Exhibit 10.1

 

Execution Version

 

SECURITIES PURCHASE AGREEMENT

 

BY AND BETWEEN

 

CRYOPORT, INC.,

 

AND

 

BTO FREEZE PARENT L.P.

 

Dated as of August 24, 2020

 

 

 

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I PURCHASE AND SALE OF PURCHASED SHARES 1     Section 1.1 Purchase and
Sale 1 Section 1.2 Closing 1       ARTICLE II REPRESENTATIONS AND WARRANTIES OF
THE COMPANY 2     Section 2.1 Organization and Power 2 Section 2.2
Authorization; No Conflicts. 2 Section 2.3 Government Approvals 3 Section 2.4
Authorized and Outstanding Stock 3 Section 2.5 Subsidiaries 5 Section 2.6
Private Placement 5 Section 2.7 SEC Documents; Financial Information 6 Section
2.8 Internal Control Over Financial Reporting 6 Section 2.9 Disclosure Controls
and Procedures 6 Section 2.10 Litigation 7 Section 2.11 Compliance with Laws;
Permits 7 Section 2.12 Taxes 7 Section 2.13 Employee Matters 8 Section 2.14
Environmental Matters 8 Section 2.15 Intellectual Property; Security 8 Section
2.16 Registration Rights 9 Section 2.17 Investment Company Act 9 Section 2.18
Nasdaq 9 Section 2.19 No Brokers or Finders 9 Section 2.20 Illegal Payments;
FCPA Violations 9 Section 2.21 Economic Sanctions 10 Section 2.22 Absence of
Certain Changes 10 Section 2.23 No Rights Agreement; Anti-Takeover Provisions 10
Section 2.24 No Additional Representations 10       ARTICLE III REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER 11     Section 3.1 Organization and Power 11
Section 3.2 Authorization, Etc. 11 Section 3.3 Government Approvals 11 Section
3.4 Investment Representations 12 Section 3.5 No Prior Ownership 12 Section 3.6
No Brokers or Finders 13 Section 3.7 Financing 13 Section 3.8 ERISA 13 Section
3.9 No Additional Representations 14

 

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ARTICLE IV COVENANTS OF THE PARTIES 14     Section 4.1 Board of Directors 14
Section 4.2 Restrictions on Transfer 15 Section 4.3 Restrictive Legends 17
Section 4.4 Standstill 19 Section 4.5 Confidentiality 19 Section 4.6 Financial
Statements and Other Information 20 Section 4.7 Antitakeover Provisions; Other
Actions 22 Section 4.8 Voting Agreement 22 Section 4.9 Tax Matters. 23 Section
4.10 Nasdaq Listing 23 Section 4.11 State Securities Laws 23 Section 4.12
Section 16b-3 Matters 24 Section 4.13 Negative Covenants 24 Section 4.14 Sponsor
25 Section 4.15 Use of Proceeds 26 Section 4.16 Corporate Actions 26 Section
4.17 Chart Acquisition 27 Section 4.18 Corporate Opportunities 27 Section 4.19
Financing Cooperation 28       ARTICLE V CONDITIONS TO THE PARTIES’ OBLIGATIONS
29     Section 5.1 Conditions of the Purchaser 29 Section 5.2 Conditions of the
Company 29       ARTICLE VI MISCELLANEOUS 30     Section 6.1 Survival 30 Section
6.2 Counterparts 31 Section 6.3 Governing Law 31 Section 6.4 Entire Agreement;
No Third Party Beneficiary 32 Section 6.5 Expenses 32 Section 6.6 Notices 32
Section 6.7 Successors and Assigns 33 Section 6.8 Headings 33 Section 6.9
Amendments and Waivers 33 Section 6.10 Interpretation; Absence of Presumption 34
Section 6.11 Severability 34 Section 6.12 Specific Performance 34 Section 6.13
Public Announcement 35 Section 6.14 Purchaser Representative 35 Section 6.15
Non-Recourse 35 Section 6.16 Further Assurances 36       ARTICLE VII TERMINATION
36     Section 7.1 Termination 36 Section 7.2 Certain Effects of Termination 36

 

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EXHIBITS

 

Exhibit A Definitions Exhibit B Form of Certificate of Designation Exhibit C
Form of Registration Rights Agreement Exhibit D Disclosure Letter Exhibit E VCOC
Letter Agreement

 

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SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT dated as of August 24, 2020 (this
“Agreement”) is by and between Cryoport, Inc., a Nevada corporation (the
“Company”), and BTO Freeze Parent L.P., a Delaware limited partnership (the
“Purchaser”). Capitalized terms used but not defined herein have the meanings
assigned to them in Exhibit A.

 

Simultaneously with the execution and delivery of this Agreement, the Company,
is entering into a Purchase Agreement (as it may be amended or supplemented from
time to time, the “Chart Purchase Agreement,” and the transactions contemplated
thereby, the “Acquisition”), by and between the Company and Chart Industries,
Inc., a Delaware corporation (“Chart”), pursuant to, and on the terms and
subject to the conditions of which, the Company or its subsidiary designees will
acquire certain assets and assume certain liabilities of Chart’s cryobiological
storage business (the “Cryo Business”).

 

Concurrent with the consummation of the Acquisition, the Purchaser desires to
purchase from the Company, and the Company desires to issue and sell to the
Purchaser, 250,000 shares of the Company’s Series C Convertible Preferred Stock,
par value $.001 per share (the “Series C Preferred Stock”) and 675,536 shares of
the common stock of the Company, par value $.001 per share (“Common Stock”), on
the terms and subject to the conditions hereinafter set forth.

 

In consideration of the premises and the mutual representations, warranties,
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

 

Article I

PURCHASE AND SALE OF PURCHASED SHARES

 

Section 1.1            Purchase and Sale. On the terms and subject to the
satisfaction or waiver of the conditions set forth in this Agreement, at the
Closing, the Purchaser shall purchase, and the Company shall issue and sell to
the Purchaser, (a) 250,000 shares of Series C Preferred Stock with an original
purchase price of $1,000 per share (the “Purchased Preferred Shares”) and (b)
675,536 shares of Common Stock (the “Purchased Common Shares” and together with
the Purchased Preferred Shares, the “Purchased Shares”) for an aggregate
purchase price of the Purchased Shares delivered at Closing of $275,000,000 (the
“Purchase Price”). The Series C Preferred Stock shall have the rights, powers,
preferences and privileges set forth in the Certificate of Designation (the
“Certificate of Designation”) attached as Exhibit B.

 

Section 1.2            Closing. On the terms and subject to the satisfaction or
waiver of the conditions set forth in this Agreement, the closing of the
issuance, sale and purchase of the Purchased Shares (the “Closing”) shall take
place remotely via the exchange of final documents and signature pages, on such
date on which all of the conditions set forth in Article V have been satisfied
or waived (other than those conditions that by their nature are to be satisfied
at the Closing, but subject to the satisfaction or waiver of those conditions at
such time), or such other time and place as the Company and the Purchaser may
agree. The date on which the Closing is to occur is herein referred to as the
“Closing Date.” At the Closing, upon receipt by the Company of payment of the
full purchase price to be paid at the Closing therefor by or on behalf of such
Purchaser to the Company by wire transfer of immediately available funds to an
account designated in writing by the Company, the Company will deliver to the
Purchaser evidence reasonably satisfactory to the Purchaser of the issuance of
the Purchased Shares in the name of the Purchaser by book-entry on the books and
records of the Company.

 

 

 

 

Article II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Purchaser as of the date hereof and
as of the Closing Date (except to the extent made only as of a specified date in
which case as of such date), that, except (a) as set forth in the SEC Documents
filed by the Company with the SEC since January 1, 2018 and prior to the date
hereof (other than disclosures in the “Risk Factors” or “Forward-Looking
Statements” sections or similarly captioned sections of any such filings) and
(b) as set forth on Exhibit D (the “Disclosure Letter”) (all such exceptions
disclosed in the Disclosure Letter being numbered to correspond to the
applicable Section of this Article II, provided, however, that any such
exception shall be deemed to be disclosed with respect to each other
representation or warranty to which the relevance of such exception is
reasonably apparent on the face of such disclosure):

 

Section 2.1            Organization and Power. The Company and each of its
Subsidiaries is a corporation, limited liability company, partnership or other
entity validly existing and in good standing under the laws of the jurisdiction
of its incorporation or formation (as applicable) and has all requisite
corporate, limited liability company, partnership or other entity power and
authority to own or lease its properties and to carry on its business as
presently conducted and as proposed to be conducted. The Company and each of its
Subsidiaries is duly licensed or qualified to do business as a foreign
corporation, limited liability company, partnership or other entity in each
jurisdiction wherein the character of its property or the nature of the
activities presently conducted by it, makes such qualification necessary, except
where the failure to so qualify has not had, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
True, correct and complete copies of the Company’s organizational documents are
included in the SEC Documents filed with the SEC.

 

Section 2.2            Authorization; No Conflicts.

 

(a)               The Company has all necessary corporate power and authority
and has taken all necessary corporate action required for the due authorization,
execution, delivery and performance by the Company of this Agreement and the
Registration Rights Agreement, and the consummation by the Company of the
transactions contemplated hereby and thereby, the filing of the Certificate of
Designation with the Nevada Secretary of State and for the due authorization,
issuance, sale and delivery of the Purchased Shares and the reservation,
issuance and delivery of the Conversion Shares. This Agreement has been, and the
Registration Rights Agreement, at the Closing will be, duly executed and
delivered by the Company. Assuming due execution and delivery thereof by each of
the other parties hereto or thereto, this Agreement and the Registration Rights
Agreement will each be a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by applicable laws relating to bankruptcy, insolvency,
reorganization, moratorium or other similar legal requirement relating to or
affecting creditors’ rights generally and except as such enforceability is
subject to general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).

 

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(b)               The authorization, execution, delivery and performance by the
Company of this Agreement and the Registration Rights Agreement, and the
consummation by the Company of the transactions contemplated hereby and thereby,
including the filing of the Certificate of Designation and the issuance of the
Purchased Shares and the Conversion Shares do not and will not: (x) violate or
result in the breach of any provision of the Articles of Incorporation or Bylaws
of the Company; or (y) with such exceptions that have not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect: (i) violate any provision of, constitute a breach of, or default
under, any judgment, order, writ, or decree applicable to the Company or any of
its Subsidiaries or any mortgage, loan or credit agreement, indenture, bond,
note, deed of trust, lease, sublease, license, contract or other agreement
(each, a “Contract”) to which the Company or any of its Subsidiaries is a party
or accelerate the Company’s or, if applicable, any of its Subsidiaries’
obligations under any such Contract; (ii) violate any provision of, constitute a
breach of, or default under, any applicable state, federal or local law, rule or
regulation; or (iii) result in the creation of any lien upon any assets of the
Company or any of its Subsidiaries or the suspension, revocation or forfeiture
of any franchise, permit or license granted by a governmental authority to the
Company or any of its Subsidiaries, other than liens under federal or state
securities laws.

 

Section 2.3            Government Approvals. No consent, approval or
authorization of, or filing with, any court or governmental authority is or will
be required on the part of the Company in connection with the execution,
delivery and performance by the Company of this Agreement and the Registration
Rights Agreement, or in connection with the issuance of the Purchased Shares or
the Conversion Shares, except for (a) the filing of the Certificate of
Designation with the Nevada Secretary of State; (b) those which have already
been made or granted; (c) the filing of a Form D and current report on Form 8-K
with the SEC; (d) filings with applicable state securities commissions; or (e)
the listing of the Conversion Shares with the Nasdaq Stock Market.

 

Section 2.4            Authorized and Outstanding Stock.

 

(a)               The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock and 2,500,000 shares of preferred stock, par
value $.001 per share (“Preferred Stock”). Of such Preferred Stock, 800,000
shares are designated as Class A Preferred Stock, 585,000 shares are designated
as Class B Preferred Stock and upon the filing of the Certificate of Designation
with the Nevada Secretary of State, 250,000 shares will be designated as the
Series C Preferred Stock.

 

(b)               As of August 21, 2020 (the “Capitalization Date”), (i)
38,781,290 shares of Common Stock were issued and outstanding, (ii) zero shares
of Class A Preferred Stock were issued and outstanding, (iii) zero shares of
Class B Preferred Stock were issued and outstanding, (iv) 7,802,100 shares of
Common Stock were reserved for issuance upon the exercise of outstanding stock
options issued pursuant to the Stock Plans, (v) zero shares of Common Stock were
reserved for issuance upon the exercise of rights granted pursuant to the
Company’s warrants to purchase Common Stock and (vi) 4,810,002 shares of Common
Stock were reserved for issuance upon conversion of the Convertible Senior
Notes. Except as set forth in the foregoing sentence, there are no outstanding
securities of the Company convertible into or exercisable or exchangeable for
shares of capital stock of, or other equity or voting interests of any character
in, the Company.

 

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(c)               All of the issued and outstanding shares of Common Stock of
the Company have been duly authorized and are validly issued, fully paid and
non-assessable. The Purchased Shares have been duly authorized and, when issued
in accordance with the terms hereof, the Purchased Shares will be, duly
authorized and validly issued and fully paid and non-assessable and will not be
subject to any preemptive right or any restrictions on transfer under applicable
law or any contract to which the Company is a party, other than, in the case of
restrictions on transfer, those under applicable state and federal securities
laws and Section 4.2 of this Agreement. The shares of Common Stock issuable upon
conversion of the Purchased Preferred Shares (the “Conversion Shares”) have been
duly authorized and reserved for issuance and, when issued upon conversion of
the Purchased Shares in accordance with the terms thereof as set forth in the
Certificate of Designation, will be validly issued and fully paid and
non-assessable. No share of Common Stock has been, and none of the Purchased
Shares and Conversion Shares will be when issued, issued in violation of any
preemptive right arising by operation of law, under the Articles, the Bylaws or
any contract, or otherwise. None of the Purchased Shares and Conversion Shares
will be when issued subject to any restrictions on transfer under applicable law
or any contract to which the Company is a party, other than, in the case of
restrictions on transfer, those under applicable state and federal securities
laws, and Section 4.2 of this Agreement. When issued in accordance with the
terms hereof and the terms of the Certificate of Designation (as applicable),
the Purchased Shares and Conversion Shares will be free and clear of all liens
(other than liens incurred by Purchaser or its Affiliates, restrictions arising
under applicable securities laws, or restrictions imposed by the this Agreement,
the Certificate of Designation or the Registration Rights Agreement).

 

(d)               Except as otherwise expressly described in this Section 2.4:
(i) no subscription, warrant, option, convertible security or other right,
commitment, agreement, arrangement issued by the Company or any other obligation
of the Company to purchase or acquire any shares of capital stock of the Company
is authorized or outstanding; (ii) there is not any commitment, agreement,
arrangement or obligation of the Company to issue any subscription, warrant,
option, convertible security or other such right or to issue or distribute
capital stock of, or other equity or voting interest (or voting debt) in, the
Company; (iii) the Company has no obligation to purchase, redeem or otherwise
acquire any shares of its capital stock or to pay any dividend or make any other
distribution in respect thereof; (iv) there are no obligations of the Company to
grant, extend or enter into any subscription, warrant, right, convertible or
exchangeable security or other similar agreement or commitment relating to any
capital stock of, or other equity or voting interests (or voting debt) in, the
Company; (v) there are no outstanding shares of capital stock of, or other
equity or voting interests of any character in, the Company as of the date
hereof other than shares that have become outstanding after the Capitalization
Date which were reserved for issuance as of the Capitalization Date as set forth
in Section 2.4(a) or pursuant to the exercise, after the Capitalization Date, of
outstanding stock options described in Section 2.4(b)(iv) or stock options
issued and subsequently exercised after the Capitalization Date; and (vi) there
are no agreements, arrangements or commitments between the Company and any
Person relating to the acquisition, disposition or voting of the capital stock
of, or other equity or voting interest (or voting debt) in, the Company. There
exists no preemptive right, whether arising by operation of law, under the
Articles, the Bylaws or any contract, or otherwise, with respect to the issuance
of any capital stock of the Company.

 

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Section 2.5            Subsidiaries. Other than any Subsidiaries of the Company
to be formed following the date hereof in connection with the transactions
contemplated by the Chart Purchase Agreement or acquired in connection with the
Company’s acquisition of CryoPDP, the Company’s Subsidiaries consist solely of
all the entities listed on Exhibit 21 to the Company’s Form 10-K for the year
ended December 31, 2019. The Company, directly or indirectly, owns of record and
beneficially, free and clear of all liens, all of the issued and outstanding
capital stock or equity interests of each of its Subsidiaries. All of the issued
and outstanding capital stock or equity interests of the Company’s Subsidiaries
has been duly authorized and validly issued, were not issued in violation of an
preemptive right, right of first refusal or similar right, and in the case of
corporations, is fully paid and non-assessable. Except as described in the SEC
Documents, there are no outstanding rights, options, warrants, preemptive
rights, conversion rights, rights of first refusal or similar rights for the
purchase or acquisition from any of the Company’s Subsidiaries of any securities
of such Subsidiaries nor are there any commitments to issue or execute any such
rights, options, warrants, preemptive rights, conversion rights or rights of
first refusal.

 

Section 2.6            Private Placement. Assuming the accuracy of the
representations and warranties of the Purchaser set forth in Section 3.4
(Investment Representations), the offer and sale of the Purchased Shares
pursuant to this Agreement will be exempt from the registration requirements of
the Securities Act. Without limiting the foregoing, neither the Company nor, to
the knowledge of the Company, any other Person authorized by the Company to act
on its behalf, has engaged in a general solicitation or general advertising
(within the meaning of Regulation D of the Securities Act) of investors with
respect to offers or sales of Series C Preferred Stock, and neither the Company
nor, to the knowledge of the Company, any Person acting on its behalf has made
any offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause the offering or issuance of Series C
Preferred Stock under this Agreement to be integrated with prior offerings by
the Company for purposes of the Securities Act that would result in none of
Regulation D or any other applicable exemption from registration under the
Securities Act to be available, nor will the Company take any action or steps
that would cause the offering or issuance of Series C Preferred Stock under this
Agreement to be integrated with other offerings by the Company.

 

 

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Section 2.7            SEC Documents; Financial Information. Since January 1,
2018, the Company has timely filed (a) all annual and quarterly reports and
proxy statements (including all amendments, exhibits and schedules thereto) and
(b) all other reports and other documents (including all amendments, exhibits
and schedules thereto), in each case required to be filed by the Company with
the SEC pursuant to the Exchange Act and the Securities Act. As of their
respective filing dates, such SEC Documents complied in all material respects
with the requirements of the Securities Act, the Exchange Act and the rules and
regulations of the SEC thereunder applicable to such SEC Documents, and as of
their respective dates none of the SEC Documents 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 light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents (the “Financial
Statements”) comply as of their respective dates in all material respects with
applicable accounting requirements and the rules and regulations of the SEC with
respect thereto (except as may be indicated in the notes thereto or, in the case
of the unaudited statements, as permitted by Form 10-Q promulgated by the SEC),
have been prepared in accordance with GAAP (except, in the case of unaudited
quarterly statements, as permitted by Form 10-Q of the SEC or other rules and
regulations of the SEC) applied on a consistent basis during the periods
involved (except (i) as may be indicated in the notes thereto or (ii) as
permitted by Regulation S-X) and present fairly in all material respects as of
their respective dates the consolidated financial position of the Company and
its Subsidiaries as at the dates thereof and the consolidated results of their
operations and their consolidated cash flows for each of the respective periods,
all in conformity with GAAP. Neither the Company nor any of its Subsidiaries has
any liabilities of any nature (whether accrued, absolute, contingent or
otherwise) that would be required under GAAP, to be reflected on a consolidated
balance sheet of the Company (including the notes thereto) except liabilities
(i) reflected or reserved against in the balance sheet (or the notes thereto) of
the Company and its Subsidiaries as of June 30, 2020 (the “Balance Sheet Date”)
included in the SEC Documents, (ii) incurred after the Balance Sheet Date in the
ordinary course of business and that do not arise from any material breach of a
Contract, (iii) as expressly contemplated by this Agreement or otherwise
incurred in connection with the Transactions, (iv) that have been discharged or
paid prior to the date of this Agreement or (v) as would not, individually or in
the aggregate, have had or reasonably be expected to have, a Material Adverse
Effect. There is no transaction, arrangement or other relationship between the
Company and/or any of its Subsidiaries and an unconsolidated or other
off-balance sheet entity that is required by applicable Law to be disclosed by
the Company in its SEC Documents and is not so disclosed.

 

Section 2.8            Internal Control Over Financial Reporting. The Company
has disclosed, based on its most recent evaluation prior to the date hereof, to
the Company’s outside auditors and the Audit Committee of the Board of Directors
(a) any significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting (as defined in Rule
13a-15(f) under the Exchange Act) that are reasonably likely to adversely affect
the Company’s ability to record, process, summarize and report financial
information and (b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company’s internal control
over financial reporting.

 

Section 2.9            Disclosure Controls and Procedures. The Company has
established and maintains, and at all times since January 1, 2018, has
maintained, disclosure controls and procedures (as such term is defined in Rule
13a-15 and 15d-15 under the Exchange Act) that are (x) designed to provide
reasonable assurance that material information relating to the Company,
including its Subsidiaries, that is required to be disclosed by the Company in
the reports that it furnishes or files under the Exchange Act is reported within
the time periods specified in the rules and forms of the SEC and that such
material information is communicated to the Company’s management to allow timely
decisions regarding required disclosure. and (y) sufficient to provide
reasonable assurance that (a) transactions are executed in accordance with
Company management’s general or specific authorization, (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP, consistently applied, and to maintain accountability for
assets, (c) access to assets is permitted only in accordance with Company
management’s general or specific authorization and (d) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. There
are no “significant deficiencies” or “material weaknesses” (as defined by the
Public Company Accounting Oversight Board) in the design or operation of the
Company’s internal controls over, and procedures relating to, financial
reporting which would reasonably be expected to adversely affect in any material
respect the Company’s ability to record, process, summarize and report financial
data, in each case which has not been subsequently remediated. Since January 1,
2018, there has not been any fraud, whether or not material, that involves
management or other employees of the Company or any of its Subsidiaries who have
a significant role in the Company’s internal controls over financial reporting.
As of the date of this Agreement, to the knowledge of the Company, there is no
reason that its outside auditors and its chief executive officer and chief
financial officer will not be able to give the certifications and attestations
required pursuant to the rules and regulations adopted pursuant to Section 404
of the Sarbanes-Oxley Act of 2002, without qualification, when next due.

 

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Section 2.10       Litigation. There is no litigation or governmental
proceeding, suit, arbitration or, to the knowledge of the Company,
investigation, pending or, to the knowledge of the Company, threatened in
writing, against the Company or any of its Subsidiaries or affecting any of the
business, operations, properties, rights or assets of the Company or any of its
Subsidiaries which would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is subject to or in default with respect to any order, writ,
injunction, decree, ruling or decision of any court, commission, board or other
government agency that is expressly applicable to the Company or any of its
Subsidiaries or any of their respective assets which would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

 

Section 2.11        Compliance with Laws; Permits. The Company and its
Subsidiaries are in compliance with all applicable laws, common law, statutes,
ordinances, codes, rules or regulations or other similar requirement enacted,
adopted, promulgated, or applied by any governmental authority, except as has
not had, and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. The Company and its Subsidiaries possess
all permits, franchises, certificates, approvals, authorizations and licenses of
governmental authorities that are required to conduct their business, except as
has not had, and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.

 

Section 2.12        Taxes. The Company and each of its Subsidiaries has filed
all Tax Returns required to be filed within the applicable periods for such
filings (with due regard to any extension) and has paid all Taxes required to be
paid, except for any such failures to file or pay that have not had, and would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Except as would not, in each case, reasonably be expected to
have a Material Adverse Effect, the Company (a) has not been advised that any of
its returns, federal, state or other, have been or are being audited as of the
date hereof, (b) has not been advised of any deficiency in assessment or
proposed judgment to its federal, state or other taxes, and (c) has no liability
for any tax to be imposed upon its properties or assets as of the date of this
Agreement that is not adequately provided for.

 

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Section 2.13         Employee Matters.

 

(a)               Except where the failure to comply has not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (i) the Company and its Subsidiaries are in compliance with all
applicable laws relating to labor, employment, fair employment practices, terms
and conditions of employment, and wages and hours, and with the terms of the
ERISA Documents, and each such ERISA Document is in compliance with all
applicable laws (including, without limitation, the applicable requirements of
ERISA and the Code); and (ii) with respect to the ERISA Documents, no actions,
liens, lawsuits, claims or complaints (other than routine claims for benefits,
appeals of such claims and domestic relations order proceedings) are pending or,
to the knowledge of the Company, threatened.

 

(b)               Neither the Company, its Subsidiaries, nor any other entity
which, together with the Company or its Subsidiaries, would be treated as a
single employer under Section 4001 of ERISA or Section 414 of the Code, has
during the last six (6) years maintained, sponsored or contributed to or had any
liability with respect to any defined benefit pension plan that is subject to
Title IV of ERISA or any “multiemployer plan” (as defined in Section 4001(a)(3)
of ERISA).

 

(c)               Except as would not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect, none of the execution of,
or the completion of the transactions contemplated by, this Agreement (whether
alone or in connection with any other event(s)), will result in (i) any
compensation or benefit becoming due, or any increase in the amount of any
compensation or benefit due, to any current or former employee of the Company or
its Subsidiaries, or (ii) acceleration of the time of payment, vesting or
funding of compensation or benefits to any current or former employee of the
Company or its Subsidiaries. No ERISA Document provides for reimbursement or
gross-up of any excise tax under Section 409A or Section 4999 of the Code.

 

Section 2.14        Environmental Matters. The Company and its Subsidiaries are
in compliance with all, and have not violated any, applicable Requirements of
Environmental Law and possess and are in compliance with all, and have not
violated any, required Environmental Permits, except, in each case, where the
failure to comply or possess has not had, and would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect. The
Company and its Subsidiaries have not received any written notice or claim from
any Person of any violation or alleged violation of, or any liability or alleged
liability under or related to, any Requirements of Environmental Law or
Environmental Permit or any presence or release of any Hazardous Substance, and
there is no basis for any such notice or claim, except as has not had, and would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries has assumed or
retained, as a result of any contract, any liabilities under any Requirements of
Environmental Law or concerning any Hazardous Substances, except as has not had,
and would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.

 

Section 2.15        Intellectual Property; Security. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (a) the Company and its Subsidiaries own their material
proprietary intellectual property, free and clear of all liens, (b) the conduct
of the businesses of the Company and its Subsidiaries does not infringe or
violate the intellectual property of any Person and no Person is infringing or
violating their intellectual property and (c) the Company and its Subsidiaries
take commercially reasonable efforts to protect the confidentiality of their
trade secrets and the integrity, continuous operation and security of their
software and systems (and the data stored or processed therein) and there have
been no breaches, outages or violations of or unauthorized accesses to same
(except for those that were resolved without material cost, liability or the
duty to notify any Person) in the last three (3) years.

 

8

 

 

Section 2.16        Registration Rights. Except as provided in this Agreement or
the Registration Rights Agreement, the Company has not granted any rights to
register under the Securities Act any of its presently outstanding securities or
any of its securities that may be issued subsequently.

 

Section 2.17        Investment Company Act. The Company is not, and immediately
after giving effect to the sale of the Purchased Shares in accordance with this
Agreement and the application of the proceeds thereof will not be required to be
registered as, an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act.

 

Section 2.18        Nasdaq. The Company’s Common Stock is listed on the Nasdaq
Stock Market, and no event has occurred, and the Company is not aware of any
event that is reasonably likely to occur, that would result in the Common Stock
being delisted from the Nasdaq Stock Market. The Company is in compliance in all
material respects with the listing and listing maintenance requirements of the
Nasdaq Stock Market applicable to it for the continued trading of its Common
Stock on the Nasdaq Stock Market.

 

Section 2.19        No Brokers or Finders. No Person has or will have, as a
result of the transactions contemplated by this Agreement, any right, interest
or claim against or upon the Company, any of its Subsidiaries or the Purchaser
for any commission, fee or other compensation as a finder or broker because of
any act of the Company or any of its Subsidiaries, other than Morgan Stanley &
Co. LLC whose fees are the sole responsibility of the Company.

 

Section 2.20        Illegal Payments; FCPA Violations. Except as has not had,
and would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect, since January 1, 2015, none of the Company, any of
its Subsidiaries or, to the knowledge of the Company, any officer, director,
employee agent, representative or consultant acting on behalf of the Company or
any of its Subsidiaries (and only in their capacities as such) has, in
connection with the business of the Company: (a) unlawfully offered, paid,
promised to pay, or authorized the payment of, directly or indirectly, anything
of value, including money, loans, gifts, travel, or entertainment, to any
Government Official with the purpose of (i) influencing any act or decision of
such Government Official in his or her official capacity; (ii) inducing such
Government Official to perform or omit to perform any activity in violation of
his or her legal duties; (iii) securing any improper advantage; or (iv) inducing
such Government Official to influence or affect any act or decision of such
Governmental Entity, except, with respect to the foregoing clauses (i) through
(iv), as permitted under the U.S. Foreign Corrupt Practices Act and other
applicable law; (b) made any illegal contribution to any political party or
candidate; (c) made, offered or promised to pay any unlawful bribe, payoff,
influence payment, kickback, unlawful rebate, or other similar unlawful payment
of any nature, directly or indirectly, in connection with the business of the
Company, to any person, including any supplier or customer; (d) knowingly
established or maintained any unrecorded fund or asset or made any false entry
on any book or record of the Company or any of its Subsidiaries for any purpose;
or (e) otherwise violated the U.S. Foreign Corrupt Practices Act of 1977, as
amended, the UK Bribery Act 2010, as amended, or any other applicable
anti-corruption or anti-bribery law.

 

9

 

 

Section 2.21        Economic Sanctions. Except as has not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, the Company is not in contravention of any sanction, and has not
engaged in any conduct sanctionable, under U.S. economic sanctions Laws,
including applicable laws administered and enforced by the U.S. Department of
the Treasury’s Office of Foreign Assets Control, 31 C.F.R. Part V, the Iran
Sanctions Act, as amended, the Comprehensive Iran Sanctions, Accountability and
Divestment Act, as amended, the Iran Threat Reduction and Syria Human Rights
Act, as amended, the Iran Freedom and Counter-Proliferation Act of 2012, as
amended, and any executive order issued pursuant to any of the foregoing. The
Company and each of its Subsidiaries has instituted and maintains a system of
internal controls designed to provide reasonable assurance that violations of
applicable anti-corruption Laws and U.S. economic sanctions Laws will be
prevented, detected, and deterred.

 

Section 2.22        Absence of Certain Changes. (a) Since December 31, 2019,
except for the execution and performance of this Agreement and any other
agreements contemplated hereby and the discussions, negotiations and
transactions related hereto, the business of the Company and its Subsidiaries
has been carried on and conducted in all material respects in the ordinary
course of business, and (b) since December 31, 2019, there has not been any
Material Adverse Effect.

 

Section 2.23        No Rights Agreement; Anti-Takeover Provisions.

 

(a)              Neither the Company nor any of its Subsidiaries is party to a
stockholder rights agreement, “poison pill” or similar anti-takeover agreement
or plan.

 

(b)              Prior to Closing, the Company and the Board of Directors have
taken all necessary actions to (including, if necessary, adoption of a provision
in the Bylaws as contemplated by Nevada Revised Statutes 78.378(1)) to ensure
that no restrictions included in any Antitakeover Provision is, or will be,
applicable to this Agreement or the Purchaser’s acquisition, or the Company’s
issuance, of the Purchased Shares and the Conversion Shares in accordance with
this Agreement and the Certificate of Designation.

 

Section 2.24        No Additional Representations. Except for the
representations and warranties made by the Company in this Article II (as
modified by the Disclosure Letter) and in any certificate delivered to the
Purchaser in connection with this Agreement, neither the Company nor any other
Person makes any express or implied representation or warranty with respect to
the Company or any Subsidiaries or their respective businesses, operations,
assets, liabilities, employees, employee benefit plans, conditions or prospects,
and the Company hereby disclaims any such other representations or warranties.
In particular, without limiting the foregoing disclaimer, neither the Company
nor any other Person makes or has made any representation or warranty to the
Purchaser, or any of its Affiliates or representatives, with respect to (a) any
financial projection, forecast, estimate, budget or prospect information
relating to the Company or any of its Subsidiaries or their respective business,
or (b) any oral or written information presented to the Purchaser or any of its
Affiliates or representatives in the course of their due diligence investigation
of the Company, the negotiation of this Agreement or in the course of the
transactions contemplated hereby. Notwithstanding anything to the contrary
herein, nothing in this Agreement shall limit the right of the Purchaser and its
Affiliates to rely on the representations, warranties, covenants and agreements
expressly set forth in this Agreement and in any certificate delivered to the
Purchaser in connection with this Agreement, nor will anything in this Agreement
operate to limit any claim by any Purchaser or any of its respective Affiliates
for fraud.

 

10

 

 

Article III

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser represents and warrants to the Company as of the date hereof and
as of the Closing Date (except to the extent made only as of a specified date in
which case as of such date) that:

 

Section 3.1          Organization and Power. The Purchaser is a Delaware limited
partnership duly formed, validly existing and in good standing under the laws of
the jurisdiction of its formation and has all necessary power and authority to
own its properties and to carry on its business as presently conducted.

 

Section 3.2          Authorization, Etc. The Purchaser has all necessary power
and authority and has taken all necessary entity action required for the due
authorization, execution, delivery and performance by the Purchaser of this
Agreement and the Registration Rights Agreement and the consummation by the
Purchaser of the transactions contemplated hereby and thereby. The
authorization, execution, delivery and performance by the Purchaser of this
Agreement and the Registration Rights Agreement, and the consummation by the
Purchaser of the transactions contemplated hereby and thereby do not and will
not: (a) violate or result in the breach of any provision of the organizational
documents of the Purchaser; or (b) with the exceptions that are not reasonably
likely to have, individually or in the aggregate, a material adverse effect on
its ability to perform its obligations under this Agreement and the Registration
Rights Agreement: (i) violate any provision of, constitute a breach of, or
default under, any judgment, order, writ, or decree applicable to the Purchaser
or any material contract to which the Purchaser is a party; or (ii) violate any
provision of, constitute a breach of, or default under, any applicable state,
federal or local law, rule or regulation. This Agreement has been, and the
Registration Rights Agreement will, at the Closing be party will be, duly
executed and delivered by the Purchaser. Assuming due execution and delivery
thereof by the other parties hereto or thereto, this Agreement and the
Registration Rights Agreement will each be a valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms, except
as the enforceability may be limited by applicable laws relating to bankruptcy,
insolvency, reorganization, moratorium or other similar legal requirement
relating to or affecting creditors’ rights generally and except as the
enforceability is subject to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).

 

Section 3.3          Government Approvals. No consent, approval, license or
authorization of, or filing with, any court or governmental authority is or will
be required on the part of the Purchaser in connection with the execution,
delivery and performance by the Purchaser of this Agreement and the Registration
Rights Agreement, except for: (a) those which have already been made or granted;
(b) the filing with the SEC of a Schedule 13D or Schedule 13G and a Form 3 to
report the Purchaser’s ownership of the Purchased Shares; or (c) those where the
failure to obtain such consent, approval or license would not have a material
adverse effect on the ability of the Purchaser to perform its obligations
hereunder.

 

11

 

 

Section 3.4           Investment Representations.

 

(a)               The Purchaser is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

 

(b)              The Purchaser has been advised by the Company that the
Purchased Shares have not been registered under the Securities Act, that the
Purchased Shares will be issued on the basis of the statutory exemption provided
by Section 4(a)(2) under the Securities Act or Regulation D promulgated
thereunder, or both, relating to transactions by an issuer not involving any
public offering and under similar exemptions under certain state securities
laws, that this transaction has not been reviewed by, passed on or submitted to
any federal or state agency or self-regulatory organization where an exemption
is being relied upon, and that the Company’s reliance thereon is based in part
upon the representations made by the Purchaser in this Agreement and the
Registration Rights Agreement. The Purchaser acknowledges that it has been
informed by the Company of, or is otherwise familiar with, the nature of the
limitations imposed by the Securities Act and the rules and regulations
thereunder on the transfer of securities.

 

(c)               The Purchaser is purchasing the Purchased Shares for its own
account and not with a view to, or for sale in connection with, any distribution
thereof in violation of federal or state securities laws.

 

(d)               By reason of its business or financial experience, the
Purchaser has the capacity to protect its own interest in connection with the
transactions contemplated hereunder.

 

(e)               The Company has provided to the Purchaser documents and
information that the Purchaser has requested relating to an investment in the
Company. The Purchaser recognizes that investing in the Company involves
substantial risks, and has taken full cognizance of and understands all of the
risk factors related to the acquisition of the Purchased Shares. The Purchaser
has carefully considered and has, discussed with the Purchaser’s professional
legal, tax and financial advisers the suitability of an investment in the
Company, and the Purchaser has determined that the acquisition of the Purchased
Shares is a suitable investment for the Purchaser. The Purchaser has not relied
on the Company for any tax or legal advice in connection with the purchase of
the Purchased Shares. In evaluating the suitability of an investment in the
Company, the Purchaser has not relied upon any representations or other
information (other than the representations and warranties of the Company set
forth in Article II).

 

Section 3.5           No Prior Ownership. As of the date hereof and as of
immediately prior to the Closing, the Purchaser does not have record or
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of any shares of the Company’s Common Stock. Since August 24, 2018, neither
Purchaser nor any affiliate or associate (within the meaning of Nevada Revised
Statutes 78.412 and 78.413, respectively) of the Purchaser was the beneficial
owner, directly or indirectly, of 10 percent or more of the voting power of the
then outstanding shares of the Company.

 

12

 

 

Section 3.6           No Brokers or Finders. No Person has or will have, as a
result of the transactions contemplated by this Agreement, any right, interest
or claim against or upon the Company, any of its Subsidiaries or any Purchaser
for any commission, fee or other compensation as a finder or broker because of
any act by the Purchaser and for which the Company will be liable.

 

Section 3.7           Financing. The Purchaser has delivered to the Company
true, correct, and complete copies of an executed commitment letter among
Blackstone Tactical Opportunities Fund III L.P. and the Purchaser, dated as of
the date hereof (together with all annexes, schedules and exhibits (in each
case, if any) thereto, the “Equity Commitment Letter”, and the commitment
thereunder, the “Equity Financing Commitment”) to provide, subject to the terms
and conditions therein, cash in the aggregate amount set forth therein (the
“Equity Financing”). The Equity Financing is in amounts sufficient to enable the
Purchaser to perform their obligations under this Agreement and to consummate
the transactions contemplated hereby. The Equity Commitment Letter is in full
force and effect and constitutes the enforceable, legal, valid and binding
obligations of each of the parties thereto. The Equity Commitment Letter,
including the Equity Financing Commitment thereunder, have not been withdrawn,
terminated, amended, restated, replaced, supplemented or otherwise modified or
waived and no such withdrawal, termination, amendment, restatement, replacement,
supplement, modification or waiver is contemplated. There are no side letters or
other agreements, arrangements, contracts or understandings relating to the
Equity Commitment Letter that could affect the availability of the Equity
Financing, and the Purchaser does not know of any facts or circumstances that
may be expected to result in any of the conditions set forth in any Equity
Commitment Letter not being satisfied, or the Equity Financing not being
available to the Purchaser, at the Closing. No event has occurred that, with or
without notice, lapse of time or both, would, or would reasonably be expected
to, constitute a default or breach on the part of the Purchaser, or by any other
party thereto, under any term or condition of the Equity Commitment Letter, and
the Purchaser has no reason to believe that it will be unable to satisfy on a
timely basis any term or condition of closing to be satisfied by it contained in
the Equity Commitment Letter. Except as expressly set forth in the Equity
Commitment Letter, there are no conditions precedent related to the funding of
the full amount of the Equity Financing Commitment. As of the date of this
Agreement, the Purchaser is not aware of any fact, circumstance or occurrence
that makes any representation or warranty of the Purchaser included in this
Agreement or the Equity Commitment Letter inaccurate. Assuming (i) the
satisfaction of the conditions in Article V hereof and (ii) the Equity Financing
is funded in accordance with their respective conditions, upon funding of the
Equity Financing Commitment, the Purchaser will have at the Closing, immediately
available cash funds sufficient to fund all of the amounts required to be
provided by the Purchaser for the consummation of the transactions contemplated
hereby, including the payment of the Purchase Price and any other amounts
required to be paid in connection with the consummation of the transactions
contemplated hereby, including all related fees and expenses, and are sufficient
for the satisfaction of all of the Purchaser’s obligations under this Agreement,
as applicable.

 

Section 3.8         ERISA. The Purchaser does not hold, and no part of the funds
used by the Purchaser to acquire any Purchased Shares constitutes, “plan assets”
(within the meaning of Section 3(42) of ERISA).

 

13

 

 

Section 3.9          No Additional Representations. The Purchaser acknowledges
and agrees, on behalf of itself and its Affiliates, that, except for the
representations and warranties contained in Article II (as modified by the
Disclosure Letter) and in any certificate delivered by the Company in connection
with this Agreement, neither the Company nor any other Person, makes any express
or implied representation or warranty with respect to the Company, its
Subsidiaries or their respective businesses, operations, assets, liabilities,
employees, employee benefit plans, conditions or prospects, and the Purchaser,
on behalf of itself and its Affiliates, hereby disclaims reliance upon any such
other representations or warranties. In particular, without limiting the
foregoing disclaimer, the Purchaser acknowledges and agrees, on behalf of itself
and its Affiliates, that neither the Company nor any other Person, makes or has
made any representation or warranty with respect to, and the Purchaser, on
behalf of itself and its Affiliates, hereby disclaims reliance upon (a) any
financial projection, forecast, estimate, budget or prospect information
relating to the Company, its Subsidiaries or their respective business, or (b)
without limiting the representations and warranties made by the Company in
Article II, any information presented to the Purchaser or any of its Affiliates
or representatives in the course of their due diligence investigation of the
Company, the negotiation of this Agreement or in the course of the transactions
contemplated hereby. To the fullest extent permitted by applicable law, without
limiting the representations and warranties contained in Article II, other than
in the case of fraud, neither the Company nor any of its Subsidiaries shall have
any liability to any Purchaser or its Affiliates or representatives on any basis
(including in contract or tort, under federal or state securities laws or
otherwise) based upon any other representation or warranty, either express or
implied, included in any information or statements (or any omissions therefrom)
provided or made available by the Company or its Subsidiaries to the Purchaser
or its Affiliates or representatives in the course of their due diligence
investigation of the Company, the negotiation of this Agreement or in the course
of the transactions contemplated by this Agreement.

 

Article IV

COVENANTS OF THE PARTIES

 

Section 4.1           Board of Directors.

 

(a)               Upon the Closing, the Purchaser Representative shall have the
right to nominate for election or appointment, one director to the Board of
Directors (the “Series C Director”). Effective as of the Closing, the Board of
Directors shall increase the size of the Board of Directors in order to elect or
appoint Ram Jagannath as the initial Series C Director and take all actions
necessary or appropriate to appoint the Series C Director as a director of the
Board of Directors effective as of the Closing Date.

 

(b)               Thereafter, for so long as the Purchaser Parties (as defined
below) hold at least 66.67% of the Series C Preferred Stock issued at the
Closing, the Purchaser Representative (as defined below) on behalf of the
Purchaser Parties shall have the right to nominate one person for election to
the Board of Directors (a “Purchaser Nominee”) each year. If the Purchaser
Representative has the right to so nominate a Purchaser Nominee in a given year,
the Company shall, at the annual meeting of the stockholders of the Company
during such year, nominate the Purchaser Nominee for election to the Board of
Directors, recommend that the holders of the Company’s voting stock vote in
favor of such Purchaser Nominee and use reasonable best efforts to cause the
Purchaser Nominee to be elected to the Board of Directors; provided, however,
that the Purchaser Nominee shall comply with the corporate governance principles
and practices of the Company as in effect from time to time and applicable to
directors generally (the “Governance Principles”). Without the prior written
consent of the Purchaser Representative, so long as the Purchaser Representative
is entitled to designate any Purchaser Nominee for election to the Board of
Directors in accordance with this Section 4.1, the Board of Directors shall not
cause the removal of any Series C Director from his or her directorship (except
as required by law or the Company’s organizational documents), unless (x) the
Purchaser Parties cease to hold the minimum percentage of the Series C Preferred
Stock that entitles it to nominate the Purchaser Nominee as provided above or
(y) the Purchaser Parties request in writing the removal of the Series C
Director. If, following election to the Board of Directors, the Purchaser
Nominee resigns, is removed, or is otherwise unable to serve for any reason
(including as a result of death or disability) and the Purchaser Parties then
have the right to nominate a Purchaser Nominee, then, subject to compliance with
the Governance Principles, the Purchaser shall be entitled to designate a
replacement Purchaser Nominee, and the Board of Directors shall cause such
replacement Purchaser Nominee to fill such vacancy and to be appointed to the
Board of Directors. If Purchaser Nominee is not re-elected and the Purchaser
still has the right to nominate such Purchaser Nominee, then, subject to
compliance with the Governance Principles, the Purchaser Parties shall be
entitled to designate a replacement Purchaser Nominee, and the Board of
Directors shall use its reasonable best efforts to elect such replacement
Purchaser Nominee to the Board of Directors. In the event that the Purchaser
Parties cease to hold the minimum percentage of the Series C Preferred Stock
that entitles it to nominate the Purchaser Nominee as provided above, if
requested by the Board of Directors, the Purchaser Parties shall use reasonable
best efforts to have such Purchaser Nominee resign as a director.

 

14

 

 

(c)              The Series C Director or Purchaser Nominee, as applicable,
shall be entitled to (i) reimbursement of expenses and indemnification in the
same manner and to the same extent as the other members of the Board of
Directors, in accordance with the Company’s organizational documents and
applicable Nevada law and including on the basis of the Company’s director
indemnification agreement, and (ii) unless waived by the Series C Director, cash
and equity compensation in the same manner and to the same extent as other
non-executive members of the Board of Directors, which shall be payable to the
Series C Director or such Person as designated by the Series C Director. Any
director minimum ownership requirements shall be deemed satisfied in respect of
the Series C Director or Purchaser Nominee, as applicable, by the Purchased
Shares, or any Conversion Shares, as applicable, held by the Purchaser Parties
or one or more of their respective Affiliates. The Company acknowledges and
agrees that it is the indemnitor of first resort (i.e., its obligations to the
Series C Directors are primary and any obligation of the Purchaser Parties or
their Affiliates to advance expenses or to provide indemnification for the same
expenses or liabilities incurred by the Series C Director are secondary).

 

Section 4.2           Restrictions on Transfer.

 

(a)               For a period of one (1) year after the Closing, the Purchaser
shall not Transfer (including, for the avoidance of doubt, in connection with
obtaining any Permitted Loan) any of the Purchased Preferred Shares to any
Person without the consent of the Company; provided, however, that, without the
consent of the Company, a Purchaser may Transfer Purchased Preferred Shares (i)
to a Permitted Transferee of the Purchaser that agrees to be bound by the terms
of this Agreement pursuant to a written agreement in form and substance
reasonably satisfactory to the Company (and upon such Transfer the Permitted
Transferee shall become a “Purchaser” for purposes of this Agreement (including
this Section 4.2)); (ii) pursuant to a tender or exchange offer, merger,
consolidation, division, acquisition, reorganization or recapitalization
involving the Company; or (iii) following the date the Company commences a
voluntary case under Title 11 of the United States Bankruptcy Code or any other
similar insolvency laws.

 

15

 

 

(b)              At no time shall a Purchaser knowingly Transfer any Purchased
Preferred Shares or Conversion Shares to (i) any Company Competitor, or (ii) any
Person who is reasonably known to have engaged in activist campaigns in the
three years prior to the date of any such proposed Transfer by stating an
intention to or actually attempting to (pursuant to proxy solicitation, tender
or exchange offer or other means) obtain a seat on the board of directors of a
company or effecting a significant change within such company, in each case,
that was publicly opposed by the board of directors of such company; provided,
that the restrictions set forth in this Section 4.2(b) shall not apply to
Transfers into the public market pursuant to a bona fide, broadly distributed
public offering, in each case made pursuant to the Registration Rights Agreement
or through a bona fide sale to the public without registration effectuated
pursuant to Rule 144 under the Securities Act or in connection with a merger,
tender offer or exchange offer or other business combination, acquisition of
assets or similar transaction or any change of control transaction involving the
Company or any Subsidiary thereof.

 

(c)               “Permitted Loan” means any total return swap or bona fide loan
or other financing arrangement, in each case entered into with a nationally
recognized financial institution, including a pledge to such a financial
institution to secure a bona fide debt financing and any foreclosure by such
financial institution or transfer to such financial institution in lieu of
foreclosure and subsequent sale of the securities, as long as such financial
institution agrees with the relevant Purchaser Party and the Company that
following such foreclosure or in connection with such Transfer it shall not
knowingly directly or indirectly Transfer (other than pursuant to Transfers into
the public market pursuant to a bona fide, broadly distributed public offering,
in each case made pursuant to a registration statement or through a bona fide
sale to the public without registration effectuated pursuant to Rule 144 under
the Securities Act or in connection with a merger, tender offer or exchange
offer or other business combination, acquisition of assets or similar
transaction or any change of control transaction involving the Company or any
Subsidiary thereof) such foreclosed or Transferred, as the case may be, Common
Stock or Series C Preferred Stock to a Company Competitor without the Company’s
consent (such agreement by the relevant financial institution, the “Foreclosure
Limitations”). Any Permitted Loan entered into by a Purchaser Party or its
Affiliates shall be with one or more financial institutions reasonably
acceptable to the Company and, except as specified above, nothing contained in
this Agreement or the Registration Rights Agreement shall prohibit or otherwise
restrict the ability of any lender (or its securities’ affiliate) or collateral
agent to foreclose upon, or accept a Transfer in lieu of foreclosure, and sell,
dispose of or otherwise Transfer the Common Stock, the Series C Preferred Stock
and/or shares of Common Stock issued upon conversion of Series C Preferred Stock
(including shares of Common Stock received upon conversion or redemption of the
Series C Preferred Stock following foreclosure or Transfer in lieu of
foreclosure on a Permitted Loan) mortgaged, hypothecated and/or pledged to
secure the obligations of the borrower following an event of default under a
Permitted Loan. Subject to the preceding provisions of this clause (c), in the
event that any lender or other creditor under a Permitted Loan transaction
(including any agent or trustee on their behalf) or any Affiliate of the
foregoing exercises any rights or remedies in respect of the Series C Preferred
Stock or the shares of Common Stock issuable or issued upon conversion of the
Series C Preferred Stock or any other collateral for any Permitted Loan, no
lender, creditor, agent or trustee on their behalf or affiliate of any of the
foregoing (other than, for the avoidance of doubt, a Purchaser Party or its
Affiliates) shall be entitled to any rights or have any obligations or be
subject to any transfer restrictions or limitations hereunder.

 

16

 

 

(d)               In any event, Restricted Securities shall not be Transferred
except upon the conditions specified in Section 4.3, which conditions are
intended to ensure compliance with the provisions of the Securities Act. Any
attempted Transfer in violation of this Section 4.2 shall be void ab initio.

 

(e)               At the Closing, the Purchaser shall deliver to the Company a
duly executed, valid, accurate and properly completed Internal Revenue Service
(“IRS”) Form W-9 certifying that the Purchaser is a U.S. person and with the
effect that the Company can make dividend payments to the Purchaser (or its
nominee) without deduction or withholding for any U.S. federal withholding taxes
(the “Tax Form Requirements”). The Purchaser agrees that if the information
provided on any IRS Form W-9 previously delivered by the Purchaser changes, or
if a lapse in time or change in circumstances renders the information on such
IRS Form W-9 obsolete, expired or inaccurate in any material respect, the
Purchaser shall promptly inform the Company and deliver promptly an updated IRS
Form W-9.

 

Section 4.3           Restrictive Legends.

 

(a)               Each certificate representing the Purchased Shares or
Conversion Shares (unless otherwise permitted by the provisions of Section
4.2(b) or Section 4.3(d)) shall be stamped or otherwise imprinted with a legend
in substantially the following form (in addition to any legend required under
applicable state securities laws):

 

“THE OFFER AND SALE OF THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY AND SUCH
SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO
A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT; OR (B)
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”

 

(b)               In addition, for so long as the Purchased Preferred Shares or
Conversion Shares are subject to the restrictions set forth in Section 4.2, each
certificate representing the Purchased Preferred Shares or Conversion Shares
shall be stamped or otherwise imprinted with a legend in substantially the
following form:

 

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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER SET FORTH IN A SECURITIES PURCHASE AGREEMENT. THE COMPANY WILL MAIL TO
THE HOLDER OF THIS CERTIFICATE A COPY OF SUCH SECURITIES PURCHASE AGREEMENT, AS
IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE, PROMPTLY AFTER RECEIPT OF A
WRITTEN REQUEST THEREFOR.”

 

(c)               The Purchaser consents to the Company making a notation on its
records and giving instructions to any transfer agent of the Purchased Shares or
the Conversion Shares in order to implement the restrictions on transfer set
forth in this Section 4.3.

 

(d)               Prior to any proposed Transfer of any Restricted Securities,
unless there is in effect a registration statement under the Securities Act
covering the proposed Transfer, a Purchaser shall give written notice to the
Company of such Purchaser’s intention to effect such Transfer. Each such notice
shall describe the manner and circumstances of the proposed Transfer in
sufficient detail, and shall be accompanied by either (i) an opinion of legal
counsel reasonably satisfactory to the Company to the effect that the proposed
Transfer of the Restricted Securities may be effected without registration under
the Securities Act, or (ii) any other evidence reasonably satisfactory to
counsel to the Company, whereupon such Purchaser shall be entitled to Transfer
such Restricted Securities in accordance with the terms of the notice delivered
by such Purchaser to the Company. Notwithstanding the foregoing (i) in the event
a Purchaser shall give the Company a representation letter containing such
representations as the Company shall reasonably request, the Company will not
require such legal opinion or such other evidence (A) in a routine sales
transaction in compliance with Rule 144 under the Securities Act, (B) in any
transaction in which a Purchaser that is a corporation distributes Restricted
Securities solely to its majority owned subsidiaries or Affiliates for no
consideration or (C) in any transaction in which a Purchaser that is a
partnership or limited liability company distributes Restricted Securities
solely to its Affiliates (including affiliated fund partnerships), or partners
or members of the Purchaser or its Affiliates for no consideration and (ii) the
requirements of the preceding sentence shall not apply to (x) any pledge of
Preferred Stock, Conversion Shares or Common Stock pursuant to a Permitted Loan,
or (y) any foreclosure upon, or acceptance of a Transfer in lieu of foreclosure,
or any sale, disposition of or other Transfer of Common Stock, the Series C
Preferred Stock and/or shares of Common Stock issued upon conversion of Series C
Preferred Stock (including shares of Common Stock received upon conversion or
redemption of the Series C Preferred Stock following foreclosure or Transfer in
lieu of foreclosure on a Permitted Loan) by any lender (or its securities’
affiliate) or collateral agent under a Permitted Loan (which shall instead be
governed by the terms of any applicable Issuer Agreements). Each certificate
evidencing the Restricted Securities transferred shall bear the appropriate
restrictive legend set forth in Section 4.3 above, except that such certificate
shall not bear the first such restrictive legend if such legend is not required
in order to establish compliance with any provisions of the Securities Act. Each
certificate evidencing the Restricted Securities transferred shall bear the
appropriate restrictive legend set forth in Section 4.3 above, except that such
certificate shall not bear the first such restrictive legend if such legend is
not required in order to establish compliance with any provisions of the
Securities Act. Upon the request of a Purchaser of a certificate bearing the
first such restrictive legend and, if necessary, the appropriate evidence as
required by clause (i) or (ii) above, the Company shall promptly remove the
first such restrictive legend from such certificate and from the certificate to
be issued to the applicable transferee if such legend is not required in order
to establish compliance with any provisions of the Securities Act and a
Purchaser promptly Transfers the Purchased Shares or Conversion Shares. If a
Purchaser holds a certificate bearing the second restrictive legend, the Company
shall promptly remove such restrictive legend from such certificate when the
provisions of Section 4.2 are no longer applicable to the applicable Purchased
Shares or Conversion Shares.

 

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Section 4.4         Standstill. Except as otherwise provided in this Agreement
or the Certificate of Designation, so long as the Purchaser Representative has
the right to designate or nominate a director to the Board of Directors pursuant
to Section 4.1, without the prior written consent of the Company, it will not at
any time, nor will it cause or permit any of its Affiliates to: (a) effect or
seek, offer or propose (whether publicly or otherwise) to effect, or announce
any intention to effect or cause or participate in or in any way assist,
facilitate or encourage any other person to effect or seek, offer or propose
(whether publicly or otherwise) to effect or participate in, (i) any acquisition
of any equity securities (or beneficial ownership thereof), rights or options to
acquire any equity securities (or beneficial ownership thereof), or any
securities convertible into or exchangeable for any such equity securities (or
beneficial ownership thereof), of the Company, (ii) any tender or exchange
offer, merger or other business combination involving the Company or its
Subsidiaries or assets of the Company or its Subsidiaries constituting a
significant portion of the consolidated assets of the Company and its
Subsidiaries, or (iii) any “solicitation” of “proxies” (as such terms are used
in the proxy rules of the SEC) or consents to vote any voting securities of the
Company or any of its Affiliates; (b) otherwise act to seek representation on or
to control or influence the management or policies of the Company or to obtain
representation on the Board of Directors of the Company (beyond their right to
do so based on their representation on the Board pursuant to Section 4.1); (c)
submit any shareholder proposal to the Company, (d) publicly propose any change
of control or other material transaction involving the Company or (e) support or
encourage any third party in doing any of the foregoing; it being understood
that nothing in this Section 4.4 shall (w) restrict or prohibit the Series C
Director or Purchaser Nominee, as applicable, from taking any action, or
refraining from taking any action, which he or she determines, in his or her
reasonable discretion, is necessary or appropriate in light of his or her
fiduciary duties as a member of the Board of Directors, (x) restrict or prohibit
the making or submission to the Company and/or the Board of Directors any
proposal by the Purchaser Parties that would not reasonably be expected to
result in the Company being obligated to publicly disclose such proposal, (y)
restrict or prohibit the Purchaser’s acquisition, disposition, sale or Transfer
of the Purchased Shares (including the accretion of dividends thereon and any
dividends payable in any other security) or Conversion Shares issuable upon
conversion of the Purchased Shares, in each case, in accordance with the terms
of this Agreement and the Certificate of Designation or (z) limit or restrict
any Transfer pursuant to a Permitted Loan or any foreclosure thereunder or
Transfer in lieu of a foreclosure thereunder.

 

Section 4.5           Confidentiality.

 

(a)               The Purchaser shall keep all Confidential Information
confidential and shall not, without the Company’s prior written consent,
disclose any Confidential Information in any manner whatsoever, in whole or in
part and the Purchaser shall not use any Confidential Information, other than in
connection with the performance of its obligations hereunder or for purposes of
monitoring, administering or managing the Purchaser Parties’ investment in the
Company. The Purchaser may disclose the Confidential Information (i) to such of
its Representatives who need to know the Confidential Information for such
purpose, who are informed by the Purchaser of the confidential nature of the
Confidential Information and directed to keep such Confidential Information
confidential, (ii) to any prospective purchaser of Purchased Shares (and
Conversion Shares) from such Purchaser Party or prospective financing sources in
connection with the syndication and marketing of any Permitted Loan, as long as
such prospective purchaser or lender agrees to be bound by substantially similar
confidentiality or non-disclosure terms as are contained in this Agreement (with
the Company as an express third party beneficiary of such agreement) or (iii) as
may be reasonably necessary in connection with such Purchaser Party’s
enforcement of its rights in connection with this Agreement or its investment in
the Company. The Purchaser shall be responsible for any non-compliance with this
Section 4.5 by its Representatives or any such prospective purchaser.

 

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(b)               In the event that the Purchaser or any of its Representatives
is required or requested by applicable law (including oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or other process) to disclose any of the Confidential
Information, the Purchaser will provide the Company with prompt notice (unless
such notification is prohibited by applicable law and other than in connection
with a routine audit or examination by, or a blanket document request from, a
regulatory or governmental entity that does not reference the Company or this
Agreement) so that the Company may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Section 4.5. In the
event that such a protective order or other remedy is not obtained, that no such
notice is required to be provided to the Company or that the Company waives
compliance with the provisions of this Section 4.5, the Purchaser may disclose
such Confidential Information without liability hereunder. The confidentiality
letter agreement, dated June 6, 2020, by and between Blackstone Tactical
Opportunities Advisors L.L.C. and the Company (the “Confidentiality Agreement”)
shall terminate simultaneously with the Closing.

 

Section 4.6           Financial Statements and Other Information.

 

(a)               For so long as the Purchaser Parties collectively hold record
and beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of more than five percent (5%) of the outstanding shares of the Company’s
Common Stock (which shall be determined assuming the conversion of all of the
shares of Series C Preferred Stock), the Company shall deliver to the Purchaser
Parties:

 

(i)                within 90 days after the end of each fiscal year of the
Company, (A) an audited, consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal year, (B) an audited, consolidated
income statement of the Company and its Subsidiaries for such fiscal year and
(C) an audited, consolidated statement of cash flows of the Company and its
Subsidiaries for such fiscal year;

 

(ii)              within 45 days after the end of each of the first three
quarters of each fiscal year of the Company, (A) an unaudited, consolidated
balance sheet of the Company and its Subsidiaries as of the end of such fiscal
quarter, (B) an unaudited, consolidated income statement of the Company and its
Subsidiaries for such fiscal quarter and (C) an unaudited, consolidated
statement of cash flows of the Company and its Subsidiaries for such fiscal
quarter; and

 

20

 

 

(iii)              reasonable access, to the extent reasonably requested by the
Purchaser Parties, to discuss the Company and its Subsidiaries and their
affairs, finances and matters related to capital structure and financing with
its and their officers, all upon reasonable notice and at reasonable times at
the Company’s principal place of business; provided that any access pursuant to
this Section 4.6 shall be conducted in a manner as not to interfere unreasonably
with the conduct of the business of the Company and its Subsidiaries.

 

(b)               Notwithstanding the foregoing, financial statements and other
reports required to be delivered pursuant to this Section 4.6 filed by the
Company with the SEC and available on EDGAR (or such other free,
publicly-accessible internet database that may be established and maintained by
the SEC as a substitute for or successor to EDGAR) shall be deemed to have been
delivered to the Purchaser Parties on the date on which the Company posts such
documents to EDGAR (or such other free, publicly-accessible internet database
that may be established and maintained by the SEC as a substitute for or
successor to EDGAR).

 

(c)               Notwithstanding anything to the contrary contained in this
Section 4.6, the Company shall not be required to furnish information or reports
or provide access to their books and records pursuant to this Section 4.6 if the
Company determines in good faith that declining to furnish such information or
reports or provide such access is reasonably necessary to preserve the
attorney-client privilege or to protect highly confidential or proprietary
information.

 

(d)               During the period from the date hereof through the Closing,
subject to Purchaser’s obligations under the Confidentiality Agreement, the
Company shall, and shall cause its Subsidiaries to, afford to the officers,
employees and authorized Representatives of the Purchaser (including independent
public accountants and attorneys) reasonable access during normal business
hours, upon reasonable advance notice, to the offices, properties, assets and
business, regulatory and financial records of the Company and its Subsidiaries
and shall furnish to Buyer or such authorized representatives such additional
information concerning the Company and its Subsidiaries (including any
businesses to be acquired by the Company or its Subsidiaries) as shall be
reasonably requested; provided, however, that the Company shall not be required
to violate any obligation of confidentiality, order or applicable law to which
it or its Subsidiaries is subject or to waive any privilege which any of them
may possess in discharging its obligations pursuant to this Section 4.6(d) (but
in such event the Company shall use commercially reasonable efforts to cooperate
with the Purchaser to seek an appropriate remedy to permit the access
contemplated hereby). Purchaser hereby acknowledges and agrees that any
investigation pursuant to this Section 4.6(d) shall be conducted in such a
manner as not to interfere unreasonably with the operations of the Company.

 

(e)               For so long as the Purchaser Parties have the right, pursuant
to Section 4.1(b), to nominate the Purchaser Nominee for election to the Board
of Directors, the Company shall deliver to the Purchaser Parties through the
Series C Director copies of all material, substantive materials provided to the
Board at substantially the same time as provided to the directors of the
Company.

 

21

 

 

Section 4.7           Antitakeover Provisions; Other Actions.

 

(a)               Antitakeover Provisions. The Company and the Board of
Directors shall (i) take all actions necessary so that no Antitakeover Provision
becomes applicable to this Agreement or the Purchaser’s acquisition, or the
Company’s issuance, of the Purchased Shares and the Conversion Shares in
accordance with this Agreement and the Certificate of Designation, and (ii) if
any such Antitakeover Provision becomes applicable thereto to any extent or in
any regard, to take all actions necessary so that such transactions may be
consummated as promptly as practicable on the terms required by, or provided
for, in this Agreement, the Registration Rights Agreement and the Certificate of
Designation, and otherwise to take all such other actions as are reasonably
necessary to eliminate or minimize to the greatest extent possible the effects
of any such Antitakeover Provision thereupon or upon the transactions
contemplated thereby.

 

(b)              Notwithstanding anything in this Agreement to the contrary,
nothing in this Agreement shall require or obligate the Sponsor and its
respective Affiliates and any investment funds or investment vehicles affiliated
with, or managed or advised by, the Sponsor or any portfolio company (as such
term is commonly understood in the private equity industry) or investment of the
Sponsor or of any such investment fund or investment vehicle to propose,
negotiation, commit to, and/or effect, by consent decree, holder separate order,
or otherwise, the sale, divestiture, transfer, license, disposition, or hold
separate (through the establishment of a trust or otherwise) of such assets,
properties, or businesses of the Sponsor or any of its respective Affiliates,
Subsidiaries, investment funds, or portfolio companies, in order to avoid the
entry of any decree, judgment, injunction (permanent or preliminary), or any
other order that would make the transactions contemplated by this Agreement
unlawful or would otherwise materially delay or prevent the consummation of the
Contemplated Transactions.

 

Section 4.8                Voting Agreement. For so long as the Purchaser has
the right to designate or nominate a director to the Board of Directors pursuant
to Section 4.1, at each meeting of the stockholders of the Company and at every
postponement or adjournment thereof, each Purchaser shall take such action as
may be required so that all of the Purchased Shares, Conversion Shares or other
shares of Common Stock owned, directly or indirectly, of record or beneficially
by the Purchaser and entitled to vote at such meeting of stockholders are voted
(a) in favor of each director nominated and recommended by the Board of
Directors for election at any such meeting, (b) against any stockholder
nomination for director that is not approved and recommended by the Board of
Directors for election at any such meeting, (c) in favor of the Company’s
“say-on-pay” proposal and any proposal by the Company relating to equity
compensation that has been approved by the Board of Directors or the
Compensation Committee of the Board of Directors (or any successor committee,
however denominated), (d) in favor of the Company’s proposal for ratification of
the appointment of the Company’s independent registered public accounting firm
and (e) in favor of the Company’s proposal for amendment of its organizational
documents in a manner that does not have an adverse effect on the holders of
Series C Preferred Stock to increase number of authorized shares of capital
stock of the Company, but no Purchaser shall be under any obligation to vote in
the same manner as recommended by the Board of Directors or in any other manner,
other than in its sole discretion, with respect to any other matter. In
furtherance of the foregoing, for so long as the Purchaser has the right to
designate or nominate a director to the Board of Directors pursuant to Section
4.1, the Purchaser shall take such action as may be required so that the
Purchaser is present, in person or by proxy, at each meeting of the stockholders
of the Company and at every postponement or adjournment thereof so that all of
the Purchased Shares, Conversion Shares or other shares of Common Stock owned,
directly or indirectly, of record or beneficially by the Purchaser may be
counted for the purposes of determining the presence of a quorum and voted in
accordance with the terms and conditions of this Section 4.8.

 

22

 

 

Section 4.9            Tax Matters.

 

(a)               USRPHC Status. At the Purchaser’s request from time to time
while the Purchaser owns an equity interest in the Company, the Company shall
use commercially reasonable efforts to determine as promptly as practicable
whether it is a United States real property holding corporation within the
meaning of Section 897(c)(2) of the Code (a “USRPHC”) and shall promptly notify
the Purchaser in writing of its determination of its status as a USRPHC (and if
in connection with a sale, shall promptly provide to the Purchaser a statement
in accordance with Treasury Regulations Section 1.897-2(h)(1) where it
determines the interest being sold is not a United States real property interest
within the meaning of Section 897 of the Code).

 

(b)               Purchase Price Allocation and Tax Treatment. The Company and
Purchaser hereby agree that the Purchase Price payable hereunder shall be
allocated among the Purchased Shares as follows: $250,000,000 shall be allocated
to the Series C Preferred Stock and $25,000,000 shall be allocated to the Common
Stock. The Company acknowledges and agrees that none of the Purchased Shares are
“preferred stock” for purposes of Section 305 of the Code, and shall not take an
inconsistent position with respect to the Purchased Shares for U.S. federal
income tax purposes.

 

Section 4.10        Nasdaq Listing. Promptly following the execution of this
Agreement, the Company shall apply to cause the Purchased Common Stock and
Conversion Shares to be approved for listing on the Nasdaq Stock Market, subject
to official notice of issuance. The Company shall use its reasonable best
efforts to maintain the listing of all of the Conversion Shares upon each
national securities exchange and automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance)
and shall maintain, so long as any other shares of Common Stock shall be so
listed, such listing of the Conversion Shares. In accordance with the
Certificate of Designation, the Company shall cause a number of shares of Common
Stock equal to the total number of Conversion Shares to be authorized, reserved,
and kept available at all times, free and clear of preemptive rights and all
liens, to allow for full conversion of the Series C Preferred Stock in
accordance with the terms thereof. From time to time following the Closing Date,
the Company shall cause the number of shares of Common Stock issuable upon
conversion or redemption of the then outstanding shares of Series C Preferred
Stock to be approved for listing on the Nasdaq Stock Market. The Company shall
pay all fees and expenses in connection with satisfying the obligations under
this Section 4.10.

 

Section 4.11        State Securities Laws. The Company shall use its reasonable
best efforts to (a) obtain all necessary permits and qualifications, if any, or
secure an exemption therefrom, required by any state or country prior to the
offer and sale of Common Stock and/or Series C Preferred Stock and (b) cause
such authorization, approval, permit or qualification to be effective as of the
Closing and as of any conversion of Series C Preferred Stock.

 

23

 

 

Section 4.12        Section 16b-3 Matters. If the Company becomes a party to a
consolidation, merger or other similar transaction or otherwise or if there is
any event or circumstance that may result in the Purchaser and each Permitted
Transferee of the Purchaser to whom shares of Preferred Stock or Common Stock
issued upon conversion of shares of Preferred Stock are transferred pursuant to
Section 4.2 or Common Stock issued under this Agreement (the “Purchaser
Parties”), their respective Affiliates and/or the Series C Director being deemed
to have made a disposition or acquisition of the Preferred Stock or Common Stock
issued or issuable upon conversion of shares of Common Stock or the Common Stock
issued under this Agreement for purposes of Section 16 of the Exchange Act, and
if the Series C Director is serving on the Board at such time or has served on
the Board during the preceding six (6) months (i) the Board or a committee
thereof composed solely of two or more “non-employee directors” as defined in
Rule 16b-3 of the Exchange Act will pre-approve such acquisition or disposition
of the Preferred Stock or Common Stock issued or issuable upon conversion of
shares of Common Stock or the Common Stock issued under this Agreement for the
express purpose of exempting the Purchaser Parties’, their respective
Affiliates’ and the Series C Director’s interests (for the Purchaser Parties
and/or their respective Affiliates, to the extent such persons may be deemed to
be “directors by deputization”) in such transaction from Section 16(b) of the
Exchange Act pursuant to Rule 16b-3 thereunder and (ii) if the transaction
involves (A) a merger or consolidation to which the Company is a party and the
Common Stock is, in whole or in part, converted into or exchanged for equity
securities of a different issuer, (B) a potential acquisition or deemed
acquisition, or disposition or deemed disposition, by the Purchaser Parties,
their respective Affiliates, and/or the Series C Director of equity securities
of such other issuer or derivatives thereof and (C) an Affiliate or other
designee of the Purchaser Parties or their respective Affiliates will serve on
the board of directors (or its equivalent) of such other issuer pursuant to the
terms of an agreement to which the Company is a party (or if the Purchaser
Parties notify the Company of such service a reasonable time in advance of the
closing of such transactions), then if the Company requires that the other
issuer pre-approve any acquisition of equity securities or derivatives thereof
for the express purpose of exempting the interests of any director or officer of
the Company or any of its subsidiaries in such transactions from Section 16(b)
of the Exchange Act pursuant to Rule 16b-3 thereunder, the Company shall require
that such other issuer pre-approve any such acquisitions of equity securities or
derivatives thereof for the express purpose of exempting the interests of the
Purchaser Parties’, their respective Affiliates’ and the Series C Director (for
the Purchaser Parties and/or their respective Affiliates, to the extent such
persons may be deemed to be “directors by deputization” of such other issuer) in
such transactions from Section 16(b) of the Exchange Act pursuant to Rule 16b-3
thereunder.

 

Section 4.13        Negative Covenants. Except as set forth on Section 4.13 of
the Disclosure Letter or as contemplated by the Chart Purchase Agreement, from
the date of this Agreement through the Closing, the Company and its Subsidiaries
shall use their reasonable best efforts to operate their businesses in the
ordinary course, and, without the prior written consent of the Purchaser Parties
(which consent shall not be unreasonably withheld, conditioned or delayed), the
Company shall not and shall cause its Subsidiaries not to:

 

(a)               take any action that would require the consent of the Holders
(as defined in the Certificate of Designation) pursuant to Section 9(a)(ii) of
the Certificate of Designation;

 

(b)              redeem, purchase, repurchase or otherwise acquire any of its
outstanding shares of capital stock or other equity or voting interests, or any
rights, warrants or options to acquire any shares of its capital stock or other
equity or voting interests, except in the ordinary course of business pursuant
to the terms of the Stock Plans or Company benefit plans;

 

24

 

 

(c)               establish a record date for, declare, set aside for payment or
pay any dividend on, or make any other distribution in respect of, any shares of
its capital stock or other equity or voting interests;

 

(d)               split, combine, subdivide, recapitalize, reclassify or like
change to any shares of its capital stock or other equity or voting interests;

 

(e)               amend, supplement or otherwise change, or waive any provision
of, the Company’s Articles of Incorporation, Bylaws (except as and to the extent
contemplated by Section 2.23(b) or Section 4.7(a)) or other organizational
documents or make any material amendments or changes to the organizational
documents of any of the Company’s Subsidiaries or take or authorize any action
to wind up its affairs or dissolve;

 

(f)                make any material change in the Company’s or its
Subsidiaries’ financial accounting principles, except as required by changes in
GAAP (or any interpretation thereof) or in applicable Law; or

 

(g)               agree, authorize or commit to do any of the foregoing.

 

Section 4.14        Sponsor.

 

(a)               Notwithstanding anything to the contrary set forth in this
Agreement, none of the terms or provisions of this Agreement (including, for the
avoidance of doubt, Section 4.2 and Section 4.4) shall in any way limit the
activities of The Blackstone Group Inc. (the “Sponsor”) or any of its Affiliates
(collectively, the “Sponsor Group”), other than the Purchaser Parties, in their
businesses distinct from the corporate private equity business of Sponsor (the
“Excluded Sponsor Parties”), so long as (i) no such Excluded Sponsor Party or
any of its Representatives is acting on behalf of or at the direction of any
Purchaser Party with respect to any matter that otherwise would violate any term
or provision of this Agreement and (ii) no Confidential Information is made
directly available to any Excluded Sponsor Party or any of its Representatives
who are not involved in the corporate private equity business of Sponsor by or
on behalf of any Purchaser Party or any of their Representatives, except with
respect to any such Representative who is (x) compliance personnel for
compliance purposes and (y) non-compliance personnel of Sponsor who are
directors or officers of, or function in a similar oversight role at, such
Affiliate as long as Confidential Information is not otherwise disclosed to such
Affiliate.

 

(b)               The Purchaser Parties and the Company hereby agree,
notwithstanding anything to the contrary in any other agreement or at law or in
equity, that, to the maximum extent permitted by law, when the Purchaser Parties
take any action under this Agreement to give or withhold their consent, the
Purchaser Parties shall have no duty (fiduciary or other) to consider the
interests of the Company or the other stockholders of the Company and may act
exclusively in their own interest; provided, however, that the foregoing shall
in no way affect the obligations of the parties hereto to comply with the
provisions of this Agreement. For the avoidance of doubt, the foregoing sentence
shall not limit or otherwise affect the fiduciary duties of the Series C
Director.

 

25

 

 

(c)               The Purchaser Parties and the Company hereby agree and
acknowledge that, subject to applicable law, the Series C Director may share
Confidential Information with the Purchaser Parties.

 

Section 4.15        Use of Proceeds The Company shall use the proceeds from the
issuance and sale of the Purchased Shares for working capital, inventory
development, global infrastructure buildout and facilities expansion, sales and
marketing and, potentially, acquisitions with strategic impact, including in
connection with the acquisition contemplated by the Chart Purchase Agreement.

 

Section 4.16        Corporate Actions.

 

(a)               If any occurrence since the date of this Agreement until the
Closing would have resulted in an adjustment to the Conversion Price pursuant to
the Certificate of Designation if the Series C Preferred Stock had been issued
and outstanding since the date of this Agreement, the Company shall adjust the
Conversion Price, effective as of the Closing, in the same manner as would have
been required by the Certificate of Designation if the Series C Preferred Stock
had been issued and outstanding since the date of this Agreement.

 

(b)               The Company shall not adopt any stockholder rights agreement,
“poison pill” or similar anti-takeover agreement or plan that prohibits the
Purchaser Parties from taking any of the actions permitted by this Agreement
under Section 4.2 or the Certificate of Designation.

 

(c)               The Company shall, upon the Purchaser’s reasonable request,
reasonably consult with the Purchaser in connection with the matters set forth
on Section 4.16(c) of the Disclosure Letter.

 

(d)               Prior to the Closing. the Company shall not, and shall not
permit any of its Subsidiaries to, without the prior written consent of the
Purchaser (which consent shall not be unreasonably withheld, conditioned or
delayed), terminate or make any amendment, supplement, waiver or other
modification to the purchase agreement entered into by the Company in connection
with the acquisition of CryoPDP (such agreement, the “CryoPDP Purchase
Agreement” and the transactions contemplated thereby, the “CryoPDP Acquisition”)
in a manner that would be materially adverse to the Purchaser; provided that the
parties hereto agree that (x) any termination of the CryoPDP Purchase Agreement
by mutual consent of the parties thereto shall be deemed materially adverse to
the Purchaser and (y) any termination of the CryoPDP Purchase Agreement by the
Company for failure of the CryoPDP Acquisition to close by the outside date of
the CryoPDP Purchase Agreement or for material breach shall not be deemed to be
materially adverse to the Purchaser.

 

26

 

 

Section 4.17        Chart Acquisition. At and prior to Closing, the Company
shall not, and shall not permit any of its Subsidiaries to, without the prior
written consent of the Purchaser (which consent shall not be unreasonably
withheld, conditioned or delayed), make any amendment, supplement, waiver or
other modification to the Chart Purchase Agreement in a manner that would be
materially adverse to the Purchaser. Without limiting the foregoing, the parties
agree that it shall be materially adverse to Purchaser to make any amendment,
supplement, waiver or other modification to the Chart Purchase Agreement to (a)
increase the Purchase Price (as defined in the Chart Purchase Agreement), (b)
modify or waive the conditions to the Closing (as defined in the Chart Purchase
Agreement) set forth in Article IX of the Chart Purchase Agreement or (c) change
in a manner adverse to the Company the scope or nature of the Assets or
Liabilities to be transferred, assumed or retained in connection with the
Acquisition. Upon the Purchaser’s request to the Company in writing, the Company
shall reasonably inform the Purchaser regarding the transactions contemplated by
the Chart Acquisition Agreement, including the status thereof, the expected
timing of the Closing, the anticipated date of the Closing and any developments
that would reasonably be expected, individually or in the aggregate, to
materially delay the Closing or make the Closing unlikely to occur. The Company
shall provide the Purchaser with no less than ten (10) Business Days’ written
notice of the anticipated Closing Date. The Company will deliver or otherwise
make available to the Purchaser (A) copies of the executed Chart Purchase
Agreement (including any amendments, modifications, waivers or other changes
thereto), (B) financial statements for the business being acquired and (C) any
other information or diligence documents that the Purchaser reasonably requests.
The Company shall make its and its Subsidiaries’ relevant personnel and
Representatives involved in the Acquisition available to the Purchaser and their
Representatives upon reasonable request and during normal business hours to
discuss the Acquisition.

 

Section 4.18        Corporate Opportunities. In recognition and anticipation
that (1) certain directors, principals, officers, employees and/or other
representatives of the Purchaser Parties and their Affiliates may serve as
directors, officers or agents of the Company, (2) the Purchaser Parties and
their Affiliates may now engage and may continue to engage in the same or
similar activities or related lines of business as those in which the Company,
directly or indirectly, may engage and/or other business activities that overlap
with or compete with those in which the Company, directly or indirectly, may
engage or proposes to engage, and (3) members of the Board who are not employees
of the Company or its subsidiaries (the “Non-Employee Directors”) and their
respective Affiliates may now engage and may continue to engage in the same or
similar activities or related lines of business as those in which the Company,
directly or indirectly, may engage and/or other business activities that overlap
with or compete with those in which the Company, directly or indirectly, may
engage or proposes to engage, the provisions of this Section 4.18 are set forth
to regulate and define the conduct of certain affairs of the Company with
respect to certain classes or categories of business opportunities as they may
involve the Purchaser Parties, the Non-Employee Directors or their respective
Affiliates, as applicable, and the powers, rights, duties and liabilities of the
Company and its directors, officers and stockholders in connection therewith.
None of (1) the Purchaser Parties or any of their Affiliates, or (2) any
Non-Employee Director (including any Non-Employee Director who serves as an
officer of the Company in both his or her director and officer capacities) or
his or her Affiliates (the Persons identified in (1) and (2) above being
referred to, collectively, as “Identified Persons” and, individually, as an
“Identified Person”) shall, to the fullest extent permitted by law, have any
duty to refrain from, directly or indirectly, (A) engaging in the same or
similar business activities or lines of business in which the Company or any of
its Affiliates now engages or proposes to engage or (B) otherwise competing with
the Company or any of its Affiliates, and, to the fullest extent permitted by
law, no Identified Person shall be liable to the Company or its stockholders or
to any Affiliate of the Company for breach of any fiduciary duty solely by
reason of the fact that such Identified Person engages in any such activities.
To the fullest extent permitted by law, the Company hereby renounces any
interest or expectancy in, or right to be offered an opportunity to participate
in, any business opportunity that may be a corporate opportunity for an
Identified Person and the Company or any of its Affiliates. Subject to the
following sentence, in the event that any Identified Person acquires knowledge
of a potential transaction or other business opportunity that may be a corporate
opportunity for itself, herself or himself and the Company or any of its
Affiliates, such Identified Person shall, to the fullest extent permitted by
law, have no duty to communicate or offer such transaction or other business
opportunity to the Company or any of its Affiliates and, to the fullest extent
permitted by law, shall not be liable to the Company or its stockholders or to
any Affiliate of the Company for breach of any fiduciary duty as a stockholder,
director or officer of the Company solely by reason of the fact that such
Identified Person pursues or acquires such corporate opportunity for itself,
herself or himself, or offers or directs such corporate opportunity to another
Person or does not communicate information regarding such corporate opportunity
to the Company. Notwithstanding the foregoing, the Company does not renounce its
interest in any corporate opportunity offered to any Non-Employee Director
(including any Non-Employee Director who serves as an officer of this Company)
if such opportunity is offered to such person solely in his or her capacity as a
director or officer of the Company, and the prior sentence shall not apply to
any such corporate opportunity. In addition to and notwithstanding the foregoing
provisions of this Agreement or anything to the contrary in the Certificate of
Designation, to the fullest extent permitted by law, a potential corporate
opportunity shall not be deemed to be a corporate opportunity for the Company if
it is a business opportunity that (1) the Company is neither financially or
legally able, nor contractually permitted to undertake, (2) from its nature, is
not in the line of the Company’s business or is of no practical advantage to the
Company, or (3) is one in which the Company has no interest or reasonable
expectancy.

 

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Section 4.19        Financing Cooperation. If requested by the Purchaser
Parties, the Company will provide the following cooperation in connection with
the Purchaser Parties obtaining any Permitted Loan following the Closing: (i)
using good faith and commercially reasonable efforts to negotiate entering into
an issuer agreement (an “Issuer Agreement”) with each lender in customary form
in connection with such transactions (which agreement may include, without
limitation, agreements and obligations of the Company relating to procedures and
specified time periods for effecting Transfers and/or conversions upon
foreclosure, agreements to not intentionally hinder or delay exercises of
remedies on foreclosure, acknowledgments regarding corporate policy, if
applicable, certain acknowledgments regarding securities law status of the
pledge arrangements and a specified list of Company Competitors) and subject to
the consent of the Company (which will not be unreasonably withheld or delayed),
with such changes thereto as are requested by such lender and customary for
similar financings, (ii) using commercially reasonable efforts to (A) remove any
restrictive legends on certificates representing pledged Series C Preferred
Stock, Conversion Shares or Common Stock and depositing such pledged Series C
Preferred Stock, Conversion Shares or Common Stock in book entry form on the
books of The Depository Trust Company, when eligible to do so (for the avoidance
of doubt, shares of Common Stock will not be considered so eligible prior to the
date the lender has a valid one year “holding period” (as defined in Rule 144)
in such shares of Common Stock) or (B) without limiting the generality of clause
(A), if such Series C Preferred Stock or Common Stock is eligible for resale
under Rule 144A, depositing such pledged Series C Preferred Stock or Common
Stock in book entry form on the books of The Depository Trust Company or other
depository with customary Rule 144A restrictive legends in lieu of the legends
specified in Section 4.3 above, (iii) if so requested by such lender or
counterparty, as applicable, (x) re-issuing the pledged Series C Preferred
Stock, Conversion Shares or Common Stock in certificated form in the name of a
Purchaser Party or its Affiliates and/or (y) re-registering the pledged Series C
Preferred Stock, Conversion Shares or Common Stock in certificated form or in
book-entry form, as so requested, in the name of the relevant lender,
counterparty, custodian or similar party to a Permitted Loan, with respect to
Permitted Loans solely as securities intermediary and only to the extent a
Purchaser Party or its Affiliates continues to beneficially own such pledged
Series C Preferred Stock, Conversion Shares or Common Stock, and (iv) such other
cooperation and assistance as the Purchaser Parties may reasonably request
(which cooperation and assistance, for the avoidance of doubt, shall not include
any requirements that the Company deliver information, compliance certificates
or any other materials typically provided by borrowers to lenders) that will not
unreasonably disrupt the operation of the Company’s business, in the cases of
clauses (ii) and (iii), subject to receipt of customary legal opinions and
certificates and the satisfaction of any relevant requirements of the Company’s
transfer agent. Notwithstanding anything to the contrary in the preceding
sentence, the Company’s obligation to deliver an Issuer Agreement is conditioned
on (i) the relevant Purchaser Party certifying to the Company in writing that
(A) the loan agreement with respect to which the Issuer Agreement is being
delivered constitutes a Permitted Loan being entered into in accordance with
this Agreement, such Purchaser Party has pledged Common Stock or the Series C
Preferred Stock and/or the underlying shares of Common Stock as collateral to
the lenders under such Permitted Loan and that the execution of such Permitted
Loan and the terms thereof do not violate the terms of this Agreement, (B) to
the extent applicable, whether the registration rights under the Registration
Rights Agreement are being assigned to the lenders under that Permitted Loan and
(C) such Purchaser Party acknowledges and agrees that the Company will be
relying on such certificate when entering into the Issuer Agreement and any
inaccuracy in such certificate will be deemed a breach of this Agreement and
(ii) the Issuer Agreement containing customary representations, warranties and
covenants for the benefit of the Company from the relevant Purchaser Party and
the lender reasonably satisfactory to the Company (including, for the avoidance
of doubt, an undertaking of the lender to sell any pledged Series C Preferred
Stock and/or common stock in compliance with the Foreclosure Limitations). The
Purchaser Parties acknowledge and agree that the statements and agreements of
the Company in an Issuer Agreement are solely for the benefit of the applicable
lenders party thereto and that in any dispute between the Company and the
Purchaser Parties under this Agreement the Purchaser Parties shall not be
entitled to use the statements and agreements of the Company in an Issuer
Agreement against the Company.

 

28

 

 

Article V

CONDITIONS TO THE PARTIES’ OBLIGATIONS

 

Section 5.1            Conditions of the Purchaser. The obligations of the
Purchaser to consummate the transactions contemplated hereby to be consummated
at the Closing are subject to the satisfaction or written waiver (to the extent
any such waiver is permitted by applicable Law) by the Purchaser, on or prior to
the Closing Date, of each of the following conditions precedent:

 

(a)               Representations and Warranties. (i) Each of the
representations and warranties of the Company contained in Article II of this
Agreement (other than Sections 2.1 (Organization and Power), 2.2(a)
(Authorization), 2.4(a) and (b) (Authorized and Outstanding Stock) and 2.22(b)
(Absence of Certain Changes) of this Agreement) shall be true and correct on and
as of the date hereof and on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of the
Closing Date, except for representations and warranties that speak as of a
specific date or time other than the Closing Date (which need only be true and
correct as of such date or time), except where the failure of such
representations and warranties to be so true and correct, without giving effect
to any qualification or limitation as to “materiality,” “Material Adverse
Effect” or similar qualifier set forth therein, has not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (ii) each of the representations and warranties of the Company
contained in Sections 2.1 (Organization and Power), 2.2(a) (Authorization) and
2.4(a) and (b) (Authorized and Outstanding Stock) of this Agreement shall be
true and correct in all material respects on and as of the date hereof and on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of the Closing Date, except for
representations and warranties that speak as of a specific date or time other
than the Closing Date (which need only be true and correct in all material
respects as of such date or time) and (iii) the representations and warranties
of the Company contained in Section 2.22(b) (Absence of Certain Changes) of this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date.

 

(b)               Covenants. The Company shall have performed and complied in
all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by it at or prior to the Closing.

 

(c)               Certificate of Designation. The Certificate of Designation
shall have been duly filed with the Nevada Secretary of State and a certified
copy shall have been delivered to the Purchaser.

 

(d)               Chart Purchase Agreement. The Acquisition shall have been
consummated or shall be consummated substantially simultaneously with the
Closing on the terms and conditions contemplated by the Chart Purchase Agreement
(subject to any amendments, supplements, waivers or other modifications but only
to the extent permitted by Section 4.17 or otherwise consented to in writing by
the Purchaser).

 

(e)               VCOC Letter Agreement. The Purchaser shall have received a
duly executed VCOC Letter Agreement, in the form of Exhibit E hereto,

 

(f)                Officer’s Certificate. The Purchaser shall have received a
certificate signed on behalf of the Company by a duly authorized officer
certifying to the effect that the conditions set forth in Section 5.1(a), (b)
and (d) have been satisfied.

 

Section 5.2            Conditions of the Company. The obligations of the Company
to consummate the transactions contemplated hereby are subject to the
satisfaction or written waiver (to the extent any such waiver is permitted by
applicable Law) by the Purchaser, on or prior to the Closing Date, of each of
the following conditions precedent:

 

29

 

 

(a)               Representations and Warranties; Performance. (i) Each of the
representations and warranties of the Purchaser contained in Article III of this
Agreement (other than Sections 3.1 (Organization and Power) and 3.2
(Authorization, Etc.)) shall be true and correct on and as of the Closing Date
with the same effect as though such representations and warranties had been made
on and as of the Closing Date, except for representations and warranties that
speak as of a specific date or time other than the Closing Date (which need only
be true and correct as of such date or time), except where the failure of such
representations and warranties to be so true and correct, without giving effect
to any qualification or limitation as to “materiality,” “material adverse
effect” or similar qualifier set forth therein, has not had, and would not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the Purchaser’s ability to consummate the transactions under
this Agreement and the Registration Rights Agreement and (ii) each of the
representations and warranties of the Purchaser contained in Sections 3.1
(Organization and Power) and 3.2 (Authorization, Etc.)) of this Agreement shall
be true and correct in all material respects on and as of the date hereof and on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of the Closing Date, except for
representations and warranties that speak as of a specific date or time other
than the Closing Date (which need only be true and correct as of such date or
time).

 

(b)               Covenants. The Purchaser shall have performed and complied in
all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by the Purchaser at or prior to the
Closing.

 

(c)               Consideration for the Securities. The Purchaser shall have
paid the purchase price of the Purchased Shares to be purchased by such
Purchaser in full at the Closing by wire transfer of immediately available funds
to an account designated in writing by the Company.

 

(d)               Certificate of Designation. The Certificate of Designation
shall have been duly filed with the Nevada Secretary of State.

 

(e)               Chart Purchase Agreement. The Acquisition shall have been
consummated or shall be consummated substantially simultaneously with the
Closing on the terms and conditions contemplated by the Chart Purchase Agreement
(subject to any amendments, supplements, waivers or other modifications but only
to the extent permitted by Section 4.17 or otherwise consented to in writing by
the Purchaser).

 

(f)                Officer’s Certificate. The Company shall have received a
certificate signed on behalf of the Purchaser by a duly authorized officer
certifying to the effect that the conditions set forth in Sections 5.2(a) and
(b) have been satisfied.

 

 

Article VI

MISCELLANEOUS

 

Section 6.1            Survival. Except in the case of fraud, the
representations and warranties of the parties contained in Article II and
Article III hereof shall not survive and shall terminate automatically as of the
Closing, and there shall be no liability in respect thereof, whether such
liability has accrued prior to or after the Closing, on the part of any party or
any of their respective Representatives. All other covenants and agreements of
the parties contained herein shall survive the Closing in accordance with their
terms.

 

30

 

 

Section 6.2            Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and will become effective when one or more counterparts have been signed by a
party and delivered to the other parties. Copies of executed counterparts of
signature pages to this Agreement may be transmitted by PDF (portable document
format) or facsimile and such PDFs or facsimiles will be deemed as sufficient as
if actual signature pages had been delivered.

 

Section 6.3            Governing Law.

 

(a)               This Agreement shall be governed by, and construed in
accordance with, the laws of the state of New York (except to the extent that
mandatory provisions of the laws of the State of Nevada are applicable), without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the state of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the state of New
York.

 

(b)               Any dispute relating hereto shall be heard in the U.S.
District Court for the Southern District of New York (and any federal appellate
courts therefrom) (and to the extent such court declines jurisdiction, state
court located in the Borough of Manhattan) (each a “Chosen Court” and
collectively, the “Chosen Courts”), and the parties hereto agree to the
exclusive jurisdiction and venue of the Chosen Courts. Such Persons further
agree that any proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby or by any matters related to the foregoing (the “Applicable
Matters”) shall be brought exclusively in a Chosen Court, and that any
proceeding arising out of this Agreement or any other Applicable Matter shall be
deemed to have arisen from a transaction of business in the State of New York,
and each of the foregoing Persons hereby irrevocably consents to the
jurisdiction of such Chosen Courts in any such proceeding and irrevocably and
unconditionally waives, to the fullest extent permitted by law, any objection
that such Person may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such Chosen Court or that any such
proceeding brought in any such Chosen Court has been brought in an inconvenient
forum.

 

(c)               Such Persons further covenant not to bring a proceeding with
respect to the Applicable Matters (or that could affect any Applicable Matter)
other than in such Chosen Court and not to challenge or enforce in another
jurisdiction a judgment of such Chosen Court.

 

(d)               Process in any such proceeding may be served on any Person
with respect to such Applicable Matters anywhere in the world, whether within or
without the jurisdiction of any such Chosen Court. Without limiting the
foregoing, each such Person agrees that service of process on such party as
provided in Section 6.6 shall be deemed effective service of process on such
Person.

 

31

 

 

(e)               Waiver of Jury Trial. EACH PARTY HERETO, FOR ITSELF AND ITS
AFFILIATES, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THE ACTIONS OF THE PARTIES HERETO OR THEIR RESPECTIVE AFFILIATES
PURSUANT TO THIS AGREEMENT OR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT HEREOF.

 

Section 6.4            Entire Agreement; No Third Party Beneficiary. This
Agreement and the Registration Rights Agreement contain the entire agreement by
and among the parties with respect to the subject matter hereof and all prior
negotiations, writings and understandings relating to the subject matter of this
Agreement. This Agreement is not intended to confer upon any Person not a party
hereto (or their successors and permitted assigns) any rights or remedies
hereunder.

 

Section 6.5            Expenses. All fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby,
including accounting and legal fees shall be paid by the party incurring such
expenses, except that, upon consummation of the Closing, the Company shall
reimburse the Purchaser for all reasonable and documented costs and expenses,
including legal fees, expenses, financial advisor fees and expenses, other
professional fees and expenses, and all reasonable out-of-pocket due diligence
expenses, in an aggregate amount not to exceed one million dollars ($1,000,000),
incurred by the Purchaser in connection with the transactions contemplated by
this Agreement.

 

Section 6.6            Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given or made as follows: (a) if sent by registered or certified
mail in the United States return receipt requested, upon receipt; (b) if sent by
nationally recognized overnight air courier, one (1) Business Day after mailing;
(c) if sent by e-mail transmission, with a copy sent on the same day in the
manner provided in the foregoing clause (a) or (b), when transmitted and receipt
is confirmed; and (d) if otherwise actually personally delivered, when
delivered, provided, that such notices, requests, demands and other
communications are delivered to the address set forth below, or to such other
address as any party shall provide by like notice to the other parties to this
Agreement:

 

If to the Company, to:

 

Cryoport, Inc.

112 Westwood Place, Suite 350

Brentwood, TN 37027

Attention:    (i) Jerrell Shelton, President, Chief Executive Officer, and
Chairman of the Board, (ii) Robert Stefanovich, Chief Financial Officer,
Treasurer and Corporate Secretary, and (iii) Tony Ippolito, Vice President
and General Counsel.
Email: JShelton@cryoport.com; RStefanovich@cryoport.com; and
TIppolito@cryoport.com

 

32

 

 

with a copy (which shall not constitute notice) to:

 

Latham & Watkins LLP
650 Town Center Drive, 20th Floor

Costa Mesa, CA 92626
Attention: Daniel Rees
Email: Daniel.Rees@lw.com

 

If to a Purchaser or to the Purchaser Representative, to:

 

BTO Freeze Parent L.P.
c/o The Blackstone Group Inc.
345 Park Avenue
New York, NY 10154
Attention: Ram Jagannath

Aaron Weiner

E-mail: Ram.Jagannath@Blackstone.com

 Aaron.Weiner@blackstone.com

 

with a copy (which shall not constitute notice) to:

 

Simpson Thacher & Bartlett LLP
425 Lexington Ave
New York, New York 10017
E-mail: avernace@stblaw.com
Attention: Anthony F. Vernace

 

Section 6.7            Successors and Assigns. This Agreement will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement may be assigned (a) in
connection with a Transfer to a Permitted Transferee permitted by Section
4.2(a)(i) and (b) as collateral security to any lender to the Purchaser;
provided that the rights and obligations of the Purchaser Parties under Sections
4.1, 4.6 and 4.12 shall not be assignable other than to a member of the Sponsor
Group that becomes a Purchaser Party pursuant to the terms of this Agreement. No
other assignment of this Agreement or of any rights or obligations hereunder may
be made by any party hereto without the prior written consent of the other
parties hereto. Any purported assignment or delegation in violation of this
Agreement shall be null and void ab initio.

 

Section 6.8            Headings. The Section, Article and other headings
contained in this Agreement are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Agreement.

 

Section 6.9            Amendments and Waivers. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
each party hereto. Any party hereto may, only by an instrument in writing, waive
compliance by any other party or parties hereto with any term or provision
hereof on the part of such other party or parties hereto to be performed or
complied with. No failure or delay of any party in exercising any right or
remedy hereunder shall operate as a waiver thereof, nor will any single or
partial exercise of any right or power, or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The waiver by any party
hereto of a breach of any term or provision hereof shall not be construed as a
waiver of any subsequent breach. The rights and remedies of the parties
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have hereunder.

 

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Section 6.10        Interpretation; Absence of Presumption.

 

(a)               For the purposes hereof: (i) words in the singular shall be
held to include the plural and vice versa and words of one gender shall be held
to include the other gender as the context requires; (ii) the terms “hereof,”
“herein,” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole (including all of the
Schedules and Exhibits) and not to any particular provision of this Agreement,
and Article, Section, paragraph, Exhibit and Schedule references are to the
Articles, Sections, paragraphs, Exhibits, and Schedules to this Agreement unless
otherwise specified; (iii) the word “including” and words of similar import when
used in this Agreement shall mean “including, without limitation,” unless the
context otherwise requires or unless otherwise specified; and (iv) the word
“or”, “any” or “either” shall not be exclusive. References to a Person are also
to its permitted assigns and successors. When calculating the period of time
between which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded (and unless, otherwise required by
Law, if the last day of such period is not a Business Day, the period in
question shall end on the next succeeding Business Day).

 

(b)               With regard to each and every term and condition of this
Agreement and any and all agreements and instruments subject to the terms
hereof, the parties hereto understand and agree that the same have or has been
mutually negotiated, prepared and drafted, and if at any time the parties hereto
desire or are required to interpret or construe any such term or condition or
any agreement or instrument subject hereto, no consideration will be given to
the issue of which party hereto actually prepared, drafted or requested any term
or condition of this Agreement or any agreement or instrument subject hereto.

 

Section 6.11        Severability. Any provision hereof that is held to be
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, shall be ineffective only to the extent of such invalidity,
illegality or unenforceability, without affecting in any way the remaining
provisions hereof, provided, however, that the parties will attempt in good
faith to reform this Agreement in a manner consistent with the intent of any
such ineffective provision for the purpose of carrying out such intent.

 

Section 6.12        Specific Performance. The parties hereto agree that
irreparable damage could occur and that the a party may not have any adequate
remedy at law in the event that any of the provisions of this Agreement are not
performed in accordance with their terms or were otherwise breached.
Accordingly, each party shall without the necessity of proving the inadequacy of
money damages or posting a bond be entitled to seek an injunction or injunctions
to prevent breaches of this Agreement and to enforce specifically the terms,
provisions and covenants contained therein (including, for the avoidance of
doubt, the right of the Company to specifically enforce the obligation of the
Purchaser to cause the Equity Commitment to be funded and the purchase of the
Purchased Shares to be consummated on the terms and subject to the conditions
set forth in this Agreement), this being in addition to any other remedy to
which they are entitled at law or in equity.

 

34

 

 

Section 6.13        Public Announcement. Subject to each party’s disclosure
obligations imposed by applicable law or the rules of any stock exchange upon
which its securities are listed, each of the parties hereto will cooperate with
each other in the development and distribution of all news releases and other
public information disclosures with respect to this Agreement and any of the
transactions contemplated by this Agreement, and neither the Company nor any
Purchaser will make any such news release or public disclosure without first
consulting with the other, and, in each case, also receiving the other’s consent
(which shall not be unreasonably withheld or delayed) and each party shall
coordinate with the party whose consent is required with respect to any such
news release or public disclosure. Notwithstanding the foregoing, this Section
6.13 shall not apply to any press release or other public statement made by the
Company or a Purchaser (a) that is consistent with prior disclosure and does not
contain any information relating to the transactions that has not been
previously announced or made public in accordance with the terms of this
Agreement or (b) is made to its auditors, attorneys, accountants, financial
advisors, limited partners or other Permitted Transferees. Notwithstanding
anything to the contrary in this Agreement or the Confidentiality Agreement, in
no event shall either this Section 6.13 or any provision of the Confidentiality
Agreement limit disclosure by any Purchaser Party and their respective
Affiliates of ordinary course communications regarding this Agreement and the
transactions contemplated by this Agreement to its existing or prospective
general and limited partners, equityholders, members, managers and investors of
any Affiliates of such Person, including disclosing information about the
transactions contemplated by this Agreement on their websites in the ordinary
course of business consistent with past practice.

 

Section 6.14        Purchaser Representative. Each Purchaser Party hereby
consents to and authorizes (a) the appointment of BTO Freeze Parent L.P. as the
Purchaser Representative hereunder (the “Purchaser Representative”) and as the
attorney-in-fact for and on behalf of the Purchaser Party, and (b) the taking by
the Purchaser Representative of any and all actions and the making of any
decisions required or permitted by, or with respect to, this Agreement and the
transactions contemplated hereby, including (i) the exercise of the power to
agree to execute any consents under this Agreement and (ii) to take all actions
necessary in the judgment of the Purchaser Representative for the accomplishment
of the foregoing and all of the other terms, conditions and limitations of this
Agreement and the transactions contemplated hereby. Each Purchaser Party shall
be bound by the actions taken by the Purchaser Representative exercising the
rights granted to it by this Agreement, and the Company shall be entitled to
rely on any such action or decision of the Purchaser Representative. If the
Purchaser Representative shall resign or otherwise be unable to fulfill its
responsibilities hereunder, the Purchaser Parties shall appoint a new Purchaser
Representative as soon as reasonably practicable by written consent of holders
of a majority of the then outstanding Series C Preferred Stock and/or shares of
Common Stock that were issued upon conversion of shares of Series C Preferred
Stock beneficially owned by the Purchaser or Purchaser Parties that are
successors or assigns of the Purchaser by sending notice and a copy of the duly
executed written consent appointing such new Purchaser Representative to the
Company.

 

Section 6.15        Non-Recourse. Any claim or cause of action based upon,
arising out of, or related to this Agreement or the Equity Commitment Letter may
only be brought against the entities that are expressly named as parties hereto
or thereto (the “Contract Parties”) and then only with respect to the specific
obligations of such party and subject to the terms, conditions and limitations
set forth herein or therein. No Person other than the Contract Parties,
including no member, partner, stockholder, unitholder, Affiliate or
Representative thereof, nor any member, partner, stockholder, unitholder,
Affiliate or Representative of any of the foregoing, shall have any liability
(whether in contract or in tort, in law or in equity, or granted by statute) for
any claims, causes of action, obligations, or liabilities arising under, out of,
in connection with, or related in any manner to this Agreement or the Equity
Commitment Letter or based on, in respect of, or by reason of this Agreement or
the Equity Commitment Letter or their respective negotiation, execution,
performance, or breach; and, to the maximum extent permitted by law, each of the
Contract Parties hereby waives and releases all such liabilities, claims, causes
of action, and obligations against any such third Person.

 

35

 

 

Section 6.16        Further Assurances. From the date hereof until the Closing,
without further consideration, the Company and the Purchaser shall use their
respective reasonable best efforts to take, or cause to be taken, all actions
necessary, appropriate or advisable to consummate the transactions contemplated
by this Agreement, the Registration Rights Agreement, the Certificate of
Designation and any and all other agreements or instruments executed and
delivered to the Purchaser by the Company hereunder or thereunder, as
applicable.

 

Article VII

TERMINATION

 

Section 7.1            Termination. This Agreement may be terminated at any time
prior to Closing:

 

(a)               by mutual written consent of the Company and Purchaser;

 

(b)               by either the Company or Purchaser, if (i) any Governmental
Entity with lawful jurisdiction shall have issued a final order, decree or
ruling or taken any other final action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree, ruling or other action is or shall have become final and nonappealable
or (ii) the Chart Purchase Agreement is terminated for any reason;

 

(c)               by notice given by the Company to the Purchaser if there have
been one or more inaccuracies in or breaches of one or more representations,
warranties, covenants or agreements made by the Purchaser in this Agreement such
that the conditions in Section 5.2(a) or Section 5.2(b) would not be satisfied
and, if capable of being cured, which have not been cured by the Purchaser
thirty (30) days after receipt by the Purchaser of written notice from the
Company requesting such inaccuracies or breaches to be cured; provided, however,
that the Company is not then in breach of any of its obligations hereunder; or

 

(d)               by notice given by the Purchaser to the Company, if there have
been one or more inaccuracies in or breaches of one or more representations,
warranties, covenants or agreements made by the Company in this Agreement such
that the conditions in Section 5.1(a) or Section 5.1(b) would not be satisfied
and, if capable of being cured, which have not been cured by the Company within
thirty (30) days after receipt by the Company of written notice from the
Purchaser requesting such inaccuracies or breaches to be cured; provided,
however, that the Purchaser is not then in breach of any of its obligations
hereunder.

 

Section 7.2            Certain Effects of Termination. In the event that this
Agreement is terminated in accordance with Section 7.1, neither party (nor any
of its Affiliates) shall have any liability or obligation to the other (or any
of its Affiliates) under or in respect of this Agreement, except to the extent
of (a) any liability arising from any breach by such party of its obligations
pursuant to this Agreement arising prior to such termination, and (b) any actual
and intentional fraud or intentional or willful breach of this Agreement. In the
event of any such termination, this Agreement shall become void and have no
effect, and the transactions contemplated hereby shall be abandoned without
further action by the parties, in each case, except (x) as set forth in the
preceding sentence and (y) that the provisions of Section 4.6 (Confidentiality),
Sections 6.2 to 6.4 (Counterparts, Governing Law, Entire Agreement) and Sections
6.6 through 6.15 (Notices, Successors and Assigns, Headings, Amendments and
Waivers, Interpretations; Absence of Presumption, Severability, Specific
Performance and Public Announcement, Purchaser Representative, Non-Recourse)
shall survive the termination of this Agreement.

 

(Signature page follows)

 

36

 

 

The parties have caused this Securities Purchase Agreement to be executed as of
the date first written above.

 

 CRYOPORT, INC.    By:  

/s/ Jerrell Shelton

  Name: Jerrell Shelton   Title: President and CEO

 

[Signature page to Securities Purchase Agreement]

 

 

 

 

  Purchaser       BTO FREEZE PARENT L.P.       By: BTO Freeze Parent GP LLC, its
general
partner       By:   /s/ Aaron Weiner     Name: Aaron Weiner     Title: Vice
President

 

[Signature page to Securities Purchase Agreement]

 

 

 

 

EXHIBIT A

 

DEFINED TERMS

 

1.       The following capitalized terms have the meanings indicated:

 

“Affiliate” of any Person means any Person, directly or indirectly, Controlling,
Controlled by or under common Control with such Person; provided, however, that
(i) the Company and its Subsidiaries, on the one hand, and any Purchaser Party
or any of its Affiliates, on the other hand, shall not be deemed to be
Affiliates, (ii) “portfolio companies” (as such term is customarily used among
institutional investors) in which any Purchaser Party or any of its Affiliates
has an investment (whether as debt or equity) shall not be deemed an Affiliate
of such Purchaser Party and (iii) the Excluded Sponsor Parties shall not be
deemed to be Affiliates of any Purchaser Party, the Company or any of the
Company’s Subsidiaries.

 

“Antitakeover Provisions” means the provisions of any rights plan or agreement,
poison pill (including any distribution under a rights plan or agreement), or
any control share acquisition, business combination, interested stockholder,
fair price, moratorium or similar anti-takeover provision under the Articles,
the Bylaws, or applicable law (including the “acquisition of controlling
interest” statutes codified in Nevada Revised Statutes 78.378 through 78.3793,
inclusive, and the “combinations with interested stockholders” statutes codified
in Nevada Revised Statutes 78.411 through 78.444, inclusive).

 

“Articles of Incorporation” means the Company’s Amended and Restated Articles of
Incorporation, as the same have been and may be further amended or restated.

 

“Board of Directors” means the Company’s board of directors.

 

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

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Bylaws” means the Amended and Restated Bylaws of the Company, adopted as of
February 8, 2016, as the same may be further amended or restated.

 

“Company Competitor” means, as of any date of determination, any Person
(including such Person’s Affiliates) engaged in the business of
temperature-controlled supply chain solutions for the life sciences industry;
provided however, that for the avoidance of doubt, a private equity fund,
financial institution, asset management firm or similar firm shall not be
considered a “Company Competitor” but its portfolio companies, if any, that own
material interests in temperature-controlled supply chain solution businesses
would be considered a “Company Competitor”.

 

A-1

 

 

“Confidential Information” means information regarding the Company or its
Subsidiaries and the Cryo Business furnished by or on behalf of the Company,
directly or indirectly, to the Purchaser or its Representatives, together with
all analyses, compilations, forecasts, studies or other documents prepared by
the Purchaser or its Representatives which contain or otherwise reflect such
information. “Confidential Information” shall not include such portions of the
Confidential Information that (a) are or become generally available to the
public other than as a result of the Purchaser’s or its Affiliates’ disclosure
in violation of this Agreement, (b) become available to the Purchaser or its
Affiliates on a non-confidential basis from a source other than the Company or
its Subsidiaries, (c) was already in the Purchaser’s or its Affiliate’s
possession prior to the date of this Agreement and which was not obtained from
the Company or its Subsidiaries or (d) are independently developed by the
Purchaser Parties or their respective Affiliates or Representatives without
reference to the Confidential Information.

 

“Control” (including its correlative meanings “under common Control with” and
“Controlled by”) means, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through ownership of securities or partnership
or other interests, by contract or otherwise.

 

“Convertible Senior Notes” means the Company’s 3.00% convertible senior notes
due in 2025.

 

“Environmental Permit” means any permit, license, certificate, approval or other
authorization under any applicable Requirements of Environmental Law.

 

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

 

“ERISA Documents” means all material “employment benefit plans” as defined in
Section 3(3) of ERISA that are maintained or sponsored by the Company or its
Subsidiaries for the benefit of their respective current or former employees or
with respect to which the Company or its Subsidiaries have any liability.

 

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

 

“GAAP” means generally accepted accounting principles as in effect in the United
States.

 

“Governmental Entity” means any supranational, national, state, municipal, local
or foreign government, any court, tribunal, arbitrator, administrative agency,
commission or other governmental official, authority or instrumentality.

 

“Government Official” means any officer or employee of a foreign governmental
authority or any department, agency, or instrumentality thereof, or of a public
international organization, or any person acting in an official capacity for or
on behalf of any such foreign governmental authority or department, agency, or
instrumentality, or for or on behalf of any such public international
organization, or any political party, party official, or candidate thereof,
excluding officials of the governments of the United States, the several states
thereof, any local subdivision of any of them or any agency, department or unit
of any of the foregoing.

 

“Hazardous Substance” means any waste, substance, product or material defined or
regulated as “hazardous” or “toxic” or as a “pollutant” or “contaminant”, or
words of similar meaning, by any applicable Requirements of Environmental Law,“
including petroleum and any fraction thereof, and any biomedical or radioactive
materials and waste.

 

 

 

 

“Investment Company Act” mean the Investment Company Act of 1940, as amended.

 

“Material Adverse Effect” means any event, change, development, circumstance,
condition, state of facts or occurrence that individually or in the aggregate
is, or would reasonably be expected to be, materially adverse to (x) the
condition (financial or otherwise), assets, properties, or liabilities of the
Company and its Subsidiaries (taken as a whole) or results of operations of the
Company and its Subsidiaries (taken as a whole), or (y) the ability of the
Company to perform its obligations or consummate the transactions contemplated
hereby, but shall exclude any prospects and shall also exclude any event,
change, development, circumstance, condition, state of facts or occurrence to
the extent resulting or arising from: (a) any change or prospective change in
any applicable law or GAAP or interpretation thereof; (b) any change in general
economic conditions in the industries or markets in which the Company and its
Subsidiaries operate or affecting the United States of America or any foreign
economies in general; (c) any change made by any Governmental Entity that is
generally applicable to the industries or markets in which the Company and its
Subsidiaries operate; (d) the announcement of this Agreement and/or the
consummation of the transactions contemplated hereby; (e) any action that is
consented to or requested by the Purchaser in writing; (f) any action expressly
required by, or the failure to take any action expressly prohibited by this
Agreement; (g) any national or international political or social conditions,
including the engagement by the United States of America or any foreign
government in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any military or terrorist attack
upon the United States of America or any foreign government or any of their
respective territories, possessions, or diplomatic or consular offices or upon
any military installation, equipment or personnel of the United States of
America or any foreign government; (h) any acts of God, including any
earthquakes, hurricanes, tornados, floods, tsunamis or other natural disasters,
or any other damage to or destruction of assets caused by casualty; (i) any
epidemic, pandemic, disease outbreak (including, for the avoidance of doubt,
COVID-19) or other health crisis or public health event; and (j) any failure of
the Company and its Subsidiaries to meet internal or published projections,
estimates or forecasts of revenues, earnings or other measures of financial or
operating performance for any period; provided, that the underlying causes of
such failure (subject to the other provisions of this definition of “Material
Adverse Effect”) shall not be excluded; provided, however, that in the case of
each of clauses (a), (b), (c) and (g) of the foregoing, any such event, change,
circumstance or occurrence shall not be excluded to the extent that it has or
would reasonably be expected to have a disproportionate adverse effect on the
condition (financial or otherwise), assets, properties, or liabilities of the
Company and its Subsidiaries (taken as a whole), or results of operations of the
Company and its Subsidiaries (taken as a whole) relative to other companies
operating in the same industry in which the Company and its Subsidiaries
operates.

 

“Permitted Transferee” means, with respect to any Person, (i) any Affiliate of
such Person, (ii) any successor entity of such Person and (iii) with respect to
any Person that is an investment fund, vehicle or similar entity, any other
investment fund, vehicle or similar entity of which such Person or an Affiliate,
advisor or manager of such Person serves as the general partner, managing
member, manager or advisor.

 

 

 

 

“Person” means an individual, corporation, partnership, limited liability
company, joint venture, trust or unincorporated organization or a government or
agency or political subdivision thereof.

 

“Registration Rights Agreement” means the Registration Rights Agreement between
the Company and the Purchaser in the form attached to the Agreement as Exhibit
C, as it may be amended or modified in accordance with the terms thereof.

 

“Related Party” means, with respect to any Person, such Person’s Affiliates and
such Person’s and its Affiliates’ respective former, current or future direct or
indirect equity holders, controlling Persons, stockholders, directors, officers,
employees, members, managers, agents, general or limited partners, successors,
partners or Representatives.

 

“Representatives” means a Persons’ Affiliates, employees, agents, consultants,
accountants, attorneys or financial advisors.

 

“Requirements of Environmental Law” means all laws (including the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation, and Liability Act, the Clean Water Act, the Clean Air Act, and any
state analogues of any of the foregoing), common law, statutes, ordinances,
codes, rules, regulations, orders or similar requirements of any Governmental
Entity which relate to (a) pollution, protection or clean-up of the environment,
including air, surface water, ground water or land; (b) solid, gaseous or liquid
waste or the generation, recycling, reclamation, release, threatened release,
treatment, storage, disposal or transportation of harmful or deleterious
substances; (c) exposure of Persons or property to harmful or deleterious
substances; or (d) the manufacture, presence, processing, distribution in
commerce, use, discharge, releases, threatened releases, emissions or storage of
harmful or deleterious substances into the environment.

 

“Restricted Securities” means Purchased Shares or Conversion Shares required to
bear the legend set forth in Section 4.3(a) under the applicable provisions of
the Securities Act.

 

“SEC” means the Securities and Exchange Commission.

 

“SEC Documents” means all reports, schedules, registration statements, proxy
statements and other documents (including all amendments, exhibits and schedules
thereto) filed by the Company with the SEC.

 

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

 

“Stock Plans” means the Cryoport, Inc. 2018 Omnibus Equity Incentive Plan, the
2015 Omnibus Equity Incentive Plan, the Cryoport, Inc. 2011 Stock Incentive
Plan, as amended and restated, the Cryoport, Inc. 2009 Stock Incentive Plan and
the 2002 Stock Incentive Plan.

 

“Subsidiary” means, when used with reference to a party, any corporation or
other organization, whether incorporated or unincorporated, of which such party
or any other Subsidiary of such party is a general partner or serves in a
similar capacity, or, with respect to such corporation or other organization, at
least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or others
performing similar functions is directly or indirectly owned or controlled by
such party or by any one or more of its Subsidiaries, or by such party and one
or more of its Subsidiaries.

 

 

 

 

“Tax” and “Taxes” means all federal, state, local and foreign taxes (including,
without limitation, income, franchise, property, sales, withholding, payroll and
employment taxes), assessments, fees or other charges imposed by any
Governmental Entity, including any interest, additions to tax or penalties
applicable thereto.

 

“Tax Return” means any return, report or similar filing (including the attached
schedules) filed or required to be filed with respect to Taxes (and any
amendments thereto), including any information return, claim for refund or
declaration of estimated Taxes.

 

“Transfer” means any direct or indirect (a) sale, transfer, hypothecation,
assignment, gift, bequest or disposition by any other means, whether for value
or no value and whether voluntary or involuntary (including, without limitation,
by realization upon any lien or by operation of law or by judgment, levy,
attachment, garnishment, bankruptcy or other legal or equitable proceedings) or
(b) grant of any option, warrant or other right to purchase or the entry into
any hedge, swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of Common Stock; provided, however, that, notwithstanding anything to the
contrary in this Agreement, a Transfer shall not include (i) the conversion of
one or more shares of Series C Preferred Stock into shares of Common Stock
pursuant to the Certificate of Designation, (ii) the redemption, repurchase or
other acquisition of Common Stock or Series C Preferred Stock by the Company, or
(iii) the direct or indirect transfer of any limited partnership interests or
other equity interests in a Purchaser Party (or any direct or indirect parent
entity of such Purchaser Party) (provided that if any transferor or transferee
referred to in this clause (iii) ceases to be controlled (directly or
indirectly) by the Person (directly or indirectly) controlling such Person
immediately prior to such transfer, such event shall be deemed to constitute a
“Transfer”). The term “Transferred” shall have a correlative meaning.

 

“Treasury Regulations” means the U.S. Treasury regulations promulgated under the
Code, as amended.

 

“VCOC Letter Agreement” means that certain letter agreement, the form of which
is attached as Exhibit E.

 

 

 

 

2.       The following terms are defined in the Sections of the Agreement
indicated:

 

INDEX OF TERMS

 

Term Section Acquisition Preamble Agreement Preamble Applicable Matters 6.3(b)
Balance Sheet Date 2.7 Capitalization Date 2.2 Certificate of Designation 1.1
Chart Purchase Agreement Preamble Chosen Court 6.3(b) Chosen Courts 6.3(b)
Closing 1.2 Closing Date 1.2 Common Stock 2.4(a) Company Preamble
Confidentiality Agreement 4.6 Contract 2.2 CryoPDP Acquisition 4.16(d) CryoPDP
Purchase Agreement 4.16(d) Conversion Shares 2.4(c) Disclosure Letter Article II
Equity Commitment Letter 3.7 Equity Financing 3.7 Equity Financing Commitment
3.7 Excluded Sponsor Parties 4.14(a) Financial Statements 2.7 Foreclosure
Limitation 4.2(c) HSR Act 2.3 Identified Person 4.18 IRS 4.2(e) Issuer
Agreements 4.19 Non-Employee Director 4.18 Permitted Loan 4.2(c) Preferred Stock
2.4(a) Purchased Common Shares Preamble Purchased Preferred Shares Preamble
Purchased Shares Preamble Purchaser Preamble Purchaser Nominee 4.1(b) Securities
Act 4.3(a) Series C Director 4.1(a) Series C Preferred Stock Preamble Sponsor
4.14(a) Sponsor Group 4.14(a) USRPHC 4.9(a)

 

 

 

 

Exhibit B

 

Form of Certificate of Designation

 

(see attached)

 

 

 

 

Form Final

 

Form of

 

Cryoport, Inc.

 

Certificate of Designation

 

4.0% Series C Convertible Preferred Stock

 

[date]

 

 

 

 

Table of Contents

 

Page

 

Section 1.        Definitions 1 Section 2.        Rules of Construction 12
Section 3.        The Convertible Preferred Stock 12
(a)                Designation; Par Value 12 (b)                Number of
Authorized Shares 13 (c)                Form, Dating and Denominations 13
(d)                Execution, Counter signature and Delivery 14
(e)                Method of Payment; Delay When Payment Date is Not a Business
Day 14 (f)                 Transfer Agent, Registrar, Paying Agent and
Conversion Agent 15 (g)                Legends 16 (h)                Transfers
and Exchanges; Transfer Taxes; Certain Transfer Restrictions 17
(i)                 Exchange and Cancellation of Convertible Preferred Stock to
Be Converted or to Be Repurchased Pursuant to a Repurchase Upon Fundamental
Change or a Redemption 19 (j)                 Status of Retired or Treasury
Shares 20 (k)                Replacement Certificates 20
(l)                 Registered Holders 20 (m)               Cancellation 20
(n)                Shares Held by the Company or its Subsidiaries 21
(o)                Outstanding Shares 21 (p)                Repurchases by the
Company and its Subsidiaries 22 (q)                Notations and Exchanges 22
Section 4.        Ranking 22 Section 5.        Dividends 22
(a)                Regular Dividends 22 (b)                Calculation of
Regular Dividends 23 (c)                Participating Dividends. 23
(d)                Treatment of Dividends Upon Redemption, Repurchase Upon
Fundamental Change or Conversion 24 Section 6.        Rights Upon Liquidation,
Dissolution or Winding Up 24 (a)                Generally 24
(b)                Certain Business Combination Transactions Deemed Not to Be a
Liquidation 25 Section 7.        Right of the Company to Redeem the Convertible
Preferred Stock 25 (a)                Right to Redeem Prior to the One Hundred
Eighty Day Anniversary 25 (b)                Right to Redeem On or After the
Five Year Anniversary 25 (c)                Redemption Prohibited in Certain
Circumstances 25 (d)                Redemption Date 25
(e)                Redemption Price 26 (f)                 Redemption Notice 26
(g)                Payment of the Redemption Price 26

 

- i -

 

 

Section 8.        Right of Holders to Require the Company to Repurchase
Convertible Preferred Stock upon a Fundamental Change 27 (a)   Fundamental
Change Repurchase Right 27 (b)   Funds Legally Available for Payment of
Fundamental Change Repurchase Price; Covenant Not to Take Certain Actions 27
(c)   Fundamental Change Repurchase Date 28 (d)   Fundamental Change Repurchase
Price 28 (e)   Initial Fundamental Change Notice 28 (f)   Final Fundamental
Change Notice 28 (g)   Procedures to Exercise the Fundamental Change Repurchase
Right 29 (h)   Payment of the Fundamental Change Repurchase Price 30 (i)   Third
Party May Conduct Repurchase Offer In Lieu of the Company 31 (j)   Fundamental
Change Agreements 31 Section 9.        Voting Rights 31 (a)   Voting and Consent
Rights with Respect to Specified Matters 31 (b)   Right to Vote with Holders of
Common Stock on an As-Converted Basis 32 (c)   Procedures for Voting and
Consents 33 Section 10.      Conversion 33 (a)   Generally 33 (b)   Conversion
at the Option of the Holders 33 (c)   Mandatory Conversion at the Company’s
Election 34 (d)   Conversion Procedures 35 (e)   Settlement upon Conversion 36
(f)   Conversion Price Adjustments 37 (g)   Voluntary Conversion Price Decreases
40 (h)   Restriction on Conversions 41 (i)   Effect of Common Stock Change Event
41 Section 11.      Certain Provisions Relating to the Issuance of Common Stock
43 (a)   Equitable Adjustments to Prices 43 (b)   Status of Shares of Common
Stock 43 (c)   Taxes Upon Issuance of Common Stock 44 Section 12.      No
Preemptive Rights 44 Section 13.      Taxes 44 Section 14.      Term 44 Section
15.      Calculations 44 (a)   Responsibility; Schedule of Calculations 44
(b)   Calculations Aggregated for Each Holder 44 Section 16.      Notices 45
Section 17.      Facts Ascertainable 45 Section 18.      Waiver 45 Section
19.      Severability 45 Section 20.      No Other Rights 45

 

Exhibits       Exhibit A: Form of Preferred Stock Certificate A-1 Exhibit B:
Form of Restricted Stock Legend B-1

 

- ii -

 

 

Certificate of Designation

 

4.0% Series C Convertible Preferred Stock

 

On [date], the Board of Directors of Cryoport, Inc., a Nevada corporation (the
“Company”), adopted the following resolution designating and creating, out of
the authorized and unissued shares of preferred stock of the Company, 250,000
authorized shares of a series of preferred stock of the Company titled the “4.0%
Series C Convertible Preferred Stock”:

 

RESOLVED that, pursuant to the authority of the Board of Directors pursuant to
the Articles of Incorporation and applicable law, a series of preferred stock of
the Company titled the “4.0% Series C Convertible Preferred Stock,” and having a
par value of $0.001 per share and an initial number of authorized shares equal
to two hundred fifty thousand (250,000), is hereby designated and created out of
the authorized and unissued shares of preferred stock of the Company, which
series has the rights, designations, preferences, voting powers and other
provisions set forth below:

 

Section 1.                Definitions.

 

“Affiliate” of any Person means any Person, directly or indirectly, Controlling,
Controlled by or under common Control with such Person; provided, however, that
(i) the Company and its Subsidiaries, on the one hand, and any Purchaser Party
or any of its Affiliates, on the other hand, shall not be deemed to be
Affiliates, (ii) “portfolio companies” (as such term is customarily used among
institutional investors) in which any Purchaser Party or any of its Affiliates
has an investment (whether as debt or equity) shall not be deemed an Affiliate
of such Purchaser Party and (iii) the Excluded Sponsor Parties (as defined in
the Purchase Agreement) shall not be deemed to be Affiliates of any Purchaser
Party, the Company or any of the Company’s Subsidiaries.

 

“Articles of Incorporation” means the Company’s amended and restated Articles of
Incorporation, as the same have been and may be further amended or restated.

 

“Board of Directors” means the Company’s board of directors or a committee of
such board duly authorized to act with the authority of such board.

 

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

 

“Bylaws” means the Amended and Restated Bylaws of the Company, adopted as of
February 8, 2016, as the same may be further amended or restated.

 

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

 

- 1 -

 

 

“Certificate” means a Physical Certificate or an Electronic Certificate.

 

“Certificate of Designation” means this Certificate of Designation, as amended
from time to time.

 

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

 

“Common Stock” means the common stock, $0.001 par value per share, of the
Company, subject to Section 10(i).

 

“Common Stock Change Event” has the meaning set forth in Section 10(i)(i).

 

“Common Stock Liquidity Conditions” will be satisfied with respect to a
Mandatory Conversion or Redemption if:

 

(a)       the offer and sale of such share of Common Stock by such Holder are
registered pursuant to an effective registration statement under the Securities
Act and such registration statement is reasonably expected by the Company to
remain effective and usable, by the Holder to sell such share of Common Stock,
continuously during the period from, and including, the date the related
Mandatory Conversion Notice or Redemption Notice Date, as applicable, is sent
to, and including, the one (1) year anniversary after the date such share of
Common Stock is issued;

 

(b)       each share of Common Stock referred to in clause (a) above (i) will,
when issued and when sold or otherwise transferred pursuant to the registration
statement referred to in such clause) (1) be admitted for book-entry settlement
through The Depository Trust Company with an “unrestricted” CUSIP number; and
(2) not be evidenced by any Certificate that bears a legend referring to
transfer restrictions under the Securities Act or other securities laws; and
(ii) will, when issued, be listed and admitted for trading, without suspension
or material limitation on trading, on any of The New York Stock Exchange, The
NYSE American, The NASDAQ Capital Market, The NASDAQ Global Market or The NASDAQ
Global Select Market (or any of their respective successors);

 

(c)       (i) the Company has not received any written threat or notice of
delisting or suspension by the applicable exchange referred to in clause (b)(ii)
above with a reasonable prospect of delisting, after giving effect to all
applicable notice and appeal periods; and (ii) no such delisting or suspension
is reasonably likely to occur or is pending based on the Company falling below
the minimum listing maintenance requirements of such exchange; and

 

(d)       the conversion of all shares of Convertible Preferred Stock pursuant
to such Mandatory Conversion or that are subject to such Redemption, as
applicable, would not be limited or otherwise restricted by Section 10(h).

 

“Common Stock Participating Dividend” has the meaning set forth in Section
5(c)(i).

 

“Company” means Cryoport, Inc., a Nevada corporation.

 

- 2 -

 

 

“Continuing Share Reserve Requirement” means, as of any time, a number of shares
of Common Stock equal to the product of (a) two (2); and (b) the number of
shares of Common Stock that would be issuable (without regard to Section 10(h))
upon conversion of all Convertible Preferred Stock outstanding as of such time
(assuming such conversion occurred as of such time).

 

“Control” (including its correlative meanings “under common Control with” and
“Controlled by”) means, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through ownership of securities or partnership
or other interests, by contract or otherwise.

 

“Conversion Agent” has the meaning set forth in Section 3(f)(i).

 

“Conversion Share” means any share of Common Stock issued or issuable upon
conversion of any Convertible Preferred Stock.

 

“Conversion Consideration” means, with respect to the conversion of any
Convertible Preferred Stock, the type and amount of consideration payable to
settle such conversion, determined in accordance with Section 10.

 

“Conversion Date” means an Optional Conversion Date or a Mandatory Conversion
Date.

 

“Conversion Price” initially means $38.6152 per share of Common Stock; provided,
however, that the Conversion Price is subject to adjustment pursuant to Sections
10(f) and 10(g). Each reference in this Certificate of Designation to the
Conversion Price as of a particular date without setting forth a particular time
on such date will be deemed to be a reference to the Conversion Price
immediately before the Close of Business on such date.

 

“Convertible Preferred Stock” has the meaning set forth in Section 3(a).

 

“Daily VWAP” means, for any VWAP Trading Day, the per share volume-weighted
average price of the Common Stock as displayed under the heading “Bloomberg
VWAP” on Bloomberg page “CYRX <EQUITY> AQR” (or, if such page is not available,
its equivalent successor page) in respect of the period from the scheduled open
of trading until the scheduled close of trading of the primary trading session
on such VWAP Trading Day (or, if such volume-weighted average price is
unavailable, the market value of one (1) share of Common Stock on such VWAP
Trading Day, determined, using a volume-weighted average price method, by a
nationally recognized independent investment banking firm the Company selects).
The Daily VWAP will be determined without regard to after-hours trading or any
other trading outside of the regular trading session.

 

“Deficit Shares” has the meaning set forth in Section 10(h)(i)(1).

 

“Dividend” means any Regular Dividend or Participating Dividend.

 

- 3 -

 

 

“Dividend Junior Stock” means any class or series of the Company’s stock, the
terms of which would result in such class or series ranking junior to the
Convertible Preferred Stock with respect to the payment of dividends (without
regard to whether or not dividends accumulate cumulatively). Dividend Junior
Stock includes the Common Stock. For the avoidance of doubt, Dividend Junior
Stock will not include any securities of the Company’s Subsidiaries.

 

“Dividend Parity Stock” means any class or series of the Company’s stock (other
than the Convertible Preferred Stock), the terms of which would result in such
class or series ranking equally with the Convertible Preferred Stock with
respect to the payment of dividends (without regard to whether or not dividends
accumulate cumulatively). For the avoidance of doubt, Dividend Parity Stock
includes the Series A Preferred Stock and the Series B Preferred Stock, but does
not include any securities of the Company’s Subsidiaries.

 

“Dividend Payment Date” means each Regular Dividend Payment Date with respect to
a Regular Dividend and each date on which any declared Participating Dividend is
scheduled to be paid on the Convertible Preferred Stock with respect to a
Participating Dividend.

 

“Dividend Senior Stock” means any class or series of the Company’s stock, the
terms of which would result in such class or series ranking senior to the
Convertible Preferred Stock with respect to the payment of dividends (without
regard to whether or not dividends accumulate cumulatively). For the avoidance
of doubt, Dividend Senior Stock will not include any securities of the Company’s
Subsidiaries.

 

“Electronic Certificate” means any electronic book entry maintained by the
Transfer Agent that evidences any share(s) of Convertible Preferred Stock.

 

“Equity Treatment Limitation” has the meaning set forth in Section 10(h)(i)(1).

 

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

 

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

 

“Expiration Date” has the meaning set forth in Section 10(f)(i)(2).

 

“Expiration Time” has the meaning set forth in Section 10(f)(i)(2).

 

“Final Fundamental Change Notice” has the meaning set forth in Section 8(f).

 

“Fundamental Change” means any of the following events, whether in a single
transaction or a series of related transactions:

 

- 4 -

 

 

(a)       a “person” or “group” (within the meaning of Section 13(d) and 14(d)
of the Exchange Act), other than the Company or its Wholly Owned Subsidiaries,
or their respective employee benefit plans, files any report with the SEC
indicating that such person or group, has become the direct or indirect
“beneficial owner” (as defined below) of shares of the Common Stock representing
more than fifty percent (50%) of the voting power of all of the Company’s Common
Stock in a transaction or series of related transactions approved by the Board
of Directors;

 

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

 

(c)       shares of Common Stock or shares of any other Capital Stock into which
the Convertible Preferred Stock is convertible are not listed for trading on any
United States national securities exchange or cease to be traded in
contemplation of a de-listing, in each case, as a result of or in connection
with a transaction or series of related transactions (or any filings or other
actions related thereto) that have been approved by the Board of Directors
(other than as a result of a transaction described in clause (b) above).

 

For the purposes of this definition, (x) any transaction or event described in
both clause (a) and in clause (b)(i) or (ii) above (without regard to the
proviso in clause (b)) will be deemed to occur solely pursuant to clause (b)
above (subject to such proviso); and (y) whether a Person is a “beneficial
owner”, whether shares are “beneficially owned”, and percentage beneficial
ownership, will be determined in accordance with Rules 13d-3 and 13d-5 under the
Exchange Act.

 

“Fundamental Change Repurchase Date” means the date fixed, pursuant to Section
8(c), for the repurchase of any Convertible Preferred Stock by the Company
pursuant to a Repurchase Upon Fundamental Change.

 

“Fundamental Change Repurchase Notice” means a notice (including a notice
substantially in the form of the “Fundamental Change Repurchase Notice” set
forth in Exhibit A) containing the information, or otherwise complying with the
requirements, set forth in Section 8(g)(i) and Section 8(g)(ii).

 

“Fundamental Change Repurchase Price” means the cash price payable by the
Company to repurchase any share of Convertible Preferred Stock upon its
Repurchase Upon Fundamental Change, calculated pursuant to Section 8(d).

 

- 5 -

 

 

“Fundamental Change Repurchase Right” has the meaning set forth in Section 8(a).

 

“Holder” means a person in whose name any Convertible Preferred Stock is
registered on the Registrar’s books.

 

“Initial Issue Date” means [closing date].

 

“Initial Fundamental Change Notice” has the meaning set forth in Section 8(e).

 

“Initial Liquidation Preference” means one thousand dollars ($1,000.00) per
share of Convertible Preferred Stock.

 

“Initial Share Reserve Requirement” means a number of shares of Common Stock
equal to the product of (a) two (2); and (b) the number of shares of Common
Stock that would be issuable (without regard to Section 10(h)) upon conversion
of all Convertible Preferred Stock outstanding as of the Initial Issue Date
(assuming such conversion occurred on the Initial Issue Date).

 

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

 

“Liquidation Junior Stock” means any class or series of the Company’s stock, the
terms of which would result in such class or series ranking junior to the
Convertible Preferred Stock with respect to the distribution of assets upon the
Company’s liquidation, dissolution or winding up. Liquidation Junior Stock
includes the Common Stock. For the avoidance of doubt, Liquidation Junior Stock
will not include any securities of the Company’s Subsidiaries.

 

“Liquidation Parity Stock” means any class or series of the Company’s stock
(other than the Convertible Preferred Stock), the terms of which would result in
such class or series ranking equally with the Convertible Preferred Stock with
respect to the distribution of assets upon the Company’s liquidation,
dissolution or winding up. For the avoidance of doubt, Liquidation Parity Stock
includes the Series A Preferred Stock and the Series B Preferred Stock, but does
not include any securities of the Company’s Subsidiaries.

 

- 6 -

 

 

“Liquidation Preference” means, with respect to the Convertible Preferred Stock,
an amount initially equal to the Initial Liquidation Preference per share of
Convertible Preferred Stock; provided, however, that the Liquidation Preference
is subject to adjustment pursuant to Section 5(b)(i).

 

“Liquidation Senior Stock” means any class or series of the Company’s stock, the
terms of which would result in such class or series ranking senior to the
Convertible Preferred Stock with respect to the distribution of assets upon the
Company’s liquidation, dissolution or winding up. For the avoidance of doubt,
Liquidation Senior Stock will not include any securities of the Company’s
Subsidiaries.

 

“LTM EBITDA” means, as of any date, the net income before interest, taxes,
depreciation and amortization of the Company, calculated in a manner consistent
with the Company’s use of EBITDA in its SEC Documents (as defined in the
Purchase Agreement), for the twelve (12) month period ending on the calendar
month end immediately preceding such date.

 

“Mandatory Conversion” has the meaning set forth in Section 10(c)(i).

 

“Mandatory Conversion Date” means a Conversion Date designated with respect to
any Convertible Preferred Stock pursuant to Section 10(c)(i) and 10(c)(iii).

 

“Mandatory Conversion Notice” has the meaning set forth in Section 10(c)(iv).

 

“Mandatory Conversion Notice Date” means, with respect to a Mandatory
Conversion, the date on which the Company sends the Mandatory Conversion Notice
for such Mandatory Conversion pursuant to Section 10(c)(iv).

 

“Mandatory Conversion Right” has the meaning set forth in Section 10(c)(i).

 

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

 

“Number of Reserved Shares” means, as of any time, the number of shares of
Common Stock that, at such time, the Company has reserved (out of its authorized
but unissued shares of Common Stock that are not reserved for any other purpose)
for delivery upon conversion of the Convertible Preferred Stock.

 

“Officer” means the Chairman of the Board of Directors, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Vice-President of the Company.

 

- 7 -

 

 

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

 

“Optional Conversion” means the conversion of any Convertible Preferred Stock
other than a Mandatory Conversion.

 

“Optional Conversion Date” means, with respect to the Optional Conversion of any
Convertible Preferred Stock, the first Business Day on which the requirements
set forth in Section 10(d)(ii) for such conversion are satisfied.

 

“Optional Conversion Notice” means a notice substantially in the form of the
“Optional Conversion Notice” set forth in Exhibit A.

 

“Participating Dividend” has the meaning set forth in Section 5(c)(i).

 

“Paying Agent” has the meaning set forth in Section 3(f)(i).

 

“Person” or “person” means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof. Any division or series of a limited liability company,
limited partnership or trust will constitute a separate “person” under this
Certificate of Designation.

 

“Physical Certificate” means any certificate (other than an Electronic
Certificate) evidencing any share(s) of Convertible Preferred Stock, which
certificate is substantially in the form set forth in Exhibit A, registered in
the name of the Holder of such share(s) and duly executed by the Company and
countersigned by the Transfer Agent.

 

“Purchase Agreement” means that certain Securities Purchase Agreement between
the Company and the Purchasers dated as of August 24, 2020, as it may be
amended, supplemented or otherwise modified from time to time, with respect to
certain terms and conditions concerning, among other things, the rights of and
restrictions on the Holders.

 

“Purchasers” has the meaning set forth in the Purchase Agreement.

 

“Purchaser Parties” means the Purchasers and each Permitted Transferee (as
defined in the Purchase Agreement) of a Purchaser to whom shares of Convertible
Preferred Stock or Common Stock issued upon conversion of shares of Convertible
Preferred Stock are transferred pursuant to Section 4.2 of the Purchase
Agreement or Common Stock issued under the Purchase Agreement.

 

“Record Date” means, with respect to any dividend or distribution on, or
issuance to holders of, Convertible Preferred Stock or Common Stock, the date
fixed (whether by law, contract or the Board of Directors or otherwise) to
determine the Holders or the holders of Common Stock, as applicable, that are
entitled to such dividend, distribution or issuance.

 

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

 

- 8 -

 

 

“Redemption Date” means the date fixed, pursuant to Section 7(d), for the
settlement of the repurchase of the Convertible Preferred Stock by the Company
pursuant to a Redemption.

 

“Redemption Notice” has the meaning set forth in Section 7(f).

 

“Redemption Notice Date” means, with respect to a Redemption, the date on which
the Company sends the Redemption Notice for such Redemption pursuant to Section
7(f).

 

“Redemption Price” means the consideration payable by the Company to repurchase
any Convertible Preferred Stock upon its Redemption, calculated pursuant to
Section 7(e).

 

“Reference Property” has the meaning set forth in Section 10(i)(i).

 

“Reference Property Unit” has the meaning set forth in Section 10(i)(i).

 

“Register” has the meaning set forth in Section 3(f)(ii).

 

“Registrar” has the meaning set forth in Section 3(f)(i).

 

“Registration Rights Agreement” means that certain Registration Rights
Agreement, dated as of [closing date], between the Company, BTO Freeze Parent
L.P., a Delaware limited partnership, and the other Holders party thereto from
time to time, as it may be amended or modified in accordance with the terms
thereof.

 

“Regular Dividend Payment Date” means, with respect to any share of Convertible
Preferred Stock, each March 31, June 30, September 30 and December 31 of each
year, beginning on December 31, 2020 (or beginning on such other date specified
in the Certificate evidencing such share).

 

“Regular Dividend Period” means each period from, and including, a Regular
Dividend Payment Date (or, in the case of the first Regular Dividend Period,
from, and including, the Initial Issue Date) to, but excluding, the next Regular
Dividend Payment Date.

 

“Regular Dividend Rate” means four percent (4.0%) per annum or, to the extent
and during the period with respect to which such rate has been adjusted as
provided in Section 8(b), such adjusted rate.

 

“Regular Dividend Record Date” has the following meaning: (a) March 15th, in the
case of a Regular Dividend Payment Date occurring on March 31st; (b) June 15th,
in the case of a Regular Dividend Payment Date occurring on June 30th; (c)
September 15th, in the case of a Regular Dividend Payment Date occurring on
September 30th; and (d) December 15th, in the case of a Regular Dividend Payment
Date occurring on December 31st.

 

“Regular Dividends” has the meaning set forth in Section 5(a)(i).

 

- 9 -

 

 

“Repurchase Upon Fundamental Change” means the repurchase of any Convertible
Preferred Stock by the Company pursuant to Section 8.

 

“Resale Registration Statement” has the meaning ascribed to “Resale Shelf
Registration Statement” in the Registration Rights Agreement.

 

“Restricted Stock Legend” means a legend substantially in the form set forth in
Exhibit B.

 

“Rule 144” means Rule 144 under the Securities Act (or any successor rule
thereto), as the same may be amended from time to time.

 

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

 

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

 

“Security” means any Convertible Preferred Stock or Conversion Share.

 

“Series A Preferred Stock” means Series A Preferred Stock, par value $0.001 of
the Company.

 

“Series B Preferred Stock” means Series B Preferred Stock, par value $0.001 of
the Company.

 

“Share Agent” means the Transfer Agent or any Registrar, Paying Agent or
Conversion Agent.

 

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

 

“Successor Person” has the meaning set forth in Section 10(i)(iii).

 

“Tender/Exchange Offer Valuation Period” has the meaning set forth in Section
10(f)(i)(2).

 

- 10 -

 

 

 

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

 

“Transfer Agent” means Continental Stock Transfer & Trust Company or its
successor.

 

“Transfer-Restricted Security” means any Security that constitutes a “restricted
security” (as defined in Rule 144); provided, however, that such Security will
cease to be a Transfer-Restricted Security upon the earliest to occur of the
following events:

 

(a)       such Security is sold or otherwise transferred to a Person (other than
the Company or an Affiliate of the Company) pursuant to a registration statement
that was effective under the Securities Act at the time of such sale or
transfer;

 

(b)       such Security is sold or otherwise transferred to a Person (other than
the Company or an Affiliate of the Company) pursuant to an available exemption
(including Rule 144) from the registration and prospectus-delivery requirements
of, or in a transaction not subject to, the Securities Act and, immediately
after such sale or transfer, such Security ceases to constitute a “restricted
security” (as defined in Rule 144); and

 

(c)       (i) such Security is eligible for resale, by a Person that is not an
Affiliate of the Company and that has not been an Affiliate of the Company
during the immediately preceding three (3) months, pursuant to Rule 144 without
any limitations thereunder as to volume, manner of sale, availability of current
public information or notice; and (ii) the Company has received such
certificates or other documentation or evidence as the Company may reasonably
require to determine that the Holder, holder or beneficial owner of such
Security is not, and that has not been during the immediately preceding three
(3) months, an Affiliate of the Company.

 

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

 

 -11- 

 

 

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

 

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

 

Section 2.                RULES OF CONSTRUCTION. For Purposes of this
Certificate of Designation:

 

(a)       “or” is not exclusive;

 

(b)       “including” means “including without limitation”;

 

(c)       “will” expresses a command;

 

(d)       the “average” of a set of numerical values refers to the arithmetic
average of such numerical values;

 

(e)       a merger involving, or a transfer of assets by, a limited liability
company, limited partnership or trust will be deemed to include any division of
or by, or an allocation of assets to a series of, such limited liability
company, limited partnership or trust, or any unwinding of any such division or
allocation;

 

(f)       words in the singular include the plural and in the plural include the
singular, unless the context requires otherwise;

 

(g)       “herein,” “hereof” and other words of similar import refer to this
Certificate of Designation as a whole and not to any particular Section or other
subdivision of this Certificate of Designation, unless the context requires
otherwise;

 

(h)       references to currency mean the lawful currency of the United States
of America, unless the context requires otherwise; and

 

(i)        the exhibits, schedules and other attachments to this Certificate of
Designation are deemed to form part of this Certificate of Designation.

 

Section 3.                The Convertible Preferred Stock.

 

 

(a)      Designation; Par Value. A series of stock of the Company titled the
“4.0% Series C Convertible Preferred Stock” (the “Convertible Preferred Stock”)
is hereby designated and created out of the authorized and unissued shares of
preferred stock of the Company. The par value of the Convertible Preferred Stock
is $0.001 per share.

 

 -12- 

 

 

(b)         Number of Authorized Shares. The total authorized number of shares
of Convertible Preferred Stock is two hundred fifty thousand (250,000);
provided, however that, by resolution of the Board of Directors and upon proper
filing of an amendment to this Certificate of Designation with the Nevada
Secretary of State, the total number of authorized shares of Convertible
Preferred Stock may be increased or reduced to a number that is not less than
the number of shares of Convertible Preferred Stock then outstanding.

 

(c)          Form, Dating and Denominations.

 

 

(i)              Form and Date of Certificates Evidencing Convertible Preferred
Stock. Each Certificate evidencing any Convertible Preferred Stock will (1) be
substantially in the form set forth in Exhibit A; (2) bear the legends required
by Section 3(g) and may bear notations, legends or endorsements required by law,
stock exchange rule or usage or the Depositary; and (3) be dated as of the date
it is countersigned by the Transfer Agent.

 

(ii)             Electronic Certificates; Physical Certificates. The Convertible
Preferred Stock will be originally issued initially in the form of one or more
Electronic Certificates. Electronic Certificates may be exchanged for Physical
Certificates, and Physical Certificates may be exchanged for Electronic
Certificates, upon request by the Holder thereof pursuant to customary
procedures, subject to Section 3(h).

 

(iii)           Electronic Certificates; Interpretation. For purposes of this
Certificate of Designation, (1) each Electronic Certificate will be deemed to
include the text of the stock certificate set forth in Exhibit A; (2) any legend
or other notation that is required to be included on a Certificate will be
deemed to be affixed to any Electronic Certificate notwithstanding that such
Electronic Certificate may be in a form that does not permit affixing legends
thereto; (3) any reference in this Certificate of Designation to the “delivery”
of any Electronic Certificate will be deemed to be satisfied upon the
registration of the electronic book entry representing such Electronic
Certificate in the name of the applicable Holder; (4) upon satisfaction of any
applicable requirements of the Nevada Revised Statutes, the Articles of
Incorporation and the Bylaws of the Company, and any related requirements of the
Transfer Agent, in each case for the issuance of Convertible Preferred Stock in
the form of one or more Electronic Certificates, such Electronic Certificates
will be deemed to be executed by the Company and countersigned by the Transfer
Agent.

 

(iv)           Appointment of Depositary. If any Convertible Preferred Stock is
admitted to the book-entry clearance and settlement facilities of any electronic
depositary, then, notwithstanding anything to the contrary in this Certificate
of Designation, each reference in this Certificate of Designation to the
delivery of, or payment on, any such Convertible Preferred Stock, or the
delivery of any related notice or demand, will be deemed to be satisfied to the
extent the applicable procedures of such depositary governing such delivery or
payment, as applicable, are satisfied.

 

(v)            No Bearer Certificates; Denominations. The Convertible Preferred
Stock will be issued only in registered form and only in whole numbers of
shares.

 

(vi)           Registration Numbers. Each Certificate evidencing any share of
Convertible Preferred Stock will bear a unique registration number that is not
affixed to any other Certificate evidencing any other then-outstanding shares of
Convertible Preferred Stock.

 

 -13- 

 

 

(d)         Execution, Countersignature and Delivery.

 

(i)           Due Execution by the Company. At least two (2) duly authorized
Officers will sign each Certificate evidencing any Convertible Preferred Stock
on behalf of the Company by manual, facsimile or electronic signature. The
validity of any Convertible Preferred Stock will not be affected by the failure
of any Officer whose signature is on any Certificate evidencing such Convertible
Preferred Stock to hold, at the time such Certificate is countersigned by the
Transfer Agent, the same or any other office at the Company.

 

(ii)          Countersignature by Transfer Agent. No Certificate evidencing any
share of Convertible Preferred Stock is valid until such Certificate is
countersigned by the Transfer Agent. Each Certificate will be deemed to be duly
countersigned only when an authorized signatory of the Transfer Agent (or a duly
appointed agent thereof) manually signs the countersignature block set forth in
such Certificate.

 

(e)         Method of Payment; Delay When Payment Date is Not a Business Day.

 

 

(i)           Method of Payment. The Company will pay all cash amounts due on
any shares of Convertible Preferred Stock of any Holder by check mailed to the
address of such Holder set forth in the Register; provided, however, that if
such Holder has delivered to the Company, no later than the time set forth in
the next sentence, a written request to receive payment by wire transfer to an
account of such Holder within the United States, then the Company will pay such
cash amounts by wire transfer of immediately available funds to such account. To
be timely, such written request must be delivered no later than the Close of
Business on the following date: (1) with respect to the payment of any declared
cash Dividend due on a Dividend Payment Date for the Convertible Preferred
Stock, the related Record Date; and (y) with respect to any other payment, the
date that is fifteen (15) calendar days immediately before the date such payment
is due.

 

(1)          Electronic Certificates. The Company will pay (or cause the Paying
Agent to pay) all declared cash Dividends or other cash amounts due on any
Convertible Preferred Stock evidenced by an Electronic Certificate by wire
transfer of immediately available funds.

 

(2)          Physical Certificates. The Company will pay (or cause the Paying
Agent to pay) all declared cash Dividends or other cash amounts due on any
Convertible Preferred Stock evidenced by a Physical Certificate as follows:

 

(A)             if the aggregate Liquidation Preference of the Convertible
Preferred Stock evidenced by such Physical Certificate is at least five million
dollars ($5,000,000) (or such lower amount as the Company may choose in its sole
and absolute discretion) and the Holder of such Convertible Preferred Stock
entitled to such cash Dividend or amount has delivered to the Paying Agent, no
later than the time set forth in the next sentence, a written request to receive
payment by wire transfer to an account of such Holder within the United States,
by wire transfer of immediately available funds to such account; and

 

 -14- 

 

 

(B)              in all other cases, by check mailed to the address of such
Holder set forth in the Register.

 

To be timely, such written request must be delivered no later than the Close of
Business on the following date: (x) with respect to the payment of any declared
cash Dividend due on a Dividend Payment Date for the Convertible Preferred
Stock, the related Record Date; and (y) with respect to any other payment, the
date that is fifteen (15) calendar days immediately before the date such payment
is due.

 

(ii)          Delay of Payment when Payment Date is Not a Business Day. If the
due date for a payment on any Convertible Preferred Stock as provided in this
Certificate of Designation is not a Business Day, then, notwithstanding anything
to the contrary in this Certificate of Designation, such payment may be made on
the immediately following Business Day and no interest, dividend or other amount
will accrue or accumulate on such payment as a result of the related delay.
Solely for purposes of the immediately preceding sentence, a day on which the
applicable place of payment is authorized or required by law or executive order
to close or be closed will be deemed not to be a “Business Day.”

 

(f)          Transfer Agent, Registrar, Paying Agent and Conversion Agent.

 

(i)           Generally. The Company designates its principal U.S. executive
offices, and any office of the Transfer Agent in the continental United States,
as an office or agency where Convertible Preferred Stock may be presented for
(1) registration of transfer or for exchange (the “Registrar”); (2) payment (the
“Paying Agent”); and (3) conversion (the “Conversion Agent”). At all times when
any Convertible Preferred Stock is outstanding, the Company will maintain an
office in the continental United States constituting the Registrar, Paying Agent
and Conversion Agent.

 

(ii)          Maintenance of the Register. The Company will keep, or cause there
to be kept, a record (the “Register”) of the names and addresses of the Holders,
the number of shares of Convertible Preferred Stock held by each Holder and the
transfer, exchange, repurchase, Redemption and conversion of the Convertible
Preferred Stock. Absent manifest error, the entries in the Register will be
conclusive and the Company and the Transfer Agent may treat each Person whose
name is recorded as a Holder in the Register as a Holder for all purposes. The
Register will be in written form or in any form capable of being converted into
written form reasonably promptly. The Company will promptly provide a copy of
the Register to any Holder upon its request.

 

(iii)         Subsequent Appointments. By notice to each Holder, the Company
may, at any time, appoint any Person (including any Subsidiary of the Company)
to act as Registrar, Paying Agent or Conversion Agent.

 

 -15- 

 

 

(iv)         If the Company or any of its Subsidiaries acts as Paying Agent or
Conversion Agent, then (1) it will segregate for the benefit of the Holders all
money and other property held by it as Paying Agent or Conversion Agent; and (2)
references in this Certificate of Designation to the Paying Agent or Conversion
Agent holding cash or other property, or to the delivery of cash or other
property to the Paying Agent or Conversion Agent, in each case for payment or
delivery to any Holders or with respect to the Convertible Preferred Stock, will
be deemed to refer to cash or other property so segregated , or to the
segregation of such cash or other property, respectively.

 

(g)         Legends.

 

(i)           Restricted Stock Legend.

 

(1)          Each Certificate evidencing any share of Convertible Preferred
Stock that is a Transfer-Restricted Security will bear the Restricted Stock
Legend.

 

(2)          If any share of Convertible Preferred Stock is issued in exchange
for, in substitution of, or to effect a partial conversion of, any other
share(s) of Convertible Preferred Stock (such other share(s) being referred to
as the “old share(s)” for purposes of this Section 3(g)(i)(2)), including
pursuant to Section 3(i) or 3(k), then the Certificate evidencing such share
will bear the Restricted Stock Legend if the Certificate evidencing such old
share(s) bore the Restricted Stock Legend at the time of such exchange or
substitution, or on the related Conversion Date with respect to such conversion,
as applicable; provided, however, that the Certificate evidencing such share
need not bear the Restricted Stock Legend if such share does not constitute a
Transfer-Restricted Security immediately after such exchange or substitution, or
as of such Conversion Date, as applicable.

 

(ii)         Other Legends. The Certificate evidencing any Convertible Preferred
Stock may bear any other legend or text, not inconsistent with this Certificate
of Designation, as may be required by applicable law, by the rules of any
applicable depositary for the Convertible Preferred Stock or by any securities
exchange or automated quotation system on which such Convertible Preferred Stock
is traded or quoted or as may be otherwise reasonably determined by the Company
to be appropriate.

 

(iii)         Acknowledgement and Agreement by the Holders. A Holder’s
acceptance of any Convertible Preferred Stock evidencing by a Certificate
bearing any legend required by this Section 3(g) will constitute such Holder’s
acknowledgement of, and agreement to comply with, the restrictions set forth in
such legend.

 

(iv)         Legends on Conversion Shares.

 

(1)          Each Conversion Share will bear a legend substantially to the same
effect as the Restricted Stock Legend if the Convertible Preferred Stock upon
the conversion of which such Conversion Share was issued was (or would have been
had it not been converted) a Transfer-Restricted Security at the time such
Conversion Share was issued; provided, however, that such Conversion Share need
not bear such a legend if the Company determines, in its reasonable discretion,
that such Conversion Share need not bear such a legend.

 

 -16- 

 

 

(2)          Notwithstanding anything to the contrary in Section 3(g)(iv)(1), a
Conversion Share need not bear a legend pursuant to Section 3(g)(iv)(1) if such
Conversion Share is issued in an uncertificated form that does not permit
affixing legends thereto (subject to compliance with Nevada Revised Statutes
78.235 and 78.242), provided the Company takes measures (including the
assignment thereto of a “restricted” CUSIP number) that it reasonably deems
appropriate to enforce the transfer restrictions referred to in such legend.

 

(h)         Transfers and Exchanges; Transfer Taxes; Certain Transfer
Restrictions.

 

(i)           Provisions Applicable to All Transfers and Exchanges.

 

(1)          Generally. Subject to this Section 3(h), Convertible Preferred
Stock evidenced by any Certificate may be transferred or exchanged from time to
time and the Company will cause the Registrar to record each such transfer or
exchange in the Register.

 

(2)           No Services Charge; Transfer Taxes. The Company and the Share
Agents will not impose any service charge on any Holder for any transfer,
exchange or conversion of any Convertible Preferred Stock, but the Company, the
Transfer Agent, the Registrar and the Conversion Agent may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge that may
be imposed in connection with any transfer, exchange or conversion of
Convertible Preferred Stock, other than exchanges pursuant to Section 3(i) or
Section 3(q) not involving any transfer (and; provided, that (A) any such taxes
or charges incurred in connection with the original issuance of the Convertible
Preferred Stock shall be paid and borne by the Company; and (B) any such taxes
or charges incurred in connection with a conversion of the Convertible Preferred
Stock pursuant to Section 10 shall be paid and borne as provided in Section
11(c)).

 

(3)           No Transfers or Exchanges of Fractional Shares. Notwithstanding
anything to the contrary in this Certificate of Designation, all transfers or
exchanges of Convertible Preferred Stock must be in an amount representing a
whole number of shares of Convertible Preferred Stock, and no fractional share
of Convertible Preferred Stock may be transferred or exchanged.

 

(4)           Legends. Each Certificate evidencing any share of Convertible
Preferred Stock that is issued upon transfer of, or in exchange for, another
share of Convertible Preferred Stock will bear each legend, if any, required by
Section 3(g).

 

(5)          Settlement of Transfers and Exchanges. Upon satisfaction of the
requirements of this Certificate of Designation to effect a transfer or exchange
of any Convertible Preferred Stock, the Company will cause such transfer or
exchange to be effected as soon as reasonably practicable but in no event later
than the second (2nd) Business Day after the date of such satisfaction.

 

 -17- 

 

 

(6)          Exchanges to Remove Transfer Restrictions. For the avoidance of
doubt, and subject to the terms of this Certificate of Designation, as used in
this Section 3(h), an “exchange” of a Certificate includes an exchange effected
for the sole purpose of removing any Restricted Stock Legend affixed to such
Certificate.

 

(ii)          Transfers and Exchanges of Convertible Preferred Stock.

 

(1)          Subject to this Section 3(h), a Holder of any Convertible Preferred
Stock evidenced by a Certificate may (x) transfer any whole number of shares of
such Convertible Preferred Stock to one or more other Person(s); and (y)
exchange any whole number of shares of such Convertible Preferred Stock for an
equal number of shares of Convertible Preferred Stock evidenced by one or more
other Certificates; provided, however, that, to effect any such transfer or
exchange, such Holder must, if such Certificate is a Physical Certificate,
surrender such Physical Certificate to the office of the Transfer Agent or the
Registrar, together with any endorsements or transfer instruments reasonably
required by the Company, the Transfer Agent or the Registrar.

 

(2)          Upon the satisfaction of the requirements of this Certificate of
Designation to effect a transfer or exchange of any whole number of shares of a
Holder’s Convertible Preferred Stock evidenced by a Certificate (such
Certificate being referred to as the “old Certificate” for purposes of this
Section 3(h)(ii)(2)):

 

(A)            such old Certificate will be promptly cancelled pursuant to
Section 3(m);

 

(B)            if fewer than all of the shares of Convertible Preferred Stock
evidenced by such old Certificate are to be so transferred or exchanged, then
the Company will issue, execute and deliver, and cause the Transfer Agent to
countersign, in each case in accordance with Section 3(d), one or more
Certificates that (x) each evidence a whole number of shares of Convertible
Preferred Stock and, in the aggregate, evidence a total number of shares of
Convertible Preferred Stock equal to the number of shares of Convertible
Preferred Stock evidenced by such old Certificate not to be so transferred or
exchanged; (y) are registered in the name of such Holder; and (z) bear each
legend, if any, required by Section 3(g);

 

(C)            in the case of a transfer to a transferee, the Company will
issue, execute and deliver, and cause the Transfer Agent to countersign, in each
case in accordance with Section 3(d), one or more Certificates that (x) each
evidence a whole number of shares of Convertible Preferred Stock and, in the
aggregate, evidence a total number of shares of Convertible Preferred Stock
equal to the number of shares of Convertible Preferred Stock to be so
transferred; (y) are registered in the name of such transferee; and (z) bear
each legend, if any, required by Section 3(g); and

 

 -18- 

 

 

(D)            in the case of an exchange, the Company will issue, execute and
deliver, and cause the Transfer Agent to countersign, in each case in accordance
with Section 3(d), one or more Certificates that (x) each evidence a whole
number of shares of Convertible Preferred Stock and, in the aggregate, evidence
a total number of shares of Convertible Preferred Stock equal to the number of
shares of Convertible Preferred Stock to be so exchanged; (y) are registered in
the name of the Person to whom such old Certificate was registered; and (z) bear
each legend, if any, required by Section 3(g).

 

(iii)         Transfers of Shares Subject to Redemption, Repurchase or
Conversion. Notwithstanding anything to the contrary in this Certificate of
Designation, the Company, the Transfer Agent and the Registrar will not be
required to register the transfer of or exchange any share of Convertible
Preferred Stock that has been surrendered for conversion.

 

(i)         Exchange and Cancellation of Convertible Preferred Stock to Be
Converted or to Be Repurchased Pursuant to a Repurchase Upon Fundamental Change
or a Redemption.

 

 

(i)           Partial Conversions of Physical Certificates and Partial
Repurchases of Physical Certificates Pursuant to a Repurchase Upon Fundamental
Change or a Redemption. If fewer than all of the shares of Convertible Preferred
Stock evidenced by a Physical Certificate (such Physical Certificate being
referred to as the “old Physical Certificate” for purposes of this Section
3(i)(i)) are to be converted pursuant to Section 10 or repurchased pursuant to a
Repurchase Upon Fundamental Change or a Redemption, then, as soon as reasonably
practicable after such Physical Certificate is surrendered for such conversion
or repurchase, as applicable, the Company will cause such Physical Certificate
to be exchanged, pursuant and subject to Section 3(h), for (1) one or more
Physical Certificates that each evidence a whole number of shares of Convertible
Preferred Stock and, in the aggregate, evidence a total number of shares of
Convertible Preferred Stock equal to the number of shares of Convertible
Preferred Stock evidenced by such old Physical Certificate that are not to be so
converted or repurchased, as applicable, and deliver such Physical
Certificate(s) to such Holder; and (2) a Physical Certificate evidencing a whole
number of shares of Convertible Preferred Stock equal to the number of shares of
Convertible Preferred Stock evidenced by such old Physical Certificate that are
to be so converted or repurchased, as applicable, which Physical Certificate
will be converted or repurchased, as applicable, pursuant to the terms of this
Certificate of Designation; provided, however, that the Physical Certificate
referred to in this clause (2) need not be issued at any time after which such
shares subject to such conversion or repurchase, as applicable, are deemed to
cease to be outstanding pursuant to Section 3(o).

 

 -19- 

 

 

(ii)          Cancellation of Convertible Preferred Stock that Is Converted and
Convertible Preferred Stock that Is Repurchased Pursuant to a Repurchase Upon
Fundamental Change or a Redemption. If shares of Convertible Preferred Stock
evidenced by a Certificate (or any portion thereof that has not theretofore been
exchanged pursuant to Section 3(i)(i)) (such Certificate being referred to as
the “old Certificate” for purposes of this Section 3(i)(ii)) are to be converted
pursuant to Section 10 or repurchased pursuant to a Repurchase Upon Fundamental
Change or a Redemption, then, promptly after the later of the time such
Convertible Preferred Stock is deemed to cease to be outstanding pursuant to
Section 3(o) and the time such old Certificate is surrendered for such
conversion or repurchase, as applicable, (1) such old Certificate will be
cancelled pursuant to Section 3(m); and (2) in the case of a partial conversion
or repurchase, the Company will issue, execute and deliver to such Holder, and
cause the Transfer Agent to countersign, in each case in accordance with Section
3(d), one or more Certificates that (x) each evidence a whole number of shares
of Convertible Preferred Stock and, in the aggregate, evidence a total number of
shares of Convertible Preferred Stock equal to the number of shares of
Convertible Preferred Stock evidenced by such old Certificate that are not to be
so converted or repurchased, as applicable; (y) are registered in the name of
such Holder; and (z) bear each legend, if any, required by Section 3(g).

 

(j)          Status of Retired or Treasury Shares. Upon any share of Convertible
Preferred Stock ceasing to be outstanding (including upon conversion or
redemption thereof, and including any shares of Convertible Preferred Stock
deemed to be treasury shares under Nevada Revised Statutes 78.283), such share
will be deemed, automatically and without any further action of the Board of
Directors, to be retired and to resume the status of an authorized and unissued
share of preferred stock of the Company, and such share cannot thereafter be
reissued as Convertible Preferred Stock.

 

(k)        Replacement Certificates. If a Holder of any Convertible Preferred
Stock claims that the Certificate(s) evidencing such Convertible Preferred Stock
have been mutilated, lost, destroyed or wrongfully taken, then the Company will
issue, execute and deliver, and cause the Transfer Agent to countersign, in each
case in accordance with Section 3(c), a replacement Certificate evidencing such
Convertible Preferred Stock upon surrender to the Company or the Transfer Agent
of such mutilated Certificate, or upon delivery to the Company or the Transfer
Agent of evidence of such loss, destruction or wrongful taking reasonably
satisfactory to the Transfer Agent and the Company. In the case of a lost,
destroyed or wrongfully taken Certificate evidencing Convertible Preferred
Stock, the Company and the Transfer Agent may require the Holder thereof to
provide such security or indemnity that is reasonably satisfactory to the
Company and the Transfer Agent to protect the Company and the Transfer Agent
from any loss that any of them may suffer if such Certificate is replaced.

 

(l)          Registered Holders. Only the Holder of any share of Convertible
Preferred Stock will have rights under this Certificate of Designation as the
owner of such share of Convertible Preferred Stock.

 

(m)        Cancellation. The Company may at any time deliver Certificates
evidencing Convertible Preferred Stock, if any, to the Transfer Agent for
cancellation. The Registrar, the Paying Agent and the Conversion Agent will
forward to the Transfer Agent each share of Convertible Preferred Stock duly
surrendered to them for transfer, exchange, payment or conversion. The Company
will cause the Transfer Agent to promptly cancel all Certificates evidencing
shares of Convertible Preferred Stock so surrendered to it in accordance with
its customary procedures.

 

 -20- 

 

 

(n)         Shares Held by the Company or its Subsidiaries. Without limiting the
generality of Section 3(j) and Section 3(o), in determining whether the Holders
of the required number of outstanding shares of Convertible Preferred Stock have
concurred in any direction, waiver or consent, shares of Convertible Preferred
Stock owned by the Company or any of its Subsidiaries will be deemed not to be
outstanding.

 

(o)         Outstanding Shares.

 

(i)           Generally. The shares of Convertible Preferred Stock that are
outstanding at any time will be deemed to be those shares indicated as
outstanding in the Register (absent manifest error), excluding those shares of
Convertible Preferred Stock that have theretofore been (1) cancelled by the
Transfer Agent or delivered to the Transfer Agent for cancellation in accordance
with Section 3(m); (2) paid in full upon their conversion or upon their
repurchase pursuant to a Repurchase Upon Fundamental Change or a Redemption in
accordance with this Certificate of Designation; or (3) deemed to cease to be
outstanding to the extent provided in, and subject to, clause (ii), (iii), (iv)
or (v) of this Section 3(o).

 

(ii)          Replaced Shares. If any Certificate evidencing any share of
Convertible Preferred Stock is replaced pursuant to Section 3(k), then such
share will cease to be outstanding at the time of such replacement, unless the
Transfer Agent and the Company receive proof reasonably satisfactory to them
that such share is held by a “bona fide purchaser” under applicable law.

 

(iii)         Shares to Be Repurchased Pursuant to a Redemption. If, on a
Redemption Date, the Paying Agent holds consideration in kind and amount that is
sufficient to pay the aggregate Redemption Price due on such date, then (unless
there occurs a default in the payment of the Redemption Price) (1) the
Convertible Preferred Stock to be redeemed on such date will be deemed, as of
such date, to cease to be outstanding (without limiting the Company’s
obligations pursuant to Section 5(d)); and (2) the rights of the Holders of such
Convertible Preferred Stock, as such, will terminate with respect to such
Convertible Preferred Stock, other than the right to receive the Redemption
Price as provided in Section 7 (and, if applicable, declared Dividends as
provided in Section 5(d)).

 

(iv)         Shares to Be Repurchased Pursuant to a Repurchase Upon Fundamental
Change. If, on a Fundamental Change Repurchase Date, the Paying Agent holds
consideration in kind and amount that is sufficient to pay the aggregate
Fundamental Change Repurchase Price due on such date, then (unless there occurs
a default in the payment of the Fundamental Change Repurchase Price) (1) the
Convertible Preferred Stock to be repurchased on such date will be deemed, as of
such date, to cease to be outstanding (without limiting the Company’s
obligations pursuant to Section 5(d)); and (2) the rights of the Holders of such
Convertible Preferred Stock, as such, will terminate with respect to such
Convertible Preferred Stock, other than the right to receive the Fundamental
Change Repurchase Price as provided in Section 8 (and, if applicable, declared
Dividends as provided in Section 5(d)).

 

 -21- 

 

 

(v)           Shares to Be Converted. If any Convertible Preferred Stock is to
be converted, then, at the Close of Business on the Conversion Date for such
conversion (unless there occurs a default in the delivery of the Conversion
Consideration due pursuant to Section 10 upon such conversion): (1) such
Convertible Preferred Stock will be deemed to cease to be outstanding (without
limiting the Company’s obligations pursuant to Section 5(d)); and (2) the rights
of the Holders of such Convertible Preferred Stock, as such, will terminate with
respect to such Convertible Preferred Stock, other than the right to receive
such Conversion Consideration as provided in Section 10 (and, if applicable,
declared Dividends as provided in Section 5(d)).

 

(p)         Repurchases by the Company and its Subsidiaries. Without limiting
the generality of Section 3(m) and the next sentence, the Company may, from time
to time, repurchase Convertible Preferred Stock in open market purchases or in
negotiated transactions without delivering prior notice to Holders. The Company
will promptly deliver to the Transfer Agent for cancellation all Convertible
Preferred Stock that the Company or any of its Subsidiaries have purchased or
otherwise acquired.

 

(q)         Notations and Exchanges. Without limiting any rights of Holders
pursuant to Section 9, if any amendment, supplement or waiver to the Articles of
Incorporation or this Certificate of Designation changes the terms of any
Convertible Preferred Stock, then the Company may, in its discretion, require
the Holder of the Certificate evidencing such Convertible Preferred Stock to
deliver such Certificate to the Transfer Agent so that the Transfer Agent may
place an appropriate notation prepared by the Company on such Certificate and
return such Certificate to such Holder. Alternatively, at its discretion, the
Company may, in exchange for such Convertible Preferred Stock, issue, execute
and deliver, and cause the Transfer Agent to countersign, in each case in
accordance with Section 3(c), a new Certificate evidencing such Convertible
Preferred Stock that reflects the changed terms. The failure to make any
appropriate notation or issue a new Certificate evidencing any Convertible
Preferred Stock pursuant to this Section 3(q) will not impair or affect the
validity of such amendment, supplement or waiver.

 

Section 4.             Ranking. The Convertible Preferred Stock will rank (a)
senior to (i) Dividend Junior Stock with respect to the payment of dividends;
and (ii) Liquidation Junior Stock with respect to the distribution of assets
upon the Company’s liquidation, dissolution or winding up; (b) equally with (i)
Dividend Parity Stock with respect to the payment of dividends; and (ii)
Liquidation Parity Stock with respect to the distribution of assets upon the
Company’s liquidation, dissolution or winding up; and (c) junior to (i) Dividend
Senior Stock with respect to the payment of dividends; and (ii) Liquidation
Senior Stock with respect to the distribution of assets upon the Company’s
liquidation, dissolution or winding up.

 

Section 5.              Dividends.

 

(a)         Regular Dividends.

 

(i)              Accumulation and Payment of Regular Dividends. The Convertible
Preferred Stock will accumulate cumulative dividends at a rate per annum equal
to the Regular Dividend Rate on the Liquidation Preference thereof (calculated
in accordance with Section 5(a)(ii)), regardless of whether or not declared or
funds are legally available for their payment (such dividends that accumulate on
the Convertible Preferred Stock pursuant to this sentence, “Regular Dividends”).
Subject to the other provisions of this Section 5 (including, for the avoidance
of doubt, Section 5(b)(i)), such Regular Dividends will be payable when, as and
if declared by the Board of Directors, quarterly in arrears on each Regular
Dividend Payment Date, to the Holders as of the Close of Business on the
immediately preceding Regular Dividend Record Date. Regular Dividends on the
Convertible Preferred Stock will accumulate daily from, and including, the last
date on which Regular Dividends have been paid (or, if no Regular Dividends have
been paid, from, and including, the Initial Issue Date) to, but excluding, the
next Regular Dividend Payment Date.

 

 -22- 

 

 

(ii)              Computation of Accumulated Regular Dividends. Accumulated
Regular Dividends will be computed on the basis of a 360-day year comprised of
twelve 30-day months. Regular Dividends on each share of Convertible Preferred
Stock will accrue on the Liquidation Preference of such share as of immediately
before the Close of Business on the preceding Regular Dividend Payment Date (or,
if there is no preceding Regular Dividend Payment Date, on the Initial Issue
Date of such share).

 

(b)         Calculation of Regular Dividends.

 

(i)               Generally. The dollar amount (expressed as an amount per share
of Convertible Preferred Stock) of each Regular Dividend on the Convertible
Preferred Stock (whether or not declared) that has accumulated on the
Convertible Preferred Stock in respect of the Regular Dividend Period ending on,
but excluding, a Regular Dividend Payment Date, will be added, effective
immediately before the Close of Business on the related Regular Dividend Payment
Date, to the Liquidation Preference of each share of Convertible Preferred Stock
outstanding as of such time. Such addition will occur automatically, without the
need of any action on the part of the Company or any other Person.

 

(ii)              Construction. Any Regular Dividends added to the Liquidation
Preference of any share of Convertible Preferred Stock pursuant to Section
5(b)(i) will be deemed to be “declared” and “paid” on such share of Convertible
Preferred Stock for all purposes of this Certificate of Designation.

 

(c)          Participating Dividends.

 

(i)               Generally. Subject to Section 5(c)(ii), no dividend or other
distribution on the Common Stock (whether in cash, securities (including rights
or options) or other property, or any combination of the foregoing) will be
declared or paid on the Common Stock unless, at the time of such declaration and
payment, an equivalent dividend or distribution is declared and paid,
respectively, on the Convertible Preferred Stock (such a dividend or
distribution on the Convertible Preferred Stock, a “Participating Dividend,” and
such corresponding dividend or distribution on the Common Stock, the “Common
Stock Participating Dividend”), such that (1) the Record Date and the payment
date for such Participating Dividend occur on the same dates as the Record Date
and payment date, respectively, for such Common Stock Participating Dividend;
and (2) the kind and amount of consideration payable per share of Convertible
Preferred Stock in such Participating Dividend is the same kind and amount of
consideration that would be payable in the Common Stock Participating Dividend
in respect of a number of shares of Common Stock equal to the number of shares
of Common Stock that would be issuable (determined in accordance with Section 10
but without regard to Section 10(h)) in respect of one (1) share of Convertible
Preferred Stock that is converted with a Conversion Date occurring on such
Record Date (subject to the same arrangements, if any, in such Common Stock
Participating Dividend not to issue or deliver a fractional portion of any
security or other property, but with such arrangement applying separately to
each Holder and computed based on the total number of shares of Convertible
Preferred Stock held by such Holder on such Record Date).

 

 -23- 

 

 

(ii)              Stockholder Rights Plans, Common Stock Change Events and Stock
Splits, Dividends and Combinations. Section 5(c)(i) will not apply to, and no
Participating Dividend will be required to be declared or paid in respect of,
(1) a Common Stock Change Event, or an event for which an adjustment to the
Conversion Price is required pursuant to Section 10(f)(i)(1), as to which
Section 10(i) or Section 10(f)(i)(1), respectively, will apply; and (2) rights
issued pursuant to a stockholder rights plan.

 

(d)         Treatment of Dividends Upon Redemption, Repurchase Upon Fundamental
Change or Conversion. If the Redemption Date, Fundamental Change Repurchase Date
or Conversion Date of any share of Convertible Preferred Stock is after a Record
Date for a declared Dividend on the Convertible Preferred Stock and on or before
the next Dividend Payment Date, then the Holder of such share at the Close of
Business on such Record Date will be entitled, notwithstanding the related
Redemption, Repurchase Upon Fundamental Change or conversion, as applicable, to
receive, on or, at the Company’s election, before such Dividend Payment Date,
such declared Dividend on such share.

 

Section 6.               Rights Upon Liquidation, Dissolution or Winding Up.

 

(a)         Generally. If the Company liquidates, dissolves or winds up, whether
voluntarily or involuntarily, then, subject to the rights of any of the
Company’s creditors or holders of any outstanding Liquidation Senior Stock, each
share of Convertible Preferred Stock will entitle the Holder thereof to receive
payment for the greater of the amounts set forth in clause (i) and (ii) below
out of the Company’s assets or funds legally available for distribution to the
Company’s stockholders, before any such assets or funds are distributed to, or
set aside for the benefit of, any Liquidation Junior Stock:

 

(i)              the Liquidation Preference (including any accumulated and
unpaid Regular Dividends on such shares of Convertible Preferred Stock to, but
excluding, the date of such payment); and

 

(ii)             the amount such Holder would have received in respect of the
number of shares of Common Stock that would be issuable upon conversion of such
share of Convertible Preferred Stock in connection with an Optional Conversion
assuming the Conversion Date of such conversion occurs on the date of such
payment.

 

 -24- 

 

 

Upon payment of such amount in full on the outstanding Convertible Preferred
Stock, Holders of the Convertible Preferred Stock will have no rights to the
Company’s remaining assets or funds, if any. If such assets or funds are
insufficient to fully pay such amount on all outstanding shares of Convertible
Preferred Stock and the corresponding amounts payable in respect of all
outstanding shares of Liquidation Parity Stock, if any, then, subject to the
rights of any of the Company’s creditors or holders of any outstanding
Liquidation Senior Stock, such assets or funds will be distributed ratably on
the outstanding shares of Convertible Preferred Stock and Liquidation Parity
Stock in proportion to the full respective distributions to which such shares
would otherwise be entitled.

 

(b)         Certain Business Combination Transactions Deemed Not to Be a
Liquidation. For purposes of Section 6(a), the Company’s consolidation or
combination with, or merger with or into, or the sale, lease or other transfer
of all or substantially all of the Company’s assets (other than a sale, lease or
other transfer in connection with the Company’s liquidation, dissolution or
winding up) to, another Person will not, in itself, constitute the Company’s
liquidation, dissolution or winding up, even if, in connection therewith, the
Convertible Preferred Stock is converted into, or is exchanged for, or
represents solely the right to receive, other securities, cash or other
property, or any combination of the foregoing.

 

Section 7.                Right of the Company to Redeem the Convertible
Preferred Stock.

 

(a)         Right to Redeem Prior to the One Hundred Eighty Day Anniversary.
Subject to the terms of this Section 7, the Company has the right, at its
election, to redeem up to fifty thousand (50,000) shares of the Convertible
Preferred Stock, at any time and from time to time, on a Redemption Date prior
to the one hundred eighty (180) day anniversary of the Initial Issue Date, for a
cash purchase price equal to the Redemption Price.

 

(b)         Right to Redeem On or After the Five Year Anniversary. Subject to
the terms of this Section 7, the Company has the right, at its election, to
redeem, subject to the right of the Holders to convert the Convertible Preferred
Stock pursuant to Section 10 prior to such redemption, all, but not less than
all, of the Convertible Preferred Stock, at any time, on a Redemption Date on or
after the five (5) year anniversary of the Initial Issue Date, for a cash
purchase price equal to the Redemption Price (such redemption, together with the
redemption referenced in Section 7(a), the “Redemptions” and each, a
“Redemption”).

 

(c)         Redemption Prohibited in Certain Circumstances. The Company will not
call for Redemption, or otherwise send a Redemption Notice in respect of the
Redemption of, any Convertible Preferred Stock pursuant to this Section 7 unless
(i) the Company has sufficient funds legally available, and is permitted under
the terms of its indebtedness for borrowed money, to fully pay the Redemption
Price in respect of all shares of Convertible Preferred Stock called for
Redemption; and (ii) the Common Stock Liquidity Conditions are satisfied and
will be satisfied on the Redemption Date.

 

(d)         Redemption Date. The Redemption Date for any Redemption will be a
Business Day of the Company’s choosing that is no more than twenty (20), nor
less than ten (10), calendar days after the Redemption Notice Date for such
Redemption.

 

 -25- 

 

 

(e)         Redemption Price. The Redemption Price for any share of Convertible
Preferred Stock to be repurchased pursuant to a Redemption is an amount in cash
equal the product of (x) the Liquidation Preference (including any accumulated
and unpaid Regular Dividends) of such share at the Close of Business on the
Redemption Date for such Redemption (including any accumulated and unpaid
Regular Dividends on such share), and (y):

 

(i)            in the case of a Redemption with a Redemption Date occurring
prior to the one hundred eighty (180) day anniversary of the Initial Issue Date,
125%;

 

(ii)           in the case of a Redemption with a Redemption Date occurring on
or after the five (5) year anniversary but prior to the six (6) year anniversary
of the Initial Issue Date, 105%; or

 

(iii)          in the case of a Redemption with a Redemption Date occurring on
or after the six (6) year anniversary of the Initial Issue Date, 100%.

 

(f)          Redemption Notice. To call any share of Convertible Preferred Stock
for Redemption, the Company must send to the Holder of such share a notice of
such Redemption (a “Redemption Notice”) , which Redemption Notice must state:

 

(i)            that such share has been called for Redemption, briefly
describing the Company’s Redemption right under this Certificate of Designation;

 

(ii)           the Redemption Date for such Redemption;

 

(iii)          the Redemption Price per share of Convertible Preferred Stock;

 

(iv)          if the Redemption Date is after a Record Date for a declared
Dividend on the Convertible Preferred Stock and on or before the next Dividend
Payment Date, that such Dividend will be paid in accordance with Section 5(d);

 

(v)           the name and address of the Transfer Agent and the Conversion
Agent, as well as instructions whereby the Holder may surrender such share to
the Transfer Agent or Conversion Agent;

 

(vi)          that Convertible Preferred Stock called for Redemption may be
converted pursuant to Section 10, at any time before the Close of Business on
the Business Day immediately before the Redemption Date (or, if the Company
fails to pay the Redemption Price due on such Redemption Date in full, at any
time until such time as the Company pays such Redemption Price in full); and

 

(vii)         the Conversion Price in effect on the Redemption Notice Date for
such Redemption.

 

(g)        Payment of the Redemption Price. The Company will cause the
Redemption Price for each share of Convertible Preferred Stock subject to
Redemption to be paid to the Holder thereof on or before the applicable
Redemption Date.

 

 -26- 

 

 

Section 8.              Right of Holders to Require the Company to Repurchase
Convertible Preferred Stock upon a Fundamental Change.

 

(a)         Fundamental Change Repurchase Right. Subject to the other terms of
this Section 8, if a Fundamental Change occurs, then each Holder may, at its
election, either (i) effective as of immediately prior to the Fundamental
Change, convert all or a portion of its shares of Convertible Preferred Stock
pursuant to Section 10 at the then-current Conversion Price or (ii) require the
Company to repurchase (the “Fundamental Change Repurchase Right”) all, or any
whole number of shares that is less than all, of such Holder’s Convertible
Preferred Stock that have not been converted pursuant to clause (i) on the
Fundamental Change Repurchase Date for such Fundamental Change for a cash
purchase price equal to the Fundamental Change Repurchase Price.

 

(b)         Funds Legally Available for Payment of Fundamental Change Repurchase
Price; Covenant Not to Take Certain Actions. If the Company does not have
sufficient funds legally available to pay the Fundamental Change Repurchase
Price of all shares of Convertible Preferred Stock that are to be repurchased
pursuant to a Repurchase Upon Fundamental Change, then the Company shall (1) pay
the maximum amount of such Fundamental Change Repurchase Price that can be paid
out of funds legally available for payment, which payment will be made pro rata
to each Holder based on the total number of shares of Convertible Preferred
Stock of such Holder that were otherwise to be repurchased pursuant to such
Repurchase Upon Fundamental Change; and (2) purchase any shares of Convertible
Preferred Stock not purchased because of the foregoing limitations at the
applicable Fundamental Change Repurchase Price as soon as practicable after the
Company is able to make such purchase out of assets legally available for the
purchase of such shares of Convertible Preferred Stock. The inability of the
Company (or its successor) to make a purchase payment for any reason shall not
relieve the Company (or its successor) from its obligation to effect any
required purchase when, as and if permitted by applicable law. If the Company
fails to pay the Fundamental Change Repurchase Price in full when due in
accordance with this Section 8 in respect of some or all of the shares or
Convertible Preferred Stock to be repurchased pursuant to the Fundamental Change
Repurchase Right, the Company will pay Dividends on such shares not repurchased
at a Dividend Rate of five and one half percent (5.5%) per annum until such
shares are repurchased, payable quarterly in arrears on each Dividend Payment
Date, for the period from and including the first Dividend Payment Date (or the
Initial Issue Date, as applicable) upon which the Company fails to pay the
Fundamental Change Repurchase Price in full when due in accordance with this
Section 8 through but not including the latest of the day upon which the Company
pays the Fundamental Change Repurchase Price in full in accordance with this
Section 8. Notwithstanding the foregoing, in the event a Holder exercises a
Fundamental Change Repurchase Right pursuant to this Section 8 at a time when
the Company is restricted or prohibited (contractually or otherwise) from
repurchasing some or all of the Convertible Preferred Stock subject to the
Fundamental Change Repurchase Right, the Company will use its commercially
reasonable efforts to obtain the requisite consents to remove or obtain an
exception or waiver to such restrictions or prohibition. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity, including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
comply with its obligations under this Section 8. The Company will not
voluntarily take any action, or voluntarily engage in any transaction, that
would result in a Fundamental Change unless the Company has sufficient funds
legally available to fully pay the maximum aggregate Fundamental Change
Repurchase Price that would be payable in respect of such Fundamental Change on
all shares of Conversion Preferred Stock then outstanding.

 

 -27- 

 

 

(c)          Fundamental Change Repurchase Date. The Fundamental Change
Repurchase Date for any Fundamental Change will be a Business Day of the
Company’s choosing that is no more than thirty (30), nor less than twenty (20),
Business Days after the date the Company sends the related Final Fundamental
Change Notice pursuant to Section 8(f).

 

(d)         Fundamental Change Repurchase Price. The Fundamental Change
Repurchase Price for any share of Convertible Preferred Stock to be repurchased
upon a Repurchase Upon Fundamental Change following a Fundamental Change is an
amount in cash equal to the greater of (i) the Liquidation Preference (including
any accumulated and unpaid Regular Dividends) of such share at the Close of
Business on the Fundamental Change Repurchase Date for such Fundamental Change
(including any accumulated and unpaid Regular Dividends on such share to, but
excluding, such Fundamental Change Repurchase Date) and (ii) the amount that
such Holders would have received had such Holders, immediately prior to such
Fundamental Change, converted such shares of Convertible Preferred Stock into
Common Stock pursuant to Section 10(a), without regard to any of the limitations
on convertibility contained in Section 10(h).

 

(e)         Initial Fundamental Change Notice. On or before the twentieth (20th)
Business Day prior to the date on which the Company anticipates consummating a
Fundamental Change (or, if later, promptly after the Company discovers that a
Fundamental Change may occur), a written notice shall be sent by or on behalf of
the Company to the Holders as they appear in the records of the Company, which
notice shall contain the date on which the Fundamental Change is anticipated to
be effected (or, if applicable, the date on which a Schedule TO or other
schedule, form or report disclosing a Fundamental Change was filed) (the
“Initial Fundamental Change Notice”). No later than ten (10) Business Days prior
to the date on which the Company anticipates consummating the Fundamental Change
as set forth in the Initial Fundamental Change Notice (or, if the Fundamental
Change has already occurred as provided in the Initial Fundamental Change
Notice, promptly, but no later than the tenth (10th) Business Day following
receipt thereof), any Holder that desires to exercise its rights pursuant to
Section 8(a) shall notify the Company in writing thereof and shall specify (x)
whether such Holder is electing to exercise its rights pursuant to clause (i) or
(ii) of Section 8(a) and (y) the number of shares of Convertible Preferred Stock
subject thereto.

 

(f)          Final Fundamental Change Notice. If a Holder elects to exercise its
Fundamental Change Repurchase Right pursuant to Section 8(a)(ii), on or before
the second (2nd) Business Day after the effective date of a Fundamental Change,
the Company will send to each Holder a notice of such Fundamental Change (a
“Final Fundamental Change Notice”). Such Final Fundamental Change Notice must
state:

 

(i)             briefly, the events causing such Fundamental Change;

 

(ii)            the effective date of such Fundamental Change;

 

 -28- 

 

 

(iii)        the procedures that a Holder must follow to require the Company to
repurchase its Convertible Preferred Stock pursuant to this Section 8, including
the deadline for exercising the Fundamental Change Repurchase Right and the
procedures for submitting and withdrawing a Fundamental Change Repurchase
Notice;

 

(iv)        the Fundamental Change Repurchase Date for such Fundamental Change;

 

(v)         the Fundamental Change Repurchase Price per share of Convertible
Preferred Stock, including reasonable detail of the calculation thereof;

 

(vi)        if the Fundamental Change Repurchase Date is after a Record Date for
a declared Dividend on the Convertible Preferred Stock and on or before the next
Dividend Payment Date, that such Dividend will be paid in accordance with
Section 5(d);

 

(vii)       the name and address of the Transfer Agent and the Conversion Agent;

 

(viii)      the Conversion Price in effect on the date of such Final Fundamental
Change Notice and a description and quantification of any adjustments to the
Conversion Price that may result from such Fundamental Change;

 

(ix)        that Convertible Preferred Stock may be converted pursuant to
Section 10 at any time before the Close of Business on the Business Day
immediately before the related Fundamental Change Repurchase Date (or, if the
Company fails to pay the Fundamental Change Repurchase Price due on such
Fundamental Change Repurchase Date in full, at any time until such time as the
Company pays such Fundamental Change Repurchase Price in full);

 

(x)         that shares of Convertible Preferred Stock for which a Fundamental
Change Repurchase Notice has been duly tendered and not duly withdrawn must be
delivered to the Paying Agent for the Holder thereof to be entitled to receive
the Fundamental Change Repurchase Price; and

 

(xi)        that shares of Convertible Preferred Stock that are subject to a
Fundamental Change Repurchase Notice that has been duly tendered may be
converted only if such Fundamental Change Repurchase Notice is withdrawn in
accordance with this Certificate of Designation.

 

(g)         Procedures to Exercise the Fundamental Change Repurchase Right.

 

(i)          Delivery of Fundamental Change Repurchase Notice and Shares of
Convertible Preferred Stock to Be Repurchased. To exercise its Fundamental
Change Repurchase Right for any share(s) of Convertible Preferred Stock
following a Fundamental Change, the Holder thereof must deliver to the Paying
Agent:

 

(1)           before the Close of Business on the Business Day immediately
before the related Fundamental Change Repurchase Date (or such later time as may
be required by law), a duly completed, written Fundamental Change Repurchase
Notice with respect to such share(s); and

 

 -29- 

 

 

(2)           such share(s), duly endorsed for transfer (to the extent such
share(s) are evidenced by one or more Physical Certificates).

 

(ii)          Contents of Fundamental Change Repurchase Notices. Each
Fundamental Change Repurchase Notice with respect to any share(s) of Convertible
Preferred Stock must state:

 

(1)           if such share(s) are evidenced by one or more Physical
Certificates, the certificate number(s) of such Physical Certificate(s);

 

(2)           the number of shares of Convertible Preferred Stock to be
repurchased, which must be a whole number; and

 

(3)           that such Holder is exercising its Fundamental Change Repurchase
Right with respect to such share(s).

 

(iii)         Withdrawal of Fundamental Change Repurchase Notice. A Holder that
has delivered a Fundamental Change Repurchase Notice with respect to any
share(s) of Convertible Preferred Stock may withdraw such Fundamental Change
Repurchase Notice by delivering a written notice of withdrawal to the Paying
Agent at any time before the Close of Business on the Business Day immediately
before the related Fundamental Change Repurchase Date. Such withdrawal notice
must state:

 

(1)           if such share(s) are evidenced by one or more Physical
Certificates, the certificate number(s) of such Physical Certificate(s);

 

(2)           the number of shares of Convertible Preferred Stock to be
withdrawn, which must be a whole number; and

 

(3)           the number of shares of Convertible Preferred Stock, if any, that
remain subject to such Fundamental Change Repurchase Notice, which must be a
whole number.

 

If any Holder delivers to the Paying Agent any such withdrawal notice
withdrawing any share(s) of Convertible Preferred Stock from any Fundamental
Change Repurchase Notice previously delivered to the Paying Agent, and such
share(s) have been surrendered to the Paying Agent, then such share(s) will be
returned to the Holder thereof.

 

(h)         Payment of the Fundamental Change Repurchase Price. Subject to
Section 8(b), the Company will cause the Fundamental Change Repurchase Price for
each share of Convertible Preferred Stock to be repurchased pursuant to a
Repurchase Upon Fundamental Change to be paid to the Holder thereof on or before
the applicable Fundamental Change Repurchase Date (or, if later in the case such
share is evidenced by a Physical Certificate, the date (x) the Physical
Certificate evidencing such share is delivered to the Paying Agent).

 

 -30- 

 

 

(i)                 Third Party May Conduct Repurchase Offer In Lieu of the
Company. Notwithstanding anything to the contrary in this Section 8, the Company
will be deemed to satisfy its obligations under this Section 8 if one or more
third parties conduct any Repurchase Upon Fundamental Change and related offer
to repurchase Convertible Preferred Stock otherwise required by this Section 8
in a manner that would have satisfied the requirements of this Section 8 if
conducted directly by the Company.

 

(j)                 Fundamental Change Agreements. The Company shall not enter
into any agreement for a transaction constituting a Fundamental Change unless
such agreement provides for, or does not interfere with or prevent (as
applicable), the exercise by the Holders of their Fundamental Change Repurchase
Right in a manner that is consistent with, and gives effect to, this Section 8.

 

Section 9.                VOTING RIGHTS. The Convertible Preferred Stock will
have no voting rights except as set forth in this Section 9 or as provided in
the Articles of Incorporation or required by the Nevada Revised Statutes.

 

(a)               Voting and Consent Rights with Respect to Specified Matters.

 

(i)                 Generally. Subject to the other provisions of this Section
9(a), (x) while any share of the Convertible Preferred Stock is outstanding with
respect to Section 9(a)(i)(1) and Section 9(a)(i)(2), and (y) while at least
seventy-five percent (75%) of the Convertible Preferred Stock issued on the
Initial Issue Date is outstanding with respect to Section 9(a)(i)(3) and Section
9(a)(i)(4), each following event will require, and cannot be effected without,
the affirmative vote or consent of Holders constituting at least a majority of
the outstanding voting power of the Convertible Preferred Stock:

 

(1)               any amendment, modification or repeal of any provision of the
Articles of Incorporation, Bylaws or this Certificate of Designation that
adversely affects the rights, preferences or powers of the Convertible Preferred
Stock (other than an amendment, modification or repeal permitted by Section
9(a)(ii));

 

(2)               any issuances by the Company of shares of, or other securities
convertible into, Dividend Parity Stock, Liquidation Parity Stock, Dividend
Senior Stock or Liquidation Senior Stock;

 

(3)               any voluntary dissolution, liquidation, bankruptcy or winding
up of the Company or any deregistration or delisting of the Common Stock of the
Company; or

 

(4)               any incurrence by the Company of any indebtedness for borrowed
money unless the Company’s ratio of indebtedness for borrowed money to LTM
EBITDA would be less than a ratio of 5-to-1 on a pro forma basis giving effect
to such incurrence and the use of proceeds therefrom;

 

provided, however, that each of the following will be deemed not to adversely
affect the special rights, preferences or voting powers of the Convertible
Preferred Stock and will not require any vote or consent pursuant to Section
9(a)(i)(1) and Section 9(a)(i)(2):

 

- 31 -

 

  

(I)       any increase in the number of the authorized but unissued shares of
the Company’s undesignated preferred stock;

 

(II)       any increase in the number of authorized shares of Convertible
Preferred Stock;

 

(III)       the creation and issuance, or increase in the authorized or issued
number, of any shares of any class or series of stock that is both Dividend
Junior Stock and Liquidation Junior Stock; and

 

(IV)       the application of Section 10(i), including the execution and
delivery of any supplemental instruments pursuant to Section 10(i)(iii) solely
to give effect to such provision.

 

(ii)              Certain Amendments Permitted Without Consent. Notwithstanding
anything to the contrary in Section 9(a)(i)(1), the Company may amend, modify or
repeal any of the terms of the Convertible Preferred Stock without the vote or
consent of any Holder to:

 

(1)               amend or correct this Certificate of Designation to cure any
ambiguity or correct any omission, defect or inconsistency; or

 

(2)               make any other change to the Articles of Incorporation or this
Certificate of Designation that does not, individually or in the aggregate with
all other such changes, adversely affect the rights of any Holder (other than
any Holders that have consented to such change).

 

(b)               Right to Vote with Holders of Common Stock on an As-Converted
Basis. Subject to the other provisions of, and without limiting the other voting
rights provided in, this Section 9, and except as provided in the Articles of
Incorporation or restricted by the Nevada Revised Statutes, the Holders will
have the right to vote together as a single class with the holders of the Common
Stock on each matter submitted for a vote or consent by the holders of the
Common Stock, and, for these purposes, (i) the Convertible Preferred Stock of
each Holder will entitle such Holder to be treated as if such Holder were the
holder of record, as of the record or other relevant date for such matter, of a
number of shares of Common Stock equal to the number of shares of Common Stock
that would be issuable (determined in accordance with Section 10(e), including
Section 10(e)(ii)) upon conversion of such Convertible Preferred Stock assuming
such Convertible Preferred Stock were converted with a Conversion Date occurring
on such record or other relevant date; and (ii) the Holders will be entitled to
notice of all stockholder meetings or proposed actions by written consent in
accordance with the Articles of Incorporation, the Bylaws of the Company, and
the Nevada Revised Statutes as if the Holders were holders of Common Stock.
Notwithstanding the foregoing, the aggregate voting power of the Convertible
Preferred Stock when voting with the holders of the Common Stock shall be
limited to the extent necessary to comply with the NASDAQ Listing Standard
Rules, and any resulting limitation on the voting rights of the Convertible
Preferred Stock shall apply pro rata among the Holders thereof.

 

- 32 -

 

  

(c)           Procedures for Voting and Consents.

 

 

(i)                 Rules and Procedures Governing Votes and Consents. If any
vote or consent of the Holders will be held or solicited, including at an annual
meeting or a special meeting of stockholders, then (1) the Board of Directors
will adopt customary rules and procedures at its discretion to govern such vote
or consent, subject to the other provisions of this Section 9; and (2) such
rules and procedures may include fixing a record date to determine the Holders
that are entitled to vote or provide consent, as applicable, rules governing the
solicitation and use of proxies or written consents and customary procedures for
the nomination and designation, by Holders, of directors for election; provided,
however, that with respect to any voting rights of the Holders pursuant to
Section 9(b), such rules and procedures will be the same rules and procedures
that apply to holders of the Common Stock with respect to the applicable matter
referred to in Section 9(b).

 

(ii)              Voting Power of the Convertible Preferred Stock. Each share of
Convertible Preferred Stock will be entitled to one vote on each matter on which
the Holders of the Convertible Preferred Stock are entitled to vote separately
as a class and not together with the holders of any other class or series of
stock.

 

(iii)            Written Consent in Lieu of Stockholder Meeting. Notwithstanding
anything to the contrary set forth in the Bylaws or otherwise, a consent or
affirmative vote of the Holders pursuant to Section 9(a) may be given or
obtained in writing without a meeting.

 

Section 10.            Conversion.

 

 

(a)           Generally. Subject to the provisions of this Section 10, the
Convertible Preferred Stock may be converted only pursuant to a Mandatory
Conversion or an Optional Conversion.

 

 

(b)           Conversion at the Option of the Holders.

 

 

(i)                 Conversion Right; When Shares May Be Submitted for Optional
Conversion. Holders will have the right to submit all, or any whole number of
shares that is less than all, of their shares of Convertible Preferred Stock
pursuant to an Optional Conversion at any time; provided, however, that,
notwithstanding anything to the contrary in this Certificate of Designation,

 

(1)               if a Fundamental Change Repurchase Notice is validly delivered
pursuant to Section 8(g)(i) with respect to any share of Convertible Preferred
Stock, then such share may not be submitted for Optional Conversion after the
Business Day prior to the consummation of the Fundamental Change, except to the
extent (A) such share is not subject to such notice; (B) such notice is
withdrawn in accordance with Section 8(g)(iii); or (C) the Company fails to pay
the Fundamental Change Repurchase Price for such share in accordance with this
Certificate of Designation;

 

(2)               no Convertible Preferred Stock may be submitted for Optional
Conversion to the extent limited by Section 10(h);

 

- 33 -

 

 

(3)               shares of Convertible Preferred Stock that are called for
Redemption may not be submitted for Optional Conversion after the Close of
Business on the Business Day immediately before the related Redemption Date (or,
if the Company fails to pay the Redemption Price due on such Redemption Date in
full, at any time until such time as the Company pays such Redemption Price in
full); and

 

(4)               shares of Convertible Preferred Stock that are subject to
Mandatory Conversion may not be submitted for Optional Conversion after the
Close of Business on the Business Day immediately before the related Mandatory
Conversion Date.

 

(ii)              Conversions of Fractional Shares Not Permitted.
Notwithstanding anything to the contrary in this Certificate of Designation, in
no event will any Holder be entitled to convert a number of shares of
Convertible Preferred Stock that is not a whole number.

 

(c)           Mandatory Conversion at the Company’s Election.

 

(i)                 Mandatory Conversion Right. Subject to the provisions of
this Section 10, the Company has the right (the “Mandatory Conversion Right”),
exercisable at its election, to designate any Business Day on or after the two
(2) year anniversary of the Initial Issue Date as a Conversion Date for the
conversion (such a conversion, a “Mandatory Conversion”) of all, but not less
than all, of the outstanding shares of Convertible Preferred Stock, but only if
the Last Reported Sale Price per share of Common Stock exceeds one hundred and
fifty percent (150%) of the Conversion Price on each of at least twenty (20)
Trading Days (whether or not consecutive) during the thirty (30) consecutive
Trading Days ending on, and including, the Trading Day immediately before the
Mandatory Conversion Notice Date for such Mandatory Conversion.

 

(ii)              Mandatory Conversion Prohibited in Certain Circumstances. The
Company will not exercise its Mandatory Conversion Right, or otherwise send a
Mandatory Conversion Notice, with respect to any Convertible Preferred Stock
pursuant to this Section 10(c) unless the Common Stock Liquidity Conditions are
satisfied with respect to the Mandatory Conversion. Notwithstanding anything to
the contrary in this Section 10(c), the Company’s exercise of its Mandatory
Conversion Right, and any related Mandatory Conversion Notice, will not apply to
any share of Convertible Preferred Stock as to which a Fundamental Change
Repurchase Notice has been duly delivered, and not withdrawn, pursuant to
Section 8(g). Notwithstanding anything to the contrary in this Section 10(c),
the Company cannot exercise its Mandatory Conversion Right with respect to any
shares of Convertible Preferred Stock to the extent limited by Section 10(h).

 

(iii)            Mandatory Conversion Date. The Mandatory Conversion Date for
any Mandatory Conversion will be a Business Day of the Company’s choosing that
is no more than twenty (20), nor less than ten (10), Business Days after the
Mandatory Conversion Notice Date for such Mandatory Conversion.

 

- 34 -

 

 

(iv)             Mandatory Conversion Notice. To exercise its Mandatory
Conversion Right with respect to any shares of Convertible Preferred Stock, the
Company must send to each Holder of such shares a written notice of such
exercise (a “Mandatory Conversion Notice”).

 

(v)               Such Mandatory Conversion Notice must state:

 

(1)               that the Company has exercised its Mandatory Conversion Right
to cause the Mandatory Conversion of the shares of Convertible Preferred Stock,
briefly describing the Company’s Mandatory Conversion Right under this
Certificate of Designation;

 

(2)               the Mandatory Conversion Date for such Mandatory Conversion
and the date scheduled for the settlement of such Mandatory Conversion;

 

(3)               the name and address of the Paying Agent and the Conversion
Agent, as well as instructions whereby the Holder may surrender such share to
the Transfer Agent or Conversion Agent;

 

(4)               that shares of Convertible Preferred Stock subject to
Mandatory Conversion may be converted earlier at the option of the Holders
thereof pursuant to an Optional Conversion at any time before the Close of
Business on the Business Day immediately before the Mandatory Conversion Date;
and

 

(5)               the Conversion Price in effect on the Mandatory Conversion
Notice Date for such Mandatory Conversion), the number of shares of Common Stock
to be issued to such Holder upon conversion of each share of Convertible
Preferred Stock held by such Holder and, if applicable, the amount of
accumulated and unpaid Regular Dividends in respect of such share of Convertible
Preferred Stock as of the Mandatory Conversion Date.

 

(d)           Conversion Procedures.

  

(i)                 Mandatory Conversion. If the Company duly exercises, in
accordance with Section 10(c), its Mandatory Conversion Right with respect to
any share of Convertible Preferred Stock, then (1) the Mandatory Conversion of
such share will occur automatically and without the need for any action on the
part of the Holder(s) thereof; and (2) the shares of Common Stock due upon such
Mandatory Conversion will be registered in the name of, and, if applicable, the
cash due upon such Mandatory Conversion will be delivered to, the Holder(s) of
such share of Convertible Preferred Stock as of the Close of Business on the
related Mandatory Conversion Date.

 

(ii)              Requirements for Holders to Exercise Optional Conversion
Right.

 

(1)               Generally. To convert any share of Convertible Preferred Stock
evidenced by a Certificate pursuant to an Optional Conversion, the Holder of
such share must (w) complete, manually sign and deliver to the Conversion Agent
an Optional Conversion Notice (at which time, in the case such Certificate is an
Electronic Certificate, such Optional Conversion will become irrevocable); (x)
if such Certificate is a Physical Certificate, deliver such Physical Certificate
to the Conversion Agent (at which time such Optional Conversion will become
irrevocable); (y) furnish any endorsements and transfer documents that the
Company or the Conversion Agent may require; and (z) if applicable, pay any
documentary or other taxes that are required to be paid by the Company as a
result of a Holder requesting that shares be registered in a name other than
such Holders’ name as described in Section 11(c).

 

- 35 -

 

 

(2)               Optional Conversion Permitted only During Business Hours.
Convertible Preferred Stock will be deemed to be surrendered for Optional
Conversion only after the Open of Business and before the Close of Business on a
day that is a Business Day.

 

(iii)            Treatment of Accumulated Dividends upon Conversion.

 

(1)               No Adjustments for Accumulated Regular Dividends. Without
limiting the operation of Section 5(b)(i) and Section 10(c)(i), the Conversion
Price will not be adjusted to account for any accumulated and unpaid Regular
Dividends on any Convertible Preferred Stock being converted.

 

(2)               Conversions Between A Record Date and a Dividend Payment Date.
If the Conversion Date of any share of Convertible Preferred Stock to be
converted is after a Record Date for a declared Dividend on the Convertible
Preferred Stock and on or before the next Dividend Payment Date, then such
Dividend will be paid pursuant to Section 5(d) notwithstanding such conversion.

 

(iv)             When Holders Become Stockholders of Record of the Shares of
Common Stock Issuable Upon Conversion. The Person in whose name any share of
Common Stock is issuable upon conversion of any Convertible Preferred Stock will
be deemed to become the holder of record of such share as of the Close of
Business on the Conversion Date for such conversion.

 

(e)           Settlement upon Conversion.

 

(i)                 Generally. Subject to Section 10(e)(ii), Section 10(h) and
Section 15(b), the consideration due upon settlement of the conversion of each
share of Convertible Preferred Stock will consist of a number of shares of
Common Stock equal to the quotient obtained by dividing (I) the Liquidation
Preference (including any accumulated and unpaid Regular Dividends on such
shares of Convertible Preferred Stock to, but excluding, the Conversion Date)
for such shares of Convertible Preferred Stock subject to conversion by (II) the
Conversion Price, in each case, as of immediately before the Close of Business
on such Conversion Date.

 

(ii)              Payment of Cash in Lieu of any Fractional Share of Common
Stock. Subject to Section 15(b), in lieu of delivering any fractional share of
Common Stock otherwise due upon conversion of any Convertible Preferred Stock,
the Company will, to the extent it is legally able to do so and permitted under
the terms of its indebtedness for borrowed money, pay cash based on the Last
Reported Sale Price per share of Common Stock on the Conversion Date for such
conversion (or, if such Conversion Date is not a Trading Day, the immediately
preceding Trading Day).

 

- 36 -

 

 

(iii)            Delivery of Conversion Consideration. Except as provided in
Sections 10(f)(i)(2) and 10(i), the Company will pay or deliver, as applicable,
the Conversion Consideration due upon conversion of any Convertible Preferred
Stock on or before the second (2nd) Business Day immediately after the
Conversion Date for such conversion.

 

(f)            Conversion Price Adjustments.

 

 

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

 

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

 

[tm2029352d1_ex10-1img01.jpg]

 

where:

 

CP0      =the Conversion Price in effect immediately before the Close of
Business on the Record Date for such dividend or distribution, or immediately
before the Close of Business on the effective date of such stock split or stock
combination, as applicable;

 

CP1      =the Conversion Price in effect immediately after the Close of Business
on such Record Date or effective date, as applicable;

 

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

 

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

  

If any dividend, distribution, stock split or stock combination of the type
described in this Section 10(f)(i)(1) is declared or announced, but not so paid
or made, then the Conversion Price will be readjusted, effective as of the date
the Board of Directors, or any Officer acting pursuant to authority conferred by
the Board of Directors, determines not to pay such dividend or distribution or
to effect such stock split or stock combination, to the Conversion Price that
would then be in effect had such dividend, distribution, stock split or stock
combination not been declared or announced.

 

- 37 -

 

  

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

 

[tm2029352d1_ex10-1img02.jpg]

where:

 

CP0      =the Conversion Price in effect immediately before the time (the
“Expiration Time”) such tender or exchange offer expires;

 

CP1      =the Conversion Price in effect immediately after the Expiration Time;

 

SP        =the average of the Last Reported Sale Prices per share of Common
Stock over the ten (10) consecutive Trading Day period (the “Tender/Exchange
Offer Valuation Period”) beginning on, and including, the Trading Day
immediately after the Expiration Date;

 

OS0      =the number of shares of Common Stock outstanding immediately before
the Expiration Time (including all shares of Common Stock accepted for purchase
or exchange in such tender or exchange offer);

 

AC        =the aggregate value (determined as of the Expiration Time by the
Board of Directors) of all cash and other consideration paid for shares of
Common Stock purchased or exchanged in such tender or exchange offer; and

 

OS1      =the number of shares of Common Stock outstanding immediately after the
Expiration Time (excluding all shares of Common Stock accepted for purchase or
exchange in such tender or exchange offer);

  

- 38 -

 

 

provided, however, that the Conversion Price will in no event be adjusted up
pursuant to this Section 10(f)(i)(2), except to the extent provided in the
immediately following paragraph. The adjustment to the Conversion Price pursuant
to this Section 10(f)(i)(2) will be calculated as of the Close of Business on
the last Trading Day of the Tender/Exchange Offer Valuation Period but will be
given effect immediately after the Expiration Time, with retroactive effect. If
the Conversion Date for any share of Convertible Preferred Stock to be converted
occurs on the Expiration Date or during the Tender/Exchange Offer Valuation
Period, then, notwithstanding anything to the contrary in this Certificate of
Designation, the Company will, if necessary, delay the settlement of such
conversion until the second (2nd) Business Day after the last Trading Day of the
Tender/Exchange Offer Valuation Period.

 

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

 

 

(ii)              No Adjustments in Certain Cases.

 

(1)               Certain Events. Without limiting the operation of Section
5(b)(i) and 10(e)(i), the Company will not be required to adjust the Conversion
Price except pursuant to Section 10(f)(i). Without limiting the foregoing, the
Company will not be required to adjust the Conversion Price on account of:

 

(A)             except as otherwise provided in Section 10(f)(i), the sale of
shares of Common Stock for a purchase price that is less than the market price
per share of Common Stock or less than the Conversion Price;

 

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

 

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

 

(D)             the issuance of any shares of Common Stock pursuant to any
option, warrant, right or convertible or exchangeable security of the Company
outstanding as of the Initial Issue Date; or

 

- 39 -

 

 

(E)              solely a change in the par value of the Common Stock.

 

(iii)            Stockholder Rights Plans. If any shares of Common Stock are to
be issued upon conversion of any Convertible Preferred Stock and, at the time of
such conversion, the Company has in effect any stockholder rights plan, then the
Holder of such Convertible Preferred Stock will be entitled to receive, in
addition to, and concurrently with the delivery of, the consideration otherwise
due upon such conversion, the rights set forth in such stockholder rights plan.

 

(iv)             Determination of the Number of Outstanding Shares of Common
Stock. For purposes of Section 10(f)(i), the number of shares of Common Stock
outstanding at any time will (1) include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock; and (2)
exclude shares of Common Stock held in the Company’s treasury.

 

(v)               Calculations. All calculations with respect to the Conversion
Price and adjustments thereto will be made to the nearest 1/100th of a cent
(with 5/1,000ths rounded upward).

 

(vi)             Notice of Conversion Price Adjustments. Upon the effectiveness
of any adjustment to the Conversion Price pursuant to Section 10(f)(i), the
Company will promptly send notice to the Holders containing (1) a brief
description of the transaction or other event on account of which such
adjustment was made; (2) the Conversion Price in effect immediately after such
adjustment; and (3) the effective time of such adjustment.

 

(g)          Voluntary Conversion Price Decreases.

  

(i)                 Generally. To the extent permitted by law and applicable
stock exchange rules, the Company, from time to time, may (but is not required
to) decrease the Conversion Price by any amount if (1) the Board of Directors
determines that such decrease is in the Company’s best interest or that such
decrease is advisable to avoid or diminish any income tax imposed on holders of
Common Stock or rights to purchase Common Stock as a result of any dividend or
distribution of shares (or rights to acquire shares) of Common Stock or any
similar event; (2) such decrease is in effect for a period of at least twenty
(20) Business Days; and (3) such decrease is irrevocable during such period;
provided, however, that any such decrease that would be reasonably expected to
result in any income tax imposed on holders of Convertible Preferred Stock shall
require the affirmative vote or consent of Holders, voting exclusively as a
single class, constituting a majority of the voting power of the outstanding
shares of Convertible Preferred Stock.

 

(ii)              Notice of Voluntary Decrease. If the Board of Directors
determines to decrease the Conversion Price pursuant to Section 10(g)(i), then,
no later than the first Business Day of the related twenty (20) Business Day
period referred to in Section 10(g)(i), the Company will send notice to each
Holder, the Transfer Agent and the Conversion Agent of such decrease to the
Conversion Price, the amount thereof and the period during which such decrease
will be in effect.

 

- 40 -

 

 

(h)           Restriction on Conversions.

  

(i)                 Equity Treatment Limitation.

 

(1)               Generally. Notwithstanding anything to the contrary in this
Certificate of Designation, the Company will in no event be required to deliver
any shares of Common Stock in settlement of the conversion of any Convertible
Preferred Stock to the extent, but only to the extent, the Company does not then
have sufficient authorized and unissued shares of Common Stock that are not
reserved for other purposes (the limitation set forth in this sentence, the
“Equity Treatment Limitation,” and any shares of Common Stock that would
otherwise be deliverable in excess of the number of such authorized and unissued
shares, the “Deficit Shares”). If any Deficit Shares are withheld pursuant to
the Equity Treatment Limitation and, at any time thereafter, some or all of such
Deficit Shares could be delivered without violating the Equity Treatment
Limitation, then (A) the Company will deliver such Deficit Shares to the extent,
but only to the extent, such delivery is permitted by the Equity Treatment
Limitation; and (B) the provisions of this sentence will continue to apply until
there are no remaining Deficit Shares.

 

(2)               Share Reserve Provisions. On the Initial Issue Date, the
Number of Reserved Shares is not less than the Initial Share Reserve
Requirement. The Company shall at all times reserve and keep available a Number
of Reserved Shares to be no less than the Continuing Share Reserve Requirement
at any time when any Convertible Preferred Stock is outstanding (including, if
applicable, by seeking the approval of its stockholders to amend the Articles of
Incorporation to increase the number of authorized shares of Common Stock).

 

(3)               Limitation on Certain Transactions. The Company will not,
without the prior written consent of Holders of a majority of the Convertible
Preferred Stock then outstanding, effect any transaction that would require an
adjustment to the Conversion Price pursuant to Section 10(f)(i) if the
settlement of the conversion of all Convertible Preferred Stock then outstanding
(assuming such conversion occurred immediately after giving effect to such
adjustment) would result in any Deficit Shares pursuant to the Equity Treatment
Limitation.

 

(i)           Effect of Common Stock Change Event.

 

 

(i)                 Generally. If there occurs any:

 

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

 

- 41 -

 

 

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

 

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

 

(4)               other similar event,

 

and, as a result of which, the Common Stock is converted into, or is exchanged
for, or represents solely the right to receive, other securities, cash or other
property, or any combination of the foregoing (such an event, a “Common Stock
Change Event,” and such other securities, cash or property, the “Reference
Property,” and the amount and kind of Reference Property that a holder of one
(1) share of Common Stock would be entitled to receive on account of such Common
Stock Change Event (without giving effect to any arrangement not to issue or
deliver a fractional portion of any security or other property), a “Reference
Property Unit”), then, notwithstanding anything to the contrary in this
Certificate of Designation,

 

(A)       from and after the effective time of such Common Stock Change Event,
(I) the consideration due upon conversion of any Convertible Preferred Stock
will be determined in the same manner as if each reference to any number of
shares of Common Stock in this Section 10 or in Section 11, or in any related
definitions, were instead a reference to the same number of Reference Property
Units; (II) for purposes of Section 7 and Section 10(c), each reference to any
number of shares of Common Stock in such Sections (or in any related
definitions) will instead be deemed to be a reference to the same number of
Reference Property Units; and (III) for purposes of the definitions of
“Fundamental Change,” the terms “Common Stock” and “common equity” will be
deemed to mean the common equity (including depositary receipts representing
common equity), if any, forming part of such Reference Property; and

 

(B)       if such Reference Property Unit consists entirely of cash, then the
Company will pay the cash due in respect of all conversions whose Conversion
Date occurs on or after the effective date of such Common Stock Change Event no
later than the tenth (10th) Business Day after the relevant Conversion Date; and

 

(C)       for these purposes, (I) the Daily VWAP of any Reference Property Unit
or portion thereof that consists of a class of common equity securities will be
determined by reference to the definition of “Daily VWAP,” substituting, if
applicable, the Bloomberg page for such class of securities in such definition;
and (II) the Daily VWAP of any Reference Property Unit or portion thereof that
does not consist of a class of common equity securities, and the Last Reported
Sale Price of any Reference Property Unit or portion thereof that does not
consist of a class of securities, will be the fair value of such Reference
Property Unit or portion thereof, as applicable, determined in good faith by the
Company (or, in the case of cash denominated in U.S. dollars, the face amount
thereof).

 

- 42 -

 

 

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

 

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

 

(iii)            Execution of Supplemental Instruments. On or before the date
the Common Stock Change Event becomes effective, the Company and, if applicable,
the resulting, surviving or transferee Person (if not the Company) of such
Common Stock Change Event (the “Successor Person”) will execute and deliver such
supplemental instruments, if any, as the Company reasonably determines are
necessary or desirable to (1) provide for subsequent adjustments to the
Conversion Price pursuant to Section 10(f)(i) in a manner consistent with this
Section 10(i); and (2) give effect to such other provisions, if any, as the
Company reasonably determines are appropriate to preserve the economic interests
of the Holders and to give effect to Section 10(i)(i). If the Reference Property
includes shares of stock or other securities or assets of a Person other than
the Successor Person, then such other Person will also execute such supplemental
instrument(s) and such supplemental instrument(s) will contain such additional
provisions, if any, that the Company reasonably determines are appropriate to
preserve the economic interests of Holders.

 

(iv)             Notice of Common Stock Change Event. The Company will provide
notice of each Common Stock Change Event to Holders as promptly as possible
after the effective date of the Common Stock Change Event.

 

Section 11.            Certain Provisions Relating to the Issuance of Common
Stock.

  

(a)               Equitable Adjustments to Prices. Whenever this Certificate of
Designation requires the Company to calculate the average of the Last Reported
Sale Prices or Daily VWAPs, or any function thereof, over a period of multiple
days (including to calculate an adjustment to the Conversion Price), the Company
will make appropriate adjustments, if any, to those calculations to account for
any adjustment to the Conversion Price pursuant to Section 10(f)(i) that becomes
effective, or any event requiring such an adjustment to the Conversion Price
where the Ex-Dividend Date, effective date or Expiration Date, as applicable, of
such event occurs, at any time during such period.

 

 

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

 

- 43 -

 

  

(c)               Taxes Upon Issuance of Common Stock. The Company will pay any
documentary, stamp or similar issue or transfer tax or duty due on the issue of
any shares of Common Stock upon conversion of the Convertible Preferred Stock of
any Holder, except any tax or duty that is due because such Holder requests
those shares to be registered in a name other than such Holder’s name.

 

 

Section 12.            No Preemptive Rights. Without limiting the rights of the
Holder set forth in this Certificate of Designation (including in connection
with the issuance of Common Stock or Reference Property upon conversion of the
Convertible Preferred Stock), the Convertible Preferred Stock will not have any
preemptive rights to subscribe for or purchase any of the Company’s securities.

 

 

Section 13.            Taxes. The Company shall pay any and all stock transfer,
documentary, stamp and similar taxes that may be payable in respect of any
issuance or delivery of shares of Convertible Preferred Stock or shares of
Common Stock or other securities issued on account of Convertible Preferred
Stock pursuant hereto or certificates evidencing such shares or securities.
However, in the case of conversion of Convertible Preferred Stock, the Company
shall not be required to pay any such tax that may be payable in respect of any
transfer involved in the issuance or delivery of shares of Convertible Preferred
Stock, shares of Common Stock or other securities to a beneficial owner other
than the beneficial owner of the Convertible Preferred Stock immediately prior
to such conversion, and shall not be required to make any such issuance,
delivery or payment unless and until the Person otherwise entitled to such
issuance, delivery or payment has paid to the Company the amount of any such tax
or has established, to the satisfaction of the Company, that such tax has been
paid or is not payable.

 

Section 14.            Term. Except as expressly provided in this Certificate of
Designation, the shares of Convertible Preferred Stock shall not be redeemable
or otherwise mature and the term of the Convertible Preferred Stock shall be
perpetual.

 

Section 15.            Calculations.

 

(a)               Responsibility; Schedule of Calculations. Except as otherwise
provided in this Certificate of Designation, the Company will be responsible for
making all calculations called for under this Certificate of Designation or the
Convertible Preferred Stock, including determinations of the Conversion Price,
the Daily VWAPs, the Last Reported Sale Prices and accumulated Regular Dividends
on the Convertible Preferred Stock. The Company will make all calculations in
good faith, and, absent manifest error, its calculations will be final and
binding on all Holders. The Company will provide a schedule of such calculations
to any Holder upon written request.

 

(b)               Calculations Aggregated for Each Holder. The composition of
the Conversion Consideration due upon conversion of the Convertible Preferred
Stock of any Holder will be computed based on the total number of shares of
Convertible Preferred Stock of such Holder being converted with the same
Conversion Date. For these purposes, any cash amounts due to such Holder in
respect thereof will be rounded to the nearest cent.

 

- 44 -

 

  

Section 16.            Notices. The Company will send all notices or
communications to Holders pursuant to this Certificate of Designation in writing
and delivered personally, by facsimile or e-mail (with confirmation of receipt
requested from the recipient, in the case of e-mail), or sent by a nationally
recognized overnight courier service guaranteeing next day delivery, to the
Holders’ respective addresses shown on the Register. Unless otherwise specified
herein, all notices and communications hereunder shall be deemed to have been
given upon the earlier of receipt thereof or three (3) Business Days after the
mailing thereof if sent by registered or certified mail with postage prepaid, or
by private courier service.

  

Section 17.            Facts Ascertainable. When the terms of this Certificate
of Designation refers to a specific agreement or other document to determine the
meaning or operation of a provision hereof, the Secretary of the Company shall
maintain a copy of such agreement or document at the principal executive offices
of the Company and a copy thereof shall be provided free of charge to any Holder
who makes a request therefor. The Secretary of the Company shall also maintain a
written record of the Initial Issue Date, the number of shares of Convertible
Preferred Stock issued to a Holder and the date of each such issuance, and shall
furnish such written record free of charge to any Holder who makes a request
therefor.

 

 

Section 18.            Waiver. Notwithstanding any provision in this Certificate
of Designation to the contrary, any provision contained herein and any right of
the Holders of Convertible Preferred Stock granted hereunder may be waived as to
all shares of Convertible Preferred Stock (and the Holders thereof) upon the
vote or written consent of the Holders of a majority of the shares of
Convertible Preferred Stock then outstanding.

 

Section 19.            SEVERABILITY. If any term of the Convertible Preferred
Stock set forth herein is invalid, unlawful or incapable of being enforced by
reason of any rule of law or public policy, all other terms set forth herein
which can be given effect without the invalid, unlawful or unenforceable term
will, nevertheless, remain in full force and effect, and no term herein set
forth will be deemed dependent upon any other such term unless so expressed
herein.

 

Section 20.            NO OTHER RIGHTS. The Convertible Preferred Stock will
have no rights, preferences or voting powers except as provided in this
Certificate of Designation or the Articles of Incorporation or as required by
applicable law.

 

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

 

- 45 -

 

 

       IN WITNESS WHEREOF, the Company has caused this Certificate of
Designation to be duly executed as of the date first written above.

 

  Cryoport, Inc.       By:       Name:     Title:

 

[Signature Page to Certificate of Designation]

 

 

 

  

EXHIBIT A

 

FORM OF PREFERRED STOCK CERTIFICATE

 

[Insert Restricted Stock Legend, if applicable]

 

Cryoport, Inc.

 

4.0% Series C Convertible Preferred Stock

 

Certificate No. [___]

 

Cryoport, Inc., a Nevada corporation (the “Company”), certifies that [___] is
the registered owner of [___] shares of the Company’s 4.0% Series C Convertible
Preferred Stock (the “Convertible Preferred Stock”) evidenced by this
certificate (this “Certificate”). The special rights, preferences and voting
powers of the Convertible Preferred Stock are set forth in the Certificate of
Designation of the Company establishing the Convertible Preferred Stock (the
“Certificate of Designation”). Capitalized terms used in this Certificate
without definition have the respective meanings ascribed to them in the
Certificate of Designation.

 

Additional terms of this Certificate are set forth on the other side of this
Certificate.

 

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

 

A-1 

 

  

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

 

      Cryoport, Inc.         Date:     By:       Name:   Title:

 

Date:     By:       Name:     Title:

 

A-2 

 

 

TRANSFER AGENT’S COUNTERSIGNATURE

 

[legal name of Transfer Agent], as Transfer Agent, certifies that this
Certificate evidences shares of Convertible Preferred Stock referred to in the
within-mentioned Certificate of Designation.

 

 

Date:  By:         Authorized Signatory

 

A-3 

 

 

Cryoport, Inc.

 

4.0% Series C Convertible Preferred Stock

 

This Certificate evidences duly authorized, issued and outstanding shares of
Convertible Preferred Stock. Notwithstanding anything to the contrary in this
Certificate, to the extent that any provision of this Certificate conflicts with
the provisions of the Certificate of Designation or the Articles of
Incorporation, the provisions of the of the Certificate of Designation or the
Articles of Incorporation, as applicable, will control.

 

 

1.                  Countersignature. This Certificate will not be valid until
countersigned by the Transfer Agent.

 

2.                  Abbreviations. Customary abbreviations may be used in the
name of a Holder or its assignee, such as TEN COM (tenants in common), TEN ENT
(tenants by the entireties), JT TEN (joint tenants with right of survivorship
and not as tenants in common), CUST (custodian), and U/G/M/A (Uniform Gift to
Minors Act).

 

* * *

 

To request a copy of the Certificate of Designation, which the Company will
provide to any Holder at no charge, please send a written request to the
following address:

 

Cryoport, Inc.

112 Westwood Place, Suite 350

Brentwood, TN 37027

Attention: (i) Jerrell Shelton, President, Chief Executive Officer, and Chairman
of the Board, (ii) Robert Stefanovich, Chief Financial Officer, Treasurer and
Corporate Secretary, and (iii) Tony Ippolito, Vice President and General Counsel

 

A-4 

 

 

OPTIONAL CONVERSION NOTICE

 

Cryoport, Inc.

 

4.0% Series C Convertible Preferred Stock

 

Subject to the terms of the Certificate of Designation, by executing and
delivering this Optional Conversion Notice, the undersigned Holder of the
Convertible Preferred Stock identified below directs the Company to convert
(check one):

 

oall of the shares of Convertible Preferred Stock

 

o                       * shares of Convertible Preferred Stock

 

evidenced by Certificate No.                      .

 

 

Date:             (Legal Name of Holder)               By:           Name:      
  Title:

 

 

 

* Must be a whole number.

 

A-5 

 

 

FUNDAMENTAL CHANGE REPURCHASE NOTICE

 

Cryoport, Inc.

 

4.0% Series C Convertible Preferred Stock

 

Subject to the terms of the Certificate of Designation, by executing and
delivering this Fundamental Change Repurchase Notice, the undersigned Holder of
the Convertible Preferred Stock identified below is exercising its Fundamental
Change Repurchase Right with respect to (check one):

 

oall of the shares of Convertible Preferred Stock

 

o                                           * shares of Convertible Preferred
Stock

 

evidenced by Certificate No.                                                   .

 

The undersigned acknowledges that Certificate identified above, duly endorsed
for transfer, must be delivered to the Paying Agent before the Fundamental
Change Repurchase Price will be paid.

 

Date:             (Legal Name of Holder)                     By:       Name:    
  Title:

 

 

* Must be a whole number.

 

A-6

 

 

ASSIGNMENT FORM

 

Cryoport, Inc.

 

4.0% Series C Convertible Preferred Stock

 

Subject to the terms of the Certificate of Designation, the undersigned Holder
of the within Convertible Preferred Stock assigns to:

 

Name:             Address:           Social security or
tax identification
number:    

  

the within Convertible Preferred Stock and all rights thereunder irrevocably
appoints:

 

as agent to transfer the within Convertible Preferred Stock on the books of the
Company. The agent may substitute another to act for him/her.

 

Date:             (Legal Name of Holder)                     By:       Name:    
  Title:

 

A-7

 

 

EXHIBIT B

 

FORM OF RESTRICTED STOCK LEGEND

 

THE OFFER AND SALE OF THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY AND SUCH SHARES MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A
REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT; OR (B)
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

B-1

 

 

Exhibit C

 

Form of Registration Rights Agreement

 

(see attached)

 

 

 

 

Form Final

  

FORM OF REGISTRATION RIGHTS AGREEMENT

 

BY AND BETWEEN

 

CRYOPORT, INC.

 

AND

 

BTO FREEZE PARENT L.P.

 

Dated as of [ ● ], 2020

 

 

 

 

TABLE OF CONTENTS

 

Page

 

Article I Resale Shelf Registration 1 Section 1.1   Resale Shelf Registration
Statement 1 Section 1.2   Effectiveness Period 2 Section 1.3   Subsequent Shelf
Registration 2 Section 1.4   Supplements and Amendments 3 Section
1.5   Subsequent Holder Notice 3 Section 1.6   Underwritten Offering 3 Section
1.7   Take-Down Notice 4 Article II Company Registration 4 Section 2.1   Notice
of Registration 4 Section 2.2   Underwriting 4 Section 2.3   Right to Terminate
Registration 5 Article III Additional Provisions Regarding Registration Rights 5
Section 3.1   Registration Procedures 5 Section 3.2   Limitation on Subsequent
Registration Rights 8 Section 3.3   Expenses of Registration 8 Section
3.4   Information by Holders 8 Section 3.5   Rule 144 Reporting 9 Section
3.6   “Market Stand-Off” Agreement 9 Article IV Indemnification 10 Section
4.1   Indemnification by Company 10 Section 4.2   Indemnification by Holders 10
Section 4.3   Notification 11 Section 4.4   Contribution 11 Article V Transfer
and Termination of Registration Rights 12 Section 5.1   Transfer of Registration
Rights 12 Section 5.2   Termination of Registration Rights 12 Article VI
Miscellaneous 12 Section 6.1   Counterparts 12 Section 6.2   Governing Law. 12
Section 6.3   Entire Agreement; No Third Party Beneficiary 13 Section
6.4   Expenses 13 Section 6.5   Notices 13

 

i

 

 

Section 6.6   Successors and Assigns 14 Section 6.7   Headings 14 Section
6.8   Amendments and Waivers 15 Section 6.9   Interpretation; Absence of
Presumption 15 Section 6.10 Severability 15

 

ii

 

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of
[ ˜ ], 2020, by and between Cryoport, Inc., a Nevada corporation (including its
successors and permitted assigns, the “Company”), and BTO Freeze Parent L.P., a
Delaware limited partnership (the “Investor”). Capitalized terms used but not
defined elsewhere herein are defined in Exhibit A.

 

This Agreement is entered into in connection with the closing of the issuance of
250,000 shares of the Series C Convertible Preferred Stock, which are
convertible into shares of Common Stock, and 675,536 shares of Common Securities
Pursuant to the Securities Purchase Agreement, dated as of August 24, 2020, by
and between the Company and the Investor (the “Securities Purchase Agreement”).

 

As a condition to each of the parties’ obligations under the Securities Purchase
Agreement, the Company and the Investor are entering into this Agreement for the
purpose of granting certain registration rights to the Investor.

 

In consideration of the premises and the mutual representations, warranties,
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

 

Article I
Resale Shelf Registration

 

Section 1.1            Resale Shelf Registration Statement. Subject to the other
applicable provisions of this Agreement, the Company shall file within ninety
(90) days of the date hereof and use its commercially reasonable efforts to
cause to go effective as promptly as practicable a registration statement
covering the sale or distribution from time to time by the Holders, on a delayed
or continuous basis pursuant to Rule 415 of the Securities Act of all of the
Registrable Securities on Form S-3 (except if the Company is not then eligible
to register for resale the Registrable Securities on Form S-3, then such
registration shall be on another appropriate form (including Form S-1) and shall
provide for the registration of such Registrable Securities for resale by such
Holders in accordance with any reasonable method of distribution elected by the
Holders) (the “Resale Shelf Registration Statement” and such registration, the
“Resale Shelf Registration”), and if the Company is a WKSI as of the filing
date, the Resale Shelf Registration Statement shall be an Automatic Shelf
Registration Statement. If the Resale Shelf Registration Statement is not an
Automatic Shelf Registration Statement, then the Company shall use its
commercially reasonable efforts to cause such Resale Shelf Registration
Statement to be declared effective by the Commission as promptly as practicable
after the filing thereof.

 

Notwithstanding the foregoing, if the Commission prevents the Company from
including any or all of the Registrable Securities on the Resale Shelf
Registration Statement due to limitations on the use of Rule 415 of the
Securities Act for the resale of the Registrable Securities by the Holders (a
“Rule 415 Limitation”), the Resale Shelf Registration Statement shall register
the resale of a number of shares of the Registrable Securities which is equal to
the maximum number of shares as is permitted by the Commission, and, subject to
the provisions of this Section 1.1, the Company shall continue to its use
commercially reasonable efforts to register all remaining Registrable Securities
as set forth in this Section 1.1. In such event, the number of shares of
Registrable Securities to be registered for each Holder in the Resale Shelf
Registration Statement shall be reduced pro rata among all Holders, provided,
however, that, prior to reducing the number of shares of Registrable Securities
to be registered for any Holder in such Resale Shelf Registration Statement, the
Company shall first remove any shares of Registrable Securities to be registered
for any Person other than a Holder that was proposed to be included in such
Resale Shelf Registration Statement. The Company shall continue to use its
commercially reasonable efforts to register all remaining Registrable Securities
as promptly as practicable in accordance with the applicable rules, regulations
and guidance of the Commission. Notwithstanding anything herein to the contrary,
if the Commission, by written comment, limits the Company’s ability to file, or
prohibits or delays the filing of, a Resale Shelf Registration Statement or a
Subsequent Shelf Registration with respect to any or all the Registrable
Securities, the Company’s compliance with such limitation, prohibition or delay
solely to the extent of such limitation, prohibition or delay shall not be a
breach or default by the Company under this Agreement and shall not be deemed a
failure by the Company to use “commercially reasonable efforts” or “reasonable
efforts” as set forth above or elsewhere in this Agreement.

 

1

 

 

Section 1.2            Effectiveness Period. Once effective, the Company shall,
subject to the other applicable provisions of this Agreement, use its
commercially reasonable efforts to cause the Resale Shelf Registration Statement
or a Subsequent Shelf Registration to be continuously effective and usable for
so long as any Registrable Securities remain outstanding (the “Effectiveness
Period”).

 

Section 1.3            Subsequent Shelf Registration. If any Shelf Registration
ceases to be effective under the Securities Act for any reason at any time
during the Effectiveness Period, the Company shall use its commercially
reasonable efforts to promptly cause such Shelf Registration to again become
effective under the Securities Act (including obtaining the prompt withdrawal of
any order suspending the effectiveness of such Shelf Registration), and in any
event shall within thirty (30) days of such cessation of effectiveness, amend
such Shelf Registration in a manner reasonably expected to obtain the withdrawal
of any order suspending the effectiveness of such Shelf Registration or, file an
additional registration statement (a “Subsequent Shelf Registration”) for an
offering to be made on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act registering the resale from time to time by Holders thereof of
all securities that are Registrable Securities as of the time of such filing. If
a Subsequent Shelf Registration is filed, the Company shall use its commercially
reasonable efforts to (a) cause such Subsequent Shelf Registration to become
effective under the Securities Act as promptly as is reasonably practicable
after such filing, but in no event later than the date that is ninety (90) days
after such Subsequent Shelf Registration is filed and (b) keep such Subsequent
Shelf Registration (or another Subsequent Shelf Registration) continuously
effective until the end of the Effectiveness Period. Any such Subsequent Shelf
Registration shall be a Registration Statement on Form S-3 to the extent that
the Company is eligible to use such form, and if the Company is a WKSI as of the
filing date, such Registration Statement shall be an Automatic Shelf
Registration Statement. Otherwise, such Subsequent Shelf Registration shall be
on another appropriate form (including Form S-1) and shall provide for the
registration of such Registrable Securities for resale by such Holders in
accordance with any reasonable method of distribution elected by the Holders.

 

2

 

 

Section 1.4            Supplements and Amendments. The Company shall supplement
and amend any Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration if required by the Securities Act or as reasonably requested
by the Holders covered by such Shelf Registration.

 

Section 1.5              Subsequent Holder Notice. If a Person becomes a Holder
of Registrable Securities after a Shelf Registration becomes effective under the
Securities Act, the Company shall, as promptly as is reasonably practicable
following delivery of written notice to the Company of such Person becoming a
Holder and requesting for its name to be included as a selling securityholder in
the prospectus related to the Shelf Registration (a “Subsequent Holder Notice”):

 

(a)             if required and permitted by applicable law, file with the
Commission a supplement to the related prospectus or a post-effective amendment
to the Shelf Registration so that such Holder is named as a selling
securityholder in the Shelf Registration and the related prospectus in such a
manner as to permit such Holder to deliver a prospectus to purchasers of the
Registrable Securities in accordance with applicable law;

 

(b)            if, pursuant to Section 1.5(a), the Company shall have filed a
post-effective amendment to the Shelf Registration that is not automatically
effective, use its commercially reasonable efforts to cause such post-effective
amendment to become effective under the Securities Act as promptly as is
reasonably practicable, but in any event by the date that is ninety (90) days
after the date such post-effective amendment is required by Section 1.5(a) to be
filed; and

 

(c)             notify such Holder as promptly as is reasonably practicable
after the effectiveness under the Securities Act of any post-effective amendment
filed pursuant to Section 1.5(a).

 

Section 1.6             Underwritten Offering. The Holders of Registrable
Securities may on up to four (4) occasions after the Resale Shelf Registration
Statement becomes effective deliver a written notice to the Company specifying
that the sale of some or all of the Registrable Securities subject to the Shelf
Registration is intended to be conducted through an underwritten offering, so
long as the anticipated gross proceeds of such underwritten offering is not less
than thirty-five million dollars ($35,000,000) (unless the Holders are proposing
to sell all of their remaining Registrable Securities in which case no such
minimum gross proceeds threshold shall apply) (the “Underwritten Offering”). In
the event of an Underwritten Offering:

 

(a)            The Holder or Holders of a majority of the Registrable Securities
participating in an Underwritten Offering shall select the managing underwriter
or underwriters to administer the Underwritten Offering; provided that such
Holder or Holders will not make the choice of such managing underwriter or
underwriters without first consulting with the Company.

 

3

 

 

(b)            Notwithstanding any other provision of this Section 1.6, if the
managing underwriter or underwriters of a proposed Underwritten Offering advises
the Board of Directors of the Company that in its or their opinion the number of
Registrable Securities requested to be included in such Underwritten Offering
exceeds the number which can be sold in such Underwritten Offering in light of
market conditions, the Registrable Securities shall be included on a pro rata
basis upon the number of securities that each Holder shall have requested to be
included in such offering. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company and the managing underwriter or underwriters.

 

(c)            The Company shall agree and shall cause its executive officers
and directors to sign a customary “lock-up” agreement with the underwriters in
any Underwritten Offering.

 

Section 1.7             Take-Down Notice. Subject to the other applicable
provisions of this Agreement, at any time that any Shelf Registration Statement
is effective, if a Holder delivers a notice to the Company (a “Take-Down
Notice”) stating that it intends to effect a sale or distribution of all or part
of its Registrable Securities included by it on any Shelf Registration Statement
(a “Shelf Offering”) and stating the number of Registrable Securities to be
included in such Shelf Offering, then, subject to the other applicable
provisions of this Agreement, the Company shall, as promptly as practicable,
amend or supplement the Shelf Registration Statement as may be necessary in
order to enable such Registrable Securities to be sold and distributed pursuant
to the Shelf Offering.

 

Article II
Company Registration

 

Section 2.1             Notice of Registration. If at any time or from time to
time the Company shall determine to file a registration statement with respect
to an offering (or to make an underwritten public offering pursuant to a
previously filed registration statement) of its Common Stock, whether or not for
its own account (other than a registration statement on Form S-4, Form S-8 or
any successor forms), the Company will:

 

(a)             promptly give to each Holder written notice thereof, which
notice shall be given, to the extent reasonably practicable, no later than five
(5) business days prior to the filing or launch date (except in the case of an
offering that is an “overnight offering”, in which case such notice must be
given no later than two (2) business days prior to the filing or launch date);
and

 

(b)            subject to Section 2.2, include in such registration or
underwritten offering (and any related qualification under blue sky laws or
other compliance) all the Registrable Securities specified in a written request
or requests made within three (3) business days after receipt of such written
notice from the Company by any Holder (except in the case of an offering that is
an “overnight offering”, in which case such request must be made no later than
one (1) business day after receipt of such written notice from the Company).

 

Section 2.2            Underwriting. The right of any Holder to registration
pursuant to Section 1.6 or this Article II shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. Each Holder
proposing to distribute its securities through such underwriting shall (together
with the Company and the other holders distributing their securities through
such underwriting) enter into and perform such Holder’s obligations under an
underwriting agreement with the managing underwriter selected for such
underwriting by the Company or by the stockholders of the Company who have the
right to select the underwriters (such underwriting agreement to be in a
customary form negotiated by the Company or such stockholders, as the case may
be). Notwithstanding any other provision of this Article II, if the managing
underwriter or underwriters of a proposed underwritten offering with respect to
which Holders of Registrable Securities have exercised their piggyback
registration rights advise the Board of Directors of the Company that in its or
their opinion the number of Registrable Securities requested to be included in
the offering thereby and all other securities proposed to be sold in the
offering exceeds the number which can be sold in such underwritten offering in
light of market conditions, the Registrable Securities and such other securities
to be included in such underwritten offering shall be allocated, (a) first, in
the event such offering was initiated by the Company for its own account, up to
the total number of securities that the Company has requested to be included in
such registration, (b) second, and only if all the securities referred to in
clause (a) have been included, up to the total number of securities that the
Holders have requested to be included in such offering (pro rata based upon the
number of securities that each of them shall have requested to be included in
such offering) and (c) third, and only if all the securities referred to in
clause (b) have been included, all other securities proposed to be included in
such offering that, in the opinion of the managing underwriter or underwriters
can be sold without having such adverse effect. If any Holder disapproves of the
terms of any such underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company and the managing underwriter or underwriters. Any
securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration.

 

4

 

 

 

Section 2.3           Right to Terminate Registration. The Company or the
holders of securities who have caused a registration statement to be filed as
contemplated by this Article II, as the case may be, shall have the right to
have any registration initiated by it or them under this Article II terminated
or withdrawn prior to the effectiveness thereof, whether or not any Holder has
elected to include securities in such registration.

 

Article III

Additional Provisions Regarding Registration Rights

 

Section 3.1           Registration Procedures. In the case of each registration
effected by the Company pursuant to Article I or II, the Company will keep each
Holder participating in such registration reasonably informed as to the status
thereof and, at its expense, the Company will, as expeditiously as possible to
the extent applicable:

 

(a)          prepare and file, as promptly as reasonably practicable, with the
Commission a registration statement with respect to such securities in
accordance with the applicable provisions of this Agreement;

 

(b)          prepare and file, as promptly as reasonably practicable, with the
Commission such amendments, including post-effective amendments, and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement (including to permit the intended method of distribution
thereof) and as may be necessary to keep the registration statement continuously
effective for the period set forth in this Agreement;

 

(c)           furnish to the Holders participating in such registration and to
their legal counsel copies of the registration statement proposed to be filed,
and provide such Holders and their legal counsel the reasonable opportunity to
review and comment on such registration statement;

 

5

 

 

(d)          furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus and final
prospectus as the such underwriters may reasonably request in order to
facilitate the public offering of such securities;

 

(e)           use commercially reasonable efforts to notify each Holder of
Registrable Securities covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
of the Company’s knowledge of the happening of any event as a result of which
the prospectus included in such 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
not misleading or incomplete in the light of the circumstances then existing,
and, subject to Section 3.1(n), at the request of any such Holder, prepare
promptly and furnish to such Holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchaser of such shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or incomplete in the light of the circumstances then existing;

 

(f)           use commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions in
which it is not already qualified;

 

(g)          in the event that the Registrable Securities are being offered in
an underwritten public offering, enter into and perform its obligations under an
underwriting agreement on customary terms and in accordance with the applicable
provisions of this Agreement;

 

(h)          use commercially reasonable efforts to furnish, (i) on the date
that such Registrable Securities are delivered to the underwriters for sale, if
such securities are being sold through underwriters, an opinion and negative
assurance letter, dated as of such date, of the legal counsel representing the
Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and (ii) on the date that the offering of such
Registrable Securities is priced and on the date that such securities are being
sold through underwriters, a letter dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters;

 

(i)           in connection with a customary due diligence review, make
available during business hours for inspection by the Holders, any underwriter
participating in any such disposition of Registrable Securities, if any, and any
counsel or accountants retained by the Holders or underwriter (collectively, the
“Offering Persons”), all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the officers, directors and employees of the Company and its subsidiaries
to supply all relevant information and participate in customary due diligence
sessions in each case reasonably requested by any such representative,
underwriter, counsel or accountant in connection with such registration
statement, provided, however, each such underwriter shall agree in writing to
hold in strict confidence and not to make any disclosure or use of any
information requested above (the “Requested Information”), unless (1) the
disclosure of the Requested Information is necessary to avoid or correct a
misstatement or omission in such registration or is otherwise required under the
Securities Act, (2) the release of the Requested Information is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, (3) the Requested Information is or has been made
generally available to the public other than by disclosure in violation of this
Agreement, (4) the Requested Information was within such underwriter’s
possession on a non-confidential basis prior to it being furnished to such
underwriter by or on behalf of the Company or any of its representatives,
provided that the source of such information was not bound by a confidentiality
agreement or other contractual, legal or fiduciary obligation of confidentiality
with respect to such information or (5) the Requested Information becomes
available to such underwriter on a non-confidential basis from a source other
than the Company or any of its representatives, provided that such source is not
bound by a confidentiality agreement or other contractual, legal or fiduciary
obligation of confidentiality with respect to such information. Such underwriter
agrees that it shall, upon learning that disclosure of the Requested Information
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
the Company’s expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, the Requested Information deemed
confidential;

 

6

 

 

(j)           in the event that any broker-dealer underwrites any Registrable
Securities or participates as a member of an underwriting syndicate or selling
group or “participates in an offering” (within the meaning of the FINRA Rules)
thereof, whether as a Holder or as an underwriter, placement, sales agent or
broker or dealer in respect thereof, or otherwise, the Company will, upon the
reasonable request of such broker-dealer, comply with any reasonable request of
such broker-dealer in complying with the FINRA Rules;

 

(k)          notwithstanding any other provision of this Agreement, if the Board
of Directors of the Company has determined in good faith that the disclosure
necessary for continued use of the prospectus and registration statement by the
Holders could be materially detrimental to the Company, the Company shall have
the right not to file or not to cause the effectiveness of any registration
covering any Registrable Securities and to suspend the use of the prospectus and
the registration statement covering any Registrable Security for such period of
time as its use would be materially detrimental to the Company by delivering
written notice of such suspension to all Holders listed on the Company’s
records; provided, however, that in any 12-month period the Company may exercise
the right to such suspension not more than twice. From and after the date of a
notice of suspension under this Section 3.1(k), each Holder agrees not to use
the prospectus or registration statement until the earlier of (i) notice from
the Company that such suspension has been lifted or (ii) the day following the
sixtieth (60th) day of suspension within any 12-month period;

 

(l)            cooperate with, and direct the Company’s transfer agent to
cooperate with, the Holders and the managing underwriters, if any, to facilitate
the timely settlement of any offering or sale of Registrable Securities,
including the preparation and delivery of certificates or book-entry
representing Registrable Securities to be sold together with any other
authorizations, certificates, opinions and directions required by the transfer
agent which authorize and direct the transfer agent to issue such Registrable
Securities without restriction upon sale by the holder of such shares of
Registrable Securities;

 

7

 

 

(m)          use its reasonable best efforts to cause all shares of Registrable
Securities to be listed on the national securities exchange on which the Common
Stock is then listed; and

 

(n)          cause its officers to use their reasonable best efforts to support
the marketing of the Registrable Securities (including, without limitation,
participation in “road shows” and other customary marketing activities, which
may be virtual).

 

Section 3.2           Limitation on Subsequent Registration Rights. From and
after the date hereof, the Company shall not enter into any agreement granting
any holder or prospective holder of any securities of the Company registration
rights with respect to such securities that conflict with the rights granted to
the Holders herein, without the prior written consent of Holders of a majority
of the Registrable Securities.

 

Section 3.3           Expenses of Registration. All Registration Expenses
incurred in connection with any registration pursuant to this Agreement or
otherwise in complying with this Agreement shall be borne by the Company. All
Selling Expenses relating to securities registered on behalf of the Holders
shall be borne by the Holders of the registered securities included in such
registration.

 

Section 3.4           Information by Holders. The Holder or Holders of
Registrable Securities included in any registration shall furnish to the Company
such information regarding such Holder or Holders, the Registrable Securities
held by them and the distribution proposed by such Holder or Holders as the
Company may reasonably request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement. It is understood and agreed that the obligations of the Company under
Article I or II are conditioned on the timely provisions of the foregoing
information by such Holder or Holders and, without limitation of the foregoing,
will be conditioned on compliance by such Holder or Holders with the following:

 

(a)          such Holder or Holders will cooperate with the Company in
connection with the preparation of the applicable registration statement, and
for so long as the Company is obligated to keep such registration statement
effective, such Holder or Holders will provide to the Company, in writing and in
a timely manner, for use in such registration statement (and expressly
identified in writing as such), all information regarding themselves and such
other information as may be required by applicable law to enable the Company to
prepare such registration statement and the related prospectus covering the
applicable Registrable Securities owned by such Holder or Holders and to
maintain the currency and effectiveness thereof;

 

(b)          during such time as such Holder or Holders may be engaged in a
distribution of the Registrable Securities, such Holder or Holders will comply
with all laws applicable to such distribution, including Regulation M
promulgated under the Exchange Act, and, to the extent required by such laws,
will, among other things: (i) not engage in any stabilization activity in
connection with the securities of the Company in contravention of such laws and
(ii) if required by applicable law, cause to be furnished to each agent or
broker-dealer to or through whom such Registrable Securities may be offered, or
to the offeree if an offer is made directly by such Holder or Holders, such
copies of the applicable prospectus (as amended and supplemented to such date)
and documents incorporated by reference therein as may be required by such
agent, broker-dealer or offeree; and

 

8

 

 

(c)          on receipt of written notice from the Company of the happening of
any of the events specified in Section 3.1(k), or that requires the suspension
by such Holder or Holders of the distribution of any of the Registrable
Securities owned by such Holder or Holders pursuant to a registered offering,
then such Holders shall cease offering or distributing the Registrable
Securities owned by such Holder or Holders in a registered offering until the
offering and distribution of the Registrable Securities owned by such Holder or
Holders may recommence in accordance with the terms hereof and applicable law.

 

Section 3.5           Rule 144 Reporting. With a view to making available the
benefits of Rule 144 to the Holders, the Company agrees that it will file with
the Commission the “Form 10 information” required by Rule 144(i)(2) as soon as
practical after the date of this Agreement and, for so long as a Holder owns
Registrable Securities, the Company will use commercially reasonable efforts to:

 

(a)          file with the Commission in a timely manner all reports and other
documents required of the Company under the Exchange Act; and

 

(b)          so long as a Holder owns any Restricted Securities, furnish to the
Holder forthwith upon written request a written statement by the Company as to
its compliance with the reporting requirements of the Exchange Act.

 

Section 3.6           “Market Stand-Off” Agreement. The Holders shall not sell,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale
with respect to, any Common Stock (or other securities of the Company) held by
the Holders (other than those included in the registration) for a period
specified by the representatives of the managing underwriter or underwriters of
Common Stock (or other securities of the Company convertible into Common Stock)
not to exceed five (5) days prior and ninety (90) days following any registered
public sale of securities by the Company in which such Holder participates in
accordance with Article II, subject to customary exceptions (including, without
limitation, to the extent that any securities of the Company are subject to a
Permitted Loan (as defined in the Securities Purchase Agreement), to permit the
pledge of such securities pursuant to such Permitted Loan and any foreclosure in
connection with such Permitted Loan, or transfer in lieu of a foreclosure
thereunder, and subsequent sales, dispositions or other transfers). Each of the
Holders also shall execute and deliver any “lock-up” agreement reasonably
requested by the representatives of any underwriters of the Company in
connection with an offering in which such Holder participates, subject to
customary exceptions (including, without limitation, as described in the
preceding sentence in respect of a Permitted Loan).

 

9

 

 

Article IV

Indemnification

 

Section 4.1            Indemnification by Company. To the extent permitted by
applicable law, the Company will, with respect to any Registrable Securities as
to which registration or qualification or compliance under applicable “blue sky”
laws has been effected pursuant to this Agreement, indemnify each Holder, each
Holder’s current and former officers, directors, partners, members, managers,
shareholders, accountants, attorneys, agents and employees, and each Person
controlling such Holder or any of the foregoing within the meaning of Section 15
of the Securities Act, and each underwriter thereof, if any, and each Person who
controls any such underwriter within the meaning of Section 15 of the Securities
Act (collectively, the “Company Indemnified Parties”), against all expenses,
claims, losses, damages, costs (including costs of preparation and reasonable
attorney’s fees and any legal or other fees or expenses actually incurred by
such party in connection with any investigation or proceeding), judgments,
fines, penalties, charges, amounts paid in settlement and other liabilities,
joint or several (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement, prospectus, preliminary prospectus, offering
circular or other document, or any amendment or supplement thereto incident to
any such registration, qualification or compliance or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of, or any
rule or regulation promulgated under, the Securities Act, Exchange Act or state
securities laws applicable to the Company in connection with any such
registration, and the Company will reimburse each of the Company Indemnified
Parties for any reasonable legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, as such expenses are incurred. The indemnity
agreement contained in this Section 4.1 shall not apply to amounts paid in
settlement of any loss, claim, damage, liability or action if such settlement is
effected without the prior written consent of the Company (which consent shall
not be unreasonably withheld or delayed), nor shall the Company be liable to a
Holder in any such case for any such loss, claim, damage, liability or action
(a) to the extent that it arises out of or is based upon a violation or alleged
violation of any state or federal law (including any claim arising out of or
based on any untrue statement or alleged untrue statement or omission or alleged
omission in the registration statement or prospectus) which occurs in reliance
upon and in conformity with written information furnished expressly for use in
connection with such registration by or on behalf of any Holder or (b) in the
case of a sale directly by a Holder of Registrable Securities (including a sale
of such Registrable Securities through any underwriter retained by such Holder
engaging in a distribution solely on behalf of such Holder), such untrue
statement or alleged untrue statement or omission or alleged omission was
corrected in a final or amended prospectus, and such Holder failed to deliver a
copy of the final or amended prospectus at or prior to the confirmation of the
sale of the Registrable Securities to the Person asserting any such loss, claim,
damage or liability in any case in which such delivery is required by the
Securities Act.

 

Section 4.2            Indemnification by Holders. To the extent permitted by
applicable law, each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration or qualification or
compliance under applicable “blue sky” laws is being effected, indemnify,
severally and not jointly, the Company, each of its directors, officers,
partners, members, managers, shareholders, accountants, attorneys, agents and
employees, each underwriter, if any, of the Company’s securities covered by such
a registration, each Person who controls the Company or such underwriter within
the meaning of Section 15 of the Securities Act, and each other Holder and each
of such other Holder’s officers, directors, partners, members, managers,
shareholders, accountants, attorneys, agents and employees and each Person
controlling such Holder or any of the foregoing within the meaning of Section 15
of the Securities Act (collectively, the “Holder Indemnified Parties”), against
all expenses, claims, losses, damages, costs (including costs of preparation and
reasonable attorney’s fees and any legal or other fees or expenses actually
incurred by such party in connection with any investigation or proceeding),
judgments, fines, penalties, charges, amounts paid in settlement and other and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement, prospectus, preliminary prospectus, offering
circular or other document, or any amendment or supplement thereto incident to
any such registration, qualification or compliance or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by such Holder of, or any
rule or regulation promulgated under, the Securities Act, Exchange Act or state
securities law applicable to such Holder, and will reimburse each of the Holder
Indemnified Parties for any reasonable legal or any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, as such expenses are incurred, in each
case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder and stated to be specifically for use therein, provided,
however, that in no event shall any indemnity under this Section 4.2 payable by
a Holder exceed the amount by which the net proceeds actually received by such
Holder from the sale of Registrable Securities included in such registration
exceeds the amount of any other losses, expenses, settlements, damages, claims
and liabilities that such Holder has been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission or violation.
The indemnity agreement contained in this Section 4.2 shall not apply to amounts
paid in settlement of any loss, claim, damage, liability or action if such
settlement is effected without the prior written consent of the applicable
Holder (which consent shall not be unreasonably withheld or delayed), nor shall
the Holder be liable for any such loss, claim, damage, liability or action where
such untrue statement or alleged untrue statement or omission or alleged
omission was corrected in a final or amended prospectus, and the Company or the
underwriters failed to deliver a copy of the final or amended prospectus at or
prior to the confirmation of the sale of the Registrable Securities to the
Person asserting any such loss, claim, damage or liability in any case in which
such delivery is required by the Securities Act

 

10

 

 

Section 4.3           Notification. Each party entitled to indemnification under
this Article IV (the “Indemnified Party”) shall give notice to the party
required to provide indemnification (the “Indemnifying Party”) promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided, however, that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld or delayed), and the Indemnified Party may
participate in such defense at such party’s expense; provided, further, however,
that an Indemnified Party (together with all other Indemnified Parties) shall
have the right to retain one (1) separate counsel, with the reasonable fees and
expenses to be paid by the Indemnifying Party, if representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate due to conflicting interests between such Indemnified Party and
any other party represented by such counsel in such proceeding. The failure of
any Indemnified Party to give notice as provided herein shall relieve the
Indemnifying Party of its obligations under this Article IV, only to the extent
that, the failure to give such notice is materially prejudicial or harmful to an
Indemnifying Party’s ability to defend such action. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the prior
written consent of each Indemnified Party (which consent shall not be
unreasonably withheld or delayed), consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. The indemnity agreements
contained in this Article IV shall not apply to amounts paid in settlement of
any loss, claim, damage, liability or action if such settlement is effected
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld or delayed. The indemnification set forth in this
Article IV shall be in addition to any other indemnification rights or
agreements that an Indemnified Party may have.

 

Section 4.4            Contribution. If the indemnification provided for in this
Article IV is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party, other than pursuant to its terms, with respect to any claim,
loss, damage, liability or action referred to therein, then, subject to the
limitations contained in Article IV, the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such claim, loss,
damage, liability or action in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and the Indemnified
Party on the other in connection with the actions that resulted in such claims,
loss, damage, liability or action, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact related to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Holders agree that it would not be
just and equitable if contribution pursuant to this Section 4.4 were based
solely upon the number of entities from whom contribution was requested or by
any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 4.4. In no event shall any
Holder's contribution obligation under this Section 4.4 exceed the amount by
which the net proceeds actually received by such Holder from the sale of
Registrable Securities included in such registration exceeds the amount of any
other losses, expenses, settlements, damages, claims and liabilities that such
Holder has been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission or violation. No Person guilty of
fraudulent misrepresentation (within the meaning of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.

 

11

 

 

Article V

Transfer and Termination of Registration Rights

 

Section 5.1            Transfer of Registration Rights. The rights to cause the
Company to register securities granted to a Holder under this Agreement may be
assigned to any Person in connection with any Transfer (as defined in the
Securities Purchase Agreement) or assignment of Registrable Securities to in a
Transfer permitted by Section 4.2 of the Securities Purchase Agreement;
provided, however, that (a) such transfer may otherwise be effected in
accordance with applicable securities laws, (b) prior written notice of such
assignment is given to the Company, and (c) such transferee agrees in writing to
be bound by, and subject to, this Agreement as a “Holder” pursuant to a written
instrument in form and substance reasonably acceptable to the Company.

 

Section 5.2            Termination of Registration Rights. The rights of any
particular Holder to cause the Company to register securities under Articles I
and II shall terminate with respect to such Holder upon the date upon which such
Holder no longer holds any Registrable Securities.

 

Article VI

Miscellaneous.

 

Section 6.1            Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and will become effective when one or more counterparts have been signed by a
party and delivered to the other parties. Copies of executed counterparts
transmitted by telecopy, telefax or other electronic transmission service shall
be considered original executed counterparts for purposes of this Section 6.1,
provided that receipt of copies of such counterparts is confirmed.

 

Section 6.2            Governing Law.

 

(a)          This Agreement shall be governed by, and construed in accordance
with, the laws of the state of New York (except to the extent that mandatory
provisions of the laws of the state of Nevada are applicable), without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the state of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the state of New York.

 

(b)          Any dispute relating hereto shall be heard in the U.S. District
Court for the Southern District of New York (and any federal appellate courts
therefrom) (and to the extent such court declines jurisdiction, state court
located in the Borough of Manhattan) (each a “Chosen Court” and collectively,
the “Chosen Courts”), and the parties agree to the exclusive jurisdiction and
venue of the Chosen Courts. Such Persons further agree that any proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby or by
any matters related to the foregoing (the “Applicable Matters”) shall be brought
exclusively in a Chosen Court, and that any proceeding arising out of this
Agreement or any other Applicable Matter shall be deemed to have arisen from a
transaction of business in the state of New York, and each of the foregoing
Persons hereby irrevocably consents to the jurisdiction of such Chosen Courts in
any such proceeding and irrevocably and unconditionally waives, to the fullest
extent permitted by law, any objection that such Person may now or hereafter
have to the laying of the venue of any such suit, action or proceeding in any
such Chosen Court or that any such proceeding brought in any such Chosen Court
has been brought in an inconvenient forum.

 

12

 

 

(c)          Such Persons further covenant not to bring a proceeding with
respect to the Applicable Matters (or that could affect any Applicable Matter)
other than in such Chosen Court and not to challenge or enforce in another
jurisdiction a judgment of such Chosen Court.

 

(d)          Process in any such proceeding may be served on any Person with
respect to such Applicable Matters anywhere in the world, whether within or
without the jurisdiction of any such Chosen Court. Without limiting the
foregoing, each such Person agrees that service of process on such party as
provided in Section 6.5 shall be deemed effective service of process on such
Person.

 

(e)          Waiver of Jury Trial. EACH PARTY HERETO, FOR ITSELF AND ITS
AFFILIATES, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THE ACTIONS OF THE PARTIES HERETO OR THEIR RESPECTIVE AFFILIATES
PURSUANT TO THIS AGREEMENT OR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT HEREOF.

 

Section 6.3           Entire Agreement; No Third Party Beneficiary. This
Agreement and the Securities Purchase Agreement contain the entire agreement by
and among the parties with respect to the subject matter hereof and all prior
negotiations, writings and understandings relating to the subject matter of this
Agreement. Except as provided in Article IV, this Agreement is not intended to
confer upon any Person not a party hereto (or their successors and permitted
assigns) any rights or remedies hereunder.

 

Section 6.4            Expenses. Except as provided in Section 3.3, all fees,
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, including accounting and legal fees shall be
paid by the party incurring such expenses. The fees specified in clause (b) of
the definition of “Registration Expenses” incurred in connection with any Shelf
Registration or Underwritten Offering pursuant to this Agreement shall, in each
case, not exceed $50,000.

 

Section 6.5           Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given or made as follows: (a) if sent by registered or certified
mail in the United States return receipt requested, upon receipt; (b) if sent by
nationally recognized overnight air courier, one (1) Business Day after mailing;
(c) if sent by e-mail transmission, with a copy sent on the same day in the
manner provided in the foregoing clause (a) or (b), when transmitted and receipt
is confirmed; and (d) if otherwise actually personally delivered, when
delivered, provided, that such notices, requests, demands and other
communications are delivered to the address set forth below, or to such other
address as any party shall provide by like notice to the other parties to this
Agreement:

 

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If to the Company, to:

 

Cryoport, Inc.

112 Westwood Place, Suite 350

Brentwood, TN 37027

Attention:  (i) Jerrell Shelton, President, Chief Executive Officer, and
Chairman of the Board, (ii) Robert Stefanovich, Chief Financial Officer,
Treasurer and Corporate Secretary, and (iii) Tony Ippolito, Vice President and
General Counsel.

Email:  JShelton@cryoport.com; RStefanovich@cryoport.com; and
TIppolito@cryoport.com

 

with a copy (which shall not constitute notice) to:

 

Latham & Watkins LLP

650 Town Center Drive, 20th Floor

Costa Mesa, CA 92626

Attention:  Daniel Rees

Email: Daniel.Rees@lw.com

 

If to the Investor, to:

 

BTO Freeze Parent L.P.

c/o The Blackstone Group Inc.

345 Park Avenue

New York, NY 10154

Attention: Ram Jagannath

E-mail: Ram.Jagannath@Blackstone.com

 

with a copy (which shall not constitute notice) to:

 

Simpson Thacher & Bartlett LLP

425 Lexington Ave

New York, New York 10017

Attention: Anthony F. Vernace

E-mail: avernace@stblaw.com

 

Section 6.6           Successors and Assigns. This Agreement will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Except as provided in Section 5.1, no
assignment of this Agreement or of any rights or obligations hereunder may be
made by any party hereto without the prior written consent of the other parties
hereto. Any purported assignment or delegation in violation of this Agreement
shall be null and void ab initio.

 

Section 6.7            Headings. The Section, Article and other headings
contained in this Agreement are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Agreement.

 

14

 

 

Section 6.8            Amendments and Waivers. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the Company and the Holders of a majority of the Registrable Securities
outstanding at the time of such amendment. Any party hereto may, only by an
instrument in writing, waive compliance by any other party or parties hereto
with any term or provision hereof on the part of such other party or parties
hereto to be performed or complied with. No failure or delay of any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor
will any single or partial exercise of any right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The waiver
by any party hereto of a breach of any term or provision hereof shall not be
construed as a waiver of any subsequent breach. The rights and remedies of the
parties hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have hereunder.

 

Section 6.9            Interpretation; Absence of Presumption.

 

(a)           For the purposes hereof: (i) words in the singular shall be held
to include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires; (ii) the terms “hereof,”
“herein,” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and paragraph references are
to the Sections and paragraphs in this Agreement unless otherwise specified;
(iii) the word “including” and words of similar import when used in this
Agreement shall mean “including, without limitation,” unless the context
otherwise requires or unless otherwise specified; and (iv) the word “or” , “any”
or “either” shall not be exclusive. References to a Person are also to its
permitted assigns and successors. When calculating the period of time between
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded (and unless, otherwise required by Law, if the
last day of such period is not a Business Day, the period in question shall end
on the next succeeding Business Day)

 

(b)         With regard to each and every term and condition of this Agreement,
the parties hereto understand and agree that the same have or has been mutually
negotiated, prepared and drafted, and if at any time the parties hereto desire
or are required to interpret or construe any such term or condition, no
consideration will be given to the issue of which party hereto actually
prepared, drafted or requested any term or condition of this Agreement.

 

Section 6.10        Severability. Any provision hereof that is held to be
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, shall be ineffective only to the extent of such invalidity,
illegality or unenforceability, without affecting in any way the remaining
provisions hereof, provided, however, that the parties will attempt in good
faith to reform this Agreement in a manner consistent with the intent of any
such ineffective provision for the purpose of carrying out such intent.

 

(The next page is the signature page)

 

15

 

 

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first above written.

 

 

  CRYOPORT, INC.       By:       Name:     Title:

 

  BTO FREEZE PARENT L.P.       By:       Name:     Title:

 

[Signature Page to Registration Rights Agreement]

 

S-1

 

 

EXHIBIT A

DEFINED TERMS

 

1.          The following capitalized terms have the meanings indicated:

 

“Affiliate” of any Person means any Person, directly or indirectly, controlling,
controlled by or under common control with such Person.

 

“Automatic Shelf Registration Statement” means an “automatic shelf registration
statement” as defined under Rule 405.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Stock” means the Company’s common stock, par value $0.001 per share.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
similar successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.

 

“Holder” means (a) any Investor holding Registrable Securities and (b) any
transferee to which the rights under this Agreement have been transferred in
accordance with Section 5.1.

 

“Person” means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization, other
legal entity, or any government or governmental agency or authority.

 

“register”, “registered” and “registration” refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness of such registration
statement.

 

“Registration Expenses” means (a) all expenses incurred by the Company in
complying with this Agreement, including, without limitation, internal expenses,
all registration, qualification, listing and filing fees, printing expenses,
escrow fees, rating agency fees, fees and disbursements of the Company’s
independent registered public accounting firm, fees and disbursements of counsel
for the Company, blue sky fees and expenses and (b) the fees and expenses of one
counsel to the Holders in connection with this Agreement; provided, however,
that Registration Expenses shall not include any Selling Expenses.

 

“Registrable Securities” means (a) any shares of Common Stock issued or issuable
upon conversion of the Series C Convertible Preferred Stock, (b) the shares of
Common Stock issued to the Investor pursuant to the Securities Purchase
Agreement and (c) any Common Stock actually issued in respect of the securities
described in clauses (a) or (b) above or this clause (c) upon any stock split,
stock dividend, recapitalization, reclassification, merger, consolidation or
similar event; provided, however, that the securities described in clauses (a),
(b) and (c) above shall only be treated as Registrable Securities until the
earliest of: (i) the date on which such security has been registered under the
Securities Act and disposed of in accordance with an effective Registration
Statement relating thereto; (ii) the date on which such security has been sold
pursuant to Rule 144 and the security is no longer a Restricted Security; or
(iii) the date on which such security is transferred in a transaction pursuant
to which the registration rights are not also assigned in accordance with
Section 5.1.

 

A-1

 

 

“Restricted Securities” means any Common Stock required to bear the legend set
forth in Section 4.3(a) of the Securities Purchase Agreement.

 

“Rule 144” means Rule 144 promulgated under the Securities Act and any successor
provision.

 

“Rule 405” means Rule 405 promulgated under the Securities Act and any successor
provision.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder or any similar federal statute and the rules
and regulations of the Commission thereunder, all as the same shall be in effect
at the time.

 

“Selling Expenses” means (a) all underwriting discounts, selling commissions and
stock transfer taxes applicable to the securities registered by the Holders and
(b) the fees and expenses of any counsel to the Holders.

 

“Series C Convertible Preferred Stock” means the Company’s Series C Convertible
Preferred Stock, par value $0.001 per share.

 

“Shelf Registration” means the Resale Shelf Registration or a Subsequent Shelf
Registration, as applicable.

 

“Transfer” has the meaning given to such term in the Securities Purchase
Agreement.

 

“WKSI” means a “well known seasoned issuer” as defined under Rule 405.

 

2.       The following terms are defined in the Sections of the Agreement
indicated:

 

INDEX OF TERMS

 

Term Section     Agreement Preamble Applicable Matters Section 6.2(b) Chosen
Court Section 6.2(b) Company Preamble Company Indemnified Parties Section 4.1
Effectiveness Period Section 1.2 Holder Section 5.1 Holder Indemnified Parties
Section 4.2 Indemnified Party Section 4.3 Indemnifying Party Section 4.3
Investor Preamble Market Stand-Off Section 3.6 Resale Shelf Registration Section
1.1 Securities Purchase Agreement Preamble Subsequent Holder Notice Section 1.5
Subsequent Shelf Registration Section 1.3 Underwritten Offering Section 1.6

 

A-2