duly executed as of the date first
written above.

 

 

BUYER:

 

 

 

HT INVESTMENTS MA LLC

 

 

 

 

By:

/s/ Eric Helenek

 

 

Name:

Eric Helenek

 

 

Title:

Authorized Signatory

 

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

 

SCHEDULE OF BUYERS

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

Buyer

 

Address and Facsimile Number

 

Aggregate
Principal
Amount of
Convertible
Notes

 

Purchase Price

 

Legal Representative’s
Address and Facsimile
Number

HT Investments MA LLC

 

Facsimile: (917)-905-9799
E-Mail: notices@hightrailcap.com

 

$

40,000,000.00

 

$

39,200,000.00

 

Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
Telephone: (212) 906-1200
Facsimile: (212) 751-4864
Attention: Peter N. Handrinos, Esq.

TOTAL

 

 

 

$

40,000,000.00

 

$

39,200,000.00

 

 

 

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