COMMON STOCK PURCHASE AGREEMENT
 
This Common Stock Purchase Agreement (this “Agreement”) is made as of May 4,
2018, by and among FUSION CONNECT, INC., f/k/a Fusion Telecommunications
International, Inc., a Delaware corporation with its principal office at 420
Lexington Avenue, Suite 1718, New York, New York 10170 (the “Company”), and
___________________ (the “Purchaser”).
 
Recitals
 
A.           The Company has authorized the sale and issuance of _________
shares (the “Shares” or “Securities”) of the common stock of the Company, $0.01
par value per share (the “Common Stock”), to the Purchaser in a private
placement (the “Offering”).
 
B.           Pursuant to Section 4(a)(2) of the Securities Act of 1933, as
amended (the “Securities Act”), and Rule 506(b) promulgated thereunder, the
Company desires to sell to the Purchaser, and the Purchaser desires to purchase
from the Company the Shares on the terms and subject to the conditions set forth
in this Agreement.
 
Terms and Conditions
 
Now, therefore, in consideration of the foregoing recitals and the mutual
covenants and agreements contained herein, the parties, intending to be legally
bound, do hereby agree as follows:
 
1.            
Purchase of the Securities.
 
1.1           Agreement to Sell and Purchase. At the Closing (as hereinafter
defined), the Company will issue and sell to the Purchaser, and the Purchaser
will purchase from the Company, the Shares for an aggregate purchase price of
$___________ (the “Purchase Price”) or $5.25 for each Share.
 
1.2           Closing; Closing Date. The completion of the sale and purchase of
the Shares (the “Closing”) shall be held simultaneously with the execution of
this Agreement, or at such other time as the Company and the Purchaser may agree
(the “Closing Date”).
 
1.3           Delivery of the Shares. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to the Purchaser a stock certificate
or certificates, in such denominations and registered in such name(s) as the
Purchaser may designate by notice to the Company, representing the Securities,
or at the Purchaser’s request, a statement or other written evidence that the
Securities issuable to the Purchaser have been issued and are held in book entry
form at the Company’s transfer agent, in either case dated as of the Closing
Date (each such certificate and each such book entry position are hereinafter
referred to as a “Certificate”), against payment of the Purchase Price in cash
in the form of a wire transfer, unless other means of payment shall have been
agreed upon by the Purchaser and the Company. 
 
2.            
Representations and Warranties of the Company. The Company hereby represents and
warrants to the Purchaser, after giving effect (unless otherwise specified
below) to the consummation of the merger between Fusion BCHI Acquisition LLC, a
Delaware limited liability company and a wholly-owned subsidiary of the Company,
with Birch Communications Holdings, Inc. and the transactions related thereto
being consummated substantially simultaneously with this Offering (the
“Merger”):
 
 
 

 
 
 
2.1           Authorization. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, has been taken. The Company has the
requisite corporate power to enter into this Agreement and carry out and perform
its obligations under this Agreement. At the Closing, the Company will have the
requisite corporate power to issue and sell the Securities. This Agreement has
been duly authorized, executed and delivered by the Company and, upon due
execution and delivery by the Purchaser, this Agreement will be a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as rights to indemnity hereunder may be limited by
federal or state securities laws and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or by equitable principles.
 
2.2           No Conflict with Other Instruments. The execution, delivery and
performance of this Agreement, the issuance and sale of the Securities to be
sold by the Company hereunder and the consummation of the actions contemplated
by this Agreement will not (A) result in any violation of, be in conflict with,
or constitute a default under, with or without the passage of time or the giving
of notice: (i) any provision of the Company’s charter documents as in effect on
the date hereof or at the Closing; (ii) any provision of any judgment,
arbitration ruling, decree or order to which the Company or its subsidiaries are
a party or by which they are bound; (iii) any bond, debenture, note or other
evidence of indebtedness, or any lease, contract, mortgage, indenture, deed of
trust, loan agreement, joint venture or other agreement, instrument or
commitment to which the Company or any subsidiary is a party or by which they or
their respective properties are bound; or (iv) any statute, rule, law or
governmental regulation or order applicable to the Company or any of its
subsidiaries, except, in the case of (ii), (iii) and (iv) above, as would not
reasonably be expected to have a Material Adverse Effect (as hereinafter
defined); or (B) result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the properties or
assets of the Company or any subsidiary or any acceleration of indebtedness
pursuant to any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or any indenture,
mortgage, deed of trust or any other agreement or instrument to which the
Company or any subsidiary are a party or by which they are bound or to which any
of the property or assets of the Company or any subsidiary is subject. No
consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or
other governmental body is required for the execution and delivery of this
Agreement by the Company and the valid issuance or sale of the Securities by the
Company pursuant to this Agreement, other than such as have been made or
obtained and that remain in full force and effect, and except for the filing of
a Form D or any filings required to be made under state securities laws.
 
2.3           Certificate of Incorporation; Bylaws. The Company has made
available to the Purchaser true, correct and complete copies of the Certificate
of Incorporation and Bylaws of the Company, as in effect on the date hereof.
 
2.4           Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted. The Company and each of its subsidiaries
has full power and authority to own, operate and occupy its properties and to
conduct its business as presently conducted and is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would not reasonably be expected to have a material adverse effect on
its or its subsidiaries’ business, financial condition, properties, operations,
prospects or assets or its ability to perform its obligations under this
Agreement (a “Material Adverse Effect”). 
 
 
 
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2.5           SEC Filings; Financial Statements. As used herein, the “Company
SEC Documents” means all reports, schedules, forms, statements and other
documents filed or furnished, as applicable, by the Company under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to
Section 13(a) or 15(d) thereof, including the exhibits thereto and documents
incorporated by reference therein. The Company has filed all SEC Documents as
required on a timely basis and as of their respective filing dates during the 12
months preceding the date hereof; the Company SEC Documents since December 31,
2015 complied in all material respects with the requirements of the Exchange Act
and the rules and regulations of the Securities and Exchange Commission (the
“SEC”) promulgated thereunder; and none of these Company SEC Documents, when
filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not misleading.
The consolidated financial statements contained in the Company SEC Documents
since December 31, 2017: (i) complied in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
applicable thereto; (ii) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered, except in the case of unaudited statements as permitted by Form 10-Q of
the SEC, and except that unaudited financial statements may not contain
footnotes and are subject to year-end audit adjustments; and (iii) fairly
present the consolidated financial position of the Company and its subsidiaries
as of the respective dates thereof and the consolidated results of operations
cash flows and the changes in shareholders’ equity of the Company and its
subsidiaries for the periods covered thereby.
 
2.6           Capitalization. The authorized capital stock of the Company,
consists of (i) 150,000,000 shares of Common Stock, of which (A) 76,583,701
shares were issued and outstanding as of the date of this Agreement, and (B)
8,526,403 shares were reserved for issuance upon the exercise or conversion, as
the case may be, of outstanding options, warrants or other convertible
securities as of the date of this Agreement, in each case, taking into account
the reverse split of the Common Stock that was effected on the date hereof and
acknowledging rounding adjustments for fractional split amounts; and (ii)
10,000,000 shares of preferred stock, of which 15,000 will be issued and
outstanding as of the date of this Agreement. All issued and outstanding shares
of capital stock have been duly authorized and validly issued, are fully paid
and non-assessable, have been issued and sold in compliance with the
registration requirements of the federal and state securities laws or the
applicable statutes of limitation have expired, and were not issued in violation
of any preemptive rights or similar rights to subscribe for or purchase
securities. Except as set forth herein, in Schedule 2.6 or in the Company SEC
Documents or as contemplated by the Agreement and Plan of Merger (the “Merger
Agreement”) relating to the Merger that is being consummated contemporaneously
with this Offering, there are no (i) outstanding rights (including, without
limitation, preemptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any unissued shares of capital stock or
other equity interest in the Company, or any contract, commitment, agreement,
understanding or arrangement of any kind to which the Company or any subsidiary
is a party and relating to the issuance or sale of any capital stock or
convertible or exchangeable security of the Company or any subsidiary, other
than 1,996,754 options granted to directors and employees of the Company and its
subsidiaries pursuant to its 1998 Stock Option Plan, 2009 Stock Option Plan or
the 2016 Equity Incentive Plan and 1,193,070 warrants that are issued and
outstanding; or (ii) obligations of the Company to purchase redeem or otherwise
acquire any of its outstanding capital stock or any interest therein or to pay
any dividend or make any other distribution in respect thereof. Except as
disclosed in the Company SEC Documents and as contemplated by (i) the Merger
Agreement, (ii) the Company’s announced agreement to acquire, through a merger,
a specified target company (the “Acquisition Agreement”), and (iii) the
Company’s Series D preferred stock, there are no anti-dilution or price
adjustment provisions, co-sale rights, registration rights, rights of first
refusal or other similar rights contained in the terms governing any outstanding
security of the Company that will be triggered by the issuance of the Securities
and no person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company (other than the rights
which have been granted (i) in connection with this Agreement, the Merger
Agreement and the Acquisition Agreement). 
 
 
 
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2.7           Subsidiaries. Except as contemplated by the Merger Agreement and
except as set forth in the Company SEC Documents, the Company does not presently
own or control, directly or indirectly, and has no stock or other interest as
owner or principal in, any other corporation or partnership, joint venture,
association or other business venture or entity (each a “subsidiary”). Each
subsidiary is duly incorporated or organized, validly existing and, if
applicable to the jurisdiction, in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite power and
authority to carry on its business as now conducted. Each subsidiary is duly
qualified to transact business and is in good standing in each jurisdiction,
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect. All of the outstanding capital stock or other
securities of each subsidiary of the Company is owned, either directly or
indirectly by the Company). Except for the liens granted under the terms of the
First Lien Credit Facility (as defined below) and the Second Lien Credit
Facility (as defined below), the capital stock or other securities of each US
subsidiary of the Company is free and clear of any liens, claims or
encumbrances.
 
2.8           Valid Issuance of Securities. The Securities are duly authorized
and, when issued, sold and delivered and paid for in accordance with the terms
hereof will be duly and validly authorized and issued, fully paid and
non-assessable, free from all taxes, liens, claims, encumbrances and charges
with respect to the issue thereof; provided, however, that the Securities will
be subject to restrictions on transfer under state and/or federal securities
laws or as otherwise set forth herein. The issuance, sale and delivery of the
Securities in accordance with the terms hereof will not be subject to preemptive
rights of shareholders of the Company.
 
2.9           Offering. Assuming the accuracy of the representations of the
Purchaser in Section 3.3 of this Agreement on the date hereof, the offer, issue
and sale of the Securities are and will be exempt from the registration and
prospectus delivery requirements of the Securities Act and have been or will be
registered or qualified (or are or will be exempt from registration and
qualification) under the registration, permit or qualification requirements of
all applicable state securities laws. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration under the
Securities Act of the issuance of the Securities to the Purchaser. Other than
the Company SEC Documents, the Company has not distributed any offering
materials in connection with the offering and sale of the Securities. The
Company has not taken any action to sell, offer for sale or solicit offers to
buy any securities of the Company which would bring the offer, issuance or sale
of the Securities within the provisions of Section 5 of the Securities Act,
unless such offer, issuance or sale was or shall be within the exemptions of
Section 4 of the Securities Act.
 
2.10           Litigation. Except as set forth in the Company SEC Documents or
as set forth in Schedule 2.10, there is no litigation matter currently
threatened against the Company or any of its subsidiaries that (a) if adversely
determined would reasonably be expected to have a Material Adverse Effect or (b)
would be required to be disclosed in the Company’s Annual Report on Form 10-K
under the requirements of Item 103 of Regulation S-K. The foregoing includes,
without limitation, any action, suit, proceeding or investigation, pending or
threatened, that questions the validity of this Agreement or the right of the
Company to enter into this Agreement and perform its obligations hereunder.
Except as set forth in Schedule 2.10, neither the Company nor any subsidiary is
subject to any injunction, judgment, decree or order of any court, regulatory
body, arbitral panel, administrative agency, national securities exchange or
other government body. To the Company’s knowledge, there is no proceeding or
investigation by the Principal Market (as defined below) pending that could lead
to a suspension of listing or trading of the Common Stock.
 
 
 
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2.11           Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or provincial governmental authority on
the part of the Company or any of its subsidiaries is required in connection
with the consummation of the transactions contemplated by this Agreement, except
for notices required or permitted to be filed with the Principal Market or
certain state and federal securities commissions, which notices will be filed on
a timely basis. 
 
2.12           No Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based on arrangements made by the
Company, it being expressly acknowledged that any fees payable in connection
with the consummation of the Merger substantially simultaneously with this
Offering are not fees to any broker, finder, underwriter or placement agent for
services in connection with this Offering.
 
2.13           Compliance. Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or Bylaws (or similar
organizational documents). The Company and its subsidiaries, and their
representatives, have been conducting their business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which they
conduct business, including, without limitation, all applicable local, state and
federal environmental laws and regulations, except where failure to be so in
compliance would not have a Material Adverse Effect. Each of the Company and its
subsidiaries has all necessary franchises, licenses, permits, certificates and
other authorizations from any foreign, federal, state or local government or
governmental agency, department or body that are currently necessary for the
operation of the business of the Company and its subsidiaries as currently
conducted, except where the failure to currently possess such franchises,
licenses, certificates and other authorizations would not reasonably be expected
to have a Material Adverse Effect.
 
2.14           No Material Changes. Except as disclosed in the Company SEC
Documents and except for the completion of the Merger and the entry by the
Company into a $595 million first lien credit facilities (the “First Lien Credit
Facility”) and the $85 million second lien credit facility (the “Second Lien
Credit Facility”) and the various transactions contemplated by each of these
credit facilities, since December 31, 2017, there has been no material adverse
change in the assets, liabilities, business, properties, operations, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole. Since December 31, 2017, the Company has not declared or paid any
dividend or distribution on its common stock.
 
2.15           Intellectual Property. 
 
(a)           The Company and each of its subsidiaries has ownership or license
or legal right to use, or can acquire on reasonable terms, all patent,
copyright, trade secret, know-how trademark, trade name customer lists, designs,
manufacturing or other processes, computer software, systems, data compilation,
research results or other proprietary rights used in the business of the Company
or such subsidiary (collectively “Intellectual Property”), except as such
failure to own, license, use or acquire would not result in a Material Adverse
Effect.
 
(b)           The Company and each of its subsidiaries has taken all reasonable
steps required in accordance with sound business practice and business judgment
to establish and preserve its ownership of all material Intellectual Property
with respect to their products and technology.
 
 
 
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(c)           To the knowledge of the Company, the present business, activities
and products of the Company and its subsidiaries do not infringe any
intellectual property of any other person, except or where such infringement
would not have a Material Adverse Effect. Except as set forth in Schedule
2.15(c), no proceeding charging the Company or any of its subsidiaries with
infringement of any adversely held Intellectual Property is currently pending.
To the knowledge of the Company, no other person is infringing any rights of the
Company or its subsidiaries to the Intellectual Property. 
 
(d)           Except as set forth in Schedule 2.15(c), no proceedings are
pending or, to the knowledge of the Company, threatened, which challenge the
rights of the Company or any of its subsidiaries to the use of the Intellectual
Property. To the knowledge of the Company, the Company and each of its
subsidiaries has the right to use, free and clear of material claims or rights
of other persons, all of its customer lists, designs, computer software,
systems, data compilations, and other information that are required for its
products or its business as presently conducted. To the knowledge of the
Company, neither the Company nor any of its subsidiaries is making unauthorized
use of any confidential information or trade secrets of any person. The
activities of any of the employees on behalf of the Company or of any of its
subsidiaries do not violate any agreements or arrangements between such
employees and third parties related to confidential information or trade secrets
of third parties or that restrict any such employee’s engagement in business
activity of any nature.
 
(e)           All material licenses or other agreements under which (i) the
Company or any subsidiary employs rights in Intellectual Property, or (ii) the
Company or any subsidiary has granted rights to others in Intellectual Property
owned or licensed by the Company or any subsidiary are in full force and effect,
and there is no default (and there exists no condition which, with the passage
of time or otherwise, would constitute a default by the Company or such
subsidiary) by the Company or any subsidiary of the Company with respect
thereto.
 
2.16           Exchange Compliance. The Company’s common stock is registered
pursuant to Section 12(b) of the Exchange Act, was immediately prior to the date
hereof listed on The Nasdaq Capital Market and as of the date hereof is listed
on The Nasdaq Global Market (the “Principal Market”), and the Company has taken
no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock (including the Shares) from the Principal Market. The Company is in
compliance with all of the presently applicable requirements for continued
listing of the Common Stock on the Principal Market. The issuance of the
Securities does not require shareholder approval including, without limitation,
pursuant to the rules and regulations of the Principal Market.
 
2.17           Form S-3 Eligibility. The Company is eligible to register the
Shares for resale by the Purchaser using Form S-3 promulgated under the
Securities Act.
 
2.18           Accountants. EisnerAmper LLP, who expressed their opinion with
respect to the consolidated financial statements contained in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2017, to be
incorporated by reference into the Registration Statement (as hereinafter
defined) and the prospectus which forms a part thereof (the “Prospectus”), have
advised the Company that they are, and to the knowledge of the Company they are,
independent accountants as required by the Securities Act and the rules and
regulations promulgated thereunder.
 
 
 
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2.19           Taxes. The Company and each of its subsidiaries has filed all
federal, state, local and foreign income and franchise tax returns and has paid
all taxes shown as due thereon (except where the failure to file would not have
a Material Adverse Effect). The Company has set aside on its books adequate
provisions for payments of taxes as of its reporting period. 
 
2.20           Insurance. The Company and each of its subsidiaries maintains and
will continue to maintain insurance of the types and in the amounts that the
Company reasonably believes is adequate for its business, including, but not
limited to, insurance covering real and personal property owned or leased by the
Company and its subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against by similarly situated
companies, all of which insurance is in full force and effect.
 
2.21           Transfer Taxes. On the Closing Date, all stock transfer or other
taxes (other than income taxes) that are required to be paid in connection with
the sale and transfer of the Securities hereunder will be, or will have been,
fully paid or provided for by the Company and the Company will have complied
with all laws imposing such taxes.
 
2.22           Investment Company. The Company (including its subsidiaries) is
not an “investment company” or an “affiliated person” of, or “promoter” or
“principal underwriter” for an investment company, within the meaning of the
Investment Company Act of 1940 and will not be deemed an “investment company” as
a result of the transactions contemplated by this Agreement.
 
2.23           Related Party Transactions. To the knowledge of the Company, no
transaction has occurred between or among the Company or any of its affiliates
(including, without limitation, any of its subsidiaries), officers or directors
or any affiliate or affiliates of any such affiliate, officer or director that
with the passage of time will be required to be disclosed pursuant to Section
13, 14 or 15(d) of the Exchange Act other than those transactions that have
already been so disclosed in the SEC Documents and those transactions that are
in connection with, or contemplated by, the Merger, the First Lien Credit
Facility, the Second Lien Credit Facility and the Company’s sale of Series D
preferred stock in connection with the Merger.
 
2.24           Books and Records. The books, records and accounts of the Company
and its subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the operations of, the
Company and its subsidiaries.
 
2.25           Disclosure Controls and Internal Controls.
 
(a)           The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the Exchange Act),
which (i) are designed to ensure that material information relating to the
Company is made known to the Company’s principal executive officer and its
principal financial officer by others within the Company particularly during the
periods in which the periodic reports required under the Exchange Act are being
prepared; and (ii) provide for the periodic evaluation of the effectiveness of
such disclosure controls and procedures as of the end of the period covered by
the Company’s most recent annual or quarterly report filed with the SEC. 
 
 
 
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(b)           The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-14 under the Exchange 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 Exchange 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 Exchange 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. The
Company is not aware of (i) any significant deficiency or material weakness in
the design or operation of its internal controls; or (ii) any fraud, whether or
not material, that involves management or other employees who have a significant
role in the Company’s or any of its subsidiary’s internal controls. 
 
(c)           Except as described in the Company SEC Documents, there are no
material off-balance sheet arrangements (as defined in Item 303 of Regulation
S-K), or any other relationships with unconsolidated entities (in which the
Company or its control persons have an equity interest) that may have a material
current or future effect on the Company’s or any of its/subsidiary’s financial
condition, revenues or expenses, changes in financial condition, results of
operations, liquidity, capital expenditures or capital resources.
 
2.26           No General Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D promulgated under the Securities Act) in connection with the offer
or sale of the Securities.
 
2.27           Foreign Corrupt Practices. Neither the Company nor any of its
subsidiaries nor any director, officer, agent, employee or other person acting
on behalf of the Company or any of its subsidiaries has, in the course of its
actions for, or on behalf of, the Company (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.
 
2.28           Sarbanes-Oxley Act. The Company is in compliance in all material
respects with any and all applicable requirements of the Sarbanes-Oxley Act of
2002 that are effective as of the date hereof, and any and all applicable rules
and regulations promulgated by the SEC thereunder that are effective as of the
date hereof.
 
 
 
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2.29           Employee Relations. Neither the Company nor any of its
subsidiaries is a party to any collective bargaining agreement. The Company
reasonably believes that its and its subsidiaries’ relations with its employees
are good. Other than as disclosed in the Company’s Form 14F-1 filed with the
SEC, no executive officer of the Company (as defined in Rule 501(f) of the
Securities Act) has notified the Company that such officer intends to leave the
Company or otherwise terminate such officer’s employment with the Company. To
the knowledge of the Company, no executive officer of the Company is, or is
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company to any liability with respect to any of the foregoing
matters. The Company and each of its subsidiaries is 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. 
 
2.30           No Manipulation; Disclosure of Information. The Company has not
taken and will not take any action designed to or that might reasonably be
expected to cause or result in an unlawful manipulation of the price of the
Common Stock to facilitate the sale or resale of the Securities. The Company
confirms that, to its knowledge, with the exception of the proposed sale of
Securities as contemplated herein (as to which the Company makes no
representation under this Section 2.30) and information provided with respect to
the Merger, the Acquisition Agreement, the First Lien Credit Facility, the
Second Lien Credit Facility and the Company’s sale of Series D preferred stock
in connection with the Merger, neither it nor any other person acting on its
behalf has provided the Purchaser or its agents or counsel with any information
that constitutes or might constitute material, non-public information. The
Company understands and confirms that the Purchaser shall be relying on the
foregoing representations in effecting transactions in securities of the
Company. All disclosures provided to the Purchaser regarding the Company, its
business and the transactions noted in this Section 2.30 furnished by the
Company are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
 
2.31           Forward-Looking Information. No forward-looking statement (within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) made by the Company or any of its officers or directors contained in the
SEC Documents, or made available to the public generally since December 31,
2017, has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
 
2.32           No Additional Agreements. Except for the issuance of common stock
pursuant to the Merger Agreement and the Acquisition Agreement and the issuance
of preferred stock listed on Schedule 2.6, the Company has no other agreements
or understandings (including, without limitation, side letters) with any other
person to purchase shares of its Common Stock on terms more favorable to such
person than as set forth herein.
 
 
 
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2.33           No “Bad Actor” Disqualification. The Company has exercised
reasonable care, in accordance with SEC rules and guidance, and has conducted a
factual inquiry, the nature and scope of which reflect reasonable care under the
relevant facts and circumstances, to determine whether any Covered Person (as
defined below) is subject to any of the “bad actor” disqualifications described
in Rule 506(d)(1)(i) to (viii) under the Securities Act (“Disqualification
Events”). To the Company’s knowledge, after conducting such sufficiently
diligent factual inquiries, no Covered Person is subject to a Disqualification
Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3)
under the Securities Act. The Company has complied, to the extent applicable,
with any disclosure obligations under Rule 506(e) under the Securities Act.
“Covered Persons” are those persons specified in Rule 506(d)(1) under the
Securities Act, including the Company; any predecessor or affiliate of the
Company; any director, executive officer, other officer participating in the
offering, general partner or managing member of the Company; any beneficial
owner of 20% or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power; any promoter (as defined in Rule 405
under the Securities Act) connected with the Company in any capacity at the time
of the sale of the Securities; and any person that has been or will be paid
(directly or indirectly) remuneration for solicitation of purchasers in
connection with the sale of the Securities (a “Solicitor”), any general partner
or managing member of any Solicitor, and any director, executive officer or
other officer participating in the offering of any Solicitor or general partner
or managing member of any Solicitor.
 
3.            
Representations and Warranties of the Purchaser. The Purchaser hereby represents
and warrants to the Company as follows:
 
3.1           Legal Power. The Purchaser has the requisite power and authority
to enter into this Agreement and to carry out and perform its obligations under
the terms of this Agreement. All action on the Purchaser’s part required for the
lawful execution and delivery of this Agreement have been or will be effectively
taken prior to the Closing.
 
3.2           Due Execution. This Agreement has been duly authorized, executed
and delivered by the Purchaser, and, upon due execution and delivery by the
Company, this Agreement will be a valid and binding agreement of the Purchaser,
except as rights to indemnity hereunder may be limited by federal or state
securities laws and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally or by equitable principles.
 
3.3           Investment Representations. In connection with the sale and
issuance of the Securities, the Purchaser makes the following representations:
 
(a)           Investment for Own Account. The Purchaser is acquiring the
Securities for its own account, not as nominee or agent, and not with a view to,
or for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act; provided, however, that by making the
representations herein, the Purchaser does not agree to hold any of the
Securities for any minimum or specific term and reserves the right to dispose of
the securities at any time in accordance with or pursuant to a registration
statement or an exemption from the registration requirements of the Securities
Act.
 
 
 
10

 
 
 
(b)           Transfer Restrictions; Legends. The Purchaser understands that (i)
the Securities have not been registered under the Securities Act; (ii) the
Securities are being offered and sold pursuant to an exemption from
registration, based in part upon the Company’s reliance upon the statements and
representations made by the Purchaser in this Agreement, and that the Securities
must be held by the Purchaser indefinitely, and that the Purchaser must,
therefore, bear the economic risk of such investment indefinitely, unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration; (iii) each Certificate representing Securities
will be endorsed or notated with substantially the following legend until the
date the Shares are eligible for sale without restriction or limitation under
Rule 144 under the Securities Act or any successor rule (“Rule 144”):
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF
ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. UNLESS SOLD PURSUANT TO EITHER AN EFFECTIVE
REGISTRATION STATEMENT OR RULE 144 UNDER THE SECURITIES ACT, THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
 
(iv) the Company will instruct any transfer agent not to register the transfer
of the Securities (or any portion thereof) until the applicable date set forth
in clause (iii) above unless (A) the conditions specified in the foregoing
legends are satisfied, (B) if the opinion of counsel referred to above is to the
further effect that such legend is not required in order to establish compliance
with any provisions of the Securities Act or this Agreement, (C) if the
Purchaser provides the Company with reasonable assurance, such as through a
representation letter, that the Securities may be sold pursuant to Rule 144
under the Securities Act, or (D) other reasonably satisfactory assurances of
such nature are given to the Company. If so required by the Company’s transfer
agent, the Company shall cause its counsel to issue and deliver a legal opinion
to the transfer agent to effect the removal of the restrictive legend
contemplated by this Agreement.
 
The Company acknowledges and agrees that the Purchaser may from time to time
pledge, and/or grant a security interest in some or all of the Securities
pursuant to a bona fide margin agreement in connection with a bona fide margin
account and, if required under the terms of such agreement or account, the
Purchaser may transfer pledged or secured Securities to the pledgees or secured
parties. Such a pledge or transfer shall not be subject to approval or consent
of the Company and no legal opinion of legal counsel to the pledgee, secured
party or pledgor shall be required in connection with the pledge, but such legal
opinion may be required in connection with a subsequent transfer following
default by the Purchaser transferee of the pledge. No notice shall be required
of such pledge. At the appropriate Purchaser’s expense, the Company will execute
and deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of the
Securities, including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling
Shareholders thereunder.
 
 
 
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Certificates evidencing the Shares shall not contain any restrictive legend
(including the legend set forth in this Section): (i) following a resale of the
Shares under an effective registration statement (including the Registration
Statement) covering the Shares, or (ii) following a sale of such Shares pursuant
to Rule 144, or (iii) while such Shares are eligible for sale under Rule 144
and, with respect to the Shares, the Purchaser is not and has not been for three
months an affiliate of the Company (as such term is defined in Rule 144(a)(1))
and such Shares have been held for one year or more pursuant to the requirements
of Rule 144 and any other requirements under Rule 144 have been satisfied at
such time, or (iv) if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements
issued by the Staff of the SEC). Following such time as restrictive legends are
not required to be placed on Certificates representing Shares, the Company will,
no later than three business days following the delivery by the Purchaser to the
Company or the Company’s transfer agent of a Certificate representing Shares
containing a restrictive legend and such other documentation and representations
as the Company, its legal counsel or Transfer Agent may reasonably request to
confirm compliance with the preceding sentence as applicable (provided, however,
that neither the Company nor its legal counsel will require a legal opinion in
connection with any sale pursuant to Rule 144), deliver or cause to be delivered
to the Purchaser a Certificate representing such Shares that is free from all
restrictive legends. The Company may not make any notation on its records or
give instructions to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section. Certificates for Shares
subject to legend removal hereunder shall be transmitted by the transfer agent
of the Company to the Purchaser by crediting the account of the Purchaser’s
prime broker with the Depository Trust Company system unless the Purchaser
provides alternate written instructions. The Company will pay all fees and
expenses of its transfer agent and the Depository Trust Company in connection
with the removal of legends pursuant to this Section 3.3(b).
 
The Purchaser agrees that the removal of the restrictive legend from
Certificates representing Shares as set forth in this Section 3.3(b) is
predicated upon the Company’s reliance that the Purchaser will sell any Shares
pursuant to either the registration requirements of the Securities Act,
including any applicable prospectus delivery requirements, or an exemption
therefrom.
 
(c)           Financial Sophistication; Due Diligence. The Purchaser has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in connection with the
transactions contemplated in this Agreement. The Purchaser has, in connection
with its decision to purchase the Securities, relied only upon the
representations and warranties contained herein and the information contained in
the Company SEC Documents. Further, the Purchaser has had such opportunity to
obtain additional information and to ask questions of, and receive answers from,
the Company, concerning the terms and conditions of the investment and the
business and affairs of the Company, as the Purchaser considers necessary in
order to form an investment decision.
 
(d)           Accredited Investor Status. The Purchaser is an “accredited
investor” as such term is defined in Rule 501(a) of the rules and regulations
promulgated under the Securities Act.
 
(e)           Residency. The Purchaser is organized under the laws of the
jurisdiction set forth beneath the Purchaser’s name on the signature page
attached hereto, and its principal place of operations is in the state set forth
beneath the Purchaser’s name on the signature page attached hereto.
 
(f)           General Solicitation. The Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over the television or radio or presented at any
seminar or any other general solicitation or general advertisement.
 
 
 
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3.4           No Investment, Tax or Legal Advice. The Purchaser understands that
nothing in the Company SEC Documents, this Agreement, or any other materials
presented to the Purchaser in connection with the purchase and sale of the
Securities constitutes legal, tax or investment advice. The Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of
Securities.
 
3.5           Additional Acknowledgement. The Purchaser acknowledges that it has
independently evaluated the merits of the transactions contemplated by this
Agreement, that it has independently determined to enter into the transactions
contemplated hereby, that it is not relying on any advice from or evaluation by
any other person. The Purchaser acknowledges that it has not taken any actions
that would deem the Purchaser to be a members of a “group” for purposes of
Section 13(d) of the Exchange Act.
 
3.6           Limited Ownership. The purchase of the Securities by the Purchaser
at the Closing will not result in the Purchaser (individually or together with
any other person or entity with whom the Purchaser has identified, or will have
identified, itself as part of a “group” in a public filing made with the SEC
involving the Company’s securities) acquiring, or obtaining the right to
acquire, in excess of 19.999% of the outstanding shares of Common Stock or
voting power of the Company on a post-transaction basis that assumes that the
Closing shall have occurred. The Purchaser does not presently intend to, along
or together with others, make a public filing with the SEC to disclose that it
has (or that it together with such other persons or entities have) acquired, or
obtained the right to acquire, as a result of the Closing (when added to any
other securities of the Company that it or they then own or have the right to
acquire), in excess of 19.999% of the outstanding shares of Common Stock or the
voting power of the Company on a post-transaction basis that assumes that the
Closing shall have occurred. 
 
3.7           No Short Position. Other than consummating the transactions
contemplated hereunder, the Purchaser has not directly or indirectly, nor has
any person or entity acting on behalf of or pursuant to any understanding with
the Purchaser, executed any purchases or sales, including short sales as defined
in Rule 200 of Regulation SHO under the Exchange Act (“Short Sales”), of the
securities of the Company during the period commencing from the time that the
Purchaser first received a term sheet (written or oral) from the Company or any
other person representing the Company setting forth the material terms of the
transactions contemplated hereunder until the date hereof (“Discussion Time”).
Notwithstanding the foregoing, in the event that the Purchaser is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of the Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of the Purchaser’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the securities
covered by this Agreement. The Purchaser has maintained the confidentiality of
all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction, the Acquisition Agreement, the First
Lien Credit Facility, the Second Lien Credit Facility and the Company’s sale of
Series D preferred stock in connection with the Merger,). Notwithstanding the
foregoing, for avoidance of doubt, nothing contained herein shall constitute a
representation or warranty, or preclude any actions, with respect to the
identification of the availability of, or securing of, available shares to
borrow in order to effect short sales or similar transactions in the future.
 
 
 
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4.            
Conditions to Closing.
 
4.1           Conditions to Obligations of Purchaser at Closing. The Purchaser’s
obligation to purchase the Securities at the Closing is subject to the
fulfillment, on or prior to the Closing, of all of the following conditions, any
of which may be waived by the Purchaser:
 
(a)           Representations and Warranties True; Performance of Obligations.
The representations and warranties made by the Company in Section 2 shall be
true and correct in all material respects (or, where the representation and
warranty itself is qualified by materiality, it shall be true and correct in all
respects) on the Closing Date with the same force and effect as if they had been
made on and as of said date (except to the extent that any such representation
and warranty expressly speaks as of an earlier date, in which case such
representation and warranty shall be so true and correct as of such earlier
date), and the Company shall have performed and complied with all obligations
and conditions herein required to be performed or complied with by it on or
prior to the Closing, including, but not limited to, those obligations and
conditions set forth in Sections 4.1(c), 4.1(f), 4.1(g), 4.1(h), and 4.1(i), and
if the Closing date is subsequent to the date hereof, a certificate duly
executed by an officer of the Company, to the effect of the foregoing, shall be
delivered to the Purchaser. The delivery of such certificate shall evidence the
satisfaction of the conditions set forth in this Section 4.1.
 
(b)           Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
and instruments incident to such transactions shall be reasonably satisfactory
in substance and form to counsel to the Purchaser, and counsel to the Purchaser
shall have received all such counterpart originals or certified or other copies
of such documents as they may reasonably request. The Company shall have
delivered (or caused to have been delivered) to the Purchaser, the
Certificate(s) required by this Agreement. 
 
(c)           Qualifications, Legal Investment. All authorizations, approvals,
or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful
sale and issuance of the Securities shall have been duly obtained and shall be
effective on and as of the Closing. No stop order or other order enjoining the
sale of the Securities shall have been issued and no proceedings for such
purpose shall be pending or, to the knowledge of the Company, threatened by the
SEC, or any commissioner of corporations or similar officer of any state having
jurisdiction over this transaction. At the time of the Closing, the sale and
issuance of the Securities shall be legally permitted by all laws and
regulations to which the Company is subject. No litigation, statute, rule,
regulation, executive order, decree, ruling or injunction will have been
enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation
of any of the transactions contemplated by this Agreement.
 
(d)           Execution of Agreement. The Company shall have executed this
Agreement and have delivered this Agreement to the Purchaser.
 
(e)           Secretary’s Certificate. The Company shall have delivered to the
Purchaser a certificate of the Secretary of the Company certifying as to (i) the
truth and accuracy of the resolutions of the board of directors relating to the
transaction contemplated hereby (a copy of which shall be included with such
certificate) and (ii) the current versions of the Company’s Certificate of
Incorporation and bylaws.
 
 
 
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(f)           Payment of Structuring Fee. The $________ structuring fee
contemplated by Section 7.6 shall have been paid.
 
(g)           Trading and Listing. Trading and listing of the Company’s common
stock on the Principal Market shall not have been suspended by the SEC or the
Principal Market.
 
(h)           Market Listing. The Company will comply with all of the
requirements of the Financial Industry Regulatory Authority, Inc. and the
Principal Market with respect to the issuance of the Securities and will list
the Shares on the Principal Market no later than the earlier of (a) the
effective date of the Registration Statement (as hereinafter defined) or (b) the
Required Effective Date (as hereinafter defined).
 
(i)           Blue Sky. The Company shall have obtained all necessary “blue sky”
law permits and qualifications, or have the availability of exemptions
therefrom, required by any state for the offer and sale of the Securities.
 
(j)           Material Adverse Change. Since the date of this Agreement, there
shall not have occurred any event which results in a Material Adverse Effect.
 
(k)           Merger. The Merger and the transactions related thereto shall be
consummated in accordance with the Merger Agreement, including the financings
contemplated by the First Lien Credit Facility and the Second Lien Credit
Facility, contemporaneously with the Offering.
 
4.2           Conditions to Obligations of the Company. The Company’s obligation
to issue and sell the Securities at the Closing is subject to the fulfillment,
on or prior to the Closing, of the following conditions, any of which may be
waived by the Company:
 
(a)           Representations and Warranties True. The representations and
warranties made by the Purchaser in Section 3 shall be true and correct in all
material respects (or, where the representation and warranty itself is qualified
by materiality, it shall be true and correct in all respects) on the Closing
Date with the same force and effect as if they had been made on and as of said
date (except to the extent that any such representation and warranty expressly
speaks as of an earlier date, in which case such representation and warranty
shall be so true and correct as of such earlier date).
 
(b)           Performance of Obligations. The Purchaser shall have performed and
complied with all agreements and conditions herein required to be performed or
complied with by them on or before the Closing. The Purchaser shall have
delivered the Purchase Price, by wire transfer, to the account designated by the
Company for such purpose. 
 
(c)           Qualifications, Legal Investment. All authorizations, approvals,
or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful
sale and issuance of the Securities shall have been duly obtained and shall be
effective on and as of the Closing. No stop order or other order enjoining the
sale of the Securities shall have been issued and no proceedings for such
purpose shall be pending or, to the knowledge of the Company, threatened by the
SEC, or any commissioner of corporations or similar officer of any state having
jurisdiction over this transaction. At the time of the Closing, the sale and
issuance of the Securities shall be legally permitted by all laws and
regulations to which the Company is subject. No litigation, statute, rule,
regulation, executive order, decree, ruling or injunction will have been
enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation
of any of the transactions contemplated by this Agreement.
 
(d)           Execution of Agreement. The Purchaser shall have executed this
Agreement and delivered this Agreement to the Company.
 
(e)           Merger. The Merger and the transactions related thereto shall be
consummated in accordance with the Merger Agreement, including the financings
contemplated by the First Lien Credit Facility and the Second Lien Credit
Facility, contemporaneously with the Offering.
 
 
 
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4.3           Termination of Obligations to Effect Closing; Effect.
 
(a)           Termination. The obligations of the Company, on the one hand, and
the Purchaser, on the other hand, to effect the Closing shall terminate as
follows:
 
(i)           Upon the mutual written consent of the Company and the Purchaser;
 
(ii)           By the Company if any of the conditions set forth in Section 4.2
shall have become incapable of fulfillment, and shall not have been waived by
the Company;
 
(iii)           By the Purchaser if any of the conditions set forth in Section
4.1 shall have become incapable of fulfillment, and shall not have been waived
by the Purchaser; or
 
(iv)           By either the Company or the Purchaser if the Closing has not
occurred on or prior to May 15, 2018, 2018; provided, however, that, in the case
of clause (iii) above and clause (iv) with respect to the Company, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants, or agreements
contained in this Agreement if such breach has resulted in the circumstances
giving rise to such party’s seeking to terminate its obligation to effect the
Closing.
 
(b)           Effect of Termination. Nothing in this Section 4.3 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 to impair the right of any party to
compel specific performance by any other party of its obligations under this
Agreement. 
 
5.            
Additional Covenants.
 
5.1           Reporting Status. With a view to making available to the Purchaser
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Shares to the public without registration, the Company agrees to use
its reasonable best efforts to file with the SEC, in a timely manner, all
reports and other documents required of the Company under the Exchange Act. The
Company will otherwise take such further action as the Purchaser may reasonably
request, all to the extent required from time to time, to enable the Purchaser
to sell the Shares without registration under the Securities Act or any
successor rule or regulation adopted by the SEC.
 
5.2           Listing. So long as the Purchaser owns any of the Securities, the
Company will use its reasonable best efforts to maintain the qualification or
listing of its Common Stock, including the Shares, on the Principal Market or an
alternative listing on The Nasdaq Stock Market, New York Stock Exchange or NYSE
MKT and will comply in all material respects with the Company’s reporting,
filing and other obligations under the rules of such exchanges, as applicable.
 
5.3           Adjustments in Share Numbers and Prices. In the event of any stock
split, subdivision, dividend or distribution payable in shares of Common Stock
(or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof, each
reference in this Agreement to a number of shares or price per share shall be
amended appropriately to account for such event.
 
 
 
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5.4           Non-Public Information. The Company covenants and agrees that
neither it nor any other person acting on its behalf will provide the Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto the Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that the Purchaser shall
be relying on the foregoing representations in effecting transactions in
securities of the Company. Furthermore, if the Company has disclosed any
material non-public information to the Purchaser, the Purchaser has no duty to
keep such information confidential following the public announcement of the
Offering.
 
5.5           Lock-Up. The Purchaser will not, without the prior written consent
of the Company, from the date of execution of this Agreement and continuing to
and including the date 180 days after the Closing Date (the “Lock-Up Period”):
(1) offer, pledge, announce the intention to sell, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, make any short sale or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into, exercisable or exchangeable for or that
represent the right to receive Common Stock (including without limitation,
Common Stock which may be deemed to be beneficially owned by the Purchaser in
accordance with the rules and regulations of the SEC and securities which may be
issued upon exercise of a stock option or warrant) (the “Purchaser’s
Securities”); (2) enter into any swap, hedge or other transaction or transfer
which could reasonably be expected to lead to or result in a transfer, sale or
disposition of the Purchaser’s Securities, or any of the economic consequences
of ownership thereof, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise; (3) make any demand for or exercise any right with respect
to, the registration of any Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock, provided, that nothing in this
Section 5.5 is intended to limit any claim regarding the breach or enforcement
of the provisions of Section 6; or (4) publicly disclose the intention to do any
of the foregoing.
 
Notwithstanding the foregoing, the Purchaser may transfer the Purchaser’s
Securities (i) as a bona fide gift or gifts, or (ii) if the Purchaser is a
corporation, partnership, limited liability company, trust or other business
entity (1) to another corporation, partnership, limited liability company, trust
or other business entity that is a direct or indirect affiliate (as defined in
Rule 405 promulgated under the Securities Act) of the Purchaser or (2) as
distributions of shares of Common Stock or any security convertible into or
exercisable for Common Stock to limited partners, limited liability company
members or stockholders of the Purchaser; provided, that (x) such transfer shall
not involve a disposition for value, (y) the transferee agrees in writing with
the Representative to be bound by the terms of this Section 5.5 and (z) no
filing by any party under Section 16(a) of the Exchange Act, shall be required
or shall be made voluntarily in connection with such transfer.
 
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Common Stock if such transfer would constitute a violation or breach of this
Section 5.5.
 
 
 
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6.            
Registration Rights.
 
6.1           Registration Procedures and Expenses; Liquidated Damages for
Certain Events.
 
(a)           The Company shall prepare and file with the SEC, as promptly as
reasonably practicable following Closing, a registration statement on Form S-3
(or any successor to Form S-3), covering the resale of the Registrable
Securities (the “S-3 Registration Statement”) and use all commercially
reasonable efforts to, as soon as reasonably practicable thereafter but in no
event later than 120 days following the date hereof (or 150 days in the event of
a full review of the S-3 Registration Statement by the SEC), effect such
registration and any related qualification or compliance with respect to all
Registrable Securities held by the Purchaser. For purposes of this Agreement,
the term “Registrable Securities” shall mean (i) the Shares and (ii) any Common
Stock of the Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, any
Shares. In the event that Form S-3 (or any successor form) is or becomes
unavailable to register the resale of the Registrable Securities at any time
prior to the date of the initial filing of the S-3 Registration Statement (the
“Initial Filing Date”), the Company shall prepare and file with the SEC, as
promptly as reasonably practicable a registration statement on Form S-1 (or any
successor to Form S-1), covering the resale of the Registrable Securities (the
“S-1 Registration Statement” and collectively the S-3 Registration Statement,
the “Registration Statement”) and use all commercially reasonable efforts to, as
soon as reasonably practicable thereafter but in no event later than 120 days
following the date hereof (150 days in the event of a full review of the S-1
Registration Statement by the SEC), to effect such registration and any related
qualification or compliance with respect to all Registrable Securities held by
the Purchaser. If the Company is not eligible to use Form S-3 at the Initial
Filing Date, and the Company subsequently becomes eligible to use Form S-3
during the Effectiveness Period (as defined below), the Company shall file, as
promptly as reasonably practicable, a new S-3 Registration Statement, or if
available, an amendment to the Form S-1, covering the resale of the Registrable
Securities and replace the S-1 Registration Statement with the new S-3
Registration Statement or amended Form S-1, as the case may be, upon the
effectiveness of the new S-3 Registration Statement.
 
(b)           The Company shall, during the Effectiveness Period (as hereinafter
defined), use its commercially reasonable efforts to:
 
(i)           prepare and file with the SEC such amendments and supplements to
the Registration Statement and the Prospectus used in connection therewith as
may be necessary or advisable to keep the Registration Statement current and
effective for the Registrable Securities held by the Purchaser for a period
ending on the earlier of (i) the second anniversary of the Closing Date, (ii)
the date on which all Registrable Securities may be sold without reporting
obligations or volume limitation or other restrictions on transfer or any other
restriction under Rule 144 or (iii) such time as all Registrable Securities have
been sold pursuant to a registration statement or Rule 144 (collectively, the
“Effectiveness Period”). The Company shall notify the Purchaser promptly upon
the Registration Statement and each post-effective amendment thereto, being
declared effective by the SEC and advise the Purchaser that the form of
Prospectus contained in the Registration Statement or post-effective amendment
thereto, as the case may be, at the time of effectiveness meets the requirements
of Section 10(a) of the Securities Act or that it intends to file a Prospectus
pursuant to Rule 424(b) under the Securities Act that meets the requirements of
Section 10(a) of the Securities Act;
 
 
 
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(ii)           furnish to the Purchaser promptly with respect to the Registrable
Securities registered under the Registration Statement such number of copies of
the Registration Statement and the Prospectus (including supplemental
prospectuses and amendments) filed with the SEC in conformance with the
requirements of the Securities Act and such other documents as the Purchaser may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Registrable Securities by the Purchaser;
 
(iii)           make any necessary blue sky filings; and
 
(iv)           advise the Purchaser, promptly after it shall receive notice or
obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the initiation
of any proceeding for that purpose; and it will promptly use its reasonable best
efforts to prevent the issuance of any stop order or to obtain its withdrawal at
the earliest possible moment if such stop order should be issued.
 
(c)           With a view to making available to the Purchaser the benefits of
Rule 144 and any other rule or regulation of the SEC that may at any time permit
the Purchaser to sell Registrable Securities to the public without registration,
the Company covenants and agrees, for as long as Purchaser owns any Shares (or
any Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
any Shares), to: (i) make and keep public information available, as such term is
understood and defined in Rule 144, until the earlier of (A) such date as all of
the Registrable Securities qualify to be resold immediately pursuant to Rule 144
or any other rule of similar effect without any restriction under Rule 144 or
such other rule or (B) such date as all of the Registrable Securities shall have
been resold pursuant to a registration statement or Rule 144 (and may be further
resold without restriction); (ii) file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act and
under the Exchange Act; and (iii) furnish to the Purchaser upon request, as long
as the Purchaser owns any Registrable Securities, (A) a written statement by the
Company as to whether it has complied with the reporting requirements of the
Securities Act and the Exchange Act, (B) if not available on the SEC EDGAR
system, a copy of the Company’s most recent Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, and (C) such other information as may be
reasonably requested in order to avail the Purchaser of any rule or regulation
of the SEC that permits the selling of any such Registrable Securities without
registration. The Company understands that the Purchaser disclaims being an
underwriter, but acknowledges that a determination by the SEC that the Purchaser
is deemed an underwriter shall not relieve the Company of any obligations it has
hereunder.
 
(d)           The Company shall pay the expenses incurred by the Company and the
Purchaser in complying with this Section 6, including, all registration and
filing fees, FINRA fees, exchange listing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding attorneys’ fees of the Purchaser and any and all underwriting
discounts and selling commissions applicable to the sale of Registrable
Securities by the Purchaser).
 
 
 
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6.2           Transfer of Shares After Registration; Suspension.
 
(a)           Except in the event that Section 6.2(b) applies, the Company shall
during the Effectiveness Period: (i) if deemed necessary or advisable by the
Company, prepare and file from time to time with the SEC a post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other required document so that such Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and so that, as thereafter delivered to
purchasers of the Registrable Securities being sold thereunder, such Prospectus
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (ii) provide the Purchaser copies, or access to copies, of any
documents filed pursuant to Section 6.2(a)(i); and (iii) upon request, inform
the Purchaser that the Company has complied with its obligations in Section
6.2(b)(i) (or that, if the Company has filed a post-effective amendment to the
Registration Statement which has not yet been declared effective, the Company
will notify the Purchaser to that effect, will use its reasonable best efforts
to secure the effectiveness of such post-effective amendment as promptly as
possible and will promptly notify the Purchaser pursuant to Section 6.2(b)(i)
when the amendment has become effective).
 
(b)           Subject to Section 6.1(c), in the event: (i) of any request by the
SEC or any other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to the
Registration Statement or related Prospectus or for additional information; (ii)
of the issuance by the SEC or any other federal or state governmental authority
of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose; (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such purpose; or (iv)
of any event or circumstance which necessitates the making of any changes in the
Registration Statement or Prospectus, or any document incorporated or deemed to
be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; then the Company shall promptly deliver a certificate in writing to
the Purchaser (the “Suspension Notice”) to the effect of the foregoing and, upon
receipt of such Suspension Notice, the Purchaser will refrain from selling any
Registrable Securities pursuant to the Registration Statement (a “Suspension”)
until the Purchaser is advised in writing by the Company that the current
Prospectus may be used, and have received copies, or access to copies, from the
Company of any additional or supplemental filings that are incorporated or
deemed incorporated by reference in any such Prospectus. In the event of any
Suspension, the Company will use its reasonable best efforts to cause the use of
the Prospectus so suspended to be resumed as soon as reasonably practicable
after delivery of a Suspension Notice to the Purchaser. In addition to and
without limiting any other remedies (including, without limitation, at law or at
equity) available to the Company and the Purchaser, the Company and the
Purchaser shall be entitled to specific performance in the event that the other
party fails to comply with the provisions of this Section 6.2(b).  
 
(c)           Notwithstanding the foregoing paragraphs of this Section 6.2, the
Company shall use its reasonable best efforts to ensure that (i) a Suspension
shall not exceed 30 days individually, (ii) Suspensions covering no more than 45
days, in the aggregate, shall occur during any twelve month period and (iii)
each Suspension shall be separated by a period of at least 30 days from a prior
Suspension (each Suspension that satisfies the foregoing criteria being referred
to herein as a “Qualifying Suspension”).
 
 
 
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(d)           During the Effectiveness Period, the Company shall cause
Certificates evidencing the Registrable Securities not to contain any
restrictive legend (including the legend set forth in Section 3.3(b)): (i)
following a resale of the Shares under an effective registration statement
(including the Registration Statement) covering such Registrable Securities, or
(ii) following a sale of such Registrable Securities pursuant to Rule 144, or
(iii) while such Registrable Securities are eligible for sale under Rule 144
and, with respect to the Purchaser’s Shares, the Purchaser is not and has not
been for three months an affiliate of the Company (as such term is defined in
Rule 144(a)(1)) and such Shares have been held for one year or more pursuant to
the requirements of Rule 144 and any other requirements under Rule 144 have been
satisfied at such time, or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the Staff of the SEC). Following such time as
restrictive legends are not required to be placed on Certificates representing
Shares, the Company will, no later than three Trading Days following the
delivery by the Purchaser to the Company or the Company’s transfer agent of a
Certificate representing Registrable Securities containing a restrictive legend,
deliver or cause to be delivered to the Purchaser a Certificate representing
such Registrable Securities that is free from all restrictive legends. Promptly
after the Registration Statement is declared effective by the SEC, the Company
will cause its counsel to issue a legal opinion to the Company’s transfer agent
to effect the removal of the restrictive legend contemplated by this Agreement
upon request by the Purchaser in connection with a sale of the Purchaser’s
Registrable Securities by the Purchaser pursuant to the Registration Statement.
The Company may not make any notation on its records or give instructions to any
transfer agent of the Company that enlarge the restrictions on transfer set
forth in this Agreement. Certificates for Registrable Securities subject to
legend removal hereunder shall be transmitted by the transfer agent of the
Company to the Purchaser by crediting the account of the Purchaser’s prime
broker with the Depository Trust Company system unless the Purchaser provides
alternate written instructions.
 
6.3           Indemnification. For the purpose of this Section 6.3:
 
(a)           the term “Selling Shareholder” shall mean the Purchaser, its
general partners, managing members, managers, executive officers and directors
and each person, if any, who controls the Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act;
 
(b)           the term “Registration Statement” shall include any final
Prospectus, exhibit, supplement or amendment included in or relating to, and any
document incorporated by reference in, the Registration Statement (or deemed to
be a part thereof) referred to in Section 6.1; and
 
 
 
21

 
 
 
 
 
(c)           the term “untrue statement” shall mean any untrue statement or
alleged untrue statement of a material fact, or any omission or alleged omission
to state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. 
 
(d)           The Company agrees to indemnify and hold harmless each Selling
Shareholder from and against any losses, claims, damages or liabilities to which
such Selling Shareholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon (i) any untrue
statement of a material fact contained in the Registration Statement, (ii) any
inaccuracy in the representations and warranties of the Company contained in
this Agreement or the failure of the Company to perform its obligations
hereunder or (iii) any failure by the Company to fulfill any undertaking
included in the Registration Statement, and the Company will reimburse such
Selling Shareholder for any reasonable legal expense or other actual accountable
out-of-pocket expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based upon, an untrue
statement made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Selling Shareholder specifically for use in preparation of the Registration
Statement or the failure of such Selling Shareholder to comply with its
covenants and agreements contained herein or any statement or omission in any
Prospectus that is corrected in any subsequent Prospectus that was delivered to
the Selling Shareholder prior to the pertinent sale or sales by the Selling
Shareholder.
 
(e)           The Purchaser agrees to indemnify and hold harmless the Company
(and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, each officer of the
Company who signs the Registration Statement and each director of the Company)
from and against any losses, claims, damages or liabilities to which the Company
(or any such officer, director or controlling person) may become subject (under
the Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any untrue statement of a material fact contained in the
Registration Statement if, and only if, such untrue statement was made in
reliance upon and in conformity with written information furnished by or on
behalf of the Purchaser specifically for use in preparation of the Registration
Statement, and the Purchaser will reimburse the Company (or such officer,
director or controlling person, as the case may be), for any reasonable legal
expense or other actual accountable out-of-pocket expenses reasonably incurred
in investigating, defending or preparing to defend any such action, proceeding
or claim. The obligation to indemnify shall be limited to the net amount of the
proceeds received by the Purchaser from the sale of the Registrable Securities
pursuant to the Registration Statement.
 
 
 
22

 
 
 
 
 
(f)           Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 6.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 6.3 (except to the extent that such
omission materially and adversely affects the indemnifying party’s ability to
defend such action) or from any liability otherwise than under this Section 6.3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof (unless it has failed to assume the defense thereof
and appoint counsel reasonably satisfactory to the indemnified party), such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate, in the reasonable opinion
of counsel to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel (who
shall not be the same as the opining counsel) at the expense of such
indemnifying person; provided, however, that no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all indemnified parties. In no
event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the
terms of such settlement; provided that such consent shall not be unreasonably
withheld. No indemnifying person shall, without the prior written consent of the
indemnified person, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified person is or could reasonably
have been a party and indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an unconditional release of
such indemnified person from all liability on claims that are the subject matter
of such proceeding. 
 
(g)           If the indemnification provided for in this Section 6.3 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (d) or (e) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Purchaser
on the other in connection with the statements or omissions or other matters
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, in the
case of an untrue statement, whether the untrue statement relates to information
supplied by the Company on the one hand or the Purchaser on the other and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement. The Company and the Purchaser agree
that it would not be just and equitable if contribution pursuant to this
subsection (g) were determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (g). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (g) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (g), the Purchaser
shall be required to contribute any amount in excess of the amount by which the
net amount received by the Purchaser from the sale of the Registrable Securities
to which such loss relates exceeds the amount of any damages which the Purchaser
has otherwise been required to pay to the Company by reason of such untrue
statement. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
 
 
 
23

 
 
 
 
 
(h)           The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 6.3, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 6.3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act and the Exchange
Act.
 
(i)           The obligations of the Company and of the Purchaser under this
Section 6.3 shall survive completion of any offering of Registrable Securities
in such Registration Statement for a period of two years from the effective date
of the Registration Statement. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of each indemnified party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation. 
 
6.4           Termination of Conditions and Obligations. The conditions
precedent imposed by Section 3 or this Section 6 upon the transferability of the
Registrable Securities shall cease and terminate as to any particular number of
the Registrable Securities when such Registrable Securities shall have been
effectively registered under the Securities Act and sold or otherwise disposed
of in accordance with the intended method of disposition set forth in the
Registration Statement covering such Registrable Securities or at such time as
an opinion of counsel satisfactory to the Company shall have been rendered to
the effect that such conditions are not necessary in order to comply with the
Securities Act. The Company shall request an opinion of counsel promptly upon
receipt of a request therefor from the Purchaser.
 
6.5           Information Available. So long as the Registration Statement is
effective covering the resale of Registrable Securities owned by the Purchaser,
the Company will furnish (or, to the extent such information is available
electronically through the Company’s filings with the SEC, the Company will make
available via the SEC’s EDGAR system or any successor thereto) to the Purchaser:
 
(a)           as soon as practicable after it is available, one copy of its
Annual Report on Form 10-K (the foregoing, in each case, excluding exhibits);
 
(b)           upon the request of the Purchaser, all exhibits excluded by the
parenthetical to subparagraph (a) of this Section 6.5 as filed with the SEC and
all other information that is made available to shareholders; and
 
(c)           upon the reasonable request of the Purchaser, an adequate number
of copies of the Prospectuses to supply to any other party requiring such
Prospectuses; and the Company, upon the reasonable request of Purchaser, will
meet with the Purchaser or a representative thereof at the Company’s
headquarters during the Company’s normal business hours to discuss all
information relevant for disclosure in the Registration Statement covering the
Registrable Securities and will otherwise reasonably cooperate with the
Purchaser conducting an investigation for the purpose of reducing or eliminating
the Purchaser’s exposure to liability under the Securities Act, including the
reasonable production of information at the Company’s headquarters; provided,
that the Company shall not be required to disclose any confidential information
to or meet at its headquarters with the Purchaser until and unless the Purchaser
shall have entered into a confidentiality agreement in form and substance
reasonably satisfactory to the Company with the Company with respect thereto.
 
 
 
24

 
 
 
 
 
6.6           Protection of Exemptions. The Company will not, for a period of
six months following the Closing Date offer for sale or sell any securities
unless, in the opinion of the Company’s counsel, such offer or sale does not
jeopardize the availability of exemptions from the registration and
qualification requirements under applicable securities laws with respect to the
Offering. Except for the issuance of stock options under the Company’s stock
option plans, the issuance of common stock upon exercise of outstanding options
and warrants, the issuance of common stock purchase warrants, the issuance of
Common Stock pursuant to the Merger Agreement or the Acquisition Agreement, the
Company’s sale of Series D preferred stock in connection with the Merger, the
Company’s public offering of Common Stock consummated on February 5, 2018 and
the offering contemplated hereby, the Company has not engaged in any offering of
equity securities during the six (6) months prior to the date of this Agreement.
The foregoing provisions of this Section 6.6 shall not prevent the Company from
filing a “shelf” registration statement pursuant to Rule 415 under the
Securities Act, but the foregoing provisions shall apply to any sale of
securities thereunder.
 
6.7           Form D and State Securities Filings. The Company will file with
the SEC a Notice of Sale of Securities on Form D with respect to the Securities,
as required under Regulation D under the Securities Act, no later than 15 days
after the Closing Date. The Company will promptly and timely file all documents
and pay all filing fees required by any states’ securities laws in connection
with the sale of Securities.
 
6.8           Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 6 may be assigned by
the Purchaser to a party that acquires, other than pursuant to the Registration
Statement or Rule 144, any of the Registrable Securities originally issued or
issuable to the Purchaser as contemplated by this Agreement, or to any affiliate
of the Purchaser that acquires any Registrable Securities. Any such permitted
assignee shall have all the rights of the Purchaser under this Section 6 with
respect to the Registrable Securities transferred during the Effectiveness
Period.
 
6.9           Selling Shareholder Questionnaire. The Purchaser agrees to furnish
to the Company a completed questionnaire in the form attached to this Agreement
as Exhibit A (a “Selling Holder Questionnaire”). The Company shall not be
required to include the Registrable Securities of the Purchaser in a
Registration Statement and shall not be required to pay any liquidated or other
damages hereunder to the Purchaser if the Purchaser fails to furnish to the
Company a fully completed Selling Holder Questionnaire at least three business
days prior to the filing of the Registration Statement.
 
7.            
Miscellaneous.
 
7.1           Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
choice of law provisions thereof, and the federal laws of the United States.
 
 
 
25

 
 
 
 
 
7.2           Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto. Notwithstanding the foregoing, the Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Purchaser.
 
7.3           Entire Agreement. This Agreement and the exhibits hereto, and the
other documents delivered pursuant hereto, constitute the full and entire
understanding and agreement among the parties with regard to the subjects hereof
and no party shall be liable or bound to any other party in any manner by any
representations, warranties, covenants, or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto and their
respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein. 
 
7.4           Severability. In the event any provision of this Agreement shall
be invalid, illegal, or unenforceable, it shall to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
 
7.5           Amendment and Waiver. Except as otherwise provided herein, any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of the Company and the Purchaser. Any
amendment or waiver effected in accordance with this Section 7.5 shall be
binding upon each future holder of any of the Securities purchased under this
Agreement and the Company.
 
7.6           Fees and Expenses. Except as otherwise set forth herein, the
Company and the Purchaser shall bear their own expenses and legal fees incurred
on their behalf with respect to this Agreement and the transactions contemplated
hereby. Each party hereby agrees to indemnify and to hold harmless of and from
any liability the other party for any commission or compensation in the nature
of a finder’s fee to any broker or other person or firm (and the costs and
expenses of defending against such liability or asserted liability) for which
such indemnifying party or any of its employees or representatives are
responsible. The Company shall pay to the Purchaser a structuring fee of
$__________ at Closing, payable in cash to Purchaser or its designee or, at
Purchaser’s option, payable by offsetting such amount from the Purchase Price.
The parties acknowledge that no fees or expenses, other than the structuring
fee, shall be payable by the Company to the Purchaser.
 
 
 
26

 
 
 
 
 
7.7           Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be delivered (A) if within the United
States, by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid or by electronic mail, or (B) if from
outside the United States, by International Federal Express (or comparable
service) or by electronic mail, and shall be deemed given (i) if delivered by
first-class registered or certified mail domestic, upon the business day
received, (ii) if delivered by nationally recognized overnight carrier, one
business day after timely delivery to such carrier, (iii) if delivered by
International Federal Express (or comparable service), two business days after
so mailed, or (iv) if delivered by electronic mail at or prior to 5:30 p.m. (New
York City time) on a Trading Day, on the Trading Day so delivered or, if
delivered by electronic mail after 5:30 p.m. (New York City time) on a Trading
Day or on a day that is not a Trading Day, the next Trading Day after the date
of delivery, and shall be addressed as follows, or to such other address or
addresses as may have been furnished in writing by a party to another party
pursuant to this paragraph:
 
● 
if to the Company, to the address of the Company’s principal office set forth on
the first page of this Agreement, Attention: James P. Prenetta, Jr., EVP and
General Counsel, e-mail: jprenetta@fusionconnect.com with a copy to (which shall
not constitute notice to the Company) Kelley Drye & Warren LLP, 101 Park Avenue,
New York, New York 10178, Attention: Carol Weiss Sherman, e-mail:
csherman@kelleydrye.com and
 
● 
if to the Purchaser, at its address on the signature page to this Agreement.
 
7.8           Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein shall survive the execution of this Agreement, the delivery
to the Purchaser of the Securities being purchased and the payment therefor, and
a party’s reliance on such representations and warranties shall not be affected
by any investigation made by such party or any information developed thereby.
 
7.9           Counterparts. This Agreement may be executed by pdf signature and
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one instrument.
 
7.10           Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
 
 
 
[The Remainder of this Page is Blank; Signature Pages Follow]
 
 
27

 
In witness whereof, the foregoing Common Stock Purchase Agreement is hereby
executed as of the date first above written. 
 
 
FUSION CONNECT, INC.
 
 
 
By:
 
 
Name:
James P. Prenetta, Jr.
 
Title:
Executive Vice President and General Counsel

 
 
 
 
 
 
 
 
 
 
 

 
In witness whereof, the foregoing Common Stock Purchase Agreement is hereby
executed as of the date first above written. 
 
 
 
 
Name of Investor
 
 
 
By:
 
 
Name:
 
 
Title:
 

 
 
 
Tax Identification No.:
 

 
 
Jurisdiction of Organization:
 

 
 
Jurisdiction of Principal Place of Operations:
 
 
 
 
 
Address for Notice:
 
 
 
 
 
 
 
Attention:
 
 
Telephone:
 

 
 
E-mail:
 

 
 
Delivery Instructions (if different from above):
 
 
 
 
 
 
 
Attention:
 
 
Telephone:
 

 
 
 

 

EXHIBIT A
 
SELLING SHAREHOLDER QUESTIONNAIRE
 
FUSION CONNECT, INC.
 
Questionnaire for Selling Shareholder
 
This questionnaire is necessary to obtain information to be used by Fusion
Connect, Inc. (the “Company”) to complete a Registration Statement (the
“Registration Statement”) covering the resale of certain shares of Company
Common Stock currently outstanding. Please complete and return this
questionnaire to Kelley Drye & Warren LLP, the Company’s legal counsel, to the
attention of Carol Weiss Sherman either by mail to 101 Park Avenue, New York,
New York 10178 or by fax to (212) 808-7897 or by email to
csherman@kelleydrye.com. Please return the questionnaire by [●], or sooner, if
possible. Call Carol Weiss Sherman at 212-808-5038 with questions.
 
FAILURE TO RETURN THE QUESTIONNAIRE MAY RESULT IN THE EXCLUSION OF YOUR NAME AND
SHARES FROM THE REGISTRATION STATEMENT.
 
Please answer all questions. If the answer to any question is “None” or “Not
Applicable,” please so state.
 
If there is any question about which you have any doubt, please set forth the
relevant facts in your answer.
 
1. 
Please correct your name and/or address if not correct below
 
 
Name:
 
 
 
 
 
Address:
 
 
 
 
 
 
 

 
2. 
Please state the total number of currently outstanding shares of Company Common
Stock that you beneficially own1 and the form of ownership and the date that you
acquired such stock. Include shares registered in your name individually or
jointly with others and shares held in the name of a bank, broker, nominee,
depository or in “street name” for your account. (DO NOT list options, warrants
or other derivative securities. See Question #3).
 
3. 
Please list any outstanding options and warrants to purchase Company Common
Stock or other derivative securities to acquire Company Common Stock that you
beneficially own*, including (i) the number of shares of Company Common Stock to
be issued upon the exercise of such option or warrant, (ii) the date such option
or warrant is exercisable, (iii) the expiration date and (iv) the exercise price
per share of EACH such option and warrant.
 
 
1 See Appendix A for definitions
 
 

 
 
 
 
 
Number of SharesCovered by Option orWarrant
 
Date Exercisable
 
Exercise Price
 
Expiration Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
4. 
Please list the number of shares of Common Stock listed under Question #2 above
that you wish to include in the Registration Statement.
 
5. 
If you are a limited liability company or limited partnership, please name the
managing member or general partner and each person controlling such managing
member or general partner.
 
6. 
If you are an entity, please identify the natural person(s) who exercises sole
or shared voting power* and/or sole or shared investment power* with regard to
the shares listed under Question #2 and Question #3.
 
7. 
Please advise whether you are a registered broker-dealer or an affiliate*
thereof. If you are an affiliate of a registered broker-dealer, please explain
the nature of the affiliation and disclose whether you acquired the shares in
the ordinary course of business and whether at the time of the acquisition you
had any plans or proposals, directly or with any other person, to distribute the
shares listed under Question #2 and Question #3.
 
8. 
List below the nature of any position, office or other material relationship
that you have, or have had within the past three years, with the Company or any
of its predecessors or affiliates*.
 
9. 
If you expressly wish to disclaim any beneficial ownership* of any shares listed
under Question #2 for any reason in the Registration Statement, indicate below
the shares and circumstances for disclaiming such beneficial ownership*.
 
10. 
With respect to the shares that you wish to include in the Registration
Statement, please list any party that has or may have secured a lien, security
interest or any other claim relating to such shares, and please give a full
description of such claims.
 
 
 
 
 
 
 
 
By:
 
 
Name:
 
 
Its:
 

 
 
 

 
APPENDIX A
 
To Exhibit A
 
CERTAIN TERMS USED IN QUESTIONNAIRE
 
AFFILIATE
 
An “affiliate” of a company is a person that directly, or indirectly through one
or more intermediaries, controls or is controlled by, or is under common control
with, such company.
 
BENEFICIAL OWNERSHIP
 
A person “beneficially owns” a security if such person, directly or indirectly,
has or shares voting power or investment power of such security, whether through
a contract, arrangement, understanding, relationship or otherwise. A person is
also the beneficial owner of a security if he has the right to acquire
beneficial ownership at any time within 60 days through the exercise of any
option, warrant or right, or the power to revoke a trust, discretionary account
or similar arrangement.
 
INVESTMENT POWER
 
“Investment power” includes the power to dispose, or to direct the disposition
of, a security.
 
VOTING POWER
 
“Voting power” includes the power to vote, or to direct the voting of, a
security.
 
 
 

 
 
 
Purchasers pursuant to Common Stock Purchase Agreement, dated May 4, 2018:
 
 
Purchaser
Number of Shares
Purchase Price
 
 
 
North Haven Credit Partners II L.P.
952,382
$5,000,005.50
Aetna Life Insurance Company
380,953
$2,000,003.25
Backcast Credit Opportunities Fund I, L.P.
190,477
$1,000,004.25