EXHIBIT 10.1

 

 

SECURITIES EXCHANGE AGREEMENT

 

This SECURITIES EXCHANGE AGREEMENT (the “Agreement”), dated as of November 8,
2019, is by and among Amyris, Inc., a Delaware corporation with offices located
at 5885 Hollis Street, Suite 100, Emeryville, CA 94608 (the “Company”), and each
of the investors listed on the Schedule of Buyers attached hereto (individually,
a “Buyer” and collectively, the “Buyers”).

 

RECITALS

 

A.       Each Buyer is a holder of senior convertible notes in the principal
amount set forth with respect to such Buyer on the Schedule of Buyers,
representing an aggregate principal amount of $47,825,316.27 (such senior
convertible notes, the “Prior Convertible Notes”).

 

B.       The Company and the Buyers are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by Section
3(a)(9) of the Securities Act of 1933, as amended (the “1933 Act”).

 

C.       The Company has authorized a new series of senior convertible notes of
the Company, in the aggregate original principal amount of $66,000,000,
substantially in the form attached hereto as Exhibit A (the “Notes”), which
Notes shall be convertible into shares of Common Stock (as defined below) (the
shares of Common Stock issuable pursuant to the terms of the Notes, including,
without limitation, the Pre-Delivery Shares (as defined in the Notes) and any
other shares of Common Stock issuable upon conversion or otherwise,
collectively, the “Conversion Shares”), in accordance with the terms of the
Notes.

 

D.       Each Buyer and the Company wish to exchange a Prior Convertible Note
for a Note in the aggregate original principal amount set forth opposite such
Buyer’s name in column (3) on the Schedule of Buyers.

 

E.       At or before the Closing (as defined below), each of the parties set
forth on Exhibit B hereto shall execute and deliver a Voting Agreement, in the
form attached hereto as Exhibit C (each such agreement, a “Voting Agreement”),
pursuant to which such party shall agree to vote its shares of the Company’s
Common Stock in favor of providing the Requisite Stockholder Approval (as
defined in the Note).

 

F.       The 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.                   EXCHANGE OF NOTES.

 

(a)                 Closing. The closing (the “Closing”) of the exchange of the
Prior Convertible Notes for the Notes by the Buyers and the Company 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.

 

(b)                Form of Payment; Exchange of Prior Convertible Notes. On the
Closing Date, (i) each Buyer shall tender a Prior Convertible Note to the
Company in exchange for a Note, (ii) immediately thereafter, the Company shall
deliver to each Buyer a Note in the aggregate original principal amount as is
set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers in
exchange for the Prior Convertible Notes, duly executed on behalf of the Company
and registered in the name of Buyer or its designee, and (iii) the Company will
issue, pursuant to the terms of the Notes, to each Buyer the number of
Pre-Delivery Shares as is set forth opposite such Buyer’s name in column (4) of
the Schedule of Buyers. For the avoidance of doubt, unless each of the
transactions set forth in clauses (i)-(iii) in the preceding sentence shall be
consummated on the Closing Date, none of such transactions will be consummated
on the Closing Date.

 

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2.                   BUYER’S REPRESENTATIONS AND WARRANTIES.

 

Each Buyer, severally and not jointly, represents and warrants to the Company
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)                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 been afforded the opportunity to ask questions of the Company. 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 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 Securities. Such Buyer acknowledges that,
except for the matters that are expressly covered by the provisions of this
Agreement, such Buyer is relying on its own investigation and analysis in
entering into this Agreement and consummating the transactions contemplated
hereby.

 

(c)                 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.

 

(d)                Transfer or Resale. Such Buyer understands that except as
provided in Section 4(g) 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 by the United States Securities and Exchange Commission (the
“SEC”) promulgated thereunder; and (ii) 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. 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 and such pledge of Securities shall not be
deemed to be a transfer, sale or assignment of the Securities hereunder, and
such Buyer shall not 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 in connection with effecting a pledge of Securities,
including, without limitation, this Section 2(d). 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.

 

(e)                 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 obligations of such Buyer enforceable
against such Buyer in accordance with its 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.

 

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(f)                  No Conflicts. The execution, delivery and performance by
such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby 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 (as defined below) on the ability of such Buyer to perform its
obligations hereunder.

 

3.                   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

Except as set forth in the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation or warranty
otherwise made herein to the extent of the disclosure contained in the
corresponding section of the Disclosure Schedules, the Company represents and
warrants to each of the Buyers that, as of the date hereof and as of the Closing
Date:

 

(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 and as presently proposed to be 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 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 any Subsidiary, individually or 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 (as defined below). Other
than the Persons (as defined below) set forth in Exhibit 21.01 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2018, the
Company has no Subsidiaries. “Subsidiaries” means any Person that would be a
“significant subsidiary” of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC, as such regulation is in effect on the
date hereof, and each of the foregoing 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. The execution and delivery of
this Agreement and the other 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 Notes and the reservation
for issuance and issuance of the Conversion Shares issuable upon conversion of
the Notes) have been duly authorized by the Company’s board of directors or
other governing body, as applicable, and (other than the filing with the SEC of
a Current Report on Form 8-K with the SEC, a Listing of Additional Shares
notification form with the Principal Market (as defined below) and any other
filings as may be required by any state securities agencies) no further filing,
consent or authorization with or of any Governmental Entity 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 Notes and the Irrevocable Transfer Agent
Instructions (as defined below).

 

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(c)                 Issuance of Securities. The issuance of the Notes is duly
authorized and upon issuance in accordance with the terms of the Transaction
Documents, after giving effect to any consents or waivers received by the
Company on or prior to the Closing Date, 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. As of the Closing, the Company shall have
reserved from its duly authorized capital stock that number of shares of Common
Stock not less than 300% of the number of shares of Common Stock as shall from
time to time be necessary to effect the conversion of the Notes (without regard
to any limitations on conversions and assuming the Notes remains outstanding
until the Maturity Date (as defined in the Note)) at the Event of Default
Conversion Price (as defined in the Note) then in effect (the “Required Reserve
Amount”). Upon issuance or conversion in accordance with the Notes, after giving
effect to any consents or waivers received by the Company on or prior to the
Closing Date, 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.

 

(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 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) (including, without limitation, any
certificate of designation contained therein) or Bylaws (as defined below) of
the Company, 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 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, after giving effect to any consents or
waivers received by the Company on or prior to the Closing Date or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree
(including, without limitation, applicable foreign, federal and state securities
laws and regulations and the rules and regulations of the Nasdaq Global Select
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, except in the case of each of clauses (ii)
and (iii) above, for any such conflict, default or violation that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

(e)                 Consents. Neither the Company nor any Subsidiary is required
to obtain any consent from, or authorization or order of, or make any filing or
registration with (other than the filing with the SEC of a Current Report on
Form 8-K with the SEC, a Listing of Additional Shares notification form with the
Principal Market and any other filings as may be required by any state
securities agencies), 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. 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 could reasonably be expected to 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 in the foreseeable future. “Governmental
Entity” means any applicable 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
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.

 

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(g)                Placement Agent’s Fees. Neither the Company nor any of its
Subsidiaries has engaged any placement agent, financial advisor or other agent
in connection with the offer or sale of the Securities.

 

(h)                No Integrated Offering. None of the Company, its Subsidiaries
or, to the Company’s knowledge, 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 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, or, to the Company’s knowledge, their affiliates nor
any Person acting on their behalf will take any action or steps that would
require registration of the issuance of any of the Securities under the 1933 Act
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 Notes in accordance with this Agreement and the
Notes are, in each case, 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; Rights Agreement. The
Company and its board of directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, interested
stockholder, business combination, poison pill (including, without limitation,
any distribution under a rights agreement), 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 or otherwise which is or could become applicable to the Buyers as
a result of the transactions contemplated by this Agreement, including, without
limitation, the Company’s issuance of the Securities and each Buyer’s ownership
of the Securities. The Company and its board of directors have taken all
necessary action, if any, in order to render inapplicable any stockholder rights
plan or similar arrangement relating to accumulations of beneficial ownership of
shares of Common Stock or a change in control of the Company or any of its
Subsidiaries.

 

(k)                SEC Documents; Financial Statements. During the two (2) years
prior to the date hereof, the Company has filed all reports, schedules, forms,
proxy statements, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act (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”). The Company has delivered or has made available to each Buyer
or its representatives true, correct and complete copies of each of the SEC
Documents not available on the EDGAR system. 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, except as
set forth in the Company’s Annual Report on Form 10-K filed with the SEC on
October 1, 2019, 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). The reserves, if any, established by the Company or the lack of
reserves, if applicable, are reasonable based upon facts and circumstances known
by the Company on the date hereof and there are no loss contingencies that are
required to be accrued by the Statement of Financial Accounting Standard No. 5
of the Financial Accounting Standards Board which are not provided for by the
Company in its financial statements or otherwise. 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 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.

 

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(l)                  Absence of Certain Changes. Except as set forth in the SEC
Documents, since the date of the Company’s most recent audited financial
statements contained in a Form 10-K, 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. Except as set
forth in the SEC Documents, since the date of the Company’s most recent audited
financial statements contained in a Form 10-K, 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. Except as set forth in the SEC
Documents, 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. Neither the
Company nor any of its Subsidiaries has engaged in any business or in any
transaction, and is not about to engage in any business or in any transaction,
for which the Company’s or such Subsidiary’s remaining assets constitute
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted.

 

(m)               No Undisclosed Events, Liabilities, Developments or
Circumstances. Except for the transactions contemplated by the Transaction
Documents, no event, liability, development or circumstance has occurred or
exists, or is reasonably expected to exist or occur with respect to the Company,
any of its Subsidiaries or any of their respective businesses, properties,
liabilities, prospects, operations (including results thereof) or condition
(financial or otherwise), that (i) would be required to be disclosed by the
Company under applicable securities laws on a registration statement on Form S-1
filed with the SEC relating to an issuance and sale by the Company of its Common
Stock and which has not been publicly announced, (ii) would reasonably be
expected to have a Material Adverse Effect on any Buyer’s investment hereunder
or (iii) would reasonably be expected to have a Material Adverse Effect.

 

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(n)                Conduct of Business; Regulatory Permits. Neither the Company
nor any of its Subsidiaries is in material violation of any term of or in
default under its Certificate of Incorporation, any certificate of designation,
preferences or rights of any other outstanding series of preferred stock of the
Company or any of its Subsidiaries or Bylaws or their organizational charter,
certificate of formation, memorandum of association, articles of association,
Certificate of Incorporation or certificate of incorporation or bylaws,
respectively. Neither the Company nor any of its Subsidiaries is in material
violation of any judgment, decree or order or any statute, ordinance, rule or
regulation applicable to the Company or any of its Subsidiaries, and neither the
Company nor any of its Subsidiaries will conduct its business in violation of
any of the foregoing, except in all cases for possible violations which would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Without limiting the generality of the foregoing, the Company is
not in material violation of any of the rules, regulations or requirements of
the Principal Market and has no knowledge of any facts or circumstances that
could reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future. Except as set forth in SEC
Documents, 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) except as set forth in the SEC Documents, 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, individually or
in the aggregate, reasonably be expected to have 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. There is no agreement, commitment, judgment,
injunction, order or decree binding upon the Company or any of its Subsidiaries
or to which the Company or any of its Subsidiaries is a party which has or would
reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of the Company or any of its Subsidiaries, any acquisition
of property by the Company or any of its Subsidiaries or the conduct of business
by the Company or any of its Subsidiaries as currently conducted other than such
effects, individually or in the aggregate, which have not had and would not
reasonably be expected to have a Material Adverse Effect on the Company or any
of its Subsidiaries.

 

(o)                Foreign Corrupt Practices. None of the Company, the Company’s
Subsidiaries or any Company director or officer, or, to the Company’s knowledge,
any Company agent or employee (individually and collectively, a “Company
Affiliate”) has 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.

 

(p)                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.

 

 7 

 

 

(q)                Transactions With Affiliates. Except as set forth in the SEC
Documents, none of the officers or directors of the Company or its Subsidiaries
and, to the knowledge of the Company, none of the employees of the Company or
its Subsidiaries is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and directors)
required to be disclosed under Item 404 of Regulation S-K under the 1934 Act.

 

(r)                  Equity Capitalization.

 

(i)                  Definitions:

 

(A)               “Common Stock” means (x) the Company’s shares of common stock,
$0.0001 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.

 

(B)               “Preferred Stock” means (x) the Company’s blank check
preferred stock, $0.0001 par value per share, the terms of which may be
designated by the board of directors of the Company in a certificate of
designations, and (y) any capital stock into which such preferred stock shall
have been changed or any share capital resulting from a reclassification of such
preferred stock (other than a conversion of such preferred stock into Common
Stock in accordance with the terms of such certificate of designations).

 

(ii)                Authorized and Outstanding Capital Stock. The authorized,
issued and outstanding shares of capital stock of the Company are as set forth
in the SEC Documents (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements, employee benefit or equity
incentive plans referred to in the SEC Documents or pursuant to the exercise of
convertible securities, warrants or options referred to in the SEC Documents).

 

(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. The SEC Documents
accurately set forth, as of the dates referred to therein, the number of shares
of Common Stock that are (A) reserved for issuance pursuant to Convertible
Securities (as defined below) (other than the Notes) and (B) that are, as of the
date referred to therein, owned by Persons who are “affiliates” (as defined in
Rule 405 of the 1933 Act and calculated based on the assumption that only
officers, directors and holders of at least 10% of the Company’s issued and
outstanding Common Stock are “affiliates” without conceding that any such
Persons are “affiliates” for purposes of federal securities laws) of the Company
or any of its Subsidiaries.

 

(iv)               Existing Securities; Obligations. Except as disclosed on
Schedule 3(r)(iv), or, in the case of clauses (B), (C) and (D), 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, in each case requiring redemption or
repurchase by the Company or any of its Subsidiaries at the election of the
holder thereof, 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 at the
election of the holder thereof; (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.

 

 8 

 

 

(v)                Organizational Documents. True, correct and complete copies
of the Company’s Restated Certificate of Incorporation, as amended and as in
effect on the date hereof (the “Certificate of Incorporation”), and the
Company’s Restated Bylaws, 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, are set forth in, or filed as exhibits to, the SEC
Documents.

 

(s)                 Indebtedness and Other Contracts. Except as set forth on
Schedule 3(s), neither the Company nor any of its Subsidiaries, (i) has any
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, in each case in excess of $1,000,000
principal amount, or in excess of $2,000,000 in aggregate principal amount, (ii)
is a party to any contract, agreement or instrument, the violation of which, or
default under which, by the other party(ies) to such contract, agreement or
instrument would reasonably be expected to result in a Material Adverse Effect,
(iii) 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 reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Effect, or (iv) 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.

 

(t)                  Litigation. Except as set forth in the SEC Documents, there
is no action, claim, suit, investigation or proceeding, whether commenced or
threatened, before any court, governmental agency or body, domestic or foreign,
now pending or, to the knowledge of the Company, threatened against the Company
or its Subsidiaries wherein an unfavorable decision, ruling or finding would
reasonably be expected to, individually or in the aggregate, (i) materially
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, the Transaction Documents or
(ii) have a Material Adverse Effect. The Company is not a party to or subject to
the provisions of any injunction, judgment, decree or order of any court,
regulatory body, administrative agency or other governmental agency or body that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

 9 

 

 

(u)                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. Neither the Company nor any such Subsidiary has been
refused any insurance coverage sought or applied for, and neither the Company
nor any such Subsidiary has any reason to believe that it will be unable to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.

 

(v)                Employee Relations. The Company is not a party to any
collective bargaining agreement and does not employ 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 Company’s knowledge,
no executive officer or other key employee of the Company or any of its
Subsidiaries is, or is now expected to be, in material 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. The Company and its Subsidiaries are in
compliance with all 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.

 

(w)               Title.

 

(i)                  Real Property. 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 (the “Real Property”) owned by the Company or any of its
Subsidiaries (as applicable). Except as set forth in the SEC Documents, the Real
Property is free and clear of all Liens and is not subject to any material
rights of way, building use restrictions, exceptions, variances, reservations,
or limitations of any nature except for (a) Liens for current taxes not yet due
and (b) zoning laws and other land use restrictions that do not impair the
present or anticipated use of the property subject thereto. Any Real Property
held under lease by the Company or any of its Subsidiaries is held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company or any of its Subsidiaries.

 

(ii)                Fixtures and Equipment. Each of the Company and its
Subsidiaries (as applicable) has good title to, or a valid leasehold interest
in, the tangible personal property, equipment, improvements, fixtures, and other
personal property and appurtenances that are used by the Company or its
Subsidiary in connection with the conduct of its business (the “Fixtures and
Equipment”). The Fixtures and Equipment are structurally sound, are in good
operating condition and repair, are adequate for the uses to which they are
being put, are not in need of maintenance or repairs except for ordinary,
routine maintenance and repairs and are sufficient for the conduct of the
Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as
conducted prior to the Closing. Except as set forth in the SEC Documents, each
of the Company and its Subsidiaries owns all of its Fixtures and Equipment free
and clear of all Liens except for (a) liens for current taxes not yet due and
(b) zoning laws and other land use restrictions that do not impair the present
or anticipated use of the property subject thereto.

 

(x)                Potential Products; FDA; EMEA.

 

(i)                  Except as described in the SEC Documents, the Company
possesses all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct its
business as currently conducted, including without limitation all such
certificates, authorizations and permits required by the United States Food and
Drug Administration (the “FDA”) or any other federal, state or foreign agencies
or bodies engaged in the regulation of pharmaceuticals or biohazardous
materials, except where the failure to so possess such certificates,
authorizations and permits, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect. Except as
described in the SEC Documents, the Company has not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would reasonably be expected to
have a Material Adverse Effect.

 

 10 

 

 

(ii)                Except to the extent disclosed in the SEC Documents, the
Company has not received any written notices or statements from the FDA, the
European Medicines Agency (the “EMEA”) or any other governmental agency, and
otherwise has no knowledge or reason to believe, that (i) any product of the
Company described in the SEC Documents (each a “Potential Product”) may or will
be rejected or determined to be non-approvable; (ii) a delay in time for review
and/or approval of a marketing authorization application or marketing approval
application in any jurisdiction for any Potential Product is or may be required,
requested or being implemented; (iii) one or more clinical studies for any
Potential Product shall or may be requested or required in addition to the
clinical studies submitted to the FDA prior to the date hereof as a precondition
to or condition of issuance or maintenance of a marketing approval for any
Potential Product; or (iv) any license, approval, permit or authorization to
conduct any clinical trial of or market any product or Potential Product of the
Company has been, will be or may be suspended, revoked, modified or limited,
except in the cases of clauses (i), (ii), (iii) and (iv) where such rejections,
determinations, delays, requests, suspensions, revocations, modifications or
limitations would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

 

(iii)              Except to the extent disclosed in the SEC Documents, to the
Company’s knowledge, the preclinical and clinical testing, application for
marketing approval of, manufacture, distribution, promotion and sale of the
products and Potential Products of the Company is in compliance, in all material
respects, with all applicable laws, rules and regulations applicable to such
activities, including without limitation applicable good laboratory practices,
good clinical practices and good manufacturing practices, except for such
non-compliance as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The descriptions of the results of
such tests and trials contained in the SEC Documents are complete and accurate
in all material respects such that there would be no untrue statement of a
material fact or omission of a material fact necessary to make the statements in
the SEC Documents, in light of the circumstances under which they are made, not
misleading. The Company is not aware of any studies, tests or trial the results
of which reasonably call into question the results of the tests and trials
conducted by or on behalf of the Company that are described or referred to in
the SEC Documents. Except to the extent disclosed in the SEC Documents, the
Company has not received notice of adverse finding, warning letter or clinical
hold notice from the FDA or any non-U.S. counterpart of any of the foregoing, or
any untitled letter or other correspondence or notice from the FDA or any other
governmental authority or agency or any institutional or ethical review board
alleging or asserting noncompliance with any law, rule or regulation applicable
in any jurisdiction, except notices, letters, and correspondences and non-U.S.
counterparts thereof alleging or asserting such noncompliance as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except to the extent disclosed in the SEC Documents, the Company
has not, either voluntarily or involuntarily, initiated, conducted or issued, or
caused to be initiated, conducted or issued, any recall, field correction,
market withdrawal or replacement, safety alert, warning, “dear doctor” letter,
investigator notice, or other notice or action relating to an alleged or
potential lack of safety or efficacy of any product or Potential Product of the
Company, any alleged product defect of any product or Potential Product of the
Company, or any violation of any material applicable law, rule, regulation or
any clinical trial or marketing license, approval, permit or authorization for
any product or potential product of the Company, and the Company is not aware of
any facts or information that would cause it to initiate any such notice or
action and has no knowledge or reason to believe that the FDA, the EMEA or any
other governmental agency or authority or any institutional or ethical review
board or other non-governmental authority intends to impose, require, request or
suggest such notice or action.

 

(y)                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 in all material respects. The SEC Documents accurately describe the
material patents owned by the Company or any of its Subsidiaries. Except as set
forth in the SEC Documents, none of the Company’s material Intellectual Property
Rights have expired or terminated or have been abandoned or are expected to
expire or terminate or are expected to be abandoned, within three years from the
date of this Agreement. 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, being threatened, against the Company or any of
its Subsidiaries regarding its Intellectual Property Rights, except for such
claims, actions or proceedings that would not, individually or the in aggregate,
be reasonably expected to have a Material Adverse Effect. Neither the Company
nor any of its Subsidiaries is aware of any facts or circumstances which might
give rise to any of the foregoing infringements or claims, actions or
proceedings. The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
Intellectual Property Rights.

 

 11 

 

 

(z)                 Environmental Laws. 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, in each of the foregoing clauses (A), (B) and (C), the failure
to so comply would be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect. The term “Environmental Laws” means all
applicable 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 letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

 

(i)                  No Hazardous Materials:

 

(A)               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)               are, to the Company’s knowledge, 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. To the Company’s knowledge, 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.

 

(ii)                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.

 

(iii)              None of the Real Property are 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.

 

(aa)              Subsidiary Rights. The Company or one of its Subsidiaries has
the unrestricted right to vote, and (subject to limitations imposed by
applicable law) to receive dividends and distributions on, all capital
securities of its Subsidiaries as owned by the Company or such Subsidiary.

 

(bb)             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, (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 (iii) has set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company and its Subsidiaries know of no basis for any
such claim. The Company is not operated in such a manner as to qualify as a
passive foreign investment company, as defined in Section 1297 of the Internal
Revenue Code of 1986, as amended (the “Code”). The net operating loss
carryforwards (“NOLs”) for United States federal income tax purposes of the
consolidated group of which the Company is the common parent, if any, shall not
be adversely effected by the transactions contemplated hereby. The transactions
contemplated hereby do not constitute an “ownership change” within the meaning
of Section 382 of the Code, thereby preserving the Company’s ability to utilize
such NOLs.

 

 12 

 

 

(cc)              Internal Accounting and Disclosure Controls. Except as set
forth in the SEC Documents, the Company 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. Except as set forth in the SEC
Documents, 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. Except as set forth in the SEC
Documents, the Company has not received any notice or correspondence from any
accountant, Governmental Entity or other Person relating to any material
weakness in any part of the internal controls over financial reporting of the
Company.

 

(dd)             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 would be reasonably likely to have a Material
Adverse Effect.

 

(ee)              Investment Company Status. The Company is not, and upon
consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company” as such terms are defined in the Investment Company
Act of 1940, as amended.

 

(ff)               Acknowledgement Regarding Buyer’s Trading Activity. It is
understood and acknowledged by the Company that (i) following the public
disclosure of the transactions contemplated by the Transaction Documents, in
accordance with the terms thereof, none of the Buyers has been asked by the
Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the
Company or any of its Subsidiaries, to desist from effecting any transactions in
or with respect to (including, without limitation, purchasing or selling, long
and/or short) any securities of the Company, or “derivative” securities based on
securities issued by the Company or to hold any of the Securities for any
specified term; (ii) any Buyer, and counterparties in “derivative” transactions
to which any such Buyer is a party, directly or indirectly, presently may have a
“short” position in the Common Stock which was established prior to such Buyer’s
knowledge of the transactions contemplated by the Transaction Documents; (iii)
each Buyer shall not be deemed to have any affiliation with or control over any
arm’s length counterparty in any “derivative” transaction; and (iv) each Buyer
may rely on the Company’s obligation to timely deliver shares of Common Stock
upon conversion or exchange, as applicable, of the Securities as and when
required pursuant to the Transaction Documents for purposes of effecting trading
in the Common Stock of the Company. The Company further understands and
acknowledges that following the public disclosure of the transactions
contemplated by the Transaction Documents pursuant to the Press Release (as
defined below) one or more Buyers may engage in hedging and/or trading
activities (including, without limitation, the location and/or reservation of
borrowable shares of Common Stock) at various times during the period that the
Securities are outstanding, including, without limitation, during the periods
that the value and/or number of the Conversion Shares deliverable with respect
to the Securities are being determined and such hedging and/or trading
activities (including, without limitation, the location and/or reservation of
borrowable shares of Common Stock), if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the
hedging and/or trading activities are being conducted. The Company acknowledges
that such aforementioned hedging and/or trading activities do not constitute a
breach of this Agreement, the Notes or any other Transaction Document or any of
the documents executed in connection herewith or therewith.

 

 13 

 

 

(gg)             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 in connection with the
offering of the Securities 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.

 

(hh)             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.

 

(ii)                Transfer Taxes. On the Closing Date, 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 in all material respects.

 

(jj)                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
or affiliates owns or controls, directly or indirectly, five percent (5%) or
more of the outstanding shares of any class of voting securities or twenty-five
percent (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 or affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

 

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

 

(ll)                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 any other business entity or
enterprise with which the Company or any Subsidiary is or has been affiliated or
associated, 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 except for personal political contributions
not involving the direct or indirect use of funds of the Company or any of its
Subsidiaries.

 

(mm)         Money Laundering. The Company and its Subsidiaries are in
compliance with, and have not previously violated, 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.

 

(nn)             Management. Except as set forth in the SEC Documents, during
the past five-year period, no current or former officer or director or, to the
knowledge of the Company, current ten percent (10%) or greater stockholder of
the Company or any of its Subsidiaries has been the subject of:

 

 14 

 

 

(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.

 

(oo)             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. No stock option granted under the
Company’s stock option plan has been backdated. The Company has not, and has no
policy or practice to, 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.

 

(pp)             No Disagreements with Accountants and Lawyers. There are no
material disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers
formerly or presently employed by the Company and the Company is current with
respect to any fees owed to its accountants and lawyers which could affect the
Company’s ability to perform any of its obligations under any of the Transaction
Documents. In addition, on or prior to the date hereof, the Company had
discussions with its accountants about its financial statements previously filed
with the SEC. Based on those discussions, the Company has no reason to believe
that it will need to restate any such financial statements or any part thereof.

 

 15 

 

 

(qq)             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.

 

(rr)               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.

 

(ss)               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.

 

(tt)                Ranking of Notes. No Indebtedness of the Company, at the
Closing, will be senior to the Notes in right of payment.

 

(uu)             Disclosure. All disclosure provided to the Buyers regarding the
Company and its Subsidiaries, their businesses and the transactions contemplated
hereby, including the schedules to this Agreement, furnished by or on behalf of
the Company or any of its Subsidiaries is true and correct in all material
respects 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. Each press release issued by the Company or any of its
Subsidiaries during the twelve (12) months preceding the date of this Agreement
did not at the time of release contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading (when taken together with the SEC
Documents). No event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, liabilities, prospects, operations (including results thereof) or
conditions (financial or otherwise), which, under applicable law, rule or
regulation, requires public disclosure at or before the date hereof or
announcement by the Company but which has not been so publicly disclosed. The
draft Form 10-Q for the three month period ended September 30, 2019 and the
related earnings release prepared by the Company and made available to Buyer
shall be consistent in all material respects with any such documents that are
subsequently filed with or furnished to the SEC. The Company acknowledges and
agrees that no Buyer makes and has not made any representations or warranties
with respect to the transactions contemplated hereby other than those
specifically set forth in Section 2.

 

(vv)             Rule 144. The Prior Convertible Notes were initially issued,
and fully paid for, on December 10, 2018. CVI Investments, Inc. is not and has
not been for the preceding three months an affiliate of the Company as defined
in Rule 144. For purposes for the holding period requirements set forth in Rule
144(d), the Notes shall be deemed to have been acquired by the Buyers on
December 10, 2018.

 

(ww)          Prior Convertible Notes. The Prior Convertible Notes constitute
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. The Prior Convertible Notes were
duly authorized and validly issued and is free of any Liens granted to the
Company, or setoff rights on behalf of the Company.

 

(xx)             Contractual Obligations. Except as set forth in Schedule 3(xx),
the Company within the last two (2) years has fulfilled all material contractual
obligations of the Company to its securityholders and the Company has received
no notice of any alleged violation of any such material contractual obligation
or engaged in any negotiations with respect thereto.

 

 16 

 

 

4.                   COVENANTS.

 

(a)                 Reasonable Best Efforts. Each Buyer shall use its reasonable
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 reasonable 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.

 

(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 issuance 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 Buyer.

 

(c)                 Reporting Status. So long as the Notes remain outstanding
and until the date on which the Securities may be resold pursuant to Rule 144
without regard to the availability of “current public information” within the
meaning of Rule 144(c), or, if sooner, such date on which each Buyer shall have
sold all of the Conversion Shares (the “Reporting Period”), the Company shall
timely file all reports required to be filed with the SEC pursuant to the 1934
Act, 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)                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 three (3) Business Days 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 interim reports or any consolidated balance sheets, income statements,
stockholders’ equity statements and/or cash flow statements for any period other
than annual, any Current Reports on Form 8-K and any registration statements
(other than on Form S-8) or amendments filed pursuant to the 1933 Act and (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), within three (3) Business Days after the release thereof, copies of
all press releases issued by the Company or any of its Subsidiaries.

 

(e)                 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 Capital Market or the Nasdaq Global Market (each, an
“Eligible Market”). Neither the Company nor any of its Subsidiaries shall take
any action which would 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(e).

 

(f)                  Fees. The Company shall reimburse [___________] for all
reasonable out-of-pocket costs and expenses incurred by it or its affiliates in
connection with the structuring, documentation, negotiation and closing of the
transactions contemplated by the Transaction Documents (including, without
limitation, as applicable, all reasonable legal fees of outside counsel and
disbursements of Latham & Watkins LLP, counsel to [____________], any other
reasonable fees and expenses in connection with the structuring, documentation,
negotiation and closing of the transactions contemplated by the Transaction
Documents and due diligence and regulatory filings in connection therewith) (the
“Transaction Expenses”) and shall reimburse [___________] for all such
Transaction Expenses (less the $50,000 previously deposited by the Company with
[___________]) at the Closing. 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 or its investment advisor) 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 documented out-of-pocket expenses) arising in
connection with any claim relating to any such payment. The Company agrees to
pay all costs and expenses of each Buyer incurred as a result of enforcement of
the Transaction Documents and the collection of any amounts owed to such Buyer
hereunder (whether in cash, equity or otherwise), including, without limitation,
reasonable attorneys’ fees and expenses. Except as otherwise set forth in the
Transaction Documents, each party to this Agreement shall bear its own expenses
in connection with the issuance of the Notes to the Buyers by the Company in
exchange for the Prior Convertible Notes.

 

 17 

 

 

(g)                Pledge of Securities. Notwithstanding anything to the
contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by a 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 shall not be deemed to be a transfer, sale
or assignment of the Securities hereunder, and no Buyer 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 in
connection with effecting a pledge of Securities, including, without limitation,
Section 2(d) hereof; provided that a Buyer and its pledgee shall be required to
comply with the provisions of Section 2(d) hereof in order to effect a sale,
transfer or assignment of Securities to such pledgee.

 

(h)                Disclosure of Transactions and Other Material Information.

 

(i)                  Disclosure of Transaction. The Company shall, on or before
9:30 a.m., New York time, on the first (1st) Business Day after the date of this
Agreement, issue a press release (the “Press Release”) reasonably acceptable to
the Buyers disclosing all the material terms of the transactions contemplated by
the Transaction Documents. On or before 9:30 a.m., New York time, on the first
(1st) Business Day after the date of this Agreement, the Company shall file a
Current Report on Form 8-K describing all the material terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act
and attaching the form of this Agreement and the form of Note (including all
attachments, the “8-K Filing”). From and after the filing 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,
effective upon the filing of the 8-K Filing, the Company acknowledges and agrees
that any and all confidentiality or similar obligations under any agreement,
whether written or oral, between the Company, any of its Subsidiaries or any of
their respective officers, directors, affiliates, employees or agents, on the
one hand, and each Buyer or any of its affiliates, on the other hand, shall
terminate.

 

(ii)                Limitations on Disclosure. 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 without the express prior written
consent of such Buyer (which may be granted or withheld in such Buyer’s sole
discretion). To the extent that the Company delivers any material, non-public
information to a Buyer without such Buyer’s 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. Subject to the foregoing,
neither the Company, its Subsidiaries nor 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 the Press Release and any press release
or other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and (ii) as is required by applicable law and
regulations. 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
as required by applicable law or regulation. Notwithstanding anything contained
in this Agreement to the contrary and without implication that the contrary
would otherwise be true, the Company expressly acknowledges and agrees that from
the filing of the 8-K Filing, no Buyer shall have (unless expressly agreed to by
such Buyer after the date hereof in a written definitive and binding agreement
executed by the Company and such Buyer) any duty of confidentiality with respect
to any material, non-public information regarding the Company or any of its
Subsidiaries.

 

 18 

 

 

(i)                  Additional Issuance of Securities. So long as any Buyer
beneficially owns a Note, the Company will not, without the prior written
consent of the Required Holders (as defined below), issue any notes of the same
series and the Company shall not issue any other securities that would cause a
breach or default under the Notes. The Company agrees that for the period
commencing on the date hereof and ending immediately following the 90th 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 (as
defined below), any preferred stock or any equity purchase rights) (any such
issuance, offer, sale, grant, disposition or announcement (whether occurring
during the Restricted Period or at any time thereafter) other than to the Buyers
as contemplated hereby is referred to as a “Subsequent Placement”).
Notwithstanding the foregoing, this Section 4(i) shall not apply in respect of
the issuance of (i) shares of Common Stock, restricted stock units, standard
options to purchase Common Stock or other equity awards (and any shares of
Common Stock issued upon exercise or settlement thereof) 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 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 or other securities
issued upon the conversion or exercise of Convertible Securities (other than
standard options to purchase Common Stock 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, the conversion, exercise or issuance price of any
such Convertible Securities (other than standard options to purchase Common
Stock issued pursuant to an Approved Stock Plan that are covered by clause (i)
above) is not lowered, except pursuant to the terms thereof that were in effect
on the date immediately prior to the date of this Agreement, none of such
Convertible Securities (other than standard options to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (i) above)
are amended to increase the number of shares issuable thereunder, except
pursuant to the terms thereof 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
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, except pursuant to the terms thereof that were in effect on the date
immediately prior to the date of this Agreement; (iii) the Conversion Shares;
(iv) securities to affiliates of the Company or to any entities affiliated with
members of the Board of Directors of the Company; (v) the issuance of equity
securities or any equity-linked debt for net proceeds of up to $200 million and
(vi) any shares of Common Stock or Convertible Securities issued or issuable in
connection with strategic or commercial alliances, acquisitions, mergers, and
strategic partnerships, provided, that (x) the primary purpose of such issuance
is not to raise capital as reasonably determined, (y) the purchaser or acquirer
of the securities in such issuance solely consists of either (A) the actual
participants in such strategic or commercial alliance or strategic or commercial
partnership, (B) the actual owners of such assets or securities acquired in such
acquisition or merger or (C) the stockholders, partners or members of the
foregoing Persons, in each case, which is, itself or through its subsidiaries,
an operating company or an owner of an asset, in a business synergistic with the
business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, and (z) the number or amount of securities
issued to such Persons by the Company shall not be disproportionate to each such
Person’s actual participation in such strategic or commercial alliance or
strategic or commercial partnership or ownership of such assets or securities to
be acquired by the Company, as applicable. “Approved Stock Plan” means any
employee benefit plan which has 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, restricted stock units, standard options to purchase Common Stock
and other equity awards may be issued to any employee, consultant, officer 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.

 

 19 

 

 

(j)                  Reservation of Shares. So long as any of the Notes remain
outstanding, the Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, no less than the Required
Reserve Amount; provided that at no time shall the number of shares of Common
Stock reserved pursuant to this Section 4(j) be reduced other than
proportionally in connection with any conversion, exercise and/or redemption, as
applicable of the 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 as soon as practicable take all corporate
action necessary to authorize and reserve a sufficient number of shares,
including, without limitation, calling a special 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 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.

 

(k)                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.

 

(l)                  Other Notes; Variable Securities. So long as any of the
Notes remain outstanding, 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 (other than the 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 but excluding an
“at-the-market” offering through an investment bank or broker-dealer that does
not exceed 10% of the composite trading volume (as reported on Bloomberg) of the
Company’s Common Stock in any day) whereby the Company or any Subsidiary may
sell securities at a future determined price (other than standard and customary
“preemptive” or “participation” rights). Each Buyer shall be entitled to obtain
injunctive relief against the Company and its Subsidiaries to preclude any such
issuance, which remedy shall be in addition to any right to collect damages.

 

 

(m)               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.

 

(n)                Restriction on Redemption and Cash Dividends. So long as any
of the Notes remain 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.

 

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

 

(p)                Conversion Procedures. The form of conversion notice included
in the Notes sets forth the totality of the procedures required of the Buyers in
order to convert the 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 Notes. The Company shall honor conversions of the Notes and
shall deliver the Conversion Shares in accordance with the terms, conditions and
time periods set forth in the Notes.

 

 20 

 

 

(q)                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.

 

(r)                  Integration. None of the Company or any person acting on
behalf of the Company 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.

 

(s)                 Stockholder Approval. Following the Closing, the Company
agrees to use commercially reasonable efforts to obtain, at a special or annual
meeting of the stockholders of the Company (at which a quorum is present) as
soon as practicably, but in no event later than December 31, 2020 (the
“Stockholder Meeting”), the Requisite Stockholder Approval. The Company will
prepare and file with the SEC a proxy statement to be sent to the Company’s
stockholders in connection with the Stockholder Meeting (the “Proxy Statement”).
The Proxy Statement shall include the Board of Directors’ recommendation that
the holders of shares of the Company’s Common Stock vote in favor of the
Requisite Stockholder Approval. If the Requisite Stockholder Approval is not
obtained at or prior to the Stockholder Meeting, the Company will hold a special
meeting of the stockholders of the Company for the purposes of obtaining such
Requisite Stockholder Approval no less often than every ninety (90) days
following the date of the Stockholder Meeting until the Requisite Stockholder
Approval is obtained and use best efforts to obtain the Requisite Stockholder
Approval at such meeting, and the Board of Directors will recommend that the
holders of shares of the Company’s Common Stock vote in favor of the Requisite
Stockholder Approval at each such meeting.

 

(t)                  Voting Agreements. The Company shall enforce the terms of
the Voting Agreements and not amend or waive the terms thereof without the prior
written consent of the Required Holders.

 

(u)                Minimum Fundraising Event. During the period beginning on the
Closing Date and ending on the date that is five (5) Business Days following the
Closing Date, the Company shall have received aggregated net cash proceeds of
not less than ten million dollars ($10,000,000). For the avoidance of doubt,
financings completed between September 30, 2019 and the Closing Date will not be
included for purposes of determining compliance with this Section 4(u).

 

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 Notes in
which the Company shall record the name and address of the Person in whose name
the Notes have been issued (including the name and address of each transferee),
the principal amount of the Notes held by such Person and the number of
Conversion Shares issuable pursuant to the terms of the Notes. The Company shall
keep the register open and available at all times during business hours for
inspection of any Buyer or its legal representatives.

 

(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 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(d) hereof, will be given by the Company to its 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, the other Transaction Documents and
applicable law. If any Buyer effects a sale, assignment or transfer of the
Securities in accordance with Section 2(d), the Company shall permit the
transfer and shall promptly instruct its 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, or such 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. Any fees (with respect to the transfer agent, counsel
to the Company or otherwise) associated with the removal of any legends on any
of the Securities shall be borne by the Company.

 

 21 

 

 

(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):

 

[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN][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 form reasonably acceptable to the Company, 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 such 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 required above in
this Section 5(d), as directed by Buyer, either: (A) provided that the Company’s
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 Company’s 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 date by which such credit is so
required to be made to the balance account of such Buyer’s or its designee with
DTC or such certificate is required to be delivered to such Buyer pursuant to
the foregoing is referred to herein as the “Required Delivery Date”). 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. Notwithstanding the foregoing, after
December 10, 2019, upon delivery by a Buyer of a legended Note to the Company
together with a customary representation letter regarding satisfaction of the
conditions of Rule 144, the Company shall deliver within two (2) Business Days
thereafter a Note to such Buyer that is free from all restrictive and other
legends, registered in the name of such Buyer or its designee without the
requirement for the delivery of any legal opinion by or on behalf of such Buyer.

 

 22 

 

 

(e)                 Failure to Timely Deliver; Buy-In. If the Company fails, for
any reason or for no reason, to issue and deliver (or cause to be delivered) to
a Buyer (or its designee) by the Required Delivery Date, if the Transfer Agent
is not participating in the DTC Fast Automated Securities Transfer Program, a
certificate for the number of Conversion Shares to which such Buyer is entitled
and register such Conversion Shares on the Company’s share register or, if the
Transfer Agent is participating in the DTC Fast Automated Securities Transfer
Program, to credit the balance account of such Buyer or such Buyer’s designee
with DTC for such number of Conversion Shares submitted for legend removal by
such Buyer pursuant to Section 5(d) above and the Company fails to promptly (x)
so notify such Buyer and (y) deliver the Conversion Shares electronically
without any restrictive legend by crediting such aggregate number of Conversion
Shares submitted for legend removal by such Buyer pursuant to Section 5(d) above
to such Buyer’s or its designee’s balance account with DTC through its
Deposit/Withdrawal At Custodian system (the event described in the immediately
foregoing clause (x) is hereinafter referred as a “Notice Failure” and together
with the event described in clause (y) above, a “Delivery Failure”), and if on
or after such Business Day such Buyer purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
such Buyer of shares of Common Stock submitted for legend removal by Buyer
pursuant to Section 5(d) above that such Buyer is entitled to receive from the
Company (a “Buy-In”), then the Company shall, within two (2) Business Days after
such Buyer’s request and in such Buyer’s discretion, either (i) pay cash to such
Buyer in an amount equal to such Buyer’s total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any, for the shares
of Common Stock so purchased) (the “Buy-In Price”), at which point the Company’s
obligation to so deliver such certificate or credit such Buyer’s balance account
shall terminate and such shares shall be cancelled, or (ii) promptly honor its
obligation to so deliver to Buyer a certificate or certificates or credit the
balance account of such Buyer or such Buyer’s designee with DTC representing
such number of shares of Common Stock that would have been so delivered if the
Company timely complied with its obligations hereunder and pay cash to such
Buyer in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Conversion Shares that the Company was
required to deliver to such Buyer by the Required Delivery Date multiplied by
(B) the lowest Last Reported Sale Price (as defined in the Note) of the Common
Stock on any Business Day during the period commencing on the date of the
delivery by such Buyer to the Company of the applicable Conversion Shares and
ending on the date of such delivery and payment under this clause (ii). Nothing
shall limit a Buyer’s right to pursue any other remedies available to it
hereunder, at law or in equity, including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock (or
to electronically deliver such shares of Common Stock) as required pursuant to
the terms hereof. Notwithstanding anything herein to the contrary, with respect
to any given Notice Failure and/or Delivery Failure, this Section 5(d) shall not
apply to a Buyer to the extent the Company has already paid such amounts in full
to such Buyer with respect to such Notice Failure and/or Delivery Failure, as
applicable, pursuant to the analogous sections of the Note held by such Buyer.

 

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

 

 23 

 

 

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

 

(a)                 The obligation of the Company hereunder to issue the Notes
to each Buyer at the Closing in exchange for the Prior Convertible Notes 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.

 

(ii)                Such Buyer shall (i) have good, valid and marketable right,
title and interest (legal and beneficial) in the Prior Convertible Note being
exchanged pursuant to this Agreement, free and clear of all liens, pledges,
security interests, options, charges, claims, equities or encumbrances of any
kind (other than restrictions under the 1933 Act and state securities laws) and
(ii) have tendered to the Company a Prior Convertible Note for exchange for a
Note.

 

(iii)              The representations and warranties of such Buyer shall be
true and correct in all material 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 EXCHANGE.

 

(a)                 The obligation of each Buyer hereunder to exchange its Prior
Convertible Note for a Note 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 Buyers shall have received the Prior Convertible Notes
pursuant to that certain securities purchase agreement dated the date hereof.

 

(ii)                The Company and Seller shall have entered into a settlement
agreement between the Company and CVI Investments, Inc., in the form attached
hereto as Exhibit D related to all disputes between the Company and CVI
Investments, Inc. existing as of or prior to the Closing Date, including but not
limited to all disputes arising out of our relating to the Prior Convertible
Notes and the compliance of the Company and CVI Investments, Inc. with the terms
thereof.

 

(iii)              The Company shall have fully repaid the remainder of the
Prior Convertible Notes not previously purchased by the Buyers.

 

(iv)               The Company 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 a Note in such original
principal amount as is set forth across from such Buyer’s name in column (3) of
the Schedule of Buyers as being issued to such Buyer at the Closing pursuant to
this Agreement.

 

(v)                Such Buyer shall have received the opinion of Fenwick & West
LLP, the Company’s counsel, dated as of the Closing Date, in the form acceptable
to such Buyer.

 

(vi)               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 Company’s transfer agent.

 

(vii)             The Company shall have delivered to such Buyer a certificate
evidencing the formation and good standing of the Company in Delaware issued by
the Delaware Secretary of State as of a date within ten (10) days of the Closing
Date.

 

 24 

 

 

(viii)           The Company shall have delivered to such Buyer a copy of the
Certificate of Incorporation, as currently in effect, certified by the Delaware
Secretary of State.

 

(ix)               The Company shall have delivered to such Buyer a certificate,
in the form acceptable to Buyer, executed by the Secretary or Assistant
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.

 

(x)                Each and every representation and warranty of the Company
shall be true and correct 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 or Chief Financial 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.

 

(xi)               The Company shall have delivered to such Buyer a letter from
the Company’s transfer agent certifying the number of shares of Common Stock
outstanding on the Closing Date immediately prior to the Closing.

 

(xii)             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 (I) in writing by
the SEC or the Principal Market or (II) by falling below the minimum maintenance
requirements of the Principal Market.

 

(xiii)           The Company shall have obtained all governmental, regulatory or
third party consents and approvals (or waiver of such consents or approvals), if
any, necessary for the sale of the Securities, including without limitation, and
for the avoidance of doubt an approval of the Principal Market of the
transactions contemplated by the Transaction Documents.

 

(xiv)           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.

 

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

 

(xvi)           The Company shall have obtained approval of the Principal Market
to list or designate for quotation (as the case may be) the Conversion Shares.

 

(xvii)         The Company shall have delivered to such Buyer executed copies of
the Voting Agreements executed by stockholders of the Company representing
Beneficial Ownership (as defined in the Voting Agreements) of no less than 29%
of the Company’s outstanding Common Stock.

 

(xviii)        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 due to the Company’s failure to satisfy
the conditions set forth in Section 7 hereof, then such Buyer shall have the
right to terminate its obligations under this Agreement at any time on or after
the close of business on such date without liability of such Buyer to any other
party; provided, however, 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, provided further
that no such termination shall affect any obligation of the Company under this
Agreement to reimburse such Buyer for the expenses described in Section 4(f)
above. 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.

 

 25 

 

 

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 parties hereto 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 shall be deemed
or operate to preclude any party hereto from bringing suit or taking other legal
action against any other party hereto in any other jurisdiction to collect on
any such other party’s obligations to such party or to enforce a judgment or
other court ruling in favor of such party. 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 of the Buyers, or collection by
any of the Buyers 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 any 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.

 

 26 

 

 

(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, 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 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, other than the Prior
Agreement and the Prior Convertible Notes, 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, none of the Company or 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 all 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 a 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 all 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). The Company
has not, directly or indirectly, made any agreements with any Buyer 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 and has no 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 any 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 any 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) each Buyer prior to the
Closing Date and (II) on or after the Closing Date, [___________], so long as it
or its affiliates hold Notes or Conversion Shares, and thereafter 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 Notes.

 

 27 

 

 

(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 e-mail (provided that such
sent e-mail is kept on file (whether electronically or otherwise) by the sending
party and the sending party does not receive an automatically generated message
from the recipient’s e-mail 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:

 

Amyris, Inc.
5885 Hollis St., Suite 100
Emeryville, CA 94608
Telephone: (510) 450-0761
Facsimile: (510) 225-2645
Attention: General Counsel

 

With a copy (for informational purposes only) to:

 

Fenwick & West LLP
801 California Street
Mountain View, California 94041
Telephone: (650) 988-8500

Attention: David Michaels

Email: dmichaels@fenwick.com

 

If to the Transfer Agent:

 

EQ Shareowner Services

1110 Centre Pointe Curve, Suite 101

Mendota Heights, MN 55120

Attention: Richard Zeck

Telephone: (855) 217-6361

 

 

If to a Buyer, to its address, 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

 

 28 

 

 

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 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 Notes. The Company shall assign
not 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 (unless the Company is in compliance with the applicable
provisions governing Fundamental Changes set forth in the Notes). Each 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, 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 party hereto 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, (B)
any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (C) any
disclosure properly made by such Buyer pursuant to Section 4(h), or (D) 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). 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.

 

 29 

 

 

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

 

 30 

 

 

(m)               Remedies. Each Buyer and in the event of assignment by such
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 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 or any Subsidiary, fails to
perform, observe, or discharge any or all of its or such Subsidiary’s (as the
case may be) 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 or any Subsidiary does not timely
perform its related 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 or such Subsidiary (as the case may be), 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 enforces or exercises its
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

 

 31 

 

 

(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)                Independent Nature of Buyers’ Obligations and Rights. The
obligations of each Buyer under the Transaction Documents are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as, and the Company acknowledges that the Buyers
do not so constitute, a partnership, an association, a joint venture or any
other kind of group or entity, or create a presumption that the Buyers are in
any way acting in concert or as a group or entity, and the Company shall not
assert any such claim with respect to such obligations or the transactions
contemplated by the Transaction Documents or any matters, and the Company
acknowledges that the Buyers are not acting in concert or as a group, and the
Company shall not assert any such claim, with respect to such obligations or the
transactions contemplated by the Transaction Documents. The decision of each
Buyer to purchase Securities pursuant to the Transaction Documents has been made
by such Buyer independently of any other Buyer. Each Buyer acknowledges that no
other Buyer has acted as agent for such Buyer in connection with such Buyer
making its investment hereunder and that no other Buyer will be acting as agent
of such Buyer in connection with monitoring such Buyer’s investment in the
Securities or enforcing its rights under the Transaction Documents. The Company
and each Buyer confirms that each Buyer has independently participated with the
Company and its Subsidiaries in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors. Each Buyer shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose. The use of a
single agreement to effectuate the purchase and sale of the Securities
contemplated hereby was solely in the control of the Company, not the action or
decision of any Buyer, and was done solely for the convenience of the Company
and its Subsidiaries and not because it was required or requested to do so by
any Buyer. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company,
each Subsidiary and a Buyer, solely, and not between the Company, its
Subsidiaries and the Buyers collectively and not between and among the Buyers.

 

[signature pages follow]

 

 

 

 

 32 

 

 

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:       AMYRIS, INC.           By:         Name:       Title:  

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Note Exchange Agreement]

 

 

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]:             By:         Name:       Title:  

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Note Exchange Agreement]

 

 

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]:             By:         Name:       Title:  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Note Exchange Agreement]

 

 

 

SCHEDULE OF BUYERS

 

(1) (2) (3) (4) (5)           Buyer Address and Facsimile Number Original
Principal Amount of Note Number of Pre-Delivery Shares Legal Representative’s
Address and Facsimile Number                                                    
        TOTAL   $66,000,000 7,500,000  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT A

 

FORM OF SENIOR CONVERTIBLE NOTE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amyris, Inc.

 

Senior Convertible Note due 2022

 

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.

 

Amyris, Inc.

 

Senior Convertible Note due 2022

 

Certificate No. A-1

 

Amyris, Inc., a Delaware corporation, for value received, promises to pay to
[ ● ] (the “Initial Holder”), or its registered assigns, one hundred and ten
percent (110%) of the principal sum of [ ● ] million dollars ($[ ● ],000,000)
(such principal sum, the “Principal Amount”) on the Maturity Date (as defined on
the reverse of this Note), and to pay interest thereon, as provided in this
Note, in each case as provided in and subject to the other provisions of this
Note, including the earlier amortization, redemption, repurchase or conversion
of this Note. [NTD: total amount of all notes to total $66,000,000.]

 

Additional provisions of this Note are set forth on the other side of this Note.

 

[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

Exhibit Version

 

 

IN WITNESS WHEREOF, Amyris, Inc. has caused this instrument to be duly executed
as of the date set forth below.

 

  Amyris, Inc.                   Date: [ ● ], 2019 By:         Name:      
Title:  

 

 

 

 

 

 

 

[Signature Page to Senior Convertible Note due 2022, Certificate No. A-1]

 

Exhibit Version

 

Amyris, Inc.

 

Senior Convertible Note due 2022

 

This Note (this “Note” and, collectively with any Note issued in exchange
therefor or in substitution thereof, the “Notes”) is issued by Amyris, Inc., a
Delaware corporation (the “Company”), and designated as one of its “Senior
Convertible Notes due 2022.”

 

Article 1.Definitions.

 

“Additional Redemption Amount” means the excess, if any, of (A) the Additional
Redemption Base Price applicable to a redemption over (B) the Redemption Base
Price applicable to such redemption. For the avoidance of doubt, the Additional
Redemption Amount cannot be a negative number.

 

“Additional Redemption Base Price” means, with respect to a redemption of this
Note to pursuant to Section 7(A), a cash amount equal to one hundred and fifteen
percent (115%) of the product of (A) the Conversion Rate in effect as of the
Trading Day immediately preceding the related Redemption Date; (B) the Principal
Amount of this Note to be so redeemed divided by $1,000; and (C) the Additional
Redemption Stock Price for such redemption.

 

“Additional Redemption Stock Price” means, with respect to any redemption of
this Note, the highest average Daily VWAP per share of Common Stock over any
five (5) consecutive VWAP Trading Days occurring during the thirty (30)
consecutive VWAP Trading Days beginning on, and including, the related
Redemption Date.

 

“Affiliate” has the meaning set forth in Rule 144 under the Securities Act.

 

“Amortization Date” means, with respect to a Note, (A) the first calendar day of
each month beginning on February 1, 2020; and (B) if not otherwise included in
clause (A), the Maturity Date.

 

“Amortization Payment” means, (A) with respect to Amortization Dates up to and
including July 1, 2020, [ ● ] dollars ($[ ● ]), [NTD: to be proportional amount
of $2,970,000 based on proportion of total Notes issued] and (B) with respect to
Amortization Dates after July 1, 2020, [ ● ] dollars ($[ ● ]) [NTD: to be
proportional amount of $3,432,000 based on proportion of total Notes issued];
provided, that the Holder and the Company may agree to increase the size of any
Amortization Payment by mutual written consent; and provided further, that in no
event shall the amount of any Amortization Payment exceed 110% of the amount of
Principal outstanding with respect to the Note as of such Amortization Date.

 

“Amortization Share Amount” has the meaning set forth in Section 5(B).

 

“Amortization Share Payment Period” has the meaning set forth in Section 5(C).

 

“Amortization Stock Payment Price” means, with respect to any Stock Payment Date
applicable to an Amortization Payment, if applicable, an amount equal to the
greater of (i) the Floor Price and (ii) the lesser of (x) eighty-eight percent
(88%) of the lesser of (A) the Daily VWAP on such Stock Payment Date and (B) the
average of the lowest two Daily VWAPs during the ten (10) VWAP Trading Day
period ending on such Stock Payment Date and (y) the Conversion Price.

 

 - 1 - 

 

Exhibit Version

 

“Authorized Denomination” means, with respect to the Notes, a Principal Amount
thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof.

 

“Bankruptcy Law” means Title 11, United States Code, or any similar U.S. federal
or state or non-U.S. law for the relief of debtors.

 

“Board of Directors” means the board of directors of the Company or a committee
of such board duly authorized to act on behalf of such board.

 

“Beneficial Ownership Limit” has the meaning set forth in Section 8(J)(i).

 

“Business Combination Event” has the meaning set forth in Section 10.

 

“Business Day” means any day other than a Saturday, a Sunday or any day on which
the Federal Reserve Bank of New York is authorized or required by law or
executive order to close or be closed.

 

“Capital Lease Obligation” means, at the time any determination is to be made,
the amount of the liability in respect of a capital lease that would at that
time be required to be capitalized on a balance sheet prepared in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be prepaid by the lessee without payment of a penalty.

 

“Capital Stock” of any Person means any and all shares of, interests in, rights
to purchase, warrants or options for, participations in, or other equivalents
of, in each case however designated, the equity of such Person, but excluding
any debt securities convertible into such equity.

 

“Cash” means all cash and liquid funds.

 

“Cash Equivalents” means, as of any date of determination, any of the following:
(A) marketable securities (i) issued or directly and unconditionally guaranteed
as to interest and principal by the United States Government, or (ii) issued by
any agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one (1) year
after such date; (B) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one (1) year after
such date and having, at the time of the acquisition thereof, a rating of at
least A-1 from Standard & Poor’s Corporation or at least P-1 from Moody’s
Investors Service; (C) commercial paper maturing no more than one (1) year from
the date of creation thereof and having, at the time of the acquisition thereof,
a rating of at least A-1 from Standard & Poor’s Corporation or at least P-1 from
Moody’s Investors Service; (D) certificates of deposit or bankers’ acceptances
maturing within one (1) year after such date and issued or accepted by any
commercial bank organized under the laws of the United States of America or any
State thereof or the District of Columbia that (i) is at least “adequately
capitalized” (as defined in the regulations of its primary federal banking
regulator), and (ii) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (E) shares of any money market mutual fund that (i)
has substantially all of its assets invested continuously in the types of
investments referred to in clauses (A) and (B) above, (ii) has net assets of not
less than $500,000,000, and (iii) has the highest rating obtainable from either
Standard & Poor’s Corporation or Moody’s Investors Service.

 

 - 2 - 

 

Exhibit Version

 

“Close of Business” means 5:00 p.m., New York City time.

 

“Common Stock” means the common stock, $0.0001 par value per share, of the
Company, subject to Section 8(I).

 

“Common Stock Change Event” has the meaning set forth in Section 8(I).

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (A) any
Indebtedness or other obligations of another Person, including any such
obligation directly or indirectly guaranteed, endorsed, co-made or discounted or
sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable; (B) any obligations with respect to
undrawn letters of credit, corporate credit cards or merchant services issued
for the account of that Person; and (C) all obligations arising under any
interest rate, currency or commodity swap agreement, interest rate cap
agreement, interest rate collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; valued for this purpose at the fair value of
the Company’s net exposure thereunder at the time of measurement, provided,
however, that the term “Contingent Obligation” shall not include endorsements
for collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement

 

“Conversion Consideration” has the meaning set forth in Section 8(D)(i).

 

“Conversion Date” means, with respect to a Note, the first Business Day on which
the requirements set forth in Section 8(C)(i) to convert such Note are
satisfied.

 

“Conversion Price” means, as of any time, an amount equal to (A) one thousand
dollars ($1,000) divided by (B) the Conversion Rate in effect at such time.

 

 - 3 - 

 

Exhibit Version

 

“Conversion Rate” initially means 200.0000 shares of Common Stock per $1,000
Principal Amount of Notes; provided, however, that the Conversion Rate is
subject to adjustment pursuant to Section 8; provided, further, that whenever
this Note refers to the Conversion Rate as of a particular date without setting
forth a particular time on such date, such reference will be deemed to be to the
Conversion Rate immediately after the Close of Business on such date.

 

“Covering Price” has the meaning set forth in Section 8(D)(v).

 

“Daily VWAP” means, for any VWAP Trading Day, the per share volume-weighted
average price of the Common Stock as displayed under the heading “Bloomberg
VWAP” on Bloomberg page “AMRS<EQUITY> AQR” (or, if such page is not available,
its equivalent successor page) in respect of the period from the scheduled open
of trading until the scheduled close of trading of the primary trading session
on such VWAP Trading Day (or, if such volume-weighted average price is
unavailable, the market value of one share of Common Stock on such VWAP Trading
Day, determined, using a volume-weighted average price method, by a nationally
recognized independent investment banking firm selected by the Company). The
Daily VWAP will be determined without regard to after-hours trading or any other
trading outside of the regular trading session.

 

“Default” means any event that is (or, after notice, passage of time or both,
would be) an Event of Default.

 

“Default Interest” has the meaning set forth in Section 4(B).

 

“Defaulted Amount” has the meaning set forth in Section 4(B).

 

“Defaulted Shares” has the meaning set forth in Section 8(D)(v).

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock that
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable at the option of the holder) or upon the happening
of any event:

 

(A) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise;

 

(B) is convertible or exchangeable for Indebtedness or Disqualified Stock
(excluding Capital Stock convertible or exchangeable solely at the option of the
issuer or a Subsidiary; provided that any such conversion or exchange will be
deemed an incurrence of Indebtedness or Disqualified Stock, as applicable); or

 

(C) is redeemable at the option of the holder thereof, in whole or in part,

 

in the case of each of clauses (A), (B) and (C), at any point prior to the
ninety-first (91st) day after the Maturity Date

 

“DTC” means The Depository Trust Company.

 

 - 4 - 

 

Exhibit Version

 

“Eligible Exchange” means any of The New York Stock Exchange, The Nasdaq Capital
Market, The Nasdaq Global Market or The Nasdaq Global Select Market (or any of
their respective successors).

 

“Equity Conditions” will be deemed to be satisfied as of any date if all of the
following conditions are satisfied as of such date and on each of the twenty
(20) previous Trading Days: (A) the shares issuable upon conversion of this Note
are Freely Tradable; (B) the Holder is not in possession of any material
non-public information provided by or on behalf of the Company; (C) the issuance
of such shares will not be limited by Section 8(J)(ii); (D) the Company is in
compliance with Section 8(E)(i) and such shares will satisfy Section 8(E)(ii);
(E) no public announcement of a pending, proposed or intended Fundamental Change
has occurred that has not been abandoned, terminated or consummated; (F) the
Daily VWAP per share of Common Stock is not less than $2.50 (subject to
proportionate adjustments for events of the type set forth in Section
8(F)(i)(1)); (G) the daily dollar trading volume (as reported on Bloomberg) of
the Common Stock on the applicable Eligible Exchange is not less than
one-million dollars ($1,000,000); and (H) no Default or Event of Default will
have occurred or be continuing.

 

“Equity Triggering Event” means that at any time the (x) Daily VWAP per share of
Common Stock over any three (3) consecutive VWAP Trading Days is less than $2.25
(subject to proportionate adjustments for events of the type set forth in
Section 8(F)(i)(1)); (y) Daily VWAP per share of Common Stock is less than $1.75
(subject to proportionate adjustments for events of the type set forth in
Section 8(F)(i)(1)); or (z) daily dollar trading volume (as reported on
Bloomberg) of the Common Stock on the applicable Eligible Exchange is less than
five hundred thousand dollars ($500,000) for three (3) consecutive Trading Days.

 

Promptly, but in no event later than two (2) Business Days after an Equity
Triggering Event, the Company will provide written notice of such Equity
Triggering Event to the Holder.

 

“Equity Triggering Event Conversion Period” means, with respect to an Equity
Triggering Event, the period beginning on, and including, the date such Equity
Triggering Event occurs and ending on such date thereafter upon which the Daily
VWAP per share of Common Stock over any ten (10) consecutive VWAP Trading Days
commencing after the beginning of such Equity Triggering Event Conversion Period
equals or exceeds $2.25 (subject to proportionate adjustments for events of the
type set forth in Section 8(F)(i)(1)).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.

 

“Event of Default” has the meaning set forth in Section 11(A).

 

“Event of Default Acceleration Amount” means, with respect to the delivery of a
notice pursuant to Section 11(B)(ii) declaring this Note to be due and payable
immediately on account of an Event of Default, a cash amount equal to one
hundred and fifteen percent (115%) of the Principal Amount of this Note.

 

 - 5 - 

 

Exhibit Version

 

“Event of Default Conversion Period” means, with respect to an Event of Default,
the period beginning on, and including, the date such Event of Default occurs
and ending on the later of (A) the twentieth (20th) Trading Day after the
Holder’s receipt of an Event of Default Notice and (B) the date such Event of
Default is cured.

 

“Event of Default Notice” has the meaning set forth in Section 11(C).

 

“Event of Default/Equity Triggering Event Additional Shares” means, with respect
to the conversion of this Note (or any portion of this Note), an amount equal to
the excess, if any, of (A) the Event of Default/Equity Triggering Event
Conversion Rate applicable to such conversion over (B) the Conversion Rate that
would otherwise apply to such conversion without giving effect to Section 8(H).
For the avoidance of doubt, the Event of Default Additional Shares cannot be a
negative number.

 

“Event of Default/Equity Triggering Event Conversion Price” means, with respect
to the conversion of this Note (or any portion of this Note), the lesser of (A)
the Conversion Price that would be in effect immediately after the Close of
Business on the Conversion Date for such conversion, without giving effect to
Section 8(H); and (B) seventy five percent (75%) of the lowest Daily VWAP per
share of Common Stock during the ten (10) consecutive VWAP Trading Days ending
on, and including, such Conversion Date (or, if such Conversion Date is not a
VWAP Trading Day, the immediately preceding VWAP Trading Day).

 

“Event of Default/Equity Triggering Event Conversion Rate” means, with respect
to the conversion of this Note (or any portion of this Note), an amount (rounded
to the nearest 1/10,000th of a share of Common Stock (with 5/100,000ths rounded
upward)) equal to (A) one thousand dollars ($1,000) divided by (B) the Event of
Default/Equity Triggering Event Conversion Price applicable to such conversion.

 

“Ex-Dividend Date” means, with respect to an issuance, dividend or distribution
on the Common Stock, the first date on which shares of Common Stock trade on the
applicable exchange or in the applicable market, regular way, without the right
to receive such issuance, dividend or distribution (including pursuant to due
bills or similar arrangements required by the relevant stock exchange). For the
avoidance of doubt, any alternative trading convention on the applicable
exchange or market in respect of the Common Stock under a separate ticker symbol
or CUSIP number will not be considered “regular way” for this purpose.

 

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

 

“Expiration Date” has the meaning set forth in Section 8(F)(i)(5).

 

“Expiration Time” has the meaning set forth in Section 8(F)(i)(5).

 

“Floor Price” means $0.80.

 

 - 6 - 

 

Exhibit Version

 

“Freely Tradable” means, with respect to any shares of Common Stock issued or
issuable upon conversion of this Note, that (A) such shares would be eligible to
be offered, sold or otherwise transferred by the Holder pursuant to Rule 144,
without any requirements as to volume, manner of sale, availability of current
public information (whether or not then satisfied) or notice under the
Securities Act and without any requirement for registration under any state
securities or “blue sky” laws; (B) such shares are (or, when issued, will be)
(i) represented by book-entries at DTC and identified therein by an
“unrestricted” CUSIP number; (ii) not represented by any certificate that bears
a legend referring to transfer restrictions under the Securities Act or other
securities laws; and (iii) listed and admitted for trading, without suspension
or material limitation on trading, on an Eligible Exchange; and (C) no delisting
or suspension by such Eligible Exchange has been threatened (with a reasonable
prospect of delisting occurring after giving effect to all applicable notice,
appeal, compliance and hearing periods) or reasonably likely to occur or pending
as evidenced by (x) a writing by such Eligible Exchange or (y) the Company
falling below the minimum listing maintenance requirements of such Eligible
Exchange.

 

“Fundamental Change” means any of the following events:

 

(A)       a “person” or “group” (within the meaning of Section 13(d)(3) of the
Exchange Act), other than the Company or its Wholly Owned Subsidiaries, or the
employee benefit plans of the Company or its Wholly Owned Subsidiaries, files
any report with the SEC indicating that such person or group has become the
direct or indirect “beneficial owner” (as defined below) of shares of the
Company’s common equity representing more than fifty percent (50%) of the voting
power of all of the Company’s then-outstanding common equity;

 

(B)       the consummation of (i) any sale, lease or other transfer, in one
transaction or a series of transactions, of all or substantially all of the
assets of the Company and its Subsidiaries, taken as a whole, to any Person
(other than solely to one or more of the Company’s Wholly Owned Subsidiaries);
or (ii) any transaction or series of related transactions in connection with
which (whether by means of merger, consolidation, share exchange, combination,
reclassification, recapitalization, acquisition, liquidation or otherwise) all
of the Common Stock is exchanged for, converted into, acquired for, or
constitutes solely the right to receive, other securities, cash or other
property (other than a subdivision or combination, or solely a change in par
value, of the Common Stock); provided, however, that any merger, consolidation,
share exchange or combination of the Company pursuant to which the Persons that
directly or indirectly “beneficially owned” (as defined below) all classes of
the Company’s common equity immediately before such transaction directly or
indirectly “beneficially own,” immediately after such transaction, more than
fifty percent (50%) of all classes of common equity of the surviving, continuing
or acquiring company or other transferee, as applicable, or the parent thereof,
in substantially the same proportions vis-à-vis each other as immediately before
such transaction will be deemed not to be a Fundamental Change pursuant to this
clause (B);

 

(C)       the Company’s stockholders approve any plan or proposal for the
liquidation or dissolution of the Company; or

 

(D)       the Common Stock ceases to be listed on any Eligible Exchange.

 

For the purposes of this definition, (x) any transaction or event described in
both clause (A) and in clause (B)(i) or (ii) above (without regard to the
proviso in clause (B)) will be deemed to occur solely pursuant to clause (B)
above (subject to such proviso); and (y) whether a Person is a “beneficial
owner” and whether shares are “beneficially owned” will be determined in
accordance with Rule 13d-3 under the Exchange Act.

 

 - 7 - 

 

Exhibit Version

 

“Fundamental Change Base Repurchase Price” means, with respect to this Note (or
any portion of this Note) to be repurchased upon a Repurchase Upon Fundamental
Change, a cash amount equal to one hundred and fifteen percent (115%) of the
greater of (A) the Principal Amount of such Note (or portion thereof) to be so
repurchased; and (B) the product of (i) the Conversion Rate in effect as of the
Trading Day immediately preceding the effective date of such Fundamental Change;
(ii) the Principal Amount of this Note to be repurchased upon a Repurchase Upon
Fundamental Change divided by $1,000; and (iii) the average of the three (3)
highest Daily VWAPs per share of Common Stock occurring during the thirty (30)
consecutive VWAP Trading Days ending on, and including, the VWAP Trading Day
immediately before the effective date of such Fundamental Change.

 

“Fundamental Change Notice” has the meaning set forth in Section 6(C).

 

“Fundamental Change Redemption Date” means the date designated by the Holder for
redemption of this Note in connection with a Fundamental Change, as provided in
Section 6(F).

 

“Fundamental Change Redemption Stock Payment Price” means, with respect to any
Fundamental Change Redemption Date, an amount equal to the greater of (i) the
Floor Price and (ii) lesser of (x) eighty-eight percent (88%) of the lesser of
(A) the Daily VWAP on the last VWAP Trading Day immediately prior to such
Fundamental Change Redemption Date and (B) the average of the lowest two Daily
VWAPs during the ten (10) VWAP Trading Day period ending on the last VWAP
Trading Day immediately prior to such Fundamental Change Redemption Date and (y)
the Conversion Price.

 

“Fundamental Change Repurchase Date” means the date as of which this Note must
be repurchased for cash in connection with a Fundamental Change, as provided in
Section 6(B).

 

“Fundamental Change Repurchase Price” means the cash price payable by the
Company to repurchase this Note (or any portion of this Note) upon its
Repurchase Upon Fundamental Change, calculated pursuant to Section 6(D).

 

“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time; provided the definitions set forth in
this Note and any financial calculations required by thereby shall be computed
to exclude any change to lease accounting rules from those in effect pursuant to
Financial Accounting Standards Board Accounting Standards Codification 840
(Leases) and other related lease accounting guidance as in effect on the date
hereof.

 

“Holder” means the person in whose name this Note is registered on the books of
the Company, which initially is the Initial Holder.

 

The term “including” means “including without limitation,” unless the context
provides otherwise.

 

 - 8 - 

 

Exhibit Version

 

“Indebtedness” means indebtedness of any kind, including (A) all indebtedness
for borrowed money or the deferred purchase price of property or services
(excluding trade credit entered into in the ordinary course of business due
within ninety (90) days), including reimbursement and other obligations with
respect to surety bonds and letters of credit, (B) all obligations evidenced by
notes, bonds, debentures or similar instruments, (C) all capital lease
obligations, (D) all Contingent Obligations, and (E) Disqualified Stock.

 

“Independent Investigator” has the meaning set forth in Section 9(T).

 

“Initial Holder” has the meaning set forth in the cover page of this Note.

 

“Interest Payment Date” means, with respect to a Note, (A) the first calendar
day of each month beginning on February 1, 2020; and (B) if not otherwise
included in clause (A), the Maturity Date.

 

“Issue Date” means November [●], 2019.

 

“Last Reported Sale Price” of the Common Stock for any Trading Day means the
closing sale price per share (or, if no closing sale price is reported, the
average of the last bid price and the last ask price per share or, if more than
one in either case, the average of the average last bid prices and the average
last ask prices per share) of Common Stock on such Trading Day as reported in
composite transactions for the principal U.S. national or regional securities
exchange on which the Common Stock is then listed. If the Common Stock is not
listed on a U.S. national or regional securities exchange on such Trading Day,
then the Last Reported Sale Price will be the last quoted bid price per share of
Common Stock on such Trading Day in the over-the-counter market as reported by
OTC Markets Group Inc. or a similar organization. If the Common Stock is not so
quoted on such Trading Day, then the Last Reported Sale Price will be the
average of the mid-point of the last bid price and the last ask price per share
of Common Stock on such Trading Day from a nationally recognized independent
investment banking firm selected by the Company.

 

“Letter Agreement” means the letter agreement, dated as of the date hereof,
between the Company and the Holder.

 

“Market Disruption Event” means, with respect to any date, the occurrence or
existence, during the one-half hour period ending at the scheduled close of
trading on such date on the principal U.S. national or regional securities
exchange or other market on which the Common Stock is listed for trading or
trades, of any material suspension or limitation imposed on trading (by reason
of movements in price exceeding limits permitted by the relevant exchange or
otherwise) in the Common Stock or in any options contracts or futures contracts
relating to the Common Stock.

 

“Maturity Date” means September 30, 2022.

 

 - 9 - 

 

Exhibit Version

 

“Minimum Revenue” has the meaning set forth in the Letter Agreement.

 

“Note Exchange Agreement” means that certain Securities Exchange Agreement,
dated as of November 8, 2019, between the Company and [˜] providing for the
issuance of this Note.

 

“Open of Business” means 9:00 a.m., New York City time.

 

The term “or” is not exclusive, unless the context expressly provides otherwise.

 

“Other Notes” means any Notes that are of the same class of this Note and that
are represented by one or more certificates other than the certificate
representing this Note.

 

“Permitted Indebtedness” means (A) Indebtedness evidenced by this Note; (B)
Indebtedness deemed to be disclosed pursuant to the Note Exchange Agreement, as
in effect as of the Issue Date (including all other Indebtedness accrued in the
balance sheet included in the Company’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2019); (C) the incurrence after the Issue Date by
the Company or any Subsidiary of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase price or
cost of design, construction, installation or improvement of property, plant or
equipment used in the business of the Company or any of its Subsidiaries;
provided that, such Indebtedness is (i) not secured by any lien or security
interest other than on such assets and improvements and accessions thereto and
(ii) is incurred by the entity that owner or lessee of the related property,
plant or equipment; (D) debt incurred by a Subsidiary of the Company and secured
by the Brotas 2 Facility that does not (i) exceed the cost of building or
acquiring the assets and related expenses, (ii) create any Liens on any assets
or property of the Company or (iii) provide for any guarantees by the Company;
(E) other Indebtedness in an aggregate amount not to exceed one hundred fifty
million dollars ($150,000,000) at any time outstanding so long as such
Indebtedness does not have a final maturity date, amortization payment, sinking
fund, mandatory redemption or other repurchase obligation or put right at the
option of the lender or holder of such Indebtedness earlier than ninety one (91)
days following the Maturity Date; (F) Contingent Obligations that are guarantees
of Indebtedness described in clauses (A) through (E); (G) extensions,
refinancings and renewals of any items of Permitted Indebtedness, provided that
the principal amount is not increased or the terms modified to impose materially
more burdensome terms upon the Company or its Subsidiary, as the case may be,
and provided further, that if the lender of any such proposed extension,
refinancing or renewal of Permitted Indebtedness incurred hereunder is different
from the lender of the Permitted Indebtedness to be so extended, refinanced or
renewed then, in addition to the foregoing proviso, such Permitted Indebtedness
shall also not have a final maturity date, amortization payment, sinking fund,
mandatory redemption or other repurchase obligation or put right at the option
of the lender or holder of such Indebtedness earlier than ninety one (91) days
following the Maturity Date; and (H) Disqualified Stock which is issued in
respect of a financing of assets or rights relating to the Company’s Biossance
business and does not require payments of cash dividends or distributions prior
to the date that is ninety one (91) days following the Maturity Date.
Notwithstanding anything to the contrary, the aggregate amount of Indebtedness
incurred pursuant to clauses (C) and (E) of the preceding sentence, together
with any extensions, refinancings and renewals in respect of such Indebtedness
incurred pursuant to clause (G) of the preceding sentence, may not at any time
exceed one hundred fifty million dollars ($150,000,000) and any amount of such
Indebtedness that exceeds this amount shall not constitute Permitted
Indebtedness.

 

 - 10 - 

 

Exhibit Version

 

“Person” or “person” means any individual, sole proprietorship, partnership,
limited liability company, joint venture, company, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or government agency.

 

“Pre-Delivery Shares” has the meaning set forth in Section 5(G)(i).

 

“Principal Amount” has the meaning set forth in the cover page of this Note;
provided, however, that the Principal Amount of this Note will be subject to
reduction (A) pursuant to Section 7 and Section 8 and (B) by an amount equal to
(i) the sum of all Amortization Payments made prior to date of determination of
the Principal Amount of the Note then outstanding, divided by (ii) one and
one-tenth (1.1).

 

“Redemption Base Price” means, with respect to a redemption of this Note
pursuant to Section 7(A), a cash amount equal to one hundred and fifteen percent
(115%) of the greater of (A) the Principal Amount of such Note to be so
redeemed; and (B) the product of (x) the Conversion Rate in effect as of the
Trading Day immediately preceding the related Redemption Date; (y) the Principal
Amount of this Note to be so redeemed divided by $1,000; and (z) the Redemption
Stock Price for such redemption.

 

“Redemption Date” has the meaning set forth in Section 7(A).

 

“Redemption Price” means the cash price payable by the Company to redeem this
Note pursuant to Section 7(B).

 

“Redemption Stock Price” means, with respect to any redemption of this Note, the
highest Daily VWAP per share of Common Stock occurring during the thirty (30)
consecutive VWAP Trading Days ending on, and including, the VWAP Trading Day
immediately before the related Redemption Date.

 

“Reference Property” has the meaning set forth in Section 8(I)(i).

 

“Reference Property Unit” has the meaning set forth in Section 8(I)(i).

 

“Repurchase Upon Fundamental Change” means the repurchase of any Note by the
Company pursuant to Section 6.

 

“Requisite Stockholder Approval” means the stockholder approval contemplated by
Nasdaq Listing Standard Rule 5635(d) with respect to the issuance of shares of
Common Stock upon conversion of this Note, or otherwise pursuant to this Note,
in excess of the limitations imposed by such rule; provided, however, that the
Requisite Stockholder Approval will be deemed to be obtained if, due to any
amendment or binding change in the interpretation of the applicable listing
standards of The Nasdaq Global Select Market, such stockholder approval is no
longer required for the Company to settle all conversions of this Note by
delivering shares of Common Stock without limitation pursuant to Section
8(J)(ii).

 

 - 11 - 

 

Exhibit Version

 

“Scheduled Trading Day” means any day that is scheduled to be a Trading Day on
the principal U.S. national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not then listed on a U.S.
national or regional securities exchange, on the principal other market on which
the Common Stock is then traded. If the Common Stock is not so listed or traded,
then “Scheduled Trading day” means a Business Day.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended.

 

“Significant Subsidiary” means, with respect to any Person, any Subsidiary of
such Person that constitutes a “significant subsidiary” (as defined in Rule
1-02(w) of Regulation S-X under the Exchange Act) of such Person

 

“Spin-Off” has the meaning set forth in Section 8(F)(i)(3)(b).

 

“Spin-Off Valuation Period” has the meaning set forth in Section 8(F)(i)(3)(b).

 

“Stated Interest Rate” means, as of any date, a rate per annum equal to 5.00%.

 

“Stated Interest Share Amount” has the meaning set forth in Section 5(B).

 

“Stated Interest Stock Payment Price” means, with respect to any Interest
Payment Date, an amount equal to the greater of (i) the Floor Price and (ii)
lesser of (x) eighty-eight percent (88%) of the lesser of (A) the Daily VWAP on
the last VWAP Trading Day immediately prior to such Interest Payment Date and
(B) the average of the lowest two Daily VWAPs during the ten (10) VWAP Trading
Day period ending on the last VWAP Trading Day immediately prior to such
Interest Payment Date and (y) the Conversion Price.

 

“Stock Payment Date” has the meaning set forth in Section 5(C).

 

“Stock Payment Notice” has the meaning set forth in Section 5(B)

 

“Subordinated Indebtedness” means Indebtedness subordinated to the Notes in
amounts and on terms and conditions satisfactory to the Holder in its sole
discretion.

 

“Subsidiary” means, with respect to any Person, (A) any corporation, association
or other business entity (other than a partnership or limited liability company)
of which more than fifty percent (50%) of the total voting power of the Capital
Stock entitled (without regard to the occurrence of any contingency, but after
giving effect to any voting agreement or stockholders’ agreement that
effectively transfers voting power) to vote in the election of directors,
managers or trustees, as applicable, of such corporation, association or other
business entity is owned or controlled, directly or indirectly, by such Person
or one or more of the other Subsidiaries of such Person; and (B) any partnership
or limited liability company where (i) more than fifty percent (50%) of the
capital accounts, distribution rights, equity and voting interests, or of the
general and limited partnership interests, as applicable, of such partnership or
limited liability company are owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person, whether in
the form of membership, general, special or limited partnership or limited
liability company interests or otherwise; and (ii) such Person or any one or
more of the other Subsidiaries of such Person is a controlling general partner
of, or otherwise controls, such partnership or limited liability company.

 

 - 12 - 

 

Exhibit Version

 

“Successor Corporation” has the meaning set forth in Section 10(A).

 

“Successor Person” has the meaning set forth in Section 8(I)(i).

 

“Tender/Exchange Offer Valuation Period” has the meaning set forth in Section
8(F)(i)(4).

 

“Trading Day” means any day on which (A) trading in the Common Stock generally
occurs on the principal U.S. national or regional securities exchange on which
the Common Stock is then listed or, if the Common Stock is not then listed on a
U.S. national or regional securities exchange, on the principal other market on
which the Common Stock is then traded; and (B) there is no Market Disruption
Event. If the Common Stock is not so listed or traded, then “Trading Day” means
a Business Day.

 

“UCC” means the Uniform Commercial Code as the same is, from time to time, in
effect in the State of New York.

 

“VWAP Market Disruption Event” means, with respect to any date, (A) the failure
by the principal U.S. national or regional securities exchange on which the
Common Stock is then listed, or, if the Common Stock is not then listed on a
U.S. national or regional securities exchange, the principal other market on
which the Common Stock is then traded, to open for trading during its regular
trading session on such date; or (B) the occurrence or existence, for more than
one half hour period in the aggregate, of any suspension or limitation imposed
on trading (by reason of movements in price exceeding limits permitted by the
relevant exchange or otherwise) in the Common Stock or in any options contracts
or futures contracts relating to the Common Stock, and such suspension or
limitation occurs or exists at any time before 1:00 p.m., New York City time, on
such date.

 

“VWAP Trading Day” means a day on which (A) there is no VWAP Market Disruption
Event; provided, that the Holder, by notice to the Company, may waive any such
VWAP Market Disruption Event; and (B) trading in the Common Stock generally
occurs on the principal U.S. national or regional securities exchange on which
the Common Stock is then listed or, if the Common Stock is not then listed on a
U.S. national or regional securities exchange, on the principal other market on
which the Common Stock is then traded. If the Common Stock is not so listed or
traded, then “VWAP Trading Day” means a Business Day.

 

“Wholly Owned Subsidiary” of a Person means any Subsidiary of such Person all of
the outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares) are owned by such Person or one or more Wholly
Owned Subsidiaries of such Person.

 

 - 13 - 

 

Exhibit Version

 

“Withheld Shares” has the meaning set forth in Section 8(J)(ii).

 

Article 2.Persons Deemed Owners.

 

The Holder of this Note will be treated as the owner of this Note for all
purposes.

 

Article 3.Registered Form.

 

This Note, and any Note issued in exchange therefor or in substitution thereof,
will be in registered form, without coupons.

 

Article 4.Accrual of Interest; Amortization Payments; Defaulted Amounts.

 

(A)             Accrual of Stated Interest. This Note will accrue interest (the
“Stated Interest”) at a rate per annum equal to the Stated Interest Rate. Stated
Interest on this Note will (i) accrue on the Principal Amount of this Note; (ii)
accrue from, and including, the most recent date to which Stated Interest has
been paid or duly provided for (or, if no Stated Interest has theretofore been
paid or duly provided for, the Issue Date) to, but excluding, the date of
payment of such Stated Interest; (iii) be payable in arrears on each Interest
Payment Date; and (iv) be computed on the basis of a 360-day year comprised of
twelve 30-day months.

 

(B)              Amortization Payments. The Company shall make an amortization
payment with respect to this Note equal to the applicable Amortization Payment
(or portion thereof, if applicable) on each Amortization Date (or applicable
Stock Payment Date, if applicable); provided, however, that the Holder may, in
its sole discretion, defer the payment of part or all of any Amortization
Payment to any future Amortization Date upon not less than two (2) Business
Days’ prior notice to the Company; provided, further, that the Holder may, in
its sole discretion, convert any Amortization Payment into Conversion
Consideration in accordance with Section 8.

 

(C)              Defaulted Amounts. If a Default or Event of Default (the
Principal Amount outstanding as of such Default or Event of Default, a
“Defaulted Amount”) occurs then in each case, to the extent lawful, interest
(“Default Interest”) will accrue on such Defaulted Amount at a rate per annum
equal to fifteen percent (15.0%), from, and including, the date of such Default
or Event of Default to, but excluding, the date such Default or Event of Default
is cured.

 

Article 5.Method of Payment; When Payment Date is Not a Business Day.

 

(A)             Method of Payment. Except as set forth in Section 5(B) hereof,
the Company will pay all cash amounts due under this Note by check mailed to the
address of the Holder of this Note entitled to such payment as set forth in the
books of the Company (or, if such Holder provides the Company, at least five (5)
days before the date such amount is due, with written notice of an account of
such Holder within the United States, by wire transfer of immediately available
funds to such account).

 

 - 14 - 

 

Exhibit Version

 

(B)              Company’s Election to Pay Amortization Payments or Stated
Interest in Cash or Common Stock. At least ten (10) Trading Days (but no more
than twenty (20) Trading Days) prior to an Amortization Date or Interest Payment
Date, as applicable, the Company, if it desires to elect to pay an Amortization
Payment due on such Amortization Date or payment of Stated Interest due on such
Interest Payment Date in shares of Common Stock, shall deliver to the Holder a
written notice of such election (a “Stock Payment Notice”) (and such election
shall be irrevocable as to such Amortization Date or Interest Payment Date, as
applicable). Failure to timely deliver such written notice to the Holder shall
be deemed an election by the Company to pay the Amortization Payment or payment
of Stated Interest on such Amortization Date or Interest Payment Date, as
applicable, in cash. With respect to any Amortization Date or Interest Payment
Date for which the Company has elected to make an Amortization Payment or
payment of Stated Interest in shares of Common Stock in accordance with this
Section 5(B), the Company shall issue to the Holder, in lieu of payment of such
Amortization Payment or payment of Stated Interest in cash, a number of validly
issued, fully paid and Freely Tradable shares of Common Stock equal to the
quotient (rounded up to the closest whole number) obtained by dividing such
Amortization Payment (or lesser amount elected by Holder and notified to the
Company in accordance with this Note) by the Amortization Stock Payment Price
for the Stock Payment Date applicable to such Amortization Payment (such
quotient, the “Amortization Share Amount”) or by dividing such payment of Stated
Interest by the Stated Interest Stock Payment Price for such payment of Stated
Interest (such quotient, the “Stated Interest Share Amount”), as applicable. In
the event that the number of shares of Common Stock issued to the Holder on such
date is reduced as a result of the Floor Price, the Company shall concurrently
with the issuance of such shares also pay to the Holder an amount, in cash,
equal to the product of (i) the number of shares by which the Amortization Share
Amount or Stated Interest Amount, as applicable, was reduced as a result of the
Floor Price, multiplied by (ii) the Amortization Stock Payment Price or Stated
Interest Stock Payment Price, as applicable. Notwithstanding anything herein to
the contrary, the Company will not have the right to, and will not, make any
Amortization Payment in shares of Common Stock if the Equity Conditions are not
satisfied for each VWAP Trading Day occurring between the date of the Stock
Payment Notice and the applicable Amortization Date, unless such failure of the
Equity Conditions to be so satisfied is waived in writing by the Holder, which
waiver may be granted or withheld by the Holder in its sole discretion. To the
extent that the Company’s election to pay an Amortization Payment or a payment
of Stated Interest in shares of Common Stock would cause the Beneficial
Ownership Limit pursuant to Section 8(J)(i) to be exceeded, the Company will
deliver shares of Common Stock up to the Beneficial Ownership Limit, and the
excess amount of such Amortization Payment or Stock Payment, as applicable,
shall be deferred to such future Amortization Date or Stock Payment Date as
Holder may elect in its sole discretion (or, if Holder shall not so elect prior
to the next Amortization Date or Stock Payment Date, the next Amortization Date
or Stock Payment Date, as applicable.

 

(C)              Stock Payment Date Election. If the Company elects to pay any
Amortization Payment in shares of Common Stock, the Holder may elect to receive
the corresponding Amortization Share Amount for all or any portion of the
applicable Amortization Payment on one or more Scheduled Trading Days (each, a
“Stock Payment Date”) during the period beginning on, and including, the
applicable Amortization Date and ending on, and including, the Scheduled Trading
Day immediately before the subsequent Amortization Date (the “Amortization Share
Payment Period”). The Holder must provide notice to the Company of its election
of any Stock Payment Date and the portion of the Amortization Payment and
corresponding Amortization Share Amount it is electing to receive on each such
Stock Payment Date no later than 4:30 p.m. New York Time on such Stock Payment
Date; provided, that the Holder may make more than one election to receive
portions of the Amortization Payment and corresponding Amortization Share
Amounts on any Stock Payment Date; and provided further, that the Amortization
Share Amount in any such notice will be updated following the close of trading
on the applicable Stock Payment Date in order to reflect the final Amortization
Stock Payment Price applicable to such Stock Payment Date. Any portion of the
Amortization Payment not paid in shares of Common Stock because the Holder did
not elect to receive shares for such full Amortization Payment on Stock Payment
Dates during the applicable Amortization Share Payment Period will be
automatically deferred to the next Amortization Date.

 

 - 15 - 

 

Exhibit Version

 

(D)             Event of Default/Equity Triggering Event Additional Shares. In
the event of issuance of any Event of Default/Equity Triggering Event Additional
Shares, to the extent that the amount of such shares was reduced as a result of
the Floor Price, then concurrently with the issuance of such shares, the Company
shall also pay to the Holder an amount, in cash, equal to the product of (i) the
number of shares by which such amount was reduced as a result of the Floor
Price, multiplied by (ii) the Event of Default/Equity Triggering Event
Conversion Price.

 

(E)              Delivery. Any shares of Common Stock to be delivered pursuant
to this Section 5 will be delivered by the Company to the Holder on or before
the second (2nd) Business Day following the applicable Stock Payment Date or
Interest Payment Date, as applicable.

 

(F)              Delay of Payment when Payment Date is Not a Business Day. If
the due date for a payment on this Note as provided in this Note is not a
Business Day, then, notwithstanding anything to the contrary in this Note, such
payment may be made on the immediately following Business Day and no interest
will accrue on such payment as a result of the related delay.

 

(G)             Pre-Delivery Shares.

 

(i)                 General. On the Issue Date, the Company shall pre-deliver to
the Holder [ ˜ ] ([ ˜ ]) [NTD: to be proportional based on total amount of Notes
issued] Freely Tradable shares of Common Stock (the “Pre-Delivery Shares”)
pursuant to the terms of this Note, which such Pre-Delivery Shares shall be
validly issued, fully paid, nonassessable and free from all preemptive or
similar rights or Liens with respect to the issue thereof.

 

(ii)              Application and Replenishment of Pre-Delivery Shares.
Notwithstanding anything to the contrary in this Note, at any time the Company
elects or is obligated to issue shares of Common Stock to the Holder pursuant to
the terms of this Note, including with respect to any conversion of this Note or
pursuant to Section 5(B) or Section 6(F), the Holder may elect, upon written
notice to the Company, given no less than two (2) Trading Days prior to the date
upon which the Company would otherwise be obligated to deliver such shares to
Holder, to apply Pre-Delivery Shares, in whole or in part, as applicable,
against the shares of Common Stock otherwise deliverable with respect thereto
and, in each case, such application of Pre-Delivery Shares shall reduce the
aggregate number of shares of Common Stock otherwise required to be delivered to
the Holder pursuant to the terms of this Note on a share-by-share basis and such
shares so applied shall no longer constitute Pre-Delivery Shares; provided,
however, that no later than the Amortization Date following any application of
Pre-Delivery Shares in accordance with this Section 5(G)(ii), the Company shall
deliver to the Holder a number of validly issued, fully paid and nonassessable
Freely Tradable shares of Common Stock, free from all preemptive or similar
rights or Liens with respect to the issue thereof, equal to the number of
Pre-Delivery Shares applied to satisfy any such election or obligation to issue
shares of Common Stock under this Section 5(G)(ii), which such Freely Tradable
shares of Common Stock shall be treated as “Pre-Delivery Shares” for all
purposes hereunder.

 

 - 16 - 

 

Exhibit Version

 

(iii)            Restrictions on Disposition of Pre-Delivery Shares by the
Holder. Holder will not (A) loan any Pre-Delivery shares to any third party,
(B)prior to February 1, 2020 sell or otherwise transfer or dispose of any
Pre-Delivery Shares to any unaffiliated third party and (C) on or after February
1, 2020 sell or otherwise transfer or dispose of any Pre-Delivery Shares to any
unaffiliated third party if the amount of such sales, transfers or dispositions
on any day would exceed 10% of the composite trading volume (as reported on
Bloomberg) of the Common Stock on such day ; provided, that the Holder will not
be responsible for any action taken unilaterally by the Holder’s brokers with
respect to any lending of the Pre-Delivery Shares outside of the Holder’s
direction; and provided further, that the restrictions set forth in this Section
5(G)(iii) shall not apply during any Event of Default Conversion Period.

 

(iv)             Delivery of Pre-Delivery Shares by the Holder. Within ten (10)
Business Days following redemption or repayment of this Note in full and the
satisfaction or discharge by the Company of all outstanding Company obligations
hereunder, the Holder shall deliver [ ● ] ([ ● ]) shares [NTD: to be
proportional based on total amount of Notes issued] (subject to proportionate
adjustments for events of the type set forth in Section 8(F)(i)(1)) of the
Company’s Common Stock to the Company, free from all preemptive or similar
rights or Liens with respect to the delivery thereof; provided, that, to the
extent the Company fails to deliver any fully paid and nonassessable Freely
Tradable shares of Common Stock to the Holder as required under Section 5(G)(i)
or Section 5(G)(ii), the number of shares of the Company’s Common Stock to be
delivered under this Section 5(G)(iv) shall be reduced by the number of such
shares of Common Stock the Company failed to deliver.

 

Article 6.Required Repurchase of Note upon a Fundamental Change.

 

(A)             Repurchase Upon Fundamental Change. Subject to the other terms
of this Section 6, including Section 6(F), if a Fundamental Change occurs, then
the Holder will have the right to require the Company to repurchase this Note
(or any portion of this Note in an Authorized Denomination) on the Fundamental
Change Repurchase Date for such Fundamental Change for a cash purchase price
equal to the Fundamental Change Repurchase Price.

 

(B)              Fundamental Change Repurchase Date. The Fundamental Change
Repurchase Date for any Fundamental Change will be a Business Day of the
Holder’s choosing that is no more than twenty (20) Business Days after the later
of (x) the date the Company delivers to the Holder the related Fundamental
Change Notice pursuant to Section 6(C); and (y) the effective date of such
Fundamental Change.

 

 - 17 - 

 

Exhibit Version

 

(C)              Fundamental Change Notice. No later than the fifth (5th)
Business Day before the occurrence of any Fundamental Change, the Company will
send to the Holder a written notice (the “Fundamental Change Notice”) thereof,
stating the expected date such Fundamental Change will occur. Following receipt
of a Fundamental Change Notice, the Holder may elect (by written notice to the
Company no later than the later of (i) ten (10) Trading Days after receipt of
such Fundamental Change Notice) and (ii) ten (10) Trading Days after the date of
any amendment or other modification to the form or value of consideration
receivable by holders of the Common Stock in connection with such Fundamental
Change, to require the Company to repurchase this Note (or any portion of this
Note in an Authorized Denomination) on the Fundamental Change Repurchase Date
for such Fundamental Change for a cash purchase price equal to the Fundamental
Change Repurchase Price.

 

(D)             Fundamental Change Repurchase Price. The Fundamental Change
Repurchase Price for this Note (or any portion of this Note) to be repurchased
upon a Repurchase Upon Fundamental Change following a Fundamental Change is an
amount in cash equal to the Fundamental Change Base Repurchase Price for such
Fundamental Change plus accrued and unpaid interest on this Note (or such
portion of this Note) to, but excluding, the Fundamental Change Repurchase Date
for such Fundamental Change. For the avoidance of doubt, if such Fundamental
Change Repurchase Date is on an Interest Payment Date, then the interest
otherwise payable on this Note (or such portion of this Note) on such Interest
Payment Date will be paid as part of the Fundamental Change Repurchase Price, in
satisfaction of the Company’s obligation to pay such interest on such Interest
Payment Date.

 

(E)              Effect of Repurchase. If this Note (or any portion of this
Note) is to be repurchased upon a Repurchase Upon Fundamental Change, then, from
and after the date the related Fundamental Change Repurchase Price is paid in
full, this Note (or such portion) will cease to be outstanding and interest will
cease to accrue on this Note (or such portion).

 

(F)              Fundamental Change Redemption. Notwithstanding anything in this
Section 6 to the contrary, at the Holder’s sole discretion following receipt of
a Fundamental Change Notice, in lieu of receiving the Fundamental Change
Repurchase Price (or any portion thereof), the Holder may require the Company to
redeem this Note (or any portion of this Note in an Authorized Denomination) in
exchange for a number of validly issued, fully paid and Freely Tradable shares
of Common Stock equal to the quotient (rounded up to the closest whole number)
obtained by dividing the Fundamental Change Repurchase Price (or applicable
portion thereof) by the Fundamental Change Redemption Stock Payment Price. The
Fundamental Change Redemption Date for any Fundamental Change will be a Business
Day of the Holder’s choosing that is no more than ten (10) Business Days after
the later of (x) the date the Company delivers to the Holder the related
Fundamental Change Notice pursuant to Section 6(C); and (y) ten (10) Trading
Days after the date of any amendment or other modification to the form or value
of consideration receivable by holders of the Common Stock in connection with
such Fundamental Change. Any such shares of Common Stock will be delivered by
the Company to the Holder on or before the second (2nd) Business Day following a
Fundamental Change Redemption Date. In the event that the number of shares of
Common Stock issued to the Holder on such date is reduced as a result of the
Floor Price, the Company shall concurrently with the issuance of such shares
also pay to the Holder an amount, in cash, equal to the product of (i) the
number of shares by which such amount was reduced as a result of the Floor
Price, multiplied by (ii) the Fundamental Change Redemption Stock Payment Price.
Notwithstanding the foregoing, in the event that any such redemption occurs
after the date of completion of such Fundamental Change, and the Holder elects
to receive such Fundamental Change Repurchase Price other than in cash, then the
consideration to be received by Holder upon such redemption shall be in the same
form as received by holders of the Common Stock in connection with such
Fundament Change and will be in an amount equal to the amount of consideration
Holder would have received in connection with such Fundamental Change had Holder
redeemed the Note in exchange for shares of Common Stock immediately prior to
the completion of such Fundamental Change.

 

 - 18 - 

 

Exhibit Version

 

Article 7.Redemption of this Note.

 

(A)             Redemption of This Note. The Company may redeem all of this
Note, on a date (the “Redemption Date”) to be determined by the Company, for a
cash redemption price equal to the Redemption Price, subject to Section 7(D);
provided, that the Company must provide notice at least ten (10) Trading Days
prior to any Redemption Date.

 

(B)              Redemption Price. The Redemption Price for this Note to be
redeemed pursuant to Section 7(A) is an amount in cash equal to the Redemption
Base Price plus accrued and unpaid interest on this Note to, but excluding, the
related Redemption Date, subject to Section 7(D). For the avoidance of doubt, if
such Redemption Date is on an Interest Payment Date, then the interest otherwise
payable on this Note on such Interest Payment Date will be paid as part of the
Redemption Price, in satisfaction of the Company’s obligation to pay such
interest on such Interest Payment Date.

 

(C)              Effect of Redemption. If this Note is to be redeemed pursuant
to Section 7(A), then, from and after the date the related Redemption Price is
paid in full, this Note will cease to be outstanding and interest will cease to
accrue on this Note, except to the extent set forth in Section 7(D).

 

(D)             Additional Redemption Amount. Notwithstanding anything to the
contrary in this Section 7, the Company will pay to the Holder any Additional
Redemption Amount on the ninety third (93rd) VWAP Trading Day immediately after
the related Redemption Date.

 

(E)              Minimum Fundraising Event Redemption. On or prior to the second
(2nd) Business Day following the date that the Company receives aggregated net
cash proceeds of seventy-five million ($75,000,000) from any issuance of Capital
Stock or the incurrence of Permitted Indebtedness by the Company, or any
combination thereof, the Company will redeem ten million dollars ($10,000,000)
of this Note by complying with the procedures set forth in Sections 7(A)-(E);
provided, that in the event such proceeds are received by the Company on or
before December 31, 2019, the Company will instead redeem such principal amount
of the Note by complying with the procedures set forth in Sections 7(A)-(C) and
the Redemption Price shall be one hundred ten percent (110%) of the principal
amount so redeemed; provided, further that the Holder, in its sole discretion,
may defer the Redemption Date for such redemption, in whole or in part, to any
future Amortization Date.

 

(F)              December 31, 2019 Redemption. On December 31, 2019, the Company
will redeem [ ● ] dollars ($[ ● ]), [NTD: to be proportional amount of
$10,000,000 based on proportion of total Notes issued] of this Note by complying
with the procedures set forth in Sections 7(A)-(C); provided that the Redemption
Price shall be one hundred ten percent (110%) of the principal amount so
redeemed; provided, further that the Holder, in its sole discretion, may defer
the Redemption Date for such redemption, in whole or in part, to any future
Amortization Date.

 

 - 19 - 

 

Exhibit Version

 

Article 8.Conversion.

 

(A)             Right to Convert.

 

(i)                 Generally. Subject to the provisions of this Section 8, the
Holder may, at its option, convert this Note, including any portion constituting
an Amortization Payment, into Conversion Consideration.

 

(ii)              Conversions in Part. Subject to the terms of this Section 8,
this Note may be converted in part, but only in an Authorized Denomination.
Provisions of this Section 8 applying to the conversion of this Note in whole
will equally apply to conversions of any permitted portion of this Note.

 

(B)              When this Note May Be Converted.

 

(i)                 Generally. The Holder may convert this Note at any time
until the Close of Business on the second (2nd) Scheduled Trading Day
immediately before the Maturity Date; provided that, with respect to the
conversion of any Amortization Payment, the Holder must provide notice of such
conversion no later than the Close of Business on the second (2nd) Scheduled
Trading Day immediately preceding the applicable Amortization Date, and any such
conversion will not reduce the amount of future Amortization Payments.

 

(ii)              Limitations and Closed Periods. Notwithstanding anything to
the contrary in this Section 8, (x) if this Note (or any portion of this Note)
is to be redeemed pursuant to Section 7(A), then in no event may this Note (or
such portion) be converted after the Close of Business on the second (2nd)
Scheduled Trading Day immediately before the related Redemption Date; and (y) if
this Note (or any portion of this Note) is to be repurchased upon a Repurchase
Upon Fundamental Change, then in no event may this Note (or such portion) be
converted after the Close of Business on the second (2nd) Scheduled Trading Day
immediately before the related Fundamental Change Repurchase Date.

 

(C)              Conversion Procedures.

 

(i)                 Generally. To convert this Note, the Holder must (1)
complete, manually sign and deliver to the Company the conversion notice
attached to this Note or a facsimile or portable document format (.pdf) version
of such conversion notice (at which time such conversion will become
irrevocable); and (2) pay any amounts due pursuant to Section 8(C)(iii). For the
avoidance of doubt, the conversion notice may be delivered by e-mail in
accordance with Section 14. If the Company fails to deliver, by the related
Conversion Settlement Date, any shares of Common Stock forming part of the
Conversion Consideration of the conversion of this Note, the Holder, by notice
to the Company, may rescind all or any portion of the corresponding conversion
notice at any time until such Defaulted Shares are delivered.

 

 - 20 - 

 

Exhibit Version

 

(ii)              Holder of Record of Conversion Shares. The person in whose
name any shares of Common Stock is issuable upon conversion of this Note will be
deemed to become the holder of record of such shares as of the Close of Business
on the Conversion Date for such conversion, conferring, as of such time, upon
such person, without limitation, all voting and other rights appurtenant to such
shares.

 

(iii)            Taxes and Duties. If the Holder converts a Note, the Company
will pay any documentary, stamp or similar issue or transfer tax or duty due on
the issue of any shares of Common Stock upon such conversion; provided, however,
that if any tax or duty is due because such Holder requested such shares to be
issued in a name other than that of such Holder, then such Holder will pay such
tax or duty and, until having received a sum sufficient to pay such tax or duty,
the Company may refuse to deliver any such shares to be issued in a name other
than that of such Holder.

 

(D)             Settlement upon Conversion.

 

(i)                 Generally. The consideration (the “Conversion
Consideration”) due in respect of each $1,000 Principal Amount of this Note
including any portion constituting an Amortization Payment to be converted will
consist of the following:

 

(1)               subject to Section 8(D)(ii), a number of shares of Common
Stock equal to the Conversion Rate in effect on the Conversion Date for such
conversion; and

 

(2)               cash in an amount equal to the aggregate accrued and unpaid
interest on this Note to, but excluding, the Conversion Settlement Date for such
conversion.

 

(ii)              Fractional Shares. The total number of shares of Common Stock
due in respect of any conversion of this Note, including any portion
constituting an Amortization Payment, will be determined on the basis of the
total Principal Amount of this Note to be converted with the same Conversion
Date; provided, however, that if such number of shares of Common Stock is not a
whole number, then such number will be rounded up to the nearest whole number.

 

(iii)            Delivery of the Conversion Consideration. The Company will pay
or deliver, as applicable, the Conversion Consideration due upon the conversion
of this Note, including any portion constituting an Amortization Payment, to the
Holder on or before the second (2nd) Business Day (or, if earlier, the standard
settlement period for the primary Eligible Exchange on which the Common Stock is
traded) immediately after the Conversion Date for such conversion (the
“Conversion Settlement Date”).

 

(iv)             Effect of Conversion. If this Note is converted, then, from and
after the date the Conversion Consideration therefor is issued or delivered in
settlement of such conversion, this Note will cease to be outstanding and
interest will cease to accrue on this Note.

 

 - 21 - 

 

Exhibit Version

 

(v)               Conversion Settlement Defaults. If (x) the Company fails to
deliver, by the related Conversion Settlement Date, any shares of Common Stock
(the “Defaulted Shares”) forming part of the Conversion Consideration of the
conversion of this Note, including any portion constituting an Amortization
Payment; and (y) the Holder (whether directly or indirectly, including by any
broker acting on the Holder’s behalf or acting with respect to such Defaulted
Shares) purchases any shares of Common Stock (whether in the open market or
otherwise) to cover any such Defaulted Shares (whether to satisfy any settlement
obligations with respect thereto of the Holder or otherwise), then, without
limiting the Holder’s right to pursue any other remedy available to it (whether
hereunder, under applicable law or otherwise), the Holder will have the right,
exercisable by notice to the Company, to cause the Company to either:

 

(1)               pay, on or before the second (2nd) Business Day after the date
such notice is delivered, cash to the Holder in an amount equal to the aggregate
purchase price (including any brokerage commissions and other out-of-pocket
costs) incurred to purchase such shares (such aggregate purchase price, the
“Covering Price”); or

 

(2)               promptly deliver, to the Holder, such Defaulted Shares in
accordance with this Note, together with cash in an amount equal to the excess,
if any, of the Covering Price over the product of (x) the number of such
Defaulted Shares; and (y) the Daily VWAP per share of Common Stock on the
Conversion Date relating to such conversion.

 

To exercise such right, the Holder must deliver notice of such exercise to the
Company, specifying whether the Holder has elected clause (1) or (2) above to
apply. If the Holder has elected clause (1) to apply, then the Company’s
obligation to deliver the Defaulted Shares in accordance with this Note will be
deemed to have been satisfied and discharged to the extent the Company has paid
the Covering Price in accordance with clause (1).

 

(E)              Reserve and Status of Common Stock Issued upon Conversion.

 

(i)                 Stock Reserve. At all times when this Note is outstanding,
the Company will reserve, out of its authorized but unissued and unreserved
shares of Common Stock, a number of shares of Common Stock equal to three
hundred percent (300%) of that which is sufficient to permit the conversion of
this Note.

 

(ii)              Status of Conversion Shares; Listing. Each share of Common
Stock delivered upon conversion of this Note will be a newly issued or treasury
share and will be duly and validly issued, fully paid, non-assessable, free from
preemptive rights and free of any lien or adverse claim (except to the extent of
any lien or adverse claim created by the action or inaction of the Holder or the
Person to whom such share will be delivered). If the Common Stock is then listed
on any securities exchange, or quoted on any inter-dealer quotation system, then
the Company will cause each share of Common Stock issued upon conversion of this
Note, when delivered upon such conversion, to be admitted for listing on such
exchange or quotation on such system.

 

 - 22 - 

 

Exhibit Version

 

(iii)            Transferability of Conversion Shares. Any shares of Common
Stock issued upon conversion of this Note will be issued in the form of
book-entries at the facilities of DTC, identified therein by an “unrestricted”
CUSIP number.

 

(F)              Adjustments to the Conversion Rate.

 

(i)                 Events Requiring an Adjustment to the Conversion Rate. The
Conversion Rate will be adjusted from time to time as follows:

 

(1)               Stock Dividends, Splits and Combinations. If the Company
issues solely shares of Common Stock as a dividend or distribution on all or
substantially all shares of the Common Stock, or if the Company effects a stock
split or a stock combination of the Common Stock (in each case excluding an
issuance solely pursuant to a Common Stock Change Event, as to which Section
8(I) will apply), then the Conversion Rate will be adjusted based on the
following formula:

 

[exh101_1.jpg]

 

where:

 

CR0 = the Conversion Rate in effect immediately before the Open of Business on
the Ex-Dividend Date for such dividend or distribution, or immediately before
the Open of Business on the effective date of such stock split or stock
combination, as applicable;

 

CR1 = the Conversion Rate in effect immediately after the Open of Business on
such Ex-Dividend Date or the Open of Business on such effective date, as
applicable;

 

OS0 = the number of shares of Common Stock outstanding immediately before the
Open of Business on such Ex-Dividend Date or effective date, as applicable,
without giving effect to such dividend, distribution, stock split or stock
combination; and

 

OS1 = the number of shares of Common Stock outstanding immediately after giving
effect to such dividend, distribution, stock split or stock combination.

 

If any dividend, distribution, stock split or stock combination of the type
described in this Section 8(F)(i)(1) is declared or announced, but not so paid
or made, then the Conversion Rate will be readjusted, effective as of the date
the Board of Directors determines not to pay such dividend or distribution or to
effect such stock split or stock combination, to the Conversion Rate that would
then be in effect had such dividend, distribution, stock split or stock
combination not been declared or announced.

 

 - 23 - 

 

Exhibit Version

 

(2)               Rights, Options and Warrants. If the Company distributes, to
all or substantially all holders of Common Stock, rights, options or warrants
(other than rights issued or otherwise distributed pursuant to a stockholder
rights plan, as to which the provisions set forth in Sections 8(F)(i)(3)(a) and
Section 8(F)(v) will apply) entitling such holders, for a period of not more
than sixty (60) calendar days after the record date of such distribution, to
subscribe for or purchase shares of Common Stock at a price per share that is
less than the average of the Last Reported Sale Prices per share of Common Stock
for the ten (10) consecutive Trading Days ending on, and including, the Trading
Day immediately before the date such distribution is announced, then the
Conversion Rate will be increased based on the following formula:

 

[exh101_2.jpg]

 

where:

 

 CR0 =the Conversion Rate in effect immediately before the Open of Business on
the Ex-Dividend Date for such distribution;        CR1 =the Conversion Rate in
effect immediately after the Open of Business on such Ex-Dividend Date;       OS
=the number of shares of Common Stock outstanding immediately before the Open of
Business on such Ex-Dividend Date;        X =the total number of shares of
Common Stock issuable pursuant to such rights, options or warrants; and        Y
=a number of shares of Common Stock obtained by dividing (x) the aggregate price
payable to exercise such rights, options or warrants by (y) the average of the
Last Reported Sale Prices per share of Common Stock for the ten (10) consecutive
Trading Days ending on, and including, the Trading Day immediately before the
date such distribution is announced.

 

To the extent that shares of Common Stock are not delivered after the expiration
of such rights, options or warrants (including as a result of such rights,
options or warrants not being exercised), the Conversion Rate will be readjusted
to the Conversion Rate that would then be in effect had the increase to the
Conversion Rate for such distribution been made on the basis of delivery of only
the number of shares of Common Stock actually delivered upon exercise of such
rights, option or warrants. To the extent such rights, options or warrants are
not so distributed, the Conversion Rate will be readjusted to the Conversion
Rate that would then be in effect had the Ex-Dividend Date for the distribution
of such rights, options or warrants not occurred.

 

 - 24 - 

 

Exhibit Version

 

For purposes of this Section 8(F)(i)(2), in determining whether any rights,
options or warrants entitle holders of Common Stock to subscribe for or purchase
shares of Common Stock at a price per share that is less than the average of the
Last Reported Sale Prices per share of Common Stock for the ten (10) consecutive
Trading Days ending on, and including, the Trading Day immediately before the
date the distribution of such rights, options or warrants is announced, and in
determining the aggregate price payable to exercise such rights, options or
warrants, there will be taken into account any consideration the Company
receives for such rights, options or warrants and any amount payable on exercise
thereof, with the value of such consideration, if not cash, to be determined by
the Board of Directors in good faith.

 

(3)               Spin-Offs and Other Distributed Property.

 

(1)Distributions Other than Spin-Offs. If the Company distributes shares of its
Capital Stock, evidences of its indebtedness or other assets or property of the
Company, or rights, options or warrants to acquire Capital Stock of the Company
or other securities, to all or substantially all holders of the Common Stock,
excluding:

 

(v)       dividends, distributions, rights, options or warrants for which an
adjustment to the Conversion Rate is required pursuant to Section 8(F)(i)(1) or
Section 8(F)(i)(2);

 

(w)       dividends or distributions paid exclusively in cash for which an
adjustment to the Conversion Rate is required pursuant to Section 8(F)(i)(4);

 

(x)       rights issued or otherwise distributed pursuant to a stockholder
rights plan, except to the extent provided in Section 8(F)(v);

 

(y)       Spin-Offs for which an adjustment to the Conversion Rate is required
pursuant to Section 8(F)(i)(3)(b); and

 

(z)       a distribution solely pursuant to a Common Stock Change Event, as to
which Section 8(I) will apply,

 

then the Conversion Rate will be increased based on the following formula:

 

[exh101_3.jpg]

 

 - 25 - 

 

Exhibit Version

 

where:

 

  CR0 = the Conversion Rate in effect immediately before the Open of Business on
the Ex-Dividend Date for such distribution;           CR1 = the Conversion Rate
in effect immediately after the Open of Business on such Ex-Dividend Date;      
    SP = the average of the Last Reported Sale Prices per share of Common Stock
for the ten (10) consecutive Trading Days ending on, and including, the Trading
Day immediately before such Ex-Dividend Date; and           FMV = the fair
market value (as determined by the Board of Directors in good faith), as of such
Ex-Dividend Date, of the shares of Capital Stock, evidences of indebtedness,
assets, property, rights, options or warrants distributed per share of Common
Stock pursuant to such distribution;

 

provided, however, that if FMV is equal to or greater than SP, then, in lieu of
the foregoing adjustment to the Conversion Rate, the Holder will receive, for
each $1,000 Principal Amount of this Note held by this Holder on the record date
for such distribution, at the same time and on the same terms as holders of
Common Stock, the amount and kind of shares of Capital Stock, evidences of
indebtedness, assets, property, rights, options or warrants that such Holder
would have received if such Holder had owned, on such record date, a number of
shares of Common Stock equal to the Conversion Rate in effect on such record
date.

 

To the extent such distribution is not so paid or made, the Conversion Rate will
be readjusted to the Conversion Rate that would then be in effect had the
adjustment been made on the basis of only the distribution, if any, actually
made or paid.

 

(2)Spin-Offs. If the Company distributes or dividends shares of Capital Stock of
any class or series, or similar equity interest, of or relating to an Affiliate,
a Subsidiary or other business unit of the Company to all or substantially all
holders of the Common Stock (other than solely pursuant to a Common Stock Change
Event, as to which Section 8(I) will apply), and such Capital Stock or equity
interest is listed or quoted (or will be listed or quoted upon the consummation
of the transaction) on a U.S. national securities exchange (a “Spin-Off”), then
the Conversion Rate will be increased based on the following formula:

 

[exh101_4.jpg]

 

 - 26 - 

 

Exhibit Version

 

where:

 

  CR0 = the Conversion Rate in effect immediately before the Open of Business on
the Ex-Dividend Date for such Spin-Off;           CR1 = the Conversion Rate in
effect immediately after the Open of Business on such Ex-Dividend Date;        
  FMV = the product of (x) the average of the Last Reported Sale Prices per
share or unit of the Capital Stock or equity interests distributed in such
Spin-Off over the ten (10) consecutive Trading Day period (the “Spin-Off
Valuation Period”) beginning on, and including, such Ex-Dividend Date (such
average to be determined as if references to Common Stock in the definitions of
Last Reported Sale Price, Trading Day and Market Disruption Event were instead
references to such Capital Stock or equity interests); and (y) the number of
shares or units of such Capital Stock or equity interests distributed per share
of Common Stock in such Spin-Off; and           SP = the average of the Last
Reported Sale Prices per share of Common Stock for each Trading Day in the
Spin-Off Valuation Period.

 

The adjustment to the Conversion Rate pursuant to this Section 8(F)(i)(3)(b)
will be calculated as of the Close of Business on the last Trading Day of the
Spin-Off Valuation Period but will be given effect immediately after the Open of
Business on the Ex-Dividend Date for the Spin-Off, with retroactive effect. If a
Note is converted and the Conversion Date occurs during the Spin-Off Valuation
Period, then, notwithstanding anything to the contrary in this Note, the Company
will, if necessary, delay the settlement of such conversion until the second
(2nd) Business Day after the last day of the Spin-Off Valuation Period.

 

To the extent any dividend or distribution of the type set forth in this Section
8(F)(i)(3)(b) is declared but not made or paid, the Conversion Rate will be
readjusted to the Conversion Rate that would then be in effect had the
adjustment been made on the basis of only the dividend or distribution, if any,
actually made or paid.

 

(4)               Cash Dividends or Distributions. If any cash dividend or
distribution is made to all or substantially all holders of Common Stock, then
the Conversion Rate will be increased based on the following formula:

 

 - 27 - 

 

Exhibit Version

 

 [exh101_5.jpg]

 

where:

 

  CR0 = the Conversion Rate in effect immediately before the Open of Business on
the Ex-Dividend Date for such dividend or distribution;           CR1 = the
Conversion Rate in effect immediately after the Open of Business on such
Ex-Dividend Date;           SP = the Last Reported Sale Price per share of
Common Stock on the Trading Day immediately before such Ex-Dividend Date; and  
        D = the cash amount distributed per share of Common Stock in such
dividend or distribution;

 

provided, however, that if D is equal to or greater than SP, then, in lieu of
the foregoing adjustment to the Conversion Rate, the Holder will receive, for
each $1,000 Principal Amount of this Note held by the Holder on the record date
for such dividend or distribution, at the same time and on the same terms as
holders of Common Stock, the amount of cash that such Holder would have received
if such Holder had owned, on such record date, a number of shares of Common
Stock equal to the Conversion Rate in effect on such record date.

 

To the extent such dividend or distribution is declared but not made or paid,
the Conversion Rate will be readjusted to the Conversion Rate that would then be
in effect had the adjustment been made on the basis of only the dividend or
distribution, if any, actually made or paid.

 

(5)               Tender Offers or Exchange Offers. If the Company or any of its
Subsidiaries makes a payment in respect of a tender offer or exchange offer for
shares of Common Stock (other than solely pursuant to an odd-lot tender offer
pursuant to Rule 13e-4(h)(5) under the Exchange Act), and the value (determined
as of the Expiration Time by the Board of Directors in good faith) of the cash
and other consideration paid per share of Common Stock in such tender or
exchange offer exceeds the Last Reported Sale Price per share of Common Stock on
the Trading Day immediately after the last date (the “Expiration Date”) on which
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it may be amended), then the Conversion Rate will be increased based on the
following formula:

 

[exh101_6.jpg]

 

 - 28 - 

 

Exhibit Version

 

where:

 

  CR0 = the Conversion Rate in effect immediately before the time (the
“Expiration Time”) such tender or exchange offer expires;           CR1 = the
Conversion Rate in effect immediately after the Expiration Time;           AC =
the aggregate value (determined as of the Expiration Time by the Board of
Directors in good faith) of all cash and other consideration paid for shares of
Common Stock purchased or exchanged in such tender or exchange offer;          
OS0 = the number of shares of Common Stock outstanding immediately before the
Expiration Time (including all shares of Common Stock accepted for purchase or
exchange in such tender or exchange offer);           OS1 = the number of shares
of Common Stock outstanding immediately after the Expiration Time (excluding all
shares of Common Stock accepted for purchase or exchange in such tender or
exchange offer); and           SP = the average of the Last Reported Sale Prices
per share of Common Stock over the ten (10) consecutive Trading Day period (the
“Tender/Exchange Offer Valuation Period”) beginning on, and including, the
Trading Day immediately after the Expiration Date;

 

provided, however, that the Conversion Rate will in no event be adjusted down
pursuant to this Section 8(F)(i)(5), except to the extent provided in the
immediately following paragraph. The adjustment to the Conversion Rate pursuant
to this Section 8(F)(i)(5) will be calculated as of the Close of Business on the
last Trading Day of the Tender/Exchange Offer Valuation Period but will be given
effect immediately after the Expiration Time, with retroactive effect. If a Note
is converted and the Conversion Date occurs on the Expiration Date or during the
Tender/Exchange Offer Valuation Period, then, notwithstanding anything to the
contrary in this Note, the Company will, if necessary, delay the settlement of
such conversion until the second (2nd) Business Day after the last day of the
Tender/Exchange Offer Valuation Period.

 

To the extent such tender or exchange offer is announced but not consummated
(including as a result of the Company being precluded from consummating such
tender or exchange offer under applicable law), or any purchases or exchanges of
shares of Common Stock in such tender or exchange offer are rescinded, the
Conversion Rate will be readjusted to the Conversion Rate that would then be in
effect had the adjustment been made on the basis of only the purchases or
exchanges of shares of Common Stock, if any, actually made, and not rescinded,
in such tender or exchange offer.

 

 - 29 - 

 

Exhibit Version

 

(ii)              No Adjustments in Certain Cases.

 

(1)               Where the Holder Participates in the Transaction or Event
Without Conversion. Notwithstanding anything to the contrary in Section 8(F)(i),
the Company will not be obligated to adjust the Conversion Rate on account of a
transaction or other event otherwise requiring an adjustment pursuant to Section
8(F)(i) (other than a stock split or combination of the type set forth in
Section 8(F)(i)(1) or a tender or exchange offer of the type set forth in
Section 8(F)(i)(5)) if the Holder participates, at the same time and on the same
terms as holders of Common Stock, and solely by virtue of being the Holder of
this Note, in such transaction or event without having to convert this Note and
as if the Holder held a number of shares of Common Stock equal to the product of
(i) the Conversion Rate in effect on the related record date; and (ii) the
aggregate Principal Amount (expressed in thousands) of this Note held by this
Holder on such date.

 

(2)               Certain Events. The Company will not be required to adjust the
Conversion Rate except as provided in Section 8(F), Section 8(H) or Section
8(I). Without limiting the foregoing, the Company will not be obligated to
adjust the Conversion Rate on account of:

 

(a)               except as otherwise provided in Section 8(F), the sale of
shares of Common Stock for a purchase price that is less than the market price
per share of Common Stock or less than the Conversion Price;

 

(3)the issuance of any shares of Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on the
Company’s securities and the investment of additional optional amounts in shares
of Common Stock under any such plan;

 

(4)the issuance of any shares of Common Stock or options or rights to purchase
shares of Common Stock pursuant to any present or future employee, director or
consultant benefit plan or program of, or assumed by, the Company or any of its
Subsidiaries;

 

(5)the issuance of any shares of Common Stock pursuant to any option, warrant,
right or convertible or exchangeable security of the Company outstanding as of
the Issue Date (other than an adjustment pursuant to Section 8(F)(i)(3)(a) in
connection with the separation of rights under the Company’s stockholder rights
plan existing, if any, as of the Issue Date);

 

(6)solely a change in the par value of the Common Stock; or

 

(7)accrued and unpaid interest on this Note.

 

(iii)            Adjustments Not Yet Effective. Notwithstanding anything to the
contrary in this Note, if:

 

 - 30 - 

 

Exhibit Version

 

(1)               this Note is to be converted;

 

(2)               the record date, effective date or Expiration Time for any
event that requires an adjustment to the Conversion Rate pursuant to Section
8(F)(i) has occurred on or before the Conversion Date for such conversion, but
an adjustment to the Conversion Rate for such event has not yet become effective
as of such Conversion Date;

 

(3)               the Conversion Consideration due upon such conversion includes
any whole shares of Common Stock; and

 

(4)               such shares are not entitled to participate in such event
(because they were not held on the related record date or otherwise),

 

then, solely for purposes of such conversion, the Company will, without
duplication, give effect to such adjustment on such Conversion Date. In such
case, if the date on which the Company is otherwise required to deliver the
consideration due upon such conversion is before the first date on which the
amount of such adjustment can be determined, then the Company will delay the
settlement of such conversion until the second (2nd) Business Day after such
first date.

 

(iv)             Conversion Rate Adjustments where the Converting Holder
Participates in the Relevant Transaction or Event. Notwithstanding anything to
the contrary in this Note, if:

 

(1)               a Conversion Rate adjustment for any dividend or distribution
becomes effective on any Ex-Dividend Date pursuant to Section 8(F)(i);

 

(2)               a Note is to be converted;

 

(3)               the Conversion Date for such conversion occurs on or after
such Ex-Dividend Date and on or before the related record date;

 

(4)               the Conversion Consideration due upon such conversion includes
any whole shares of Common Stock based on a Conversion Rate that is adjusted for
such dividend or distribution; and

 

(5)               such shares would be entitled to participate in such dividend
or distribution (including pursuant to Section 8(C)(ii)),

 

then (x) such Conversion Rate adjustment will not be given effect for such
conversion; (y) the shares of Common Stock issuable upon such conversion based
on such unadjusted Conversion Rate will not be entitled to participate in such
dividend or distribution; and (z) there will be added, to the Conversion
Consideration otherwise due upon such conversion, the same kind and amount of
consideration that would have been delivered in such dividend or distribution
with respect to such shares of Common Stock had such shares been entitled to
participate in such dividend or distribution.

 

(v)               Stockholder Rights Plans. If any shares of Common Stock are to
be issued upon conversion of any Note and, at the time of such conversion, the
Company has in effect any stockholder rights plan, then the Holder of such Note
will be entitled to receive, in addition to, and concurrently with the delivery
of, the Conversion Consideration otherwise payable under this Note upon such
conversion, the rights set forth in such stockholder rights plan, unless such
rights have separated from the Common Stock at such time, in which case, and
only in such case, the Conversion Rate will be adjusted pursuant to Section
8(F)(i)(3)(a) on account of such separation as if, at the time of such
separation, the Company had made a distribution of the type referred to in such
Section to all holders of the Common Stock, subject to readjustment in
accordance with such Section if such rights expire, terminate or are redeemed.

 

 - 31 - 

 

Exhibit Version

 

(vi)             Limitation on Effecting Transactions Resulting in Certain
Adjustments. The Company will not engage in or be a party to any transaction or
event that would require the Conversion Rate to be adjusted pursuant to Section
8(F)(i), or Section 8(H) to an amount that would result in the Conversion Price
per share of Common Stock being less than the par value per share of Common
Stock.

 

(vii)          Equitable Adjustments to Prices. Whenever any provision of this
Note requires the Company to calculate the average of the Last Reported Sale
Prices, or any function thereof, over a period of multiple days (including to
calculate an adjustment to the Conversion Rate), the Company will make
proportionate adjustments, if any, to such calculations to account for any
adjustment to the Conversion Rate pursuant to Section 8(F)(i) that becomes
effective, or any event requiring such an adjustment to the Conversion Rate
where the Ex-Dividend Date or effective date, as applicable, of such event
occurs, at any time during such period.

 

(viii)        Calculation of Number of Outstanding Shares of Common Stock. For
purposes of this Section 8(F), the number of shares of Common Stock outstanding
at any time will (i) include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock; and (ii) exclude shares
of Common Stock held in the Company’s treasury (unless the Company pays any
dividend or makes any distribution on shares of Common Stock held in its
treasury).

 

(ix)             Calculations. All calculations with respect to the Conversion
Rate and adjustments thereto will be made to the nearest 1/10,000th of a share
of Common Stock (with 5/100,000ths rounded upward).

 

(x)               Notice of Conversion Rate Adjustments. Upon the effectiveness
of any adjustment to the Conversion Rate pursuant to Section 8(F)(i), the
Company will promptly send notice to the Holder containing (i) a brief
description of the transaction or other event on account of which such
adjustment was made; (ii) the Conversion Rate in effect immediately after such
adjustment; and (iii) the effective time of such adjustment.

 

(G)             Voluntary Adjustments.

 

(i)                 Generally. To the extent permitted by law and applicable
stock exchange rules, the Company, from time to time, may (but is not required
to) increase the Conversion Rate by any amount if (i) the Board of Directors
determines in good faith that such increase is either (x) in the best interest
of the Company; or (y) advisable to avoid or diminish any income tax imposed on
holders of Common Stock or rights to purchase Common Stock as a result of any
dividend or distribution of shares (or rights to acquire shares) of Common Stock
or any similar event; (ii) such increase is in effect for a period of at least
twenty (20) Business Days; and (iii) such increase is irrevocable during such
period.

 

 - 32 - 

 

Exhibit Version

 

(ii)              Notice of Voluntary Increases. If the Board of Directors
determines to increase the Conversion Rate pursuant to Section 8(G)(i), then, no
later than the first Business Day of the related twenty (20) Business Day period
referred to in Section 8(G)(i), the Company will send notice to the Holder of
such increase, the amount thereof and the period during which such increase will
be in effect.

 

(H)             Adjustments to the Conversion Rate in Connection with an Event
of Default or Equity Triggering Event. If an Event of Default or Equity
Triggering Event occurs and the Conversion Date for the conversion of a Note
occurs during the related Event of Default Conversion Period or Equity
Triggering Event Conversion Period, as applicable, then, subject to Section
8(J)(ii), the Conversion Rate applicable to such conversion will be increased by
a number of shares equal to the Event of Default/Equity Triggering Event
Additional Shares.

 

(I)                Effect of Certain Recapitalizations, Reclassifications,
Consolidations, Mergers and Sales.

 

(i)                 Generally. If there occurs:

 

(1)               recapitalization, reclassification or change of the Common
Stock (other than (x) changes solely resulting from a subdivision or combination
of the Common Stock, (y) a change only in par value or from par value to no par
value or no par value to par value and (z) stock splits and stock combinations
that do not involve the issuance of any other series or class of securities);

 

(2)               consolidation, merger, combination or binding or statutory
share exchange involving the Company;

 

(3)               sale, lease or other transfer of all or substantially all of
the assets of the Company and its Subsidiaries, taken as a whole, to any Person;
or

 

(4)               other similar event,

 

and, in each case, as a result of such occurrence, the Common Stock is converted
into, or is exchanged for, or represents solely the right to receive, other
securities or other property (including cash or any combination of the
foregoing) (such an event, a “Common Stock Change Event,” and such other
securities or other property, the “Reference Property,” and the amount and kind
of Reference Property that a holder of one (1) share of Common Stock would be
entitled to receive on account of such Common Stock Change Event (without giving
effect to any arrangement not to issue fractional shares of securities or other
property), a “Reference Property Unit”), then, notwithstanding anything to the
contrary in this Note, at the effective time of such Common Stock Change Event,
(x) the Conversion Consideration due upon conversion of any Note will be
determined in the same manner as if each reference to any number of shares of
Common Stock in this Section 8 (or in any related definitions) were instead a
reference to the same number of Reference Property Units; and (y) for purposes
of the definition of “Fundamental Change,” the term “Common Stock” and “common
equity” will be deemed to mean the common equity, if any, forming part of such
Reference Property. For these purposes, (I) the Daily VWAP of any Reference
Property Unit or portion thereof that consists of a class of common equity
securities will be determined by reference to the definition of “Daily VWAP,”
substituting, if applicable, the Bloomberg page for such class of securities in
such definition; and (II) the Daily VWAP of any Reference Property Unit or
portion thereof that does not consist of a class of common equity securities,
and the Last Reported Sale Price of any Reference Property Unit or portion
thereof that does not consist of a class of securities, will be the fair value
of such Reference Property Unit or portion thereof, as applicable, determined in
good faith by the Company (or, in the case of cash denominated in U.S. dollars,
the face amount thereof).

 

 - 33 - 

 

Exhibit Version

 

If the Reference Property consists of more than a single type of consideration
to be determined based in part upon any form of stockholder election, then the
composition of the Reference Property Unit will be deemed to be the weighted
average of the types and amounts of consideration actually received, per share
of Common Stock, by the holders of Common Stock. The Company will notify the
Holder of such weighted average as soon as practicable after such determination
is made.

 

At or before the effective date of such Common Stock Change Event, the Company
and the resulting, surviving or transferee Person (if not the Company) of such
Common Stock Change Event (the “Successor Person”) will execute and deliver such
instruments or agreements that (x) provides for subsequent conversions of this
Note in the manner set forth in this Section 8(I); (y) provides for subsequent
adjustments to the Conversion Rate pursuant to Section 8(F) and Section 8 (H) in
a manner consistent with this Section 8(I); and (z) contains such other
provisions as the Company reasonably determines are appropriate to preserve the
economic interests of the Holder and to give effect to the provisions of this
Section 8(I). If the Reference Property includes shares of stock or other
securities or assets of a Person other than the Successor Person, then such
other Person will also execute such instruments or agreements and such
instruments or agreements will contain such additional provisions the Company
reasonably determines are appropriate to preserve the economic interests of the
Holder.

 

(ii)              Notice of Common Stock Change Events. As soon as practicable
after learning the anticipated or actual effective date of any Common Stock
Change Event, the Company will provide written notice to the Holder of such
Common Stock Change Event, including a brief description of such Common Stock
Change Event, its anticipated effective date and a brief description of the
anticipated change in the conversion right of this Note.

 

(iii)            Compliance Covenant. The Company will not become a party to any
Common Stock Change Event unless its terms are consistent with this Section
8(I).

 

 - 34 - 

 

Exhibit Version

 

(J)                Limitations on Conversions.

 

(i)                 Beneficial Ownership Limitation. Notwithstanding anything to
the contrary in this Note, no shares of Common Stock will be issued upon
conversion of this Note, including any Amortization Payment, or in lieu of
payment of an Amortization Payment or payment of Stated Interest due in cash
pursuant to Section 5(B), this Note will not be convertible by the Holder, and
the Company will not effect any conversion of this Note or issue such shares, as
applicable, in each case to the extent, and only to the extent, that such
issuance, convertibility or conversion would result in the Holder or a “person”
or “group” (within the meaning of Section 13(d)(3) of the Exchange Act)
beneficially owning in excess of four and ninety nine hundredths percent (4.99%)
of the then-outstanding shares of Common Stock (the “Beneficial Ownership
Limit”); provided, however, that this Section 8(J)(i) will not apply to any
Holder that is subject to Section 16(a) or (b) of the Exchange Act with respect
to the Company by virtue of being deemed to be a “director” or “officer” of the
Company within the meaning of Section 16 of the Exchange Act. For these
purposes, beneficial ownership and calculations of percentage ownership will be
determined in accordance with Rule 13d-3 under the Exchange Act. For the
avoidance of doubt, the limitations on the convertibility of this Note pursuant
to this Section 8(J)(i) will not, in themselves, cause this Note to cease to be
outstanding (and interest will continue to accrue on any portion of this Note
that has been tendered for conversion and whose convertibility is suspended
pursuant to this Section 8(J)(i)), and such limitations will cease to apply if
and when this Note’s convertibility and conversion will not violate this Section
8(J)(i). Notwithstanding anything to the contrary in this Section 8(J)(i), the
Holder may elect, in its sole discretion, that the provisions of this Section
8(J)(i) cease to apply. To make such election, the Holder must provide written
notice of such election to the Company, in which case the provisions of this
Section 8(J)(i) will cease to apply from and after the sixty first (61st)
calendar day after the delivery of such written notice.

 

(ii)                 Stock Exchange Limitations. Notwithstanding anything to the
contrary in this Note, until the Requisite Stockholder Approval is obtained, in
no event will the number of shares of Common Stock issued upon conversion of
this Note, in lieu of payment of an Amortization Payment or Stated Interest in
cash pursuant to Section 5(B), or otherwise pursuant to this Note, exceed [ ˜ ]
[NTD: to be a prorated proportion based on total amount of Notes issued] shares
in the aggregate. If, after May 31, 2020, any one or more shares of Common Stock
are not delivered upon conversion of this Note as a result of the operation of
the preceding sentence (such shares, the “Withheld Shares”), then (1) on the
Conversion Settlement Date for such conversion, the Company will pay to the
Holder, in addition to the Conversion Consideration otherwise due upon such
conversion, cash in an amount equal to the product of (x) the number of such
Withheld Shares; and (y) the Daily VWAP per share of Common Stock on the
Conversion Date for such conversion; and (2) to the extent the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver
in settlement of a sale by the Holder of such Withheld Shares, the Company will
reimburse the Holder for (x) any brokerage commissions and other out-of-pocket
expenses, if any, of the Holder incurred in connection with such purchases and
(y) the excess, if any, of (A) the aggregate purchase price of such purchases
over (B) the product of (I) the number of such Withheld Shares purchased by the
Holder; and (II) the Daily VWAP on the Conversion Date for such conversion.

 

 - 35 - 

 

Exhibit Version

 

Article 9.Affirmative and Negative Covenants.

 

(A)             Stay, Extension and Usury Laws. To the extent that it may
lawfully do so, the Company (A) agrees that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law (wherever or whenever enacted or in force) that
may affect the covenants or the performance of this Note; and (B) expressly
waives all benefits or advantages of any such law and agrees that it will not,
by resort to any such law, hinder, delay or impede the execution of any power
granted to the Holder by this Note, but will suffer and permit the execution of
every such power as though no such law has been enacted.

 

(B)              Corporate Existence. Subject to Section 10, the Company will
cause to preserve and keep in full force and effect:

 

(i)                 its corporate existence in accordance with the
organizational documents of the Company; and

 

(ii)              the material rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries;

 

provided, however, that the Company need not preserve or keep in full force and
effect any such license or franchise if the Board of Directors determines in
good faith that (x) the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries, taken as a whole;
and (y) the loss thereof is not, individually or in the aggregate, materially
adverse to the Holder.

 

(C)              Ranking. All payments due under this Note shall rank pari passu
with all Other Notes and all other unsecured indebtedness of the Company and
shall rank senior to any Subordinated Indebtedness.

 

(D)             Indebtedness. The Company shall not and shall not permit any
Subsidiary to create, incur, assume, guarantee or be or remain liable with
respect to any Indebtedness, other than Permitted Indebtedness.

 

(E)                Taxes. The Company and its Subsidiaries shall pay when due
all taxes, fees or other charges of any nature whatsoever (together with any
related interest or penalties) now or hereafter imposed or assessed against the
Company and its Subsidiaries or their respective assets or upon their ownership,
possession, use, operation or disposition thereof or upon their rents, receipts
or earnings arising therefrom. The Company and its Subsidiaries shall file on or
before the due date therefor all personal property tax returns. Notwithstanding
the foregoing, the Company and its Subsidiaries may contest, in good faith and
by appropriate proceedings, taxes for which they maintain adequate reserves
therefor in accordance with GAAP.

 

(F)              Minimum Revenue. As of the last day of each fiscal quarter
concluding on and after December 31, 2019, the Company and its consolidated
Subsidiaries shall have revenue (determined in accordance with GAAP) of not less
than the Minimum Revenue for the preceding 12 months.

 

 - 36 - 

 

Exhibit Version

 

(G)             Minimum Liquidity. On the last day of each calendar month, the
Company shall have, on a consolidated basis, liquidity calculated as (i)
unrestricted, unencumbered Cash and Cash Equivalents in one or more deposit
accounts located in the United States in a minimum amount equal to the amount
specified in the Letter Agreement, plus (ii) any additional amount of available
credit, borrowings, or investments readily convertible to Cash to the extent
necessary so that the sum of the amounts described in clause (i) and this clause
(ii) of Section 9(G) is not less than the amount specified in the Letter
Agreement.

 

(H)             Minimum Fundraising Event.  (i) During the period beginning on
the Issue Date and ending on the date that is five (5) Business Days following
the Issue Date, the Company shall have received aggregated net cash proceeds of
not less than nine million, five hundred thousand dollars ($9,500,000); (ii)
during the period beginning on the Issue Date and ending on or prior to December
31, 2019, the Company shall have received aggregated net cash proceeds of not
less than thirty million dollars ($30,000,000) (not including the amount set
forth in clause (i) hereof); and (iii) during the period beginning on the Issue
Date and ending on or prior to March 15, 2020, the Company shall have received
further additional aggregated net cash proceeds of not less than seventy-five
million ($75,000,000) (not including the amount set forth in clause (i) or
clause (ii) hereof), in each case from an issuance of Capital Stock or the
incurrence of Permitted Indebtedness by the Company, or any combination thereof,
and in each case before giving effect to transaction expenses. For the avoidance
of doubt, financings completed between September 30, 2019 and the Issue Date
will not be included for purposes of determining compliance with this Section
9(H). 

 

(I)                Minimum Debt Equitization. During the period beginning on the
Issue Date and ending on or prior to December 15, 2019, the Company shall have
converted or exchanged not less than sixty million dollars ($60,000,000) of
existing Indebtedness held by Foris Venture, LLC into or for consideration
consisting solely of Capital Stock (other than Disqualified Capital Stock).

 

(J)                Change in Nature of Business. The Company shall not, and the
Company shall cause each of its Subsidiaries to not, directly or indirectly,
engage in any material line of business substantially different from those lines
of business conducted by or publicly contemplated to be conducted by the Company
and each of its Subsidiaries on the Issue Date or any business substantially
related or incidental thereto. The Company shall not, and the Company shall
cause each of its Subsidiaries to not, directly or indirectly, modify its or
their corporate structure or purpose.

 

(K)             Maintenance of Properties, Etc. The Company shall maintain and
preserve all of its properties which are necessary or useful (as determined by
the Company in good faith) in the proper conduct of its business in good working
order and condition, ordinary wear and tear excepted, and comply at all times
with the provisions of all leases to which it is a party as lessee or under
which it occupies property, so as to prevent any loss or forfeiture thereof or
thereunder.

 

(L)              Maintenance of Intellectual Property. The Company will take all
action necessary or advisable to maintain all of the Intellectual Property
Rights (as defined in the Note Exchange Agreement) of the Company that are
necessary or material (as determined by the Company in good faith) to the
conduct of its business in full force and effect.

 

 - 37 - 

 

Exhibit Version

 

(M)            Maintenance of Insurance. The Company shall maintain insurance
with responsible and reputable insurance companies or associations (including,
without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real
properties leased or owned by it) and business, in such amounts and covering
such risks as is required by any governmental authority having jurisdiction with
respect thereto or as is carried generally in accordance with sound business
practice by companies in similar businesses similarly situated.

 

(N)             Transactions with Affiliates. The Company shall not enter into,
renew, extend or be a party to, any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease, transfer
or exchange of property or assets of any kind or the rendering of services of
any kind) with any affiliate, except transactions for fair consideration and on
terms no less favorable to it than would be obtainable in a comparable arm’s
length transaction with a Person that is not an affiliate thereof.

 

(O)             Restricted Issuances. The Company shall not, directly or
indirectly, without the prior written consent of the holders of a majority in
aggregate principal amount of the Notes then outstanding, (i) issue any Notes
(other than as contemplated by the Note Exchange Agreement and the Notes) or
(ii) issue any other securities or incur any Indebtedness that would cause a
breach or Default under the Notes or that by its terms would prohibit or
restrict the performance of any of the Company’s obligations under the Notes,
including without limitation, the payment of interest and principal thereon.

 

(P)              Independent Investigation. At the request of the Holder either
(x) at any time when an Event of Default has occurred and is continuing, or (y)
upon the occurrence of a Default, the Company shall hire an independent,
reputable investment bank selected by the Company and approved by the Holder to
investigate as to whether any breach of this Note has occurred (the “Independent
Investigator”). If the Independent Investigator determines that such breach of
this Note has occurred, the Independent Investigator shall notify the Company of
such breach and the Company shall deliver written notice to the Holder of such
breach. In connection with such investigation, the Independent Investigator may,
during normal business hours and upon signing a confidentiality agreement in a
form reasonably acceptable to the Company, inspect all contracts, books,
records, personnel, offices and other facilities and properties of the Company
and its Subsidiaries and, to the extent available to the Company after the
Company uses reasonable efforts to obtain them, the records of its legal
advisors and accountants (including the accountants’ work papers) and any books
of account, records, reports and other papers not contractually required of the
Company to be confidential or secret, or subject to attorney-client or other
evidentiary privilege, and the Independent Investigator may make such copies and
inspections thereof as the Independent Investigator may reasonably request. The
Company shall furnish the Independent Investigator with such financial and
operating data and other information with respect to the business and properties
of the Company as the Independent Investigator may reasonably request. The
Company shall permit the Independent Investigator to discuss the affairs,
finances and accounts of the Company with, and to make proposals and furnish
advice with respect thereto to, the Company’s officers, directors, key employees
and independent public accountants or any of them (and by this provision the
Company authorizes said accountants to discuss with such Independent
Investigator the finances and affairs of the Company and any Subsidiaries), all
at such reasonable times, upon reasonable notice, and as often as may be
reasonably requested.

 

 - 38 - 

 

Exhibit Version

 

Article 10.Successors.

 

The Company will not consolidate with or merge with or into, or (directly, or
indirectly through one or more of its Subsidiaries) sell, lease or otherwise
transfer, in one transaction or a series of transactions, all or substantially
all of the assets of the Company and its Subsidiaries, taken as a whole, to
another Person, other than the Holder or any of its Affiliates (a “Business
Combination Event”), unless:

 

(A)             the resulting, surviving or transferee Person either (x) is the
Company or (y) if not the Company, is a corporation (the “Successor
Corporation”) duly organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia that expressly assumes
(by executing and delivering to the Holder, at or before the effective time of
such Business Combination Event, a supplement to this instrument) all of the
Company’s obligations under this Note; and

 

(B)              immediately after giving effect to such Business Combination
Event, no Default or Event of Default will have occurred and be continuing.

 

At the effective time of any Business Combination Event, the Successor
Corporation (if not the Company) will succeed to, and may exercise every right
and power of, the Company under this Note with the same effect as if such
Successor Corporation had been named as the Company in this Note, and, except in
the case of a lease, the predecessor Company will be discharged from its
obligations under this Note.

 

 

Article 11.Defaults and Remedies

 

(A)             Events of Default. “Event of Default” means the occurrence of
any of the following:

 

(i)                 a default in the payment when due of an Amortization
Payment, the Principal Amount, Fundamental Change Repurchase Price, Redemption
Price, Additional Redemption Amount, Amortization Share Amount or Stock Payment
Share Amount of this Note;

 

(ii)              a default for two (2) Business Days in the payment when due of
interest on this Note;

 

(iii)            a default in the Company’s obligation to convert this Note in
accordance with Section 8 upon the exercise of the conversion right with respect
thereto;

 

(iv)             a default in the Company’s obligation to deliver a Fundamental
Change Notice pursuant to Section 6(C), and such default continues for three (3)
Business Days;

 

 - 39 - 

 

Exhibit Version

 

(v)               a default in any of the Company’s obligations or agreements
under this Note or the Note Exchange Agreement (in each case, other than a
default set forth in clause (i), (ii) or (iii) of this Section 11(A)), or a
breach of any representation or warranty in any material respect (other than
representations or warranties subject to material adverse effect or materiality,
which may not be breached in any respect) of the Note Exchange Agreement;
provided, however, that if such default or breach can be cured, then such
default or breach will not be an Event of Default unless the Company has failed
to cure such default within ten (10) days after its occurrence;

 

(vi)             any provision of the Note Exchange Agreement at any time for
any reason (other than pursuant to the express terms thereof) ceases to be valid
and binding on or enforceable against the parties thereto, or the validity or
enforceability thereof is contested, directly or indirectly, by the Company or
any of its Subsidiaries, or a proceeding is commenced by the Company or any of
its Subsidiaries or any governmental authority having jurisdiction over any of
them, seeking to establish the invalidity or unenforceability thereof;

 

(vii)          a breach of any representation or warranty in any material
respect (other than representations or warranties subject to material adverse
effect or materiality, which may not be breached in any respect) of the Note
Exchange Agreement, except, in the case of a breach of a covenant or other term
or condition that is curable, only if such breach remains uncured for a period
of ten (10) consecutive Trading Days;

 

(viii)        at any time, this Note or any shares of Common Stock issuable upon
conversion of this Note or in lieu of payment of an Amortization Payment in cash
pursuant to Section 5(B) are not Freely Tradable;

 

(ix)             the Company fails to use commercially reasonable efforts to
obtain the Requisite Stockholder Approval on or prior to May 31, 2020, or best
efforts to obtain the Requisite Stockholder Approval thereafter in the event
that the Requisite Stockholder Approval is not obtained on or before such date;

 

(x)               the suspension from trading or failure of the Common Stock to
be trading or listed on an Eligible Exchange for a period of three (3)
consecutive Trading Days;

 

(xi)             a default by the Company or any of its Subsidiaries with
respect to any one or more mortgages, agreements or other instruments under
which there is outstanding, or by which there is secured or evidenced, any
indebtedness for money borrowed of at least five million dollars ($5,000,000)
(or its foreign currency equivalent) in the aggregate of the Company or any of
its Subsidiaries, whether such indebtedness exists as of the Issue Date or is
thereafter created, which default permits the holder thereof to declare such
indebtedness due and payable;

 

(xii)          one or more final judgments, orders or awards (or any settlement
of any litigation or other proceeding that, if breached, could result in a
judgment, order or award) for the payment of at least five million dollars
($5,000,000) (or its foreign currency equivalent) in the aggregate (excluding
any amounts covered by insurance pursuant to which the insurer has been notified
and has not denied coverage), is rendered against the Company or any of its
Subsidiaries and remains unsatisfied and (i) enforcement proceedings shall have
been commenced by any creditor upon any such judgment, order, award or
settlement or (ii) there shall be a period of ten (10) consecutive Trading Days
after entry thereof during which (A) a stay of enforcement thereof is not in
effect or (B) the same is not vacated, discharged, stayed or bonded pending
appeal;

 

 - 40 - 

 

Exhibit Version

 

(xiii)        at any time while the shares of Common Stock issued or issuable
upon conversion of this Note are not Freely Tradable, the Company fails to
timely file its quarterly reports on Form 10-Q or its annual reports on Form
10-K with the Commission in the manner and within the time periods required by
the Exchange Act, or the Company withdraws or restates any such quarterly report
or annual report previously filed with the Commission.

 

(xiv)         the Company or any of its Significant Subsidiaries, pursuant to or
within the meaning of any Bankruptcy Law, either:

 

(1)               commences a voluntary case or proceeding;

 

(2)               consents to the entry of an order for relief against it in an
involuntary case or proceeding;

 

(3)               consents to the appointment of a custodian of it or for any
substantial part of its property;

 

(4)               makes a general assignment for the benefit of its creditors;

 

(5)               takes any comparable action under any foreign Bankruptcy Law;
or

 

(6)               generally is not paying its debts as they become due; or

 

(xv)           a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that either:

 

(1)               is for relief against Company or any of its Significant
Subsidiaries in an involuntary case or proceeding;

 

(2)               appoints a custodian of the Company or any of its Significant
Subsidiaries, or for any substantial part of the property of the Company or any
of its Significant Subsidiaries;

 

(3)               orders the winding up or liquidation of the Company or any of
its Significant Subsidiaries; or

 

(4)               grants any similar relief under any foreign Bankruptcy Law,

 

and, in each case under this Section 11(A)(xiv), such order or decree remains
unstayed and in effect for at least thirty (30) days.

 

 - 41 - 

 

Exhibit Version

 

(B)              Acceleration.

 

(i)                 Automatic Acceleration in Certain Circumstances. If an Event
of Default set forth in Section 11(A)(xii) or (xiv) occurs with respect to the
Company (and not solely with respect to a Significant Subsidiary of the
Company), then the Principal Amount of, and all accrued and unpaid interest on,
all of this Note will immediately become due and payable without any further
action or notice by any Person.

 

(ii)              Optional Acceleration. If an Event of Default (other than an
Event of Default set forth in Section 11(A)(xii) or (xiv) with respect to the
Company and not solely with respect to a Subsidiary of the Company) occurs and
is continuing, then the Holder, by notice to the Company, may declare this Note
to become due and payable immediately for cash in an amount equal to the Event
of Default Acceleration Amount plus all accrued and unpaid interest on this
Note.

 

(C)              Notice of Events of Default. Promptly, but in no event later
than two (2) Business Days after an Event of Default, the Company will provide
written notice of such Event of Default (an “Event of Default Notice”) to the
Holder, which Event of Default Notice shall include (i) a reasonable description
of the applicable Event of Default, (ii) a certification as to whether, in the
opinion of the Company, such Event of Default is capable of being cured and, if
applicable, a reasonable description of any existing plans of the Company to
cure such Event of Default and (iii) a certification as to the date the Event of
Default occurred and, if cured on or prior to the date of such Event of Default
Notice, the date of such cure.

 

Article 12.Ranking.

 

The indebtedness represented by this Note will constitute the senior unsecured
obligations of the Company.

 

Article 13.Replacement Notes.

 

If the Holder of this Note claims that this Note has been mutilated, lost,
destroyed or wrongfully taken, then the Company will issue, execute and deliver
a replacement Note upon surrender to the Company of such mutilated Note, or upon
delivery to the Company of evidence of such loss, destruction or wrongful taking
reasonably satisfactory to the Company. In the case of a lost, destroyed or
wrongfully taken Note, the Company may require the Holder to provide such
security or an indemnity that is reasonably satisfactory to the Company to
protect the Company from any loss that it may suffer if this Note is replaced.

 

Article 14.Notices.

 

Any notice or communication to the Company will be deemed to have been duly
given if in writing and delivered in person or by first class mail (registered
or certified, return receipt requested), facsimile transmission, electronic
transmission (including e-mail) or other similar means of unsecured electronic
communication or overnight air courier guaranteeing next day delivery, or to the
other’s address, which initially is as follows:

 

 - 42 - 

 

Exhibit Version

 

Amyris, Inc.

5885 Hollis Street, Suite 100

Emeryville, California 94608

Attention: General Counsel

Facsimile: (510) 225-2645

 

The Company, by notice to the Holder, may designate additional or different
addresses for subsequent notices or communications.

 

Any notice or communication to the Holder will be by e-mail to its email
address(es), which initially are as set forth in the Note Exchange Agreement.
The Holder, by notice to the Company, may designate additional or different
addresses for subsequent notices or communications.

 

If a notice or communication is mailed in the manner provided above within the
time prescribed, it will be deemed to have been duly given, whether or not the
addressee receives it.

 

 

Article 15.Successors.

 

All agreements of the Company in this Note will bind its successors.

 

Article 16.Severability.

 

If any provision of this Note is invalid, illegal or unenforceable, then the
validity, legality and enforceability of the remaining provisions of this Note
will not in any way be affected or impaired thereby.

 

Article 17.Headings, Etc.

 

The headings of the Sections of this Note have been inserted for convenience of
reference only, are not to be considered a part of this Note and will in no way
modify or restrict any of the terms or provisions of this Note.

 

Article 18.Amendments

 

This Note may not be amended or modified unless in writing by the Company and
the Required Holders (as defined in the Note Exchange Agreement), and no
condition herein (express or implied) may be waived unless waived in writing by
each party whom the condition is meant to benefit.

 

Article 19.Governing Law; Waiver of Jury Trial.

 

THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE
THIS NOTE. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS NOTE.

 

 - 43 - 

 

Exhibit Version

 

Article 20.Submission to Jurisdiction.

 

The Company (A) agrees that any suit, action or proceeding against it arising
out of or relating to this Note may be instituted in any U.S. federal court with
applicable subject matter jurisdiction sitting in The City of New York; (B)
waives, to the fullest extent permitted by applicable law, (i) any objection
that it may now or hereafter have to the laying of venue of any such suit,
action or proceeding; and (ii) any claim that it may now or hereafter have that
any such suit, action or proceeding in such a court has been brought in an
inconvenient forum; and (C) submits to the nonexclusive jurisdiction of such
courts in any such suit, action or proceeding.

 

Article 21.Enforcement Fees.

 

The Company agrees to pay all costs and expenses of the Holder incurred as a
result of enforcement of this Note and the collection of any amounts owed to the
Holder hereunder (whether in cash, Common Stock or otherwise), including,
without limitation, reasonable attorneys’ fees and expenses.

 

 

 

* * *

 

 

 

 

 

 

 

 

 

 

 

 - 44 - 

 

Exhibit Version

 

CONVERSION NOTICE

 

Amyris, Inc.

 

Senior Convertible Note due 2022

 

Subject to the terms of this Note, by executing and delivering this Conversion
Notice, the undersigned Holder of this Note directs the Company to convert the
following Principal Amount of this Note: $ ,000 in accordance with the following
details.

 

oCheck if the Conversion Date occurs during an Event of Default Conversion
Period or Equity Triggering Event Conversion Period, as applicable.

 

Shares of Common Stock to be delivered:

 

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Accrued interest amount:

 

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DTC Participant Number:

 

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DTC Participant Name:

 

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DTC Participant Phone Number:

 

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DTC Participant Contact Email:

 

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Date:               (Legal Name of Holder)  

 

 

  By:           Name:       Title: