Exhibit 10.1

 

SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT

 

THIS SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of December 13, 2018, by and among Cryoport, Inc., a Nevada corporation
with headquarters located at 17305 Daimler Street, Irvine, CA 92614 (the
“Company”), and each investor identified on the signature pages hereto (each, an
“Investor” and collectively, the “Investors”).

 

RECITALS

 

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

 

B.           Each Investor, severally and not jointly, wishes to purchase, and
the Company wishes to sell, upon the terms and conditions stated in this
Agreement, that aggregate number of shares of the common stock, $0.001 par
value, of the Company (the “Common Stock”), set forth across from such
Investor’s name under the heading “Number of Shares Purchased” on the Schedule
of Investors (which aggregate amount for all Investors together shall
collectively be referred to herein as the “Common Shares”).

 

C.           In addition, each Investor, severally and not jointly, wishes to
purchase, and the Company wishes to issue to each Investor, upon the terms and
conditions stated in this Agreement, one or more floating rate convertible notes
of the Company in substantially the form attached hereto as Exhibit B
(collectively, the “Notes” and each, individually, a “Note”) in the aggregate
principal amount set forth across from such Investor’s name under the heading
“Principal Amount of Note” on the Schedule of Investors, which Notes shall be
convertible on the terms stated therein into shares of Common Stock of the
Company (that shares of Common Stock issuable pursuant to the terms of the
Notes, including, without limitation, upon conversion or otherwise,
collectively, the “Note Shares”). The Common Shares, the Notes and the Note
Shares are collectively referred to herein as the “Securities.”

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors,
intending to be legally bound hereby, agree as follows:

 

Article I

DEFINITIONS

 

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

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the
Securities Act.

 

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

 

“Allowable Grace Period” has the meaning set forth in Section 4.7(c)(xv).

 

   

 

 

“Applicable Date” means the earlier of (x) the first date on which the resale by
the Investors of all the Registrable Securities required to be filed on the
initial Registration Statement is declared effective by the SEC (and each
prospectus contained therein is available for use on such date) or (y) the first
date on which all of the Registrable Securities are eligible to be resold by the
Investors pursuant to Rule 144 (or, if a Current Public Information Failure has
occurred and is continuing, such later date after which the Company has cured
such Current Public Information Failure).

 

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

 

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

 

“Buy-In” has the meaning set forth in Section 4.1(e).

 

“Buy-In Price” has the meaning set forth in Section 4.1(e).

 

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

 

“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

 

“Closing Date” means the first (1st) Trading Day after the date on which this
Agreement has been executed and delivered by all parties hereto, unless on such
date the conditions set forth in Sections 2.2, 5.1 and 5.2 (other than those to
be satisfied at the Closing) shall not have been satisfied or waived in writing,
in which case the Closing Date shall be on the first (1st) Trading Day after the
date on which the last to be satisfied or waived of the conditions set forth in
Sections 2.2, 5.1 and 5.2 (other than those to be satisfied at the Closing)
shall have been satisfied or waived.

 

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

 

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

 

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

 

“Company Counsel” means Snell & Wilmer L.L.P.

 

“Current Public Information Failure” has the meaning set forth in Section
4.7(b).

 

“Effectiveness Deadline” means (i) with respect to the initial Registration
Statement required to be filed pursuant to Section 4.7(a), the earlier of (A)
the 90th calendar day after the Closing Date (or, if subject to a review by the
SEC, the 120th calendar day after the Closing Date) (subject to any Permitted
Initial Registration Extension pursuant to Section 4.7(c)(xix)) and (B) the 5th
Business Day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such Registration Statement will not be
reviewed or will not be subject to further review and (ii) with respect to any
additional Registration Statements that may be required to be filed by the
Company pursuant to this Agreement, the earlier of (A) the 90th calendar day
following the date on which the Company was required to file such additional
Registration Statement (or, if subject to a review by the SEC, the 120th
calendar day following the date on which the Company was required to file such
additional Registration Statement) and (B) the 5th Business Day after the date
the Company is notified (orally or in writing, whichever is earlier) by the SEC
that such Registration Statement will not be reviewed or will not be subject to
further review.

 

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“Effectiveness Failure” has the meaning set forth in Section 4.7(b).

 

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

 

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

 

“Filing Deadline” means (i) with respect to the initial Registration Statement
required to be filed pursuant to Section 4.7(a), the 45th calendar day after the
Closing Date (subject to any Permitted Initial Registration Extension pursuant
to Section 4.7(c)(xix)) and (ii) with respect to any additional Registration
Statements that may be required to be filed by the Company pursuant to this
Agreement, the date on which the Company was required to file such additional
Registration Statement pursuant to the terms of this Agreement.

 

“Filing Failure” has the meaning set forth in Section 4.7(b).

 

“FINRA” has the meaning set forth in Section 3.2(c).

 

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

 

“Grace Period” has the meaning set forth in Section 4.7(c)(xv).

 

“Indebtedness” means, with respect to any Person, without duplication (A) all
indebtedness for borrowed money, (B) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, and (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by such Person, even though such Person
which owns such assets or property has not assumed or become liable for the
payment of such indebtedness.

 

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

 

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

 

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

 

“Initial Registration Statement” has the meaning set forth in Section
4.7(c)(xix).

 

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

 

“Legend Removal Date” has the meaning set forth in Section 4.1(d).

 

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

 

“Maintenance Failure” has the meaning set forth in Section 4.7(b).

 

“Material Adverse Effect” means any condition, circumstance, or situation that
may result in, or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of this Agreement or any of
the Transaction Documents, (ii) a material adverse effect on the results of
operations, assets, business, condition (financial or otherwise) or prospects of
the Company and its Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s authority or ability to perform its obligations
hereunder or under any of the Transaction Documents in any material respect on a
timely basis.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Permitted Initial Registration Extension” has the meaning set forth in Section
4.7(c)(xix).

 

“Permitted Initial Registration Extension Notice” has the meaning set forth in
Section 4.7(c)(xix).

 

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

 

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

 

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

 

“Registrable Securities” means (i) the Common Shares, (ii) the Note Shares, and
(iii) any shares of capital stock issued or issuable with respect to the Common
Shares, the Note Shares and the Notes, including, without limitation, (1) as a
result of any stock split, dividend, distribution, recapitalization or similar
transaction and (2) shares of capital stock of a Successor Entity (as defined in
the Notes) into which the shares of Common Stock are converted or exchanged, in
each case, without regard to any limitations on conversion of the Notes.

 

“Registration Delay Payments” has the meaning set forth in Section 4.7(b).

 

“Registration Period” has the meaning set forth in Section 4.7(c)(i).

 

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“Registration Statement” means a registration statement or registration
statements of the Company filed under the Securities Act covering Registrable
Securities, including, in each case, the prospectus, amendments and supplements
to such registration statement or prospectus, including pre- and post-effective
amendments, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.

 

“Regulation D” has the meaning set forth in the Recitals.

 

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

 

“Required Registration Amount” means the sum of (i) the total number of Common
Shares and (ii) 120% of the maximum number of Note Shares issuable upon
conversion of the Notes (assuming for purposes hereof that any such conversion
shall not take into account any limitations on the conversion of the Notes set
forth in the Notes).

 

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

 

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

 

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

 

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

 

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

 

“Short Sales” has the meaning set forth in Section 3.2(k).

 

“Specified Acquisition” has the meaning set forth in Section 3.1(qq).

 

“Subsidiary” means any Person in which the Company, directly or indirectly, (i)
owns more than 50% of the outstanding capital stock or any equity or similar
interest of such Person or (ii) controls or operates all or any part of the
business, operations or administration of such Person.

 

“Total Purchase Price” means, with respect to any Investor, the aggregate price
paid by such Investor for Common Shares and Notes as set forth across from such
Investor’s name under the heading “Aggregate Purchase Price” on the Schedule of
Investors.

 

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

 

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

 

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

 

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

 

“Transfer Agent Instructions” means the transfer agent instructions,
substantially in the form of Exhibit A, executed by the Company and delivered to
the Transfer Agent.

 

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

 

Article II

PURCHASE AND SALE

 

2.1          Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing, the Company shall issue and sell to each Investor,
and each Investor shall, severally and not jointly, purchase from the Company,
(i) such number of Common Shares set forth across from such Investor’s name
under the heading “Number of Shares Purchased” on the Schedule of Investors, at
a purchase price equal to $10.00 per Common Share and (ii) Notes in the
principal amount set forth across from such Investor’s name under the heading
“Principal Amount of Note” on the Schedule of Investors, at a purchase price
equal to the principal face amount thereof. The date and time of the Closing
shall be 10:00 a.m., New York City Time, on the Closing Date. The Closing shall
take place at the offices of the Company Counsel, or at such other location as
the parties determine. Closing may take place by delivery of the items to be
delivered at Closing by facsimile or other electronic transmission.

 

2.2          Closing Deliverables.

 

(a)          At the Closing, the Company shall:

 

(i)          deliver or cause to be delivered to each Investor a copy of the
Company’s irrevocable instructions to the Transfer Agent instructing the
Transfer Agent to deliver one or more stock certificates, inclusive of such
restrictive and other legends as set forth in Section 4.1(b) hereof, evidencing
such number of Common Shares set forth across from such Investor’s name under
the heading “Number of Shares Purchased” on the Schedule of Investors,
registered in the name of such Investor;

 

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

 

(iii)        pay to Petrichor Opportunities Fund I LP a commitment fee (the
“Commitment Fee”) equal to one percent (1%) of the aggregate Total Purchase
Price with respect to all the Investors, in U.S. dollars and in immediately
available funds, payable to Petrichor Opportunities Fund I LP by wire transfer
to the account designated in writing to the Company by Petrichor Opportunities
Fund I LP for such purpose.

 

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(b)          At the Closing, each Investor shall deliver or cause to be
delivered to the Company the following:

 

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

 

(ii)         a completed and executed Investor Signature Page to this Agreement.

 

Article III

REPRESENTATIONS AND WARRANTIES

 

3.1          Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors as follows:

 

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

 

(b)          Organization and Qualification. The Company and each Subsidiary is
an entity duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, as applicable, with
the requisite power and legal authority to own and use its properties and assets
and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation of any of the provisions of its certificate or
articles of incorporation, bylaws or other organizational or charter documents,
as applicable. The Company and each Subsidiary is duly qualified to do business
and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

 

(c)          Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party, to
issue the Securities in accordance with the terms hereof and thereof, and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery by the Company of each of the Transaction Documents to which it is
a party and the consummation by it of the transactions contemplated hereby and
thereby, including the issuance of the Securities and the reservation for
issuance and issuance of the Note Shares, have been duly authorized by all
necessary action on the part of the Company, and (other than the filing with the
SEC of one or more Registration Statements in accordance with Section 4.7, the
filing with the SEC of a Form D and any other filings as may be required by
state securities agencies) no further consent, filing, authorization or action
is required from or with any United States federal or state regulatory authority
or governmental body or any Trading Market by the Company. Each of the
Transaction Documents to which it is a party has been (or upon delivery will be)
duly executed by the Company and is, or when delivered in accordance with the
terms hereof, will constitute, the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

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(d)          No Conflicts. The execution, delivery and performance by the
Company of the Transaction Documents to which it is a party, the issuance and
sale of the Securities, the reservation for issuance and issuance of the Note
Shares, and the consummation by the Company of the transactions contemplated
hereby and thereby do not, and will not, (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, as
applicable, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any
agreement (including any Material Contract), credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound, or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or any Subsidiary is subject or by which any property or
asset of the Company or any Subsidiary is bound or affected, except, in the case
of clauses (ii) and (iii) above, to the extent that such conflict, default,
termination, amendment, acceleration, cancellation right or violation would not
have or reasonably be expected to result in a Material Adverse Effect. The
Company is not in violation of the listing requirements of the Trading Market
and has no knowledge of any facts that would reasonably lead to delisting or
suspension of the Common Stock in the foreseeable future. The issuance of the
Company of the Securities shall not have the effect of delisting or suspending
the Company Stock from the Trading Market.

 

(e)          Valid Issuance. The Securities are duly authorized and, when issued
and paid for in accordance with the applicable Transaction Documents, will be
duly and validly issued, fully paid and nonassessable, free and clear of all
Liens (other than restrictions on transfer arising under applicable securities
laws) and will not be subject to preemptive or similar rights of stockholders.
Upon issuance or conversion in accordance with the Notes, the Conversion Shares,
when issued, will be validly issued, fully paid and nonassessable, free and
clear of all Liens (other than restrictions on transfer arising under applicable
securities laws) and will not be subject to preemptive or similar rights of
stockholders, with the holders being entitled to all rights accorded to a holder
of Common Stock.

 

(f)           Capitalization. The aggregate number of shares and type of all
authorized, issued and outstanding classes of capital stock, options and other
securities of the Company and of each Subsidiary (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of
the Company or any Subsidiary, as applicable) is set forth in Schedule 3.1(f)
hereto. All outstanding shares of capital stock of the Company and of each
Subsidiary are duly authorized, validly issued, fully paid and nonassessable and
have been issued in compliance in all material respects with all applicable
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase any capital
stock of the Company or such Subsidiary. As of the Closing, the Company shall
have reserved from its duly authorized capital stock not less than the maximum
number of Note Shares issuable upon conversion of the Notes based on the initial
Conversion Price (as defined in the Notes) of $13.11.

 

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(g)          SEC Reports; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it under the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the twelve months preceding the date hereof (the “SEC Reports”). As
of their respective dates (or, if amended or superseded by a filing prior to the
Closing Date, then on the date of such filing), the SEC Reports filed by the
Company complied in all material respects with the requirements of the Exchange
Act and the rules and regulations of the SEC promulgated thereunder, and none of
the SEC Reports, when filed (or, if amended or superseded by a filing prior to
the Closing Date, then on the date of such filing) by the Company, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing
(or, if amended or superseded by a filing prior to the Closing Date, then on the
date of such filing). Such financial statements have been prepared in accordance
with GAAP, except as may be otherwise specified in such financial statements or
the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP or may be condensed or summary statements, and
fairly present in all material respects the consolidated financial position of
the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, year-end audit
adjustments. All Material Contracts to which the Company or any Subsidiary is a
party or to which the property or assets of the Company or any Subsidiary are
subject are included as part of or identified in the SEC Reports.

 

(h)          Absence of Litigation. Except as disclosed in the SEC Reports,
there is no action, suit, claim, or Proceeding pending, or, to the Company’s
knowledge, threatened, before or by any court, public board, government agency,
self-regulatory organization or body that adversely affect or challenge the
legality, validity or enforceability of any of the Transaction Documents or that
would, individually or in the aggregate, have or be reasonably likely to result
in a Material Adverse Effect.

 

(i)           Compliance. Except as would not, individually or in the aggregate,
have or be reasonably likely to result in a Material Adverse Effect, (i) neither
the Company nor any Subsidiary is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received written notice of a claim that it is
in default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement (including any Material Contract) or instrument
to which it is a party or by which it or any of its properties is bound (whether
or not such default or violation has been waived), (ii) neither the Company nor
any Subsidiary is in violation of any order of any court, arbitrator or
governmental body to which the Company or any Subsidiary is subject or by which
any property or asset of the Company or any Subsidiary is bound or affected, or
(iii) neither the Company nor any Subsidiary is in violation of any law,
statute, rule or regulation of any governmental authority to which the Company
or any Subsidiary is subject or by which any property or asset of the Company or
any Subsidiary is bound or affected.

 

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

 

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

 

(l)           Insurance. The Company and each Subsidiary is insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses and locations in which
the Company and each Subsidiary is engaged. Neither the Company nor any
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business.

 

(m)         Internal Accounting Controls. The Company and each Subsidiary
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

 

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

 

(o)          Indebtedness. Except as disclosed in the SEC Reports, neither the
Company nor any Subsidiary has any outstanding Indebtedness.

 

 10 

 

 

(p)          Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents
(including the issuance of the Securities), other than (i) filings required by
applicable state securities laws, (ii) the filing of a Notice of Sale of
Securities on Form D with the SEC under Regulation D of the Securities Act,
(iii) the filing of any requisite notices and/or application(s) to any Trading
Market for the issuance and sale of the Common Shares and the Note Shares and
the listing of the Common Shares and Note Shares for trading or quotation, as
the case may be, thereon in the time and manner required thereby, (iv) the
filing of one or more Registration Statements in accordance with Section 4.7,
and (v) those that have been made or obtained prior to the date of this
Agreement (collectively, the “Required Approvals”).

 

(q)          Material Changes; Undisclosed Events, Liabilities or Developments.
Since December 31, 2017, there has been no event, occurrence or development that
has had or that would reasonably be expected to result in a Material Adverse
Effect. Since December 31, 2017, except as specifically disclosed in an SEC
Report filed subsequent to such date and prior to the date hereof: (i) the
Company has not incurred any liabilities (contingent or otherwise) other than
(A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or disclosed in
filings made with the SEC, (ii) the Company has not altered its method of
accounting, (iii) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (iv) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans.
The Company does not have pending before the SEC any request for confidential
treatment of information. Except for the transactions contemplated by the
Transaction Documents, including the issuance of the Securities, no event,
liability, fact, circumstance, occurrence or development has occurred or exists
with respect to the Company or its Subsidiaries or their respective businesses,
properties, operations, assets or financial condition, that would be required to
be disclosed by the Company on a Current Report on Form 8-K at the time this
representation is made or deemed made that has not been publicly disclosed at
least one Trading Day prior to the date that this representation is made.

 

(r)          Labor Relations. No labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company,
which would reasonably be expected to result in a Material Adverse Effect. None
of the Company’s or its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company or such Subsidiary, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good. To the knowledge of the Company, no
executive officer of the Company or any Subsidiary, is, or is now expected to
be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement with the Company, or any restrictive covenant in favor
of any third party.

 

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

 

 11 

 

 

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

 

(u)          Environmental Laws. Except as set forth in the SEC Reports, the
Company and its Subsidiaries (i) are in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations, decisions and orders
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as described in the
SEC Reports; and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except, in
the case of any of clauses (i), (ii) or (iii) above, for any such failure to
comply or failure to receive required permits, licenses, other approvals or
liability as would not, individually or in the aggregate, have a Material
Adverse Effect.

 

(v)         Transactions with Affiliates and Employees. Except as set forth in
the SEC Reports, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from providing for the borrowing of money from or lending of
money to, or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee, stockholder, member or partner, in each case in
excess of $100,000 other than for: (i) payment of salary or consulting fees for
services rendered; (ii) reimbursement for expenses incurred on behalf of the
Company; and (iii) other employee benefits, including, without limitation, award
agreements under any incentive compensation plan of the Company.

 

(w)         Certain Fees. Other than as set forth on Schedule 3.1(w), no
brokerage or finder’s fees or commissions are or will be payable by the Company
or any Subsidiaries to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Investors shall have
no obligation with respect to any fees or with respect to any claims made by or
on behalf of other Persons for fees of a type contemplated in this Section
3.1(w) that may be due in connection with the transactions contemplated by the
Transaction Documents. The Company shall pay, and hold each Investor harmless
against, any liability, loss or expense (including, without limitation,
attorney’s fees and out-of-pocket expenses) arising in connection with any such
fees or claims.

 

 12 

 

 

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

 

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

 

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

 

(aa)        Disclosure. The Company understands and confirms that the Investors
will rely on the foregoing representation in effecting transactions in
securities of the Company. All of the disclosure furnished by or on behalf of
the Company to the Investors regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the
Schedules to this Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The Company acknowledges and agrees that
no Investor makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.

 

(bb)        No Integrated Offering. Assuming the accuracy of the Investors’
representations and warranties set forth in in Section 3.2 and their compliance
with their agreements contained in this Agreement, neither the Company, nor any
of its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
the Securities Act which would require the registration of any such securities
under the Securities Act.

 

(cc)        Solvency. Based on the consolidated financial condition of the
Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Common Shares and the Notes
hereunder: (i) the fair saleable value of the Company’s assets as a going
concern exceeds the amount that will be required to be paid on or in respect of
the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature and (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business as now conducted including
its capital needs taking into account the particular capital requirements of the
business conducted by the Company. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt). The
Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date.

 

(dd)        Tax Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary know
of no basis for any such claim.

 

 13 

 

 

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

 

(ff)         Foreign Corrupt Practices. Neither the Company nor any Subsidiary,
nor to the Company’s knowledge, any agent or other person acting on behalf of
the Company or any Subsidiary, has: (i) directly or indirectly, used any funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees, (iii) failed
to disclose fully any contribution made by the Company or any Subsidiary (or
made by any person acting on its behalf of which the Company is aware) which is
in violation of law or (iv) violated in any material respect any provision of
Foreign Corrupt Practices Act of 1977, as amended.

 

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

 

(hh)        Office of Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the sale of the Securities, or lend, contribute
or otherwise make available such proceeds to any joint venture partner or other
person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan or
any other country sanctioned by OFAC or for the purpose of financing the
activities of any person currently subject to any U.S. sanctions.

 

(ii)          U.S. Real Property Holding Corporation. The Company is not and has
never been a U.S. real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended, and the Company
shall so certify upon Investors’ request.

 

(jj)          Bank Holding Company Act. Neither the Company nor any of its
Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the
Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of
its Subsidiaries or Affiliates owns or controls, directly or indirectly, five
percent or more of the outstanding shares of any class of voting securities or
twenty-five percent or more of the total equity of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve. Neither the
Company nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

 

 14 

 

 

(kk)        Money Laundering. The operations of the Company and its Subsidiaries
are and, to the Company’s knowledge, have been conducted at all times in
material compliance with applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules and
regulations thereunder (collectively, the “Money Laundering Laws”), and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any Subsidiary with
respect to the Money Laundering Laws is pending or, to the Company’s knowledge,
threatened.

 

(ll)          Disqualification Events. None of the Company or any Subsidiary,
any of their respective predecessors, any director, executive officer, other
officer of the Company or any Subsidiary participating in the offering
contemplated hereby, any beneficial owner (as that term is defined in Rule 13d-3
under the Exchange Act) of 20% or more of the Company’s outstanding voting
equity securities, calculated on the basis of voting power, any “promoter” (as
that term is defined in Rule 405 under the Securities Act) connected with the
Company or any of the Subsidiaries in any capacity at the time of the Closing,
any placement agent or dealer participating in the offering of the Common Shares
or the Notes, any of such agents’ or dealer’s directors, executive officers,
other officers participating in the offering of the Common Shares or the Notes
(each, a “Covered Person” and, together, “Covered Persons”) is subject to any of
the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act (a “Disqualification Event”). The Company has exercised
reasonable care to determine (i) the identity of each person that is a Covered
Person; and (ii) whether any Covered Person is subject to a Disqualification
Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e). The Company is not for any other reason
disqualified from reliance upon Rule 506 of Regulation D under the Securities
Act for purposes of the offer and sale of the Securities. The Company will
notify the Investors prior to the Closing Date of the existence of any
Disqualification Event with respect to any Covered Person.

 

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

 

 15 

 

 

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

 

(oo)        Manipulation of Price. Neither the Company nor any of its
Subsidiaries has, and, to the knowledge of the Company, no Person acting on
their behalf has, directly or indirectly, (i) taken any action designed to cause
or to result in the stabilization or manipulation of the price of any security
of the Company or any of its Subsidiaries to facilitate the sale or resale of
any of the Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities, (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company or any of its Subsidiaries in connection with the
transactions contemplated by the Transaction Documents, or (iv) paid or agreed
to pay any Person for research services with respect to any securities of the
Company or any of its Subsidiaries.

 

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

 

(qq)        Acquisitions. Except with respect to those Acquisitions (as defined
below) that have specifically been disclosed in writing by the Company to each
Investor prior to the date hereof (each, a “Specified Acquisition”), neither the
Company nor any of its Subsidiaries is currently actively pursuing any
acquisition of all or substantially all of the assets or capital stock of any
Person or of all or substantially all of the assets of any operating division of
any Person (each, an “Acquisition”). With respect to each Specified Acquisition,
the Company has, prior to the date hereof, disclosed to each Investor (i) to the
extent in the possession of the Company or any of its Subsidiaries, the annual
and quarterly financial statements of the applicable target company in respect
of such Specified Acquisition and (ii) the Company’s current expectation of the
aggregate consideration that may be payable by the Company and its Subsidiaries
in connection with such Specified Acquisition (including, without limitation,
all cash or equity consideration, all Indebtedness or other liabilities incurred
or assumed and the maximum amount of any earn-out or comparable payment
obligation in connection therewith).

 

 16 

 

 

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

 

(a)          Organization; Authority. Such Investor is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate, limited liability company,
partnership or other power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The purchase by such Investor of
the Common Shares and Notes hereunder and the consummation of the transactions
contemplated by the Transaction Documents have been duly authorized by all
necessary corporate, partnership or other action on the part of such Investor.
This Agreement and the Transaction Documents to which such Investor is a party
or has or will execute have been duly executed and delivered by such Investor
and constitute the valid and binding obligations of such Investor, enforceable
against it in accordance with their terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

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

 

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

 

(d)          Experience of Such Investor; Risk of Loss. Such Investor has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment.
Such Investor understands that it must bear the economic risk of its investment
in the Securities indefinitely, and is able to bear such risk and is able to
afford a complete loss of such investment.

 

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

 

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

 

 17 

 

 

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

 

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

 

(i)           Transfer or Resale. Such Investor understands that: (i) the
Securities have not been and are not being registered under the Securities Act,
any U.S. state securities laws or the laws of any foreign country or other
jurisdiction, and may not be offered for sale, sold, assigned or transferred
other than pursuant to Section 4.1; and (ii) except as set forth in Section 4.7,
neither the Company nor any other Person is under any obligation to register the
Securities under the Securities Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder.

 

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

 

(k)          Certain Trading Activities. Such Investor has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Investor, engaged in any transactions in the securities
of the Company (including, without limitation, any Short Sales (as defined
below) involving the Company’s securities) prior to the execution of this
Agreement by such Investor. “Short Sales” means all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the Exchange Act.

 

Article IV

OTHER AGREEMENTS OF THE PARTIES

 

4.1          Transfer Restrictions.

 

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

 

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

 

THESE SECURITIES [for Notes, insert: AND THE SECURITIES ISSUABLE UPON CONVERSION
HEREOF] HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

 

(c)          The Company acknowledges and agrees that an Investor may from time
to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a
financial institution that is an “accredited investor” as defined in Rule 501(a)
under the Securities Act and who agrees to be bound by the provisions of this
Agreement and, if required under the terms of such arrangement, such Investor
may transfer pledged or secured Securities to the pledgees or secured parties.
Such a pledge or transfer would not be subject to approval of the Company and no
legal opinion of legal counsel of the pledgee, secured party or pledgor shall be
required in connection therewith; provided, that an opinion of legal counsel to
the Company may be required by the Transfer Agent in connection with any such
transfer. Further, no notice shall be required of such pledge. At the
appropriate Investor’s expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of such Securities,
including, (i) the opinion of legal counsel to the Company, if required by the
Transfer Agent, as described above and (ii) if the Securities are subject to
registration pursuant to this Agreement, the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders.

 

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

 

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(e)          If the Company shall fail for any reason or for no reason to issue
to an Investor within three Trading Days after the Legend Removal Date a
certificate or book-entry (including shares transferred via DWAC or similar
methodology by DTC) that is free from all restrictive and other legends, and if
on or after such Trading Day such Investor purchases (in an open market
transaction or other arm’s length transaction) Securities to deliver in
satisfaction of a sale by such Investor of such Securities that such Investor
anticipated receiving without legend from the Company (a “Buy-In”), then the
Company shall, within three Business Days after the written request of such
Investor and in such Investor’s discretion, either (i) pay cash to such Investor
in an amount equal to such Investor’s total purchase price (including brokerage
commissions, if any) for the shares of Securities so purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such un-legended
Securities shall terminate, or (ii) promptly honor its obligation to deliver to
such Investor such unrestricted Securities as provided above and pay cash to
such Investor in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of Securities multiplied by (B) the closing price
of the Securities on the applicable Trading Market on the Legend Removal Date.
If an Investor effects a Buy-In in accordance with this Section 4.1(e), and the
Company thereafter pays to such Investor, within the applicable three Business
Day period, the amount specified in the immediately preceding clauses (i) or
(ii) (as elected by such Investor’s), then such payment shall be such Investor’s
sole and exclusive remedy for the Company’s failure to issue to an Investor
within three Trading Days after the Legend Removal Date a certificate or
book-entry (including shares transferred via DWAC or similar methodology by DTC)
that is free from all restrictive and other legends.

 

4.2          Use of Proceeds. The Company intends to use the net proceeds from
the sale of the Common Shares and the Notes to fund future potential
acquisitions, for general corporate purposes and to pay the fees and expenses
incurred in connection with the transactions contemplated by this Agreement. The
Company shall not use such proceeds in violation of FCPA or OFAC regulations.

 

4.3          Securities Laws Disclosure; Publicity. The Company shall, on or
before 9:30 a.m., New York time, on the first (1st) Business Day after the date
of this Agreement, issue a press release (the “Press Release”), the contents of
which shall be subject to prior review and written approval of the Investors,
disclosing all the material terms of the transactions contemplated by the
Transaction Documents. For the avoidance of doubt, the Specified Acquisitions
are not “transactions contemplated by the Transaction Documents” for purposes of
this Agreement. On or before 9:30 a.m., New York time, on the first (1st)
Business Day after the date of this Agreement, the Company shall file a Current
Report on Form 8-K describing all the material terms of the transactions
contemplated by the Transaction Documents in the form required by the Exchange
Act and attaching all the material Transaction Documents (including, without
limitation, this Agreement (and all schedules to this Agreement) and the form of
Notes. Without the prior written consent of an Investor, which consent shall not
be unreasonably withheld, conditioned or delayed, the Company shall not publicly
disclose the name of such Investor, or include the name of such Investor in any
filing with the SEC or any regulatory agency or Trading Market; provided,
however, that without such Investor’s consent, the Company may publicly disclose
the name of such Investor, or include the name of such Investor in any filing
with the SEC or any regulatory agency or Trading Market (a) as required by
federal securities law or (b) to the extent such disclosure is required by law
(other than federal securities law) or Trading Market regulations, in which case
the Company shall provide the Investors with prior notice of such disclosure
permitted under this clause (b); provided, however, that, notwithstanding the
foregoing proviso, at least five (5) Business Days prior to the Company’s filing
with the SEC of its first Quarterly Report on Form 10-Q or Annual Report on Form
10-K following the Closing Date, the Company shall deliver to each Investor a
draft of such Quarterly Report on Form 10-Q or such Annual Report on Form 10-K
and shall reasonably cooperate with each such Investor in respect of any
reasonable comments thereto proposed by such Investor.

 

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4.4          Shareholder Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that any Investor
is an “Acquiring Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Investor could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents.

 

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

 

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

 

4.7          Resale Registration.

 

(a)          Mandatory Registration. The Company shall prepare and, as soon as
reasonably practicable, but in no event later than the Filing Deadline, file
with the SEC, an initial Registration Statement on Form S-3 or such other form
under the Securities Act as is then available to the Company, providing for the
resale from time to time by the Investors of at least the number of Registrable
Securities equal to the Required Registration Amount as of the date such
Registration Statement is initially filed with the SEC. Notwithstanding anything
to the contrary contained herein, the Filing Deadline with respect to any
Registration Statement shall be automatically extended by a number of days
necessary to address any comments to such Registration Statement by any
Investor’s counsel, which comments have required that the Company not file such
Registration Statement as set forth in clause (B) of Section 4.7(c)(iii). Such
initial Registration Statement, and each other Registration Statement required
to be filed pursuant to the terms of this Agreement, shall contain (except as
otherwise directed by the Investors) the “Selling Stockholders” and “Plan of
Distribution” sections in substantially the form attached hereto as Annex B. The
Company agrees to use its reasonable best efforts to cause the initial
Registration Statement, and each other Registration Statement required to be
filed pursuant to the terms of this Agreement, to be declared effective by the
SEC as soon as practicable following such filing, but in no event later than the
applicable Effectiveness Deadline for such Registration Statement. The Company
shall promptly, and in any event within three (3) Trading Days, notify the
Investors of the effectiveness of a Registration Statement.

 

 21 

 

 

(b)          Effect of Failure to File and Obtain and Maintain Effectiveness of
any Registration Statement. If (i) a Registration Statement covering the resale
of all of the Registrable Securities required to be covered thereby (after
giving effect to any reduction pursuant to Section 4.7(g)) and required to be
filed by the Company pursuant to this Agreement is (A) not filed with the SEC on
or before the Filing Deadline for such Registration Statement (a “Filing
Failure”) or (B) not declared effective by the SEC on or before the
Effectiveness Deadline for such Registration Statement (an “Effectiveness
Failure”) (it being understood that if on or prior to the fifth Business Day
immediately following the effective date for such Registration Statement the
Company shall not have filed a “final” prospectus for such Registration
Statement with the SEC under Rule 424(b) (to the extent such a prospectus is
either technically required by such rule or is otherwise required under
applicable securities laws in order to permit the resale by the Investors of the
Registrable Securities covered thereby), the Company shall be deemed to not have
satisfied this clause (i)(B) and such event shall be deemed to be an
Effectiveness Failure), (ii) other than during an Allowable Grace Period, on any
day after the effective date of a Registration Statement during the Registration
Period (as defined below) for such Registration Statement sales of all of the
Registrable Securities required to be included on such Registration Statement
cannot be made pursuant to such Registration Statement (including, without
limitation, because of a failure to keep such Registration Statement effective,
a failure to disclose such information as is necessary for sales to be made
pursuant to such Registration Statement, a suspension or delisting of the shares
of Common Stock on the applicable Trading Market, or a failure to register a
sufficient number of shares of Common Stock or by reason of a stop order) or the
prospectus contained therein is not available for use for any reason (a
“Maintenance Failure”), or (iii) other than during an Allowable Grace Period, if
a Registration Statement is not effective for any reason or the prospectus
contained therein is not available for use for any reason, and either (x) the
Company fails for any reason to satisfy the requirements of Rule 144(c)(1),
including, without limitation, the failure to satisfy the current public
information requirement under Rule 144(c) or (y) the Company has ever been an
issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future,
and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2)
(a “Current Public Information Failure”) as a result of which any of the
Investors are unable to sell Registrable Securities without restriction under
Rule 144 (including, without limitation, volume restrictions) (a “Current Public
Information Failure”), then, as partial relief (other than equity remedies) for
the damages to any holder by reason of any such delay in, or reduction of, its
ability to sell Registrable Securities (which remedy shall not be exclusive of
any other remedies available in equity), the Company shall pay to each holder of
Registrable Securities relating to such Registration Statement an amount in cash
equal to three quarters of one percent (0.75%) of the Total Purchase Price paid
by such Investor for the Securities purchased by such Investor pursuant to this
Agreement on (1) the date of such Filing Failure, Effectiveness Failure,
Maintenance Failure or Current Public Information Failure, as applicable, and
(2) on every thirty (30) day anniversary of (I) a Filing Failure until such
Filing Failure is cured; (II) an Effectiveness Failure until such Effectiveness
Failure is cured; (III) a Maintenance Failure until such Maintenance Failure is
cured; and (IV) a Current Public Information Failure until the earlier of (i)
the date such Current Public Information Failure is cured and (ii) such time
that such public information is no longer required pursuant to Rule 144 (in each
case, pro-rated for periods totaling less than thirty (30) days). The payments
to which a holder of Registrable Securities shall be entitled pursuant to this
Section 4.7(b) are referred to herein as “Registration Delay Payments.”
Following the initial Registration Delay Payment for any particular event or
failure (which shall be paid on the date of such event or failure, as set forth
above), without limiting the foregoing, if an event or failure giving rise to
the Registration Delay Payments is cured prior to any monthly anniversary of
such event or failure, then such Registration Delay Payment shall be made on the
third (3rd) Business Day after such cure (pro-rated for the number of days
elapsed between the date on which the most recent Registration Delay Payment was
required to have been paid in accordance with this Section 4.7(b) and the date
of cure). In the event the Company fails to make Registration Delay Payments in
a timely manner in accordance with the foregoing, such Registration Delay
Payments shall bear interest at the rate of 1.0% per month (prorated for partial
months) until paid in full. Notwithstanding the foregoing, no Registration Delay
Payments shall be owed to an Investor (other than with respect to a Maintenance
Failure resulting from a suspension or delisting of (or a failure to timely
list) the shares of Common Stock on the applicable Trading Market) with respect
to any period during which all of such Investor’s Registrable Securities may be
sold by such Investor without restriction under Rule 144 (including, without
limitation, volume restrictions) and without the need for current public
information required by Rule 144(c)(1)). For the avoidance of doubt, no more
than one Registration Delay Payment shall be payable by the Company at any given
time, notwithstanding that more than one failure giving rise to a Registration
Delay Payment shall have occurred and is continuing (e.g., an Effectiveness
Failure and a Current Public Information Failure continuing simultaneously);
provided, that, Registration Delay Payments shall continue in accordance with
this Section 4.7(b) until all failures giving rise to such payments are cured.
Notwithstanding the foregoing, in the event an Investor assigns its rights under
this Agreement, with respect to the assignee of such rights, no Registration
Delay Payment shall be payable specifically with respect to the Registrable
Securities assigned to such assignee for any event occurring from the date of
such transfer until (i) in the event that such assignee is either (x) an
Affiliate of an Investor or (y) a limited partner of an Investor or an Affiliate
of any such limited partner, in each case where the Company is notified of such
assignment at least five (5) days prior to the date that the Company files the
Initial Registration Statement with the SEC, the date that such assignee has
satisfied its obligations under Section 4.7(d), or (ii) in all other cases, the
later of (A) thirty (30) days after the date of such transfer or (B) the date
that such assignee has satisfied its obligations under Section 4.7(d).

 

 22 

 

 

(c)          Related Obligations. The Company shall use its reasonable best
efforts to effect the registration of all the Registrable Securities in
accordance with the intended method of disposition thereof, and, pursuant
thereto, the Company shall have the following obligations:

 

(i)          The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to all the Registrable Securities (but in no
event later than the applicable Filing Deadline) and use its reasonable best
efforts to cause such Registration Statement to become effective as soon as
practicable after such filing (but in no event later than the applicable
Effectiveness Deadline). Subject to Allowable Grace Periods, the Company shall
keep each Registration Statement effective (and the prospectus contained therein
available for use) pursuant to Rule 415 for resales by the Investors on a
delayed or continuous basis at then-prevailing market prices (and not fixed
prices) at all times until the earlier of (A) the date as of which all of the
Investors may sell all of the Registrable Securities required to be covered by
such Registration Statement (disregarding any reduction pursuant to
Section 4.7(g)) without restriction pursuant to Rule 144 (including, without
limitation, volume restrictions) and without the need for current public
information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (B)
the date on which the Investors shall have sold all of the Registrable
Securities covered by such Registration Statement (the “Registration Period”).
Notwithstanding anything to the contrary contained in this Agreement, the
Company shall ensure that, when filed and at all times while effective, each
Registration Statement (1) shall 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 case of prospectuses, in the
light of the circumstances in which they were made) not misleading and (2) will
disclose (whether directly or through incorporation by reference to other SEC
filings to the extent permitted) all material information regarding the Company
and its securities. The Company shall submit to the SEC, within five (5) days
after the Staff advises the Company (orally or in writing, whichever is earlier)
that the Staff either will not review a particular Registration Statement or has
no further comments on such Registration Statement (as the case may be), a
request for acceleration of effectiveness of such Registration Statement to a
time and date not later than forty-eight (48) hours after the submission of such
request.

 

 23 

 

 

(ii)         Subject to Section 4.7(c)(xv), the Company shall prepare and file
with the SEC such amendments (including, without limitation, post-effective
amendments) and supplements to each Registration Statement and the prospectus
used in connection with each such Registration Statement, which prospectus is to
be filed pursuant to Rule 424 promulgated under the Securities Act, as may be
necessary to keep each such Registration Statement effective at all times during
the Registration Period for such Registration Statement, and, during such
period, comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company required to be covered
by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods
of disposition by the seller or sellers thereof as set forth in such
Registration Statement or the completion of the applicable Registration Period;
provided, however, by 5:30 p.m. (New York time) on or prior to the fifth (5th)
Business Day immediately following the effective date of each Registration
Statement, the Company shall file with the SEC in accordance with Rule 424(b)
under the Securities Act the final prospectus to be used in connection with
sales pursuant to such Registration Statement (whether or not such a prospectus
is technically required by such rule). In the case of amendments and supplements
to any Registration Statement which are required to be filed pursuant to this
Agreement (including, without limitation, pursuant to this Section 4.7(c)(ii))
by reason of the Company filing a report on Form 10-Q or Form 10-K or any
analogous report under the Exchange Act, the Company shall, if permitted under
the applicable rules and regulations of the SEC, have incorporated such report
by reference into such Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on or prior to the third (3rd) Trading
Day following the date on which the Exchange Act report is filed with the SEC
which created the requirement for the Company to amend or supplement such
Registration Statement.

 

(iii)        The Company shall (A) permit legal counsel for each Investor to
review and comment upon (i) each Registration Statement that includes the name,
or otherwise identifies, any Investor as a “Selling Stockholder” with respect to
securities registered for sale pursuant to such Registration Statement at least
five (5) days prior to its filing with the SEC and (ii) all amendments and
supplements to each Registration Statement that includes the name, or otherwise
identifies, any Investor as a “Selling Stockholder” with respect to securities
registered for sale pursuant to such Registration Statement (including, without
limitation, the prospectus contained therein) (except for Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any
similar or successor reports) within a reasonable number of days prior to their
filing with the SEC, and (B) not file any Registration Statement or amendment or
supplement thereto, in each, referred to in clause (A) above, in a form to which
any legal counsel for any Investor reasonably objects in a timely manner. The
Company shall reasonably cooperate with legal counsel for each other Investor in
performing the Company’s obligations pursuant to this Section 4.7(c)(iii).

 

(iv)        The Company shall promptly furnish to each Investor whose
Registrable Securities are included in any Registration Statement, without
charge, (i) copies of any correspondence from the SEC or the Staff to the
Company or its representatives relating to such Registration Statement, provided
that such correspondence shall not contain any material, non-public information
regarding the Company or any of its Subsidiaries, (ii) upon request, after the
same is prepared and filed with the SEC, a reasonable number of copies of such
Registration Statement and any amendment(s) and supplement(s) thereto,
including, if so requested, the financial statements and schedules filed
therewith, all documents incorporated therein by reference, all exhibits and
each preliminary prospectus, (iii) upon request, upon the effectiveness of such
Registration Statement, two (2) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request from time to time), and
(iv) such other documents, including, without limitation, copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.

 

 24 

 

 

(v)         The Company shall use its reasonable best efforts to (i) register
and qualify, unless an exemption from registration and qualification applies,
the resale by Investors of the Registrable Securities covered by any
Registration Statement under such other securities or “blue sky” laws of
jurisdictions in the United States as shall be reasonably appropriate for the
distribution of the Registrable Securities covered by such Registration
Statement, (ii) prepare and file in those jurisdictions, such amendments
(including, without limitation, post-effective amendments) and supplements to
such registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the applicable Registration Period, (iii) take such
other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the applicable Registration Period,
and (iv) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, the
Company shall not be required in connection therewith or as a condition thereto
to (x) qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 4.7(c)(v), (y) subject itself to
general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
each Investor who holds Registrable Securities of the receipt by the Company of
any notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the securities
or “blue sky” laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threatening of any proceeding for such
purpose.

 

(vi)        The Company shall notify each Investor in writing of the happening
of any event, as promptly as practicable after becoming aware of such event, as
a result of which the prospectus included in a Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits 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 (provided that in no event shall such notice contain any material,
non-public information regarding the Company or any of its Subsidiaries), and,
subject to Section 4.7(c)(xv), promptly prepare a supplement or amendment to
such Registration Statement and such prospectus contained therein to correct
such untrue statement or omission and, upon request by any Investor, deliver two
(2) copies of such supplement or amendment to such Investor (or such other
number of copies as such Investor may reasonably request). The Company shall
also promptly notify each Investor in writing when a prospectus or any
prospectus supplement or post-effective amendment relating to a Registration
Statement has been filed, when a Registration Statement or any post-effective
amendment thereto has become effective (notification of such effectiveness shall
be delivered to each Investor by facsimile or e-mail on the same day of such
effectiveness or by overnight mail), and when the Company receives written
notice from the SEC that a Registration Statement or any post-effective
amendment thereto will be reviewed by the SEC. The Company shall respond as
promptly as practicable to any comments received from the SEC with respect to
each Registration Statement or any amendment thereto. If the Company receives
SEC comments which challenge the right of an Investor to have its Registrable
Securities included in a Registration Statement without being deemed an
underwriter thereunder, the Company shall, in discussions with and responses to
the SEC, use its reasonable best efforts and time to cause as many Registrable
Securities as possible to be included in such Registration Statement without
characterizing any Investor as an underwriter and in such regard use its
reasonable best efforts to cause the SEC to permit the affected Investors or
their respective counsel to reasonably participate in SEC conversations on such
issue together with Company Counsel, and timely convey relevant information
concerning such issue with the affected Investors or their respective counsel.
In no event may the Company name any Investor as an underwriter without such
Investor’s prior written consent.

 

 25 

 

 

(vii)       The Company shall (i) use reasonable best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of each
Registration Statement or the use of any prospectus contained therein, or the
suspension of the qualification, or the loss of an exemption from qualification,
of any of the Registrable Securities for sale in any jurisdiction and, if such
an order or suspension is issued, to obtain the withdrawal of such order or
suspension as soon as reasonably practicable and (ii) notify each Investor who
holds Registrable Securities of the issuance of such order and the resolution
thereof or its receipt of actual notice of the initiation or threat of any
proceeding for such purpose.

 

(viii)      The Company shall hold in confidence and not make any disclosure of
confidential information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in a Registration Statement or is
otherwise required to be disclosed in a Registration Statement pursuant to the
Securities Act, (iii) the release of such information is ordered pursuant to a
subpoena or other final, non-appealable order from a court or governmental body
of competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement
or any other Transaction Document. The Company agrees that it shall, upon
learning that disclosure of such information concerning an Investor is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to such Investor and allow such Investor, at
such Investor’s expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information.

 

(ix)         Without limiting any obligation of the Company under this
Agreement, the Company shall use its reasonable best efforts either to (i) cause
all of the Registrable Securities covered by each Registration Statement to be
listed on each securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) secure designation and quotation of all of the Registrable Securities on
the applicable Trading Market. In addition, the Company shall cooperate with
each Investor and any broker or dealer through which any such Investor proposes
to sell its Registrable Securities in effecting a filing with FINRA pursuant to
FINRA Rule 5110 as requested by such Investor and at such Investor’s expense.
Other than with respect to the immediately preceding sentence, the Company shall
pay all fees and expenses in connection with satisfying its obligations under
this Section 4.7(c)(ix).

 

(x)          The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (subject to applicable securities laws,
not bearing any restrictive legend) representing the Registrable Securities to
be offered pursuant to any Registration Statement and enable such certificates
to be in such denominations or amounts (as the case may be) as the Investors may
reasonably request from time to time and registered in such names as the
Investors may request.

 

 26 

 

 

(xi)         The Company shall use its reasonable best efforts to cause the
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities.

 

(xii)        The Company shall make generally available to its security holders
as soon as practical, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with, and in
the manner provided by, the provisions of Rule 158 under the Securities Act)
covering a twelve-month period beginning not later than the first day of the
Company’s fiscal quarter next following the effective date of each Registration
Statement.

 

(xiii)       The Company shall otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.

 

(xiv)      Within two (2) Business Days after the date on which a Registration
Statement which covers Registrable Securities is declared effective by the SEC,
the Company shall deliver, or shall cause legal counsel for the Company to
deliver, to the Transfer Agent (with copies to the Investors whose Registrable
Securities are included in such Registration Statement upon request by any such
Investor) written confirmation that such Registration Statement has been
declared effective by the SEC.

 

(xv)       Notwithstanding anything to the contrary herein, at any time after
the date on which a particular Registration Statement is declared effective by
the SEC, the Company may suspend the use of any prospectus for sales of
Registrable Securities under such Registration Statement or delay the disclosure
of any material, non-public information or pending development concerning the
Company or any of its Subsidiaries for a specified period if the disclosure of
such information or development during such period would be materially
detrimental, in the good faith opinion of the Company’s board of directors or
any named executive officer of the Company, to the Company (a “Grace Period”),
provided that the Company shall promptly notify the Investors in writing of the
(i) existence of material, non-public information or pending development giving
rise to a Grace Period (provided that in each such notice the Company shall not
disclose the content of such material, non-public information or pending
development to any of the Investors) and the date on which such Grace Period
will begin and (ii) date on which such Grace Period ends, provided further that
(I) in the event that (x) such Grace Period relates to material non-public
information or pending development relating to or involving a business
combination with respect to which the Company is required to disclose a third
party’s financial statements in a Current Report on Form 8-K or in any
Registration Statement pursuant to Rule 3-05 of Regulation S-X of the Securities
Act (such financial statements of such third party that are so required to be
disclosed are herein referred to as the “Required Financial Statements”), (y)
the Required Financial Statements that are so required to be disclosed includes
audited financial statements in respect of one or more periods (the “Required
Audited Statements”), and (z) the applicable third party does not then have the
Required Audited Statements in its possession (a Grace Period satisfying each of
the conditions in the foregoing clauses (x), (y) and (z), a “Financial Statement
Grace Period”), such Financial Statement Grace Period shall not exceed seventy
five (75) consecutive days, (II) in the event that such Grace Period is not a
Financial Statement Grace Period, such Grace Period shall not exceed thirty (30)
consecutive days, (III) during any three hundred sixty five (365) day period,
(x) to the extent that a Financial Statement Grace Period shall occur during
such sixty five (365) day period, all Grace Periods (including all Financial
Statement Grace Periods and all other Grace Periods) occurring during such
period shall not exceed an aggregate of ninety (90) days, or (y) to the extent
that a Financial Statement Grace Period shall not occur during such sixty five
(365) day period, all Grace Periods occurring during such period shall not
exceed an aggregate of forty-five (45) days, (III) the first day of any Grace
Period must be at least five (5) Trading Days after the last day of any prior
Grace Period, (IV) no Grace Period may exist during the forty-five (45) Trading
Day period immediately following the effective date of such Registration
Statement (provided that such forty-five (45) Trading Day period shall be
extended by the number of Trading Days during such period and any extension
thereof contemplated by this proviso during which such Registration Statement is
not effective or the prospectus contained therein is not available for use), and
(V) no Grace Period may be declared on the basis of any transaction,
contemplated transaction, development or pending development, or any information
related to any of the foregoing, to the extent such transaction, contemplated
transaction, development or pending development, or any information related to
any of the foregoing, was the basis of any Permitted Initial Registration
Extension (each Grace Period satisfying each of the conditions in the foregoing
clauses (I), (II), (III), (IV) and (V), an “Allowable Grace Period”). For
purposes of determining the length of a Grace Period above, such Grace Period
shall begin on and include the date the Company delivers to the Investors the
notice referred to in clause (i) above and shall end on and include the earlier
of (x) the date stated in the notice referred to in clause (ii) above as the end
of such Grace Period or (y) to the extent considered appropriate by the Company
in its sole discretion, such earlier date as to which the Company may advise the
Investors in writing after the Company’s provision of the notices described
above. The provisions of Section 4.7(c)(vi) hereof shall not be applicable
during the period of any Allowable Grace Period. Upon expiration of each Grace
Period, the Company shall again be bound by the first sentence of Section
4.7(c)(vi) with respect to the information giving rise thereto unless such
material, non-public information is no longer applicable.

 

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(xvi)      If any Investor may be required under applicable securities law to be
described in any Registration Statement as an underwriter and such Investor
consents to so being named an underwriter, at the request of any Investor, the
Company shall furnish to such Investor, on the date of the effectiveness of such
Registration Statement and thereafter from time to time on such dates as an
Investor may reasonably request (i) a letter, dated such date, from the
Company’s independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the Investors, and (ii) an
opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the Investors.

 

(xvii)     If any Investor may be required under applicable securities law to be
described in any Registration Statement as an underwriter and such Investor
consents to so being named an underwriter, upon the written request of such
Investor, the Company shall make available for inspection, upon reasonable
notice and during normal business hours, by (i) such Investor, (ii) legal
counsel for such Investor and (iii) one (1) firm of accountants or other agents
retained by such Investor (collectively, the “Inspectors”), all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the “Records”), as shall be deemed reasonably
necessary by each Inspector to enable such Investor to exercise its due
diligence responsibly, and cause the Company’s officers, directors and employees
to supply all information which any Inspector may reasonably request; provided,
however, each Inspector shall agree in writing to hold in strict confidence and
not to make any disclosure (except to such Investor) or use of any Record or
other information which the Company’s board of directors determines in good
faith to be confidential, and of which determination the Inspectors are so
notified, unless (1) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the Securities Act, (2) the release of such Records is ordered
pursuant to a final, non-appealable subpoena or order from a court or government
body of competent jurisdiction, or (3) the information in such Records has been
made generally available to the public other than by disclosure in violation of
this Agreement or any other Transaction Document. Such Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and such Investor, if any) shall
be deemed to limit any Investor’s ability to sell Registrable Securities in a
manner which is otherwise consistent with applicable laws and regulations. For
the avoidance of doubt, any material non-public information received by an
Inspector and/or an Investor in connection with exercising its inspection right
under this Section 4.7(c)(xvii) shall not constitute a violation of any
provision of the other Transaction Documents.

 

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(xviii)    The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by each Investor of its Registrable
Securities pursuant to each Registration Statement.

 

(xix)       Notwithstanding anything to the contrary contained in this
Agreement, if the Company’s board of directors determines in good faith that the
Company’s filing of the initial Registration Statement required to be filed
pursuant to Section 4.7(a) (the “Initial Registration Statement”) or the
Company’s request to the SEC to have the Initial Registration Statement declared
effective would (i) materially interfere with a Specified Acquisition, or (ii)
require premature disclosure of material information regarding a Specified
Acquisition that the Company has a bona fide business purpose for preserving as
confidential, then, upon delivery by the Company of written notice of such
determination to each of the Investors (a “Permitted Initial Registration
Extension Notice”), the Company may extend (a “Permitted Initial Registration
Extension”) the Filing Deadline (as contemplated by clause (i) of the definition
thereof) and the Effectiveness Deadline (as contemplated by clause (i) of the
definition thereof), in each case solely with respect to the Initial
Registration Statement, by a period of not more than (x) if the Company files a
Current Report on Form 8-K announcing the completion of a Specified Acquisition
prior to the 45th calendar day after the Closing Date, a period of time equal to
the number of days that the seventy fifth (75th) calendar day after the date the
Company files such Form 8-K exceeds the 45th calendar day after the Closing
Date, and (y) if the Company does not file a Current Report on Form 8-K
announcing the completion of a Specified Acquisition prior to the 45th calendar
day after the Closing Date, fifteen (15) days; provided, that, for the avoidance
of doubt, (A) any Permitted Initial Registration Extension under this Section
4.7(c)(xix) shall relate solely to the Filing Deadline and/or Effectiveness
Deadline in respect of the Initial Registration Statement only (and not to any
Registration Statement other than the Initial Registration Statement), (B) the
Company shall be permitted to effect no more than one (1) Permitted Initial
Registration Extension in the aggregate pursuant to this Section 4.7(c)(xix),
(C) the Permitted Initial Registration Extension shall in no event be longer
than the period permitted by clause (x) or (y) above, as applicable, (D) to the
extent the Company effects a Permitted Initial Registration Extension under this
Section 4.7(c)(xix), neither the applicable Specified Acquisition to which such
Permitted Initial Registration Extension nor any information in respect thereof
shall form the basis for any Allowable Grace Period, and (E) notwithstanding
anything to the contrary set forth in this Section 4.7(c)(xix), the
Effectiveness Deadline (as contemplated by clause (i) of the definition thereof)
in respect of the Initial Registration Statement shall in no event be extended
to a date later than the 150th day following the Closing Date. The Company shall
specify in any Permitted Initial Registration Extension Notice delivered
pursuant to this Section 4.7(c)(xix) the length (which shall not be in excess of
the length permitted by this Section 4.7(c)(xix)) of the Permitted Initial
Registration Extension.

 

(d)          Obligations of the Investors. Each Investor shall furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as the Company
shall reasonably request and as shall be required in connection with the
registration of the Registrable Securities, and shall execute such documents in
connection with such registration as the Company may reasonably request. Each
Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement, unless such
Investor has notified the Company in writing of such Investor’s election to
exclude all of such Investor’s Registrable Securities from such Registration
Statement.

 

 29 

 

 

(e)          Expenses of Registration. All expenses incurred in connection with
any Registration Statement, excluding underwriters’ discounts and commissions,
but including without limitation all registration, filing and qualification
fees, word processing, duplicating, printers’ and accounting fees, stock
exchange fees, messenger and delivery expenses, all fees and expenses of
complying with state securities or blue sky laws and the fees and disbursements
of counsel for the Company shall be paid by the Company; provided, however, in
the event the Company is required to file an amendment or supplement to any
Registration Statement to identify an assignee of Registrable Securities as a
“Selling Stockholder” in such Registration Statement, then, except with respect
to the first transfer by the Investor of Registrable Securities to an assignee
that is (or the first series of substantially concurrent transfers of
Registrable Securities by the Investors to assignees that are) either (x) an
Affiliate of an Investor or (y) a limited partner of an Investor or an Affiliate
of any such limited partner, such assignee shall pay any such expenses incurred
in connection therewith.

 

(f)           Sufficient Number of Shares Registered. Subject to Section 4.7(g),
in the event the number of shares available under any Registration Statement
during the applicable Registration Period is insufficient to cover all of the
Registrable Securities required to be covered by such Registration Statement or
an Investor’s allocated portion of the Registrable Securities pursuant to
Section 4.7(h), the Company shall amend such Registration Statement (if
permissible), or file with the SEC a new Registration Statement (on the short
form available therefor, if applicable), or both, so as to cover at least the
Required Registration Amount as of the Trading Day immediately preceding the
date of the filing of such amendment or new Registration Statement, in each
case, as soon as practicable, but in any event not later than fifteen (15) days
after the necessity therefor arises (but taking account of any Staff position
with respect to the date on which the Staff will permit such amendment to such
Registration Statement and/or such new Registration Statement (as the case may
be) to be filed with the SEC). The Company shall use reasonable best efforts to
cause such amendment to such Registration Statement and/or such new Registration
Statement (as the case may be) to become effective as soon as practicable
following the filing thereof with the SEC. Subject to Section 4.7(g), for
purposes of the foregoing provision, the number of shares available under a
Registration Statement shall be deemed “insufficient to cover all of the
Registrable Securities” if at any time the number of shares of Common Stock
available for resale under the applicable Registration Statement is less than
the product determined by multiplying (i) the Required Registration Amount as of
such time by (ii) 0.95. The calculation set forth in the foregoing sentence
shall be made without regard to any limitations on conversion, amortization
and/or redemption of the Notes (and such calculation shall assume that (A) the
Notes are then convertible in full into shares of Common Stock at the then
prevailing Conversion Rate (as defined in the Notes) and (B) the initial
outstanding principal amount of the Notes remains outstanding through the
scheduled Maturity Date (as defined in the Notes) and no redemptions of the
Notes occur prior to the scheduled Maturity Date (except to the extent
redemptions of the Notes have actually occurred on or prior to such date).

 

 30 

 

 

(g)          Offering. Notwithstanding anything to the contrary contained in
this Agreement, in the event the Staff or the SEC seeks to characterize any
offering pursuant to a Registration Statement filed pursuant to this Agreement
as constituting an offering of securities by, or on behalf of, the Company, or
in any other manner, such that the Staff or the SEC do not permit such
Registration Statement to become effective and used for resales in a manner that
does not constitute such an offering and that permits the continuous resale at
the market by the Investors participating therein (or as otherwise may be
acceptable to each Investor) without being named therein as an “underwriter,”
then the Company shall reduce the number of shares to be included in such
Registration Statement by all Investors until such time as the Staff and the SEC
shall so permit such Registration Statement to become effective as aforesaid. In
making such reduction, the Company shall reduce the number of shares to be
included by all Investors on a pro rata basis (based upon the number of
Registrable Securities otherwise required to be included for each Investor)
unless the inclusion of shares by a particular Investor or a particular set of
Investors are resulting in the Staff or the SEC’s “by or on behalf of the
Company” offering position, in which event the shares held by such Investor or
set of Investors shall be the only shares subject to reduction (and if by a set
of Investors on a pro rata basis by such Investors or on such other basis as
would result in the exclusion of the least number of shares by all such
Investors); provided, that, with respect to such pro rata portion allocated to
any Investor, such Investor may elect the allocation of such pro rata portion
among the Registrable Securities of such Investor. In addition, in the event
that the Staff or the SEC requires any Investor seeking to sell securities under
a Registration Statement filed pursuant to this Agreement to be specifically
identified as an “underwriter” in order to permit such Registration Statement to
become effective, and such Investor does not consent to being so named as an
underwriter in such Registration Statement, then, in each such case, the Company
shall reduce the total number of Registrable Securities to be registered on
behalf of such Investor, until such time as the Staff or the SEC does not
require such identification or until such Investor accepts such identification
and the manner thereof. In the event of any reduction in Registrable Securities
pursuant to this paragraph, an affected Investor shall have the right to
require, upon delivery of a written request to the Company signed by such
Investor, the Company to file a registration statement within forty-five (45)
days of such request (subject to any restrictions imposed by Rule 415 or
required by the Staff or the SEC) for resale by such Investor in a manner
acceptable to such Investor, and the Company shall following such request cause
to be and keep effective such Registration Statement in the same manner as
otherwise contemplated in this Agreement for Registration Statements hereunder,
in each case until such time as: (i) all Registrable Securities held by such
Investor have been registered and sold pursuant to an effective Registration
Statement in a manner acceptable to such Investor or (ii) all Registrable
Securities may be resold by such Investor without restriction (including,
without limitation, volume limitations) pursuant to Rule 144 (taking account of
any Staff position with respect to “affiliate” status) and without the need for
current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if
applicable) or (iii) such Investor agrees to be named as an underwriter in any
such Registration Statement in a manner acceptable to such Investor as to all
Registrable Securities held by such Investor and that have not theretofore been
included in a Registration Statement under this Agreement.

 

(h)          Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and any increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors based on the number of Registrable Securities held by
each Investor at the time such Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC. In the event that an Investor sells or otherwise transfers any of such
Investor’s Registrable Securities, each transferee or assignee (as the case may
be) that becomes an Investor shall be allocated a pro rata portion of the
then-remaining number of Registrable Securities included in such Registration
Statement for such transferor or assignee (as the case may be). Any shares of
Common Stock included in a Registration Statement and which remain allocated to
any Person which ceases to hold any Registrable Securities covered by such
Registration Statement shall be allocated to the remaining Investors, pro rata
based on the number of Registrable Securities then held by such Investors which
are covered by such Registration Statement.

 

(i)           No Inclusion of Other Securities. The Company shall in no event
include any securities other than Registrable Securities on any Registration
Statement filed in accordance herewith without the prior written consent of the
Investors. The Company shall not enter into any agreement providing any
registration rights to any of its security holders to the extent such agreement
requires, or would otherwise result in, any registration statement of the
Company in respect of any securities of the Company (other than the Registrable
Securities) becoming effective on or prior to the Applicable Date.

 

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4.8          Furnishing of Information. In order to enable the Investors to sell
the Securities under Rule 144 of the Securities Act, for a period of two years
from the Closing, the Company shall use its commercially reasonable efforts to
timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to the Exchange Act. During such two year period, if
the Company is not required to file reports pursuant to such laws, it will
prepare and furnish to the Investors and make publicly available in accordance
with Rule 144(c) such information as is required for the Investors to sell the
Common Shares and Note Shares under Rule 144.

 

Article V

CONDITIONS

 

5.1          Conditions Precedent to the Obligations of the Investors. The
obligation of each Investor to purchase the Common Shares and Notes at the
Closing is subject to the satisfaction, unless waived in writing by such
Investor, at or before the Closing, of each of the following conditions:

 

(a)          Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on
and as of the Closing Date (except for those representations and warranties that
speak as of a specific date, which shall be true and correct in all material
respects as of such specified date).

 

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

 

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

 

(d)          No Suspensions of Trading in Common Stock; Listing. Trading in the
Common Stock shall not have been suspended by the SEC or any Trading Market at
any time since the date of execution of this Agreement and, at any time prior to
the Closing Date, trading in securities generally as reported by Bloomberg L.P.
shall not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any
material outbreak or escalation of hostilities or other national or
international calamity which, in each case, makes it impracticable to purchase
the Securities at the Closing.

 

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

 

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(f)           Transaction Documents. The Company shall have executed each of the
Transaction Documents to which it is a party and delivered the same to the
Investors.

 

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

 

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

 

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

 

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

 

(k)          Officer’s Certificate. The Company shall have delivered to the
Investors a certificate executed by a duly authorized officer of the Company
certifying the fulfillment of the conditions specified in Sections 5.1(a) and
5.1(b).

 

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

 

(m)         Commitment Fee. The Company shall have paid and delivered the
Commitment Fee to Petrichor Opportunities Fund I LP.

 

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

 

5.2          Conditions Precedent to the Obligations of the Company. The
obligation of the Company to sell the Securities at the Closing is subject to
the satisfaction or waiver by the Company, at or before the Closing, of each of
the following conditions:

 

(a)          Representations and Warranties. The representations and warranties
of the Investors contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on
and as of the Closing Date (except for those representations and warranties that
speak as of a specific date, which shall be true and correct in all material
respects as of such specified date).

 

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

 

Article VI

INDEMNIFICATION

 

6.1          Indemnification.

 

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

 

 34 

 

 

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

 

(c)          Promptly after receipt by an Indemnified Person or Indemnified
Party (as the case may be) under this Section 6.1 of notice of the commencement
of any action or proceeding (including, without limitation, any governmental
action or proceeding) involving a Claim, such Indemnified Person or Indemnified
Party (as the case may be) shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Section 6.1, deliver to the applicable
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party (as the case may be); provided, however, an Indemnified
Person or Indemnified Party (as the case may be) shall have the right to retain
its own counsel with the fees and expenses of such counsel to be paid by the
indemnifying party if: (i) the indemnifying party has agreed in writing to pay
such fees and expenses; (ii) the indemnifying party shall have failed promptly
to assume the defense of such Claim and to employ counsel reasonably
satisfactory to such Indemnified Person or Indemnified Party (as the case may
be) in any such Claim; or (iii) the named parties to any such Claim (including,
without limitation, any impleaded parties) include both such Indemnified Person
or Indemnified Party (as the case may be) and the indemnifying party, and such
Indemnified Person or such Indemnified Party (as the case may be) shall have
been advised by counsel that a conflict of interest is likely to exist if the
same counsel were to represent such Indemnified Person or such Indemnified Party
and the indemnifying party (in which case, if such Indemnified Person or such
Indemnified Party (as the case may be) notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, then the indemnifying party shall not have the right to
assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party), provided further that in the case of clause (iii) above the
indemnifying party shall not be responsible for the reasonable fees and expenses
of more than one (1) separate legal counsel for such Indemnified Person or
Indemnified Party (as the case may be). The Indemnified Party or Indemnified
Person (as the case may be) shall reasonably cooperate with the indemnifying
party in connection with any negotiation or defense of any such action or Claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party or Indemnified Person
(as the case may be) which relates to such action or Claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person (as the case may
be) reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent; provided, however, the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person (as the case may be), consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person (as the case may be) of a release from all liability in
respect to such Claim or litigation, and such settlement shall not include any
admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person (as the
case may be) with respect to all third parties, firms or corporations relating
to the matter for which indemnification has been made. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party (as the case may be)
under this Section 6.1, except to the extent that the indemnifying party is
materially and adversely prejudiced in its ability to defend such action.

 

 35 

 

 

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

 

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

 

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

 

 36 

 

 

Article VII

MISCELLANEOUS

 

7.1          Termination. This Agreement may be terminated by the Company or
Investors having the right to acquire a majority of the Common Shares hereunder,
by written notice to the other parties, if the Closing has not been consummated
by December 20, 2018; provided that no such termination will affect the right of
any party to sue for any breach by the other party (or parties).

 

7.2          Fees and Expenses. Except as expressly set forth in the Transaction
Documents to the contrary, the Company shall pay or otherwise reimburse the
Investors for all fees and expenses incurred by or on behalf of the Investors in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Transaction Documents and the matters contemplated
herein and therein, including, without limitation, the fees and expenses of
counsel to the Investors; provided, that, the aggregate maximum amount of fees
and expenses that the Company shall be required to reimburse the Investors in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Transaction Documents entered into in connection with
the Closing shall not exceed $150,000 unless otherwise mutually agreed upon
between the Company and Petrichor Opportunities Fund I LP. In the event any
legal action or other proceeding is brought by one party against the other party
to enforce any provision of the Transaction Documents or in which the subject
matter of such legal action or other proceeding arises under, or is with respect
to, the provisions of the Transaction Documents, the prevailing party in any
such legal action or other proceeding is entitled to recover from the other
party all fees and expenses associated with defending or prosecuting such legal
action or other proceeding, any appeal therefrom, and any ancillary or related
proceedings, including, without limitation, attorneys’ fees and costs.

 

7.3          Entire Agreement; Further Assurances. The Transaction Documents,
together with the Exhibits, Annexes and Schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company and the Investors will execute and deliver to the
Investors such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.

 

7.4          Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and provided
by email and by deposit with a nationally recognized courier service and shall
be deemed given and effective on the earliest of (a) the Trading Date such
notice or communication is delivered by such nationally recognized courier
service to the party to whom such notice is required to be given, if such notice
or communication is delivered at the address specified in this Section 7.4 prior
to 6:30 p.m. (New York City time) on a Trading Day, or (b) the next Trading Day
after the date of delivery, if such notice or communication is delivered by such
nationally recognized courier service to the party to whom such notice is
required to be given at the address specified in this Section 7.4 on a day that
is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day. The addresses and email addresses for such notices and communications are
those set forth on the signature pages hereof, or such other address as may be
designated in writing hereafter, in the same manner, by any such Person.

 

7.5          Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and the Investors holding or having the right to acquire a
majority of the Common Shares and the Note Shares (voting together as a single
class) at the time of such amendment or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right.

 

 37 

 

 

7.6          Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

7.7          Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors; provided, however this
Agreement shall be assigned to any corporation or association into which the
Company may be merged or converted or with which it may be consolidated, or any
corporation, association or other similar entity resulting from any merger,
conversion or consolidation to which the Company shall be a party without the
execution or filing of any paper with any party hereto or any further act on the
part of any of the parties to this Agreement except where an instrument of
transfer or assignment is required by law to effect such succession, anything
herein to the contrary notwithstanding. Any Investor may assign its rights under
this Agreement to any Person to whom such Investor assigns or transfers any
Securities, provided (i) such transferor agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company after such assignment, (ii) the Company is furnished with written
notice of the name and address of such transferee or assignee, (iii) following
such transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, (iv) such transferee agrees in writing to be bound, with
respect to the transferred Securities, by the provisions hereof that apply to
the “Investors” and (v) such transfer shall have been made in accordance with
the applicable requirements of this Agreement and with all laws applicable
thereto.

 

7.8          No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

 

7.9          Governing Law; Venue; Waiver of Jury Trial. This agreement shall be
governed by and construed in accordance with the laws of the State of New York.
The Company and Investors hereby irrevocably submit to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute brought by the Company
or any Investor hereunder, in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably waive,
and agree not to assert in any suit, action or proceeding brought by the Company
or any Investor, any claim that it is not personally subject to the jurisdiction
of any such court, or that such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
The Company and Investors hereby waive all rights to a trial by jury.

 

 38 

 

  

7.10        Survival. Unless this Agreement is terminated under Section 7.1, the
representations and warranties, agreements and covenants contained herein shall
survive indefinitely.

 

7.11        Execution. This Agreement may be executed in counterparts, all of
which when taken together shall be considered one and the same agreement. In the
event that any signature is delivered by facsimile transmission or email
attachment, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or email-attached signature page were an
original thereof.

 

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

 

7.13        Independent Nature of Investors’ Obligations and Rights. The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Documents. The decision of each Investor to
purchase Securities pursuant to this Agreement has been made by such Investor
independently of any other Investor and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company which may have been made or given by any
other Investor or by any agent or employee of any other Investor, and no
Investor or any of its agents or employees shall have any liability to any other
Investor (or any other person) relating to or arising from any such information,
materials, statements or opinions. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no other
Investor will be acting as agent of such Investor in connection with monitoring
its investment hereunder. Each Investor shall be entitled to independently
protect and enforce its rights, including without limitation the rights arising
out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other Investor to be joined as an additional party in
any Proceeding for such purpose.

 

7.14        Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Investors and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

 

7.15        Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, then the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction. The applicant for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs (including
customary indemnity) associated with the issuance of such replacement
Securities, but without any requirement to post a bond (unless required by the
Transfer Agent, in which case the cost of such bond shall be paid by the
Company).

 

[SIGNATURE PAGES FOLLOW]

 

 39 

 

 

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

 

  CRYOPORT, INC.

 

  By: /s/ Robert Stefanovich

  Name: Robert Stefanovich   Title: Chief Financial Officer

 

  Address for Notice:      

Cryoport, Inc.

17305 Daimler Street

Irvine, CA 92614

Email: rstefanovich@cryoport.com 

      With a copy, which shall not constitute notice, to:      

Anthony Ippolito, Esq.

Snell & Wilmer L.L.P.

600 Anton Boulevard., Suite 1400

Costa Mesa, California 92626

 

COMPANY SIGNATURE PAGE

 

   

 

 

Investor Signature Page

 

IN WITNESS WHEREOF, by its execution and delivery of this signature page, the
undersigned Investor hereby joins in and agrees to be bound by the terms and
conditions of that certain Securities Purchase and Registration Rights Agreement
dated as of December 13, 2018 (the “Purchase Agreement”), by and among Cryoport,
Inc., a Nevada corporation, and the Investors (as defined therein), as to the
number of shares of Common Stock and Notes set forth across from such Investor’s
name on the Schedule of Investors, and authorizes this signature page to be
attached to the Purchase Agreement or counterparts thereof.

 

 

Name of Investor:

 

PETRICHOR OPPORTUNITIES FUND I LP

By PETRICHOR OPPORTUNITIES FUND I GP LLC

 

  By: /s/ Tadd Wessel

  Name:  Tadd Wessel   Title:  Managing Member

 

  Address:

85 Third Avenue

Suite 2403

New York, NY 10022

 

  Email Address: twessel@petrichorcap.com

 

Delivery Instructions (if different than above):

 

c/o:    

Address:    

     

Telephone No.:    

Facsimile No. :    

Other Special Instructions:    

 

Exhibits:

 

ACompany Transfer Agent Instructions

 

   

 

  

ANNEX a

 

SCHEDULE OF INVESTORS

 

Name and Address of Investor  Number of
Shares
Purchased   Principal
Amount of
Note   Aggregate
Purchase Price  Petrichor Opportunities Fund I LP
885 Third Avenue
Suite 2403
New York, NY 10022   1,000,000   $15,000,000   $25,000,000  TOTAL:   1,000,000  
$15,000,000   $25,000,000 

 

   

 

 

Exhibit A

 

COMPANY TRANSFER AGENT INSTRUCTIONS

 

[COMPANY TRANSFER AGENT]

[ADDRESS]

Attention:[_________], Account Representative

 

Ladies and Gentlemen:

 

Reference is made to that certain Securities Purchase and Registration Rights
Agreement, dated as of December 13, 2018 (the “Agreement”), by and among
Cryoport, Inc., a Nevada corporation (the “Company”), and the investors named on
the Schedule of Investors attached thereto (collectively, the “Holders”),
pursuant to which the Company is issuing to the Holders shares (the “Common
Shares”) of the Company’s common stock, par value $0.001 per share (“Common
Stock”).

 

In connection with the consummation of the transactions contemplated by the
Agreement, this letter shall serve as our irrevocable authorization and
direction to you to issue an aggregate of _______ shares of Common Stock in the
names and denominations set forth on Exhibit I attached hereto. The certificates
should bear the legend set forth on Exhibit II attached hereto and “stop
transfer” instructions should be placed against their subsequent transfer.
Kindly deliver the certificates to the respective delivery addresses set forth
on Exhibit I via hand delivery or overnight courier. We confirm that these
shares will be validly issued, fully paid and non-assessable upon issuance.

 

Please be advised that the Holders are relying upon this letter as an inducement
to enter into the Agreement and, accordingly, each Holder is a third party
beneficiary to these instructions.

 

Please execute this letter in the space indicated to acknowledge your agreement
to act in accordance with these instructions. Should you have any questions
concerning this matter, please contact Robert Stefanovich, at
RStefanovich@cryoport.com.

 

  Very truly yours,       CRYOPORT, INC.

 

  By:  

  Name:   Title:

 

   

 

 

THE FOREGOING INSTRUCTIONS ARE ACKNOWLEDGED AND AGREED TO this ___ day of
[_________], 2018

 

[●]  

 

By:    

  Name:    

  Title:    

 

Enclosures

 

   

 

  

Exhibit I

 

Name and Address of Stockholder 

Number of
Shares
Purchased

                             TOTAL:     

 

   

 

  

EXHIBIT II

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

 

   

 

 

ANNEX B

 

“SELLING STOCKHOLDERS” / “PLAN OF DISTRIBUTION”

 

Plan of Distribution

 

Each Selling Stockholder (the “Selling Stockholders”) of the shares and any of
their pledgees, assignees and successors-in-interest may, from time to time,
sell any or all of their shares covered hereby on the NASDAQ Capital Market or
any other stock exchange, market or trading facility on which the securities are
traded or in private transactions. These sales may be at fixed or negotiated
prices. A Selling Stockholder may use any one or more of the following methods
when selling shares:

 

·ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

·block trades in which the broker-dealer will attempt to sell the securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 

·purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 

·an exchange distribution in accordance with the rules of the applicable
exchange;

 

·privately negotiated transactions;

 

·in transactions through broker-dealers that agree with the Selling Stockholders
to sell a specified number of such securities at a stipulated price per
security;

 

·through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

 

·a combination of any such methods of sale; or

 

·any other method permitted pursuant to applicable law.

 

The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.

 

Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of securities, from the purchaser) in amounts to be
negotiated.

 

In connection with the sale of the shares or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the shares in
the course of hedging the positions they assume. The Selling Stockholders may
also sell shares short and deliver these shares to close out their short
positions, or loan or pledge the shares to broker-dealers that in turn may sell
these securities. The Selling Stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or create one
or more derivative securities which require the delivery to such broker-dealer
or other financial institution of shares offered by this prospectus, which
shares such broker-dealer or other financial institution may resell pursuant to
this prospectus (as supplemented or amended to reflect such transaction).

 

 B-1 

 

 

The Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.

 

The Selling Stockholders may be deemed to be statutory underwriters under the
Securities Act. In addition, any broker-dealers who act in connection with the
sale of the shares hereunder may be deemed to be “underwriters” within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
them and profit on any resale of the shares as principal may be deemed to be
underwriting discounts and commissions under the Securities Act. Because Selling
Stockholders may be deemed to be “underwriters” within the meaning of the
Securities Act, they may be subject to the prospectus delivery requirements of
the Securities Act including Rule 172 thereunder.

 

The selling stockholders have acknowledged that they understand their
obligations to comply with the provisions of the Securities Exchange Act of
1934, as amended, and the rules thereunder relating to stock manipulation,
particularly Regulation M.

 

We agreed to keep this prospectus effective with respect to shares of common
stock offered by a Selling Stockholder hereunder until the earlier of such
Selling Stockholder’s sale of such shares pursuant to this prospectus or until
such shares may be sold without restrictions or other limitations pursuant to
Rule 144 (or any successor provision) under the Securities Act (including,
without limitation, volume restrictions) and without the need for current public
information required by Rule 144(c)(1).

 

We will make copies of this prospectus available to the Selling Stockholders and
have informed them of the need to deliver a copy of this prospectus to each
purchaser at or prior to the time of the sale (including by compliance with Rule
172 under the Securities Act).

 

There can be no assurance that the Selling Stockholders will sell any or all of
the shares of common stock registered pursuant to the registration statement of
which this prospectus forms a part.

 

We are not aware of any plans, arrangements or understandings between the
Selling Stockholders and any underwriter, broker-dealer or agent regarding the
sale of shares of common stock by the selling stockholders.

 

We will pay all expenses incident to the filing of this registration statement,
estimated to be $[●]. These expenses include accounting and legal fees in
connection with the preparation of the registration statement of which this
prospectus forms a part, legal and other fees in connection with the
qualification of the sale of the shares under the laws of certain states (if
any), registration and filing fees and other expenses.

 

 B-2