Securities Purchase Agreement



 Exhibit 4.1 
  

SECURITIES PURCHASE AGREEMENT 
  
 SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of February 24, 2004, by and among BUCA, Inc., a Minnesota corporation
with headquarters located at 1300 Nicollet Mall, Suite 5003, Minneapolis, Minnesota 55403 (the “Company”), and the investors listed on the Schedule of Investors attached hereto as Exhibit A (individually, an
“Investor” and collectively, the “Investors”). 
  
 WHEREAS: 
  
 A. The
Company and each Investor is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506
of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act. 
  
 B. Each Investor, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, that aggregate number of shares of the Common Stock, par value $.01 per share, of the Company (the “Common Stock”), set forth opposite such Investor’s name in column two (2) on the Schedule
of Investors in Exhibit A (which aggregate amount for all Investors together shall be 3,300,000 shares of Common Stock and shall collectively be referred to herein as the “Common Shares”). 
  
 C. The Common Shares issued pursuant to this Agreement are collectively are
referred to herein as the “Securities.” 
  
 NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows: 
  
 ARTICLE I 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated: 
  
 “8-K Filing” has the meaning set forth in Section 4.5. 
  
 “Advice” has the meaning set forth in Section 6.5. 







 “Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act. 
  
 “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City
of New York, New York or the city of Minneapolis, Minnesota are authorized or required by law to remain closed. 
  
 “Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1. 
  
 “Closing Date” means the date and time of the Closing and
shall be 10:00 a.m., New York City Time, on February 26, 2004 (or such other date and time as is mutually agreed to by the Company and each Investor). 
  
 “Commission” has the meaning set forth in the preamble hereto. 
  
 “Common Shares” means an aggregate of 3,300,000 shares of Common Stock, which are being issued and sold by
the Company to the Investors at the Closing. 
  
 “Common
Stock” means the common stock of the Company, par value $0.01 per share. 
  
 “Company Counsel” means Faegre & Benson LLP, counsel to the Company. 
  
 “Convertible Securities” means any stock or securities (other than Options) convertible into or exercisable or exchangeable for Common
Stock. 
  
 “Credit Agreement” has the meaning set
forth in Section 3.1(a). 
  
 “Disclosure
Materials” has the meaning set forth in Section 3.1(g). 
  
 “Effective Date” means the date that the Registration Statement is first declared effective by the Commission. 
  
 “Effectiveness Period” has the meaning set forth in Section 6.1. 
  
 “Eligible Market” means any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ
National Market or the NASDAQ SmallCap Market. 
  
 “Event” has the meaning set forth in Section 6.1. 
  
 “Event Payments” has the meaning set forth in Section 6.1. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Excluded Events” has the meaning set forth in Section 6.1. 
  

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 “Filing Date” means March 29, 2004. 
  
 “Indemnified Party” has the meaning set forth in Section
6.4. 
  
 “Indemnifying Party” has the meaning
set forth in Section 6.4. 
  
 “Intellectual
Property Rights” has the meaning set forth in Section 3.1. 
  
 “Lead Investor” means Smithfield Fiduciary LLC. 
  
 “Lead Investor Counsel” means Schulte Roth & Zabel LLP, counsel to the Lead Investor. 
  
 “Lien” means any lien, charge, claim, security interest,
encumbrance, right of first refusal or other restriction. 
  
 “Losses” means any and all losses, claims, damages, liabilities, settlement costs and expenses, including, without limitation, costs of preparation and reasonable attorneys’ fees. 
  
 “Material Adverse Effect” has the meaning set forth in
Section 3.1. 
  
 “Material Permits” has
the meaning set forth in Section 3.1. 
  
 “Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities. 
  
 “Person” means any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited
liability company, or joint stock company.  
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened in writing. 

  
 “Prospectus” means the prospectus included in
the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the
Prospectus including post effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means any Common Stock issued or issuable pursuant to the Transaction Documents, together with any securities
issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing. 
  

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 “Registration Statement” means each registration statement required to be filed under
Article VI, including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to
be incorporated by reference in such registration statement. 
  
 “Related Person” has the meaning set forth in Section 4.6. 
  
 “Required Effectiveness Date” means May 26, 2004 or, if the Registration Statement is subject to a full review by the Commission, June 25, 2004. 
  
 “Rule 144,” “Rule 415,” and “Rule
424” means Rule 144, Rule 415 and Rule 424, respectively, promulgated by the Commission pursuant to the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule. 
  
 “SEC Reports” has the meaning set forth in Section 3.1. 
  
 “Securities” means the Common Shares. 
  
 “Securities Act” has the meaning set forth in the preamble hereto. 
  
 “Shares” means shares of the Company’s Common Stock. 
  
 “Subsidiary” means any “Significant Subsidiary” of the Company as such term is defined in
Regulation S-X. 
  
 “Trading Day” means (a) any
day on which the Common Stock is listed or quoted and traded on its primary Trading Market, or (b) if the Common Stock is not then listed or quoted and traded on any Trading Market, then any Business Day. 
  
 “Trading Market” means the Nasdaq National Market or any
other Eligible Market, or any national securities exchange, market or trading or quotation facility on which the Common Stock is then listed or quoted. 
  
 “Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, and the Transfer Agent Instructions.

  
 “Transfer Agent” means Wells Fargo Bank,
N.A., or any successor transfer agent for the Company. 
  
 “Transfer Agent Instructions” means, with respect to the Company, the Irrevocable Transfer Agent Instructions, in the form of Exhibit E, executed by the Company and delivered to and acknowledged in writing by the
Transfer Agent 
  

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 ARTICLE II 
 PURCHASE AND SALE 
  
 2.1
Closing. Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell to each Investor, and each Investor shall, severally and not jointly, purchase from the Company, such number of Common
Shares set forth opposite such Investor’s name on Exhibit A hereto under the headings “Common Shares.” The date and time of the Closing and shall be 10:00 a.m., New York City Time, on the Closing Date. The Closing shall take
place at the offices of Lead Investor Counsel or at such other location or time as the parties may agree. 
  
 2.2 Closing Deliveries. 
  
 (a) At the Closing, the Company shall deliver or cause to be delivered to each Investor the following: 
  
 (i) one or more stock certificates, free and clear of all restrictive and
other legends (except as expressly provided in Section 4.1(b) hereof, evidencing such number of Company Shares equal to the number of Shares set forth opposite such Investor’s name on Exhibit A hereto under the heading
“Common Shares,” registered in the name of such Investor; 
  
 (ii) a legal opinion of Company Counsel, covering the matters identified in Exhibit C in a manner reasonably satisfactory to the Investors, executed by such counsel and addressed to the Investors; and 
  
 (iii) duly executed Transfer Agent Instructions acknowledged by the Transfer
Agent. 
  
 (b) At the Closing, each Investor shall deliver or
cause to be delivered to the Company the purchase price set forth opposite such Investor’s name on Exhibit A hereto under the heading “Purchase Price” in United States dollars and in immediately available funds, by wire
transfer to an account designated in writing to such Investor by the Company for such purpose. 
  
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
  
 3.1 Representations and Warranties of the Company. The Company hereby represents and warrants to the Investors as
follows (which representations and warranties shall be deemed to apply, where appropriate, to each subsidiary of the Company): 
  
 (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a) hereto. Except as disclosed
in Schedule 3.1(a) hereto, the Company owns, directly or indirectly, all of the capital stock or comparable equity interests of each Subsidiary free and clear of any Lien, other than a pledge of all such equity interests to the Company’s
lenders pursuant to that certain Revolving Credit and Term Loan Agreement, dated as of September 30, 2002, by and among the Company and the Guarantors and the Lenders named therein, as amended 
  

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 on November 4, 2003 (the “Credit Agreement”). All the issued and outstanding shares of capital stock or
comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights. 
  
 (b) Organization and Qualification. Each of the Company and the Subsidiaries is an entity duly incorporated or organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite legal authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the
Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to do
business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or
in good standing, as the case may be, could not reasonably be expected to, individually or in the aggregate, (i) materially and adversely affect the legality, validity or enforceability of any Transaction Document, (ii) have or result in a material
adverse effect on the results of operations, assets, business or financial condition of the Company and the Subsidiaries, taken as a whole on a consolidated basis, or (iii) materially and adversely impair the Company’s ability to perform fully
on a timely basis its obligations under any of the Transaction Documents (any of (i), (ii) or (iii), a “Material Adverse Effect”). 
  
 (c) Authorization; Enforcement. The Company has the requisite corporate authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents to which it is a party by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further consent or action is required by the Company, its Board of Directors or its shareholders. Each of
the Transaction Documents to which it is a party has been (or upon delivery will be) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will constitute, the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors rights
generally, and (ii) the effect of rules of law governing the availability of specific performance and other equitable remedies. 
  
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents to which it is a party by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby do not, and will not, (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary 
  

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 debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound, or affected, except to the extent that such conflict, default, termination, amendment, acceleration or cancellation right could not reasonably be expected to have a Material Adverse Effect, or (iii)
result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and
regulations and the rules and regulations of any self-regulatory organization to which the Company or its securities are subject), or by which any property or asset of the Company or a Subsidiary is bound or affected, except to the extent that such
violation could not reasonably be expected to have a Material Adverse Effect. 
  
 (e) Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens (except for restrictions under applicable securities laws) and shall not be subject to preemptive or similar rights of shareholders. 
  
 (f) Capitalization. The aggregate number of shares and type of all authorized, issued and outstanding classes of capital stock, options and other
securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) is set forth in Schedule 3.1(f) hereto. All outstanding shares of capital stock are duly
authorized, validly issued, fully paid and nonassessable and have been issued in compliance with all applicable securities laws. Except as disclosed in Schedule 3.1(f) hereto, the Company has not issued any other options, warrants, script
rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or entered into any agreement giving any Person any right to subscribe
for or acquire, any shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. Except as set forth on Schedule 3.1(f) hereto, and except for customary adjustments as a result of stock dividends,
stock splits, combinations of shares, reorganizations, recapitalizations, reclassifications or other similar events, there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement
providing rights to security holders) and the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder
of securities to adjust the exercise, conversion, exchange or reset price under such securities. To the knowledge of the Company, except as specifically disclosed in the SEC Reports or in any Schedule 13G or Schedule 13G/A filed by any Person
reporting its beneficial ownership of shares of the Company’s Common Stock, no Person or group of related Persons beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange Act), or has the right to acquire, by agreement with or
by obligation binding upon the Company, beneficial ownership of in excess of 5% of the outstanding Common Stock, ignoring for such purposes any limitation on the number of shares of Common Stock that may be owned at any single time. 
  
 (g) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (the foregoing materials (together with any materials filed 
  

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 by the Company under the Exchange Act, whether or not required, including the Company’s Current Report on Form 8-K
furnished to the Commission on February 9, 2004) being collectively referred to herein as the “SEC Reports” and, together with this Agreement and the Schedules to this Agreement, the “Disclosure Materials”) on a
timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in
the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments. Except as set forth in Schedule 3.1(g), the Company is not required to file any agreement, note, lease, mortgage, deed or other instrument entered into prior to the date hereof and
to which the Company is a party or by which the Company is bound which has not been previously filed as an exhibit to its filings with the Commission under the Exchange Act. 
  
 (h) Material Changes. Since the date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in the SEC Reports or in Schedule 3.1(h) hereto, (i) there has been no event, occurrence or development in the Company’s business that, individually or in the aggregate, has had or that could reasonably
be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting or the identity of its
auditors, except as disclosed in its SEC Reports, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders, in their capacities as such, or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock (except for repurchases by the Company of shares of capital stock held by employees, officers, directors, or consultants pursuant to an option of the Company to repurchase such shares upon the
termination of employment or services), and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock-based plans. 
  
 (i) Absence of Litigation. Except as disclosed in the Company’s
SEC Reports, there is no action, suit, claim, or proceeding, or, to the Company’s knowledge, inquiry or investigation, before or by any court, public board, government agency, self-regulatory organization or body 
  

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 pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries that
could reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect. 
  
 (j) Compliance. Except as set forth in Schedule 3.1(j) hereto, neither the Company nor any Subsidiary, except in each case as could not,
individually or in the aggregate, reasonably be expected to have or result in a Material Adverse Effect, (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is
or has been in violation of any statute, rule or regulation of any governmental authority. 
  
 (k) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries and
good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens that do not, individually or in the aggregate, have
or result in a Material Adverse Effect and (ii) first priority mortgages on all real property owned by the Company and the Subsidiaries granted to the Lenders named in the Credit Agreement. Any real property and facilities held under lease by the
Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in material compliance. 
  
 (l) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its affiliates, nor any
Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for persons engaged by any Investor or its investment advisor) relating to or arising out of the issuance of the Securities pursuant to
this Agreement. The Company shall pay, and hold each Investor harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any such claim for
fees arising out of the issuance of the Securities pursuant to this Agreement. The Company acknowledges that it has engaged Banc of America Securities LLC as placement agent (the “Agent”) in connection with the sale of the
Securities. Other than the Agent, the Company has not engaged any placement agent or other agent in connection with the sale of the Securities. 
  
 (m) Private Placement. Neither the Company nor any Person acting on the Company’s behalf and with its authorization has sold or offered to
sell or solicited any offer to buy the Securities by means of any form of general solicitation or advertising. Neither the Company nor any of its Affiliates nor any Person acting on the Company’s behalf and with its authorization has, directly
or indirectly, at any time within the past six months, made any offer or sale of any security 
  

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 or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the
exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction Documents
to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or shareholder approval provisions, including, without limitation, under the rules and regulations of any Trading Market. The Company is not required
to be registered as, and is not an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company is not required to be registered as, a United States real property holding
corporation within the meaning of the Foreign Investment in Real Property Tax Act of 1980. 
  
 (n) Form S-3 Eligibility. The Company is eligible to register the Common Shares for resale by the Investors using Form S-3 promulgated under the Securities Act. 
  
 (o) Listing and Maintenance Requirements. The Company has not, in the
twelve months preceding the date hereof, received notice (written or oral) from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is in compliance with all such listing and maintenance requirements. 
  
 (p) Registration Rights. Except as described in Schedule 3.1(p), the Company has not granted or agreed to grant to any Person any rights
(including “piggy-back” registration rights) to have any securities of the Company registered with the Commission or any other governmental authority that have not been satisfied or waived. 
  
 (q) Application of Takeover Protections. There is no control share
acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s charter documents or the laws of its state of incorporation that is or could
become applicable to any of the Investors as a result of the Investors and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation, as a result of the Company’s issuance
of the Securities and the Investors’ ownership of the Securities. 
  
 (r) Disclosure. Except for any information to be publicly disclosed by the Company concurrently with the press release to be issued in accordance with Section 4.5 hereof, the Company confirms that neither it nor any officers,
directors or Affiliates, has provided any of the Investors or their agents or counsel with any information that constitutes or might constitute material, nonpublic information (other than the existence and terms of the issuance of Securities, as
contemplated by this Agreement). The Company understands and confirms that each of the Investors will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided by the Company to the
Investors regarding the Company, its business and the transactions contemplated hereby, including the Schedules to this Agreement, furnished by or on the behalf of the Company are true and correct in all material respects and do not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made 
  

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 therein, in the light of the circumstances under which they were made, not misleading. To the Company’s knowledge,
no event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, operations or financial conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by the Company but which has not been so publicly announced or disclosed. The Company acknowledges and agrees that no Investor makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in the Transaction Documents. 
  
 (s) Acknowledgment Regarding Investors’ Purchase of Securities. Based upon the assumption that the transactions contemplated by this Agreement are consummated in all material respects in conformity with
the Transaction Documents, the Company acknowledges and agrees that each of the Investors is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and
thereby. The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by any
Investor or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investors’ purchase of the Securities. The Company
further represents to each Investor that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives. 
  
 (t) Patents and Trademarks. The Company and the Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses
as described in the SEC Reports and which the failure to so have does not have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a written notice that
the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person, except for matters which could not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company,
all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, except for matters which could not reasonably be expected to have a Material Adverse Effect.

  
 (u) Insurance. The Company and the Subsidiaries are
insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses and location in which the Company and the Subsidiaries are engaged. Neither the Company nor
any Subsidiary has any knowledge that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a
significant increase in cost. 
  

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 (v) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits does not, individually
or in the aggregate, have or result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation or modification of any
Material Permit. 
  
 (w) Transactions With Affiliates and
Employees. Except as set forth or incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 29, 2002, none of the officers, directors or employees of the Company is presently a party to any
transaction that would be required to be reported on Form 10-K with the Company or any of its Subsidiaries (other than for ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the Company’s knowledge, any corporation,
partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner. 
  

(x) Internal Accounting Controls. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 
  
 (y) Sarbanes-Oxley Act. The Company is in compliance with applicable requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and
regulations promulgated by the Commission thereunder, except where such noncompliance would not have, individually or in the aggregate, a Material Adverse Effect. 
  
 3.2 Representations and Warranties of the Investors. Each Investor hereby, as to itself only and for no other
Investor, represents and warrants to the Company as follows: 
  
 (a) Organization; Authority. Such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The purchase by such Investor of the Securities hereunder has been duly authorized by all necessary action on
the part of such Investor. This Agreement has been duly executed and delivered by such Investor and constitutes the valid and binding obligation of such Investor, enforceable against it in accordance with its terms, except as may be limited by (i)
applicable bankruptcy, insolvency, 
  

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 reorganization or other laws of general application relating to or affecting the enforcement of creditors rights
generally, and (ii) the effect of rules of law governing the availability of specific performance and other equitable remedies. 
  
 (b) No Public Sale or Distribution; Investment Intent. Such Investor is (i) acquiring the Common Shares in the ordinary course of business for its
own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under the Securities Act or under an exemption from such registration and in compliance with
applicable federal and state securities laws, and such Investor does not have a present arrangement to effect any distribution of the Securities to or through any person or entity; provided, however, that by making the representations
herein, such Investor does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption
under the Securities Act. 
  
 (c) Investor Status. At the
time such Investor was offered the Securities, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Such Investor has not been formed solely for the purpose of acquiring the
Securities. 
  
 (d) Experience of such Investor. Such
Investor, either alone or together with its representatives has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Investor is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 
  
 (e) Access to Information. Such Investor acknowledges that it has
reviewed the Disclosure Materials and has been afforded: (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the
Securities and the merits and risks of investing in the Securities; (ii) access to information (other than material non-public information) about the Company and the Subsidiaries and their respective financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Investor or its representatives or counsel shall modify, amend or affect such
Investor’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents. 
  
 (f) No Governmental Review. Such Investor understands that no United
States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities
passed upon or endorsed the merits of the offering of the Securities. 
  

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 (g) No Conflicts. The execution, delivery and performance by such Investor of this Agreement and
the consummation by such Investor of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Investor or (ii) conflict with, or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Investor is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Investor, except in the case of clauses (ii) and (iii) above, for such that are not material and do not otherwise affect the ability of such
Investor to consummate the transactions contemplated hereby. 
  
 (h) No Legal, Tax or Investment Advice. Such Investor understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Investor in connection with the purchase of the Securities
constitutes legal, tax or investment advice. Such Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities. Such Investor
understands that the Agent has acted solely as the agent of the Company in this placement of the Securities, and that the Agent makes no representation or warranty with regard to the merits of this transaction or as to the accuracy of any
information such Investor may have received in connection therewith. Such Investor acknowledges that he has not relied on any information or advice furnished by or on behalf of the Agent. 
  
 (i) Reliance on Exemptions. Such Investor understands that the Securities are being offered and sold to it in
reliance on specific exemptions from the registration requirements of the federal and state securities laws and that the Company is relying upon the truth and accuracy of, and such Investor’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the availability of such exemptions and the eligibility of such Investor to acquire the Securities. 
  
 (j) Transfer or Resale. Such Investor understands that except as
otherwise provided in this Agreement, the Securities have not been registered under the Securities Act or any state securities or blue sky laws, and may not be offered for sale, sold, assigned or transferred unless subsequently registered thereunder
or pursuant to an available exemption from such registration. 
  

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 ARTICLE IV 
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1 Transfer Restrictions. 
  
 (a) The Investors
covenant that the Securities will only be disposed of pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act or pursuant to an available exemption from the registration requirements of
the Securities Act, and in compliance with any applicable state securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or to the Company, or pursuant to Rule 144(k), except as
otherwise set forth herein, the Company may require the transferor to provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration under the Securities Act. 
  
 (b) The Investors agree to the imprinting, so long as is required by this Section 4.1(b), of the following legend on any certificate evidencing Securities: 
  
 THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR
BLUE SKY LAWS. 
  
 Certificates evidencing Securities shall not be required to
contain such legend or any other legend (i) after a transfer pursuant to a Registration Statement that is effective under the Securities Act covering the resale of such Securities, (ii) following any sale of such Securities pursuant to Rule 144,
(iii) if such Securities are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Securities Act (including controlling judicial interpretations and pronouncements issued by the Staff of
the Commission). The Company shall cause its counsel to issue the legal opinion included in the Transfer Agent Instructions to the Transfer Agent on the Effective Date. Following the Effective Date or at such earlier time as a legend is no longer
required for certain Securities, the Company will no later than three Trading Days following the delivery by an Investor to the Transfer Agent (with a copy to the Company) at the following address of a legended certificate representing such
Securities and an opinion of counsel to the extent required by Section 4.1(a), deliver or cause to be delivered to such Investor a certificate representing such Securities that is free from all restrictive and other legends. The Company may not make
any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section. The Transfer Agent shall be contacted at: 
  
 Wells Fargo Bank, N.A. 
 Shareowner Services 
 161 North Concord Exchange 
  

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 South St. Paul, MN 55075 
 Attention: John Baker 
 Phone: (612) 552-6975 
 Fax: (651) 450-4078 
  
 (c) The Company will not object to and shall permit (except as prohibited by
law) an Investor to pledge or grant a security interest in some or all of the Securities in connection with a bona fide margin agreement or other loan or financing arrangement secured by the Securities, and if required under the terms of such
agreement, loan or arrangement, the Company will not object to and shall permit (except as prohibited by law) such Investor to transfer pledged or secured Securities to the pledges or secured parties. Except as required by law, such a pledge or
transfer would not be subject to approval of the Company, no legal opinion of the pledgee, secured party or pledgor shall be required in connection therewith, and no notice shall be required of such pledge. Each Investor acknowledges that the
Company shall not be responsible for any pledges relating to, or the grant of any security interest in, any of the Securities or for any agreement, understanding or arrangement between any Investor and its pledgee or secured party. At the
appropriate Investor’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including the
preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Shareholders thereunder. Provided that the Company
is in compliance with the terms of this Section 4.1(c), the Company’s indemnification obligations pursuant to Section 6.4 shall not extend to any Proceeding or Losses arising out of or related to this Section 4.1(c). 
  
 4.2 Furnishing of Information. As long as any Investor owns
Securities, but for a period not exceeding two years from the date hereof, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act. Upon the reasonable request of any Investor, the Company shall deliver to such Investor a written certification of a duly authorized officer as to whether it has complied with the preceding
sentence. The Company further covenants that it will take such further action as any holder of Securities may reasonably request to satisfy the provisions of this Section 4.2. 
  
 4.3 Integration. The Company shall not, and shall use its reasonable best efforts to ensure that no Affiliate thereof
shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require
the registration under the Securities Act of the sale of the Securities to the Investors or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market. 
  
 4.4 Reservation of Securities. The Company shall maintain a reserve
from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents. In the event that at any time the then
authorized shares of Common Stock are insufficient for the Company to satisfy its obligations in full under the Transaction Documents, the Company shall promptly take such actions as may be required to increase the number of authorized shares.

  

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 4.5 Securities Laws Disclosure; Publicity. The Company shall, on or before 8:30 a.m., New York
time, on the first Trading Day following execution of this Agreement, issue a press release acceptable to the Lead Investor disclosing all material terms of the transactions contemplated hereby. On the Closing Date, the Company shall file a Current
Report on Form 8-K (a copy of which will be provided to the Lead Investor for their review as early as practicable prior to its filing) with the Commission (the “8-K Filing”) describing the material terms of the transactions
contemplated by the Transaction Documents and including as exhibits to such Current Report on Form 8-K this Agreement, in the form required by the Exchange Act. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any
Investor (except as disclosed in the Registration Statement), or include the name of any Investor in any press release without the prior written consent of such Investor. The Company shall not, and shall use its reasonable best efforts to cause each
of its Subsidiaries and its and each of their respective officers, directors, employees and agents not to, provide any Investor with any material nonpublic information regarding the Company or any of its Subsidiaries from and after the issuance of
the above referenced press release without the express written consent of such Investor. 
  
 4.6 Use of Proceeds. The Company intends to use the net proceeds from the sale of the Securities for partial repayment of the term loan under the Credit Agreement and for general corporate purposes. The Company
also may use a portion of the net proceeds, currently intended for general corporate purposes, to acquire or invest in technologies, products or services that complement its business, although the Company has no present plans or commitments and is
not currently engaged in any material negotiations with respect to these types of transactions. Pending these uses, the Company intends to invest the net proceeds from this offering in short-term, interest-bearing, investment-grade securities, or as
otherwise pursuant to the Company’s customary investment policies. 
  
 4.7 Delivery of Prospectus. If a suspension described in Section 6.1(e) is not then in effect, an Investor may sell the Securities under the Registration Statement, provided, that if such delivery is required pursuant to the
Securities Act such Investor arranges for delivery of a current Prospectus to the transferee of such Securities. Upon receipt of a request therefor, the Company will provide an adequate number of current Prospectuses to the Investor. 
  
 4.8 Additional Issuances of Securities. 
  
 (a) For purposes of this Section 4.8, the following definitions shall apply.

  
 (i) “Common Stock
Equivalents” means, collectively, Options and Convertible Securities. 
  
 (ii) “Convertible Securities” means any stock or securities (other than Options) convertible into or exercisable or
exchangeable for Common Stock. 
  

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 (iii) “Options” means any rights, warrants or options to subscribe for
or purchase Common Stock or Convertible Securities. 
  
 (iv) “Trading Day” means any day on which the Common Stock is traded on the Trading Market; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such
exchange or market, then during the hour ending at 4:00 p.m., New York City Time). 
  
 (b) From the date hereof until the date that is 30 Trading Days following the Effective Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or
announce any offer, sale, grant or any option to purchase or other disposition of) any of its or its Subsidiaries’ equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security
that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common Stock or Common Stock Equivalents. 
  

(c) The restrictions contained in subsection (b) of this Section 4.8 shall not apply (1) in connection with any employee benefit plan which has been
approved by the Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer or director for services provided to the Company or any of its Subsidiaries, or pursuant to the exercise of any
securities of the Company issued thereunder; (2) pursuant to a bona fide firm commitment underwritten public offering with a nationally recognized underwriter which generates gross proceeds to the Company in excess of $30,000,000 (other than an
“at-the-market offering” as defined in Rule 415(a)(4) under the 1933 Act and “equity lines”); (3) upon conversion of any Options or Convertible Securities that are outstanding on the day immediately preceding the Closing Date,
provided, that the terms of such Options or Convertible Securities are not amended, modified or changed on or after the Closing Date; or (4) in connection with any bona fide strategic transaction or acquisition by the Company, whether through
an acquisition for stock or a merger, of any business, assets or technologies the primary purpose of which is not to raise equity capital. 
  
 ARTICLE V 
 CONDITIONS 
  
 5.1 Conditions Precedent to the Obligations of the Investors. The
obligation of each Investor to acquire Securities at the Closing is subject to the satisfaction or waiver by such Investor, at or before the Closing, of each of the following conditions: 
  
 (a) Representations and Warranties. The representations and warranties of the Company contained herein shall be true
and correct in all material respects as of the date when made and as of the Closing as though made on and as of such date; and 
  

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 (b) Performance. The Company and each other Investor shall have performed, satisfied and complied
in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing. 
  
 5.2 Conditions Precedent to the Obligations of the Company. The obligation of the Company to sell the Securities at
the Closing is subject to the satisfaction or waiver by the Company, at or before the Closing, of each of the following conditions: 
  
 (a) Representations and Warranties. The representations and warranties of the Investors contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on and as of such date; and 
  
 (b) Performance. The Investors shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by the Investors at or prior to the Closing. 
  
 ARTICLE VI 
 REGISTRATION RIGHTS 
  
 6.1 Shelf Registration. 
  
 (a) As promptly as possible, and in any event on or prior to the Filing
Date, the Company shall prepare and file with the Commission a “Shelf” Registration Statement covering the resale of all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance with the Securities Act and
the Exchange Act and as consented to by the Investors) and shall contain (except if otherwise directed by the Investors or the Commission) the “Plan of Distribution” attached hereto as Exhibit D. The Company shall only be obligated
to include an Investor as a selling shareholder in the registration statement if such Investor has completed the Questionnaire in the form of Exhibit B-2. Each Investor included in such Registration Statement shall promptly advise the Company
of any change to the approved plan of distribution or any change in the information relating to the Investor included in the Registration Statement which would require the Company to file a pre- or post-effective amendment to the Registration
Statement or amend or supplement the Prospectus. 
  
 (b) The
Company shall use its reasonable best efforts to cause the Registration Statement to be declared effective by the Commission as promptly as possible after the filing thereof, but in any event prior to the Required Effectiveness Date, and shall use
its reasonable best efforts to keep the Registration Statement continuously effective under the Securities Act until the earlier of the date that all Registrable Securities covered by such Registration Statement have been sold or can be sold
publicly under Rule 144(k) (the “Effectiveness Period”). 
  

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 (c) The Company shall notify each Investor in writing promptly (and in any event within three Business
Days) after receiving notification from the Commission that the Registration Statement has been declared effective. 
  
 (d) Should an Event (as defined below) occur, then upon the occurrence of such Event, and on every monthly anniversary thereof commencing with the second
month anniversary thereof (i.e., not for the first month and with all monthly amounts prorated for partial months) until the applicable Event is cured, as partial relief for the damages suffered therefrom by the Investors (which remedy shall not be
exclusive of any other remedies available under this Agreement, at law or in equity), the Company shall pay to each Investor an amount in cash, as liquidated damages and not as a penalty, equal to 1% of (i) the number of Securities held by such
Investor as of the date of such Event, multiplied by (ii) the purchase price paid by such Investor for such Securities then held,. The payments to which an Investor shall be entitled pursuant to this Section 6.1(d) are referred to herein as
“Event Payments”. Any Event Payments payable pursuant to the terms hereof shall apply on a pro-rata basis for any portion of a month prior to the cure of an Event. In the event the Company fails to make Event Payments in a timely
manner, such Event Payments shall bear interest at the rate of 1% per month (prorated for partial months) until paid in full. All pro rated calculations made pursuant to this paragraph shall be based upon the actual number of days in such pro rated
month. 
  
 For such purposes, each of the following shall constitute an
“Event”: 
  
 (i) the Registration Statement is not
filed on or prior to the Filing Date or is not declared effective on or prior to the Required Effectiveness Date; provided, however, that such dates shall be extended due to delays directly caused by Investors or Investors’ representatives;

  
 (ii) except (A) as provided for in Section 6.1(e), (B)
if the Company is involved in a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (C) a merger or consolidation of the Company or a sale of more than one-half of the assets of the Company in one or a series of
related transactions, unless following such transaction or series of transactions, the holders of the Company’s securities prior to the first such transaction continue to hold at least 50% of the voting rights and equity interests of the
surviving entity or acquirer (clauses (B) and (C), collectively, the “Excluded Events”), after the Effective Date and during the Effectiveness Period, an Investor is not permitted to sell Registrable Securities under the
Registration Statement (or a subsequent Registration Statement filed in replacement thereof) for any reason (other than the fault of such Investor) for five or more Trading Days (whether or not consecutive) in any 12-month period; 
  
 (iii) except as a result of the Excluded Events, during the Effectiveness
Period, the Common Stock is not listed or quoted, or is suspended from trading, on an Eligible Market for a period of five Trading Days (which need not be consecutive Trading Days) in any 12-month period; 
  
 (iv) the Company fails for any reason to deliver a certificate evidencing
any Securities to an Investor within three Trading Days after delivery of such certificate is required pursuant to any Transaction Document (provided that any payment required under this subsection (iv) shall only be made to the affected Investor);
or 
  

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 (v) during the Effectiveness Period, any of the Common Shares are not listed on an Eligible Market.

  
 (d) Notwithstanding anything in this Agreement to the
contrary, after 60 consecutive days of continuous effectiveness of the initial Registration Statement filed and declared effective pursuant to this Agreement, the Company may, by written notice to the Investors, suspend sales under a Registration
Statement after the Effective Date thereof and/or require that the Investors immediately cease the sale of shares of Common Stock pursuant thereto and/or defer the filing of any subsequent Registration Statement if (i) the Company becomes aware of
any event which causes the Prospectus included in the Registration Statement as then in effect to 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, in light of the circumstances under which they were made, not misleading and (ii) the Board of Directors determines in good faith that the disclosures of such event would be detrimental to the Company (other than as relating solely to the
price of the Common Stock). Upon receipt of such notice, each Investor shall immediately discontinue any sales of Registrable Securities pursuant to such registration until such Investor has received copies of a supplemented or amended Prospectus or
until such Investor is advised in writing by the Company that the then-current Prospectus may be used and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus. In
no event, however, shall this right be exercised to suspend sales beyond the period during which (in the good faith determination of the Company’s Board of Directors) the failure to require such suspension would be materially detrimental to the
Company. The Company’s rights under this Section 6(e) may be exercised for a period of no more than 20 days at a time and not more than three times in any twelve-month period, without such suspension being considered as part of an Event
Payment determination. Immediately after the end of any suspension period under this Section 6(e), the Company shall take all necessary actions (including filing any required supplemental prospectus) to restore the effectiveness of the
applicable Registration Statement and the ability of the Investors to publicly resell their Registrable Securities pursuant to such effective Registration Statement. 
  
 (e) The Company shall not, from the date hereof until the Effective Date of the Registration Statement, prepare and file
with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than a registration statement on Form S-4 or S-8 or their equivalents
relating to equity securities to be issued solely in connection with an acquisition of any entity or business or equity securities to be issued solely in connection with stock option or other employee benefit plans. 
  
 (g) It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 6.1 that each Investor shall furnish to the Company the legal name of such Investor, the number of shares of Common Stock of the Company beneficially owned by such Investor for the purpose of completing the
Registration Statement and any additional information relating to such Investor that is required by the Commission. 
  

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 6.2 Registration Procedures. In connection with the Company’s registration obligations
hereunder, the Company shall: 
  
 (a) Not less than three Trading
Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), furnish to each Investor and
the Lead Investor Counsel copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Investors and Lead Investor Counsel. The
Company shall reflect in each such document when so filed with the Commission such comments as the Investors and Lead Investor Counsel may reasonably and promptly propose. 
  
 (b) (i) Subject to Section 6.1(e), prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep the Registration Statement continuously effective, as to the applicable Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible, and in any event within 12 Trading Days (except to the extent that the Company reasonably requires
additional time to respond to accounting comments), to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly as reasonably possible provide the Lead Investor Counsel true and
complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Investors thereof set forth in the Registration Statement as so amended or in such Prospectus as
so supplemented. 
  
 (c) Notify the Lead Investor Counsel as
promptly as reasonably possible, and (if requested by the Lead Investor Counsel confirm such notice in writing no later than two Trading Days thereafter, of any of the following events: (i) the Commission notifies the Company whether there will be a
“review” of any Registration Statement; (ii) the Commission comments in writing on any Registration Statement (in which case the Company shall deliver to the Lead Investor Counsel a copy of such comments and of all written responses
thereto); (iii) any Registration Statement or any post-effective amendment is declared effective; (iv) the Commission or any other Federal or state governmental authority requests any amendment or supplement to any Registration Statement or
Prospectus or requests additional information related thereto; (v) the Commission issues any stop order suspending the effectiveness of any Registration Statement or initiates any Proceedings for that purpose; (vi) the Company receives notice of any
suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or threat of any Proceeding for such purpose; or (vii) the financial statements included in any
Registration Statement become ineligible for inclusion therein or any statement made in any Registration 
  

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 Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference is untrue in any
material respect or any revision to a Registration Statement, Prospectus or other document is required so that it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
  
 (d) Use its reasonable best efforts to avoid the issuance of or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of any
Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as soon as possible. 
  
 (e) If requested by an Investor, provide such Investor and the Lead Investor
Counsel, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, and all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such documents with the Commission. 
  
 (f) Promptly deliver to each Investor, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Investors in connection with the offering and sale of
the Registrable Securities covered by such Prospectus and any amendment or supplement thereto to the extent permitted by federal and state securities laws and regulations. 
  
 (g) (i) In the time and manner required by each Trading Market, prepare and file with such Trading Market an additional
shares listing application covering all of the Registrable Securities; (ii) take all steps necessary to cause such Registrable Securities to be approved for listing on each Trading Market as soon as possible thereafter; (iii) provide to the Lead
Investor Counsel evidence of such listing; and (iv) except as a result of the Excluded Events, during the Effectiveness Period, maintain the listing of such Registrable Securities on each such Trading Market or another Eligible Market. 

 
 (h) Prior to any public offering of Registrable Securities, use its
reasonable best efforts to register or qualify or cooperate with the selling Investors and Lead Investor Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Investor requests in writing, to keep each such registration or qualification (or exemption therefrom) effective for so long as
required, but not to exceed the duration of the Effectiveness Period, and to do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a
Registration Statement; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. 
  

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 (i) Cooperate with the Investors to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by this Agreement and under law, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names as any such Investors may reasonably request. 
  
 (j) Upon the occurrence of any event described in Section 6.2(c)(vii), but subject to Section 6.1(e) hereof, as promptly as reasonably possible,
prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other
required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading. 
  
 (k) Cooperate with any reasonable due diligence investigation undertaken by the Investors in connection with the sale of Registrable Securities,
including, without limitation by making available documents and information; provided that the Company will not deliver or make available to any Investor material, nonpublic information unless such Investor specifically requests in advance to
receive material, nonpublic information in writing and executes an appropriate form of confidentiality agreement. 
  
 (l) Comply with all rules and regulations of the Commission applicable to the registration of the Securities. 
  
 6.3 Registration Expenses. The Company shall pay all fees and expenses
incident to the performance of or compliance with Article VI of this Agreement by the Company, including without limitation (a) all registration and filing fees and expenses, including without limitation those related to filings with the Commission,
any Trading Market and in connection with applicable state securities or Blue Sky laws, (b) printing expenses (including without limitation expenses of printing certificates for Registrable Securities), (c) messenger, telephone and delivery
expenses, (d) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, and (e) all listing fees to be paid by the Company to the Trading Market.

  
 6.4 Indemnification 
  
 (a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless each Investor, the officers, directors, partners, members, agents and employees of each of them, each Person who controls any such Investor (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, agents and employees of each such controlling Person 
  


 -24- 








 (each, an “Investor Indemnified Person”), to the fullest extent permitted by applicable law, from and against
any and all Losses, as incurred, arising out of or relating to (i) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated
hereby or thereby, (ii) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (iii) any cause of action, suit or
claim brought or made against such Indemnified Party (as defined in Section 6.4(c) below) by a third party (including for these purposes a derivative action brought on behalf of the Company), arising out of or resulting from (x) execution, delivery,
performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (y) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Securities, or (z) the status of Indemnified Party as a holder of the Securities, or (iv) any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of Company
prospectus or in any amendment or supplement thereto or in any Company preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (A) such untrue statements, alleged
untrue statements, omissions or alleged omissions are based solely upon information regarding such Investor furnished in writing to the Company by such Investor for use therein, or to the extent that such information relates to such Investor or such
Investor’s proposed method of distribution of Registrable Securities, or (B) in the case of an occurrence of an event of the type specified in Section 6.2(c)(v)-(vii), the use by such Investor of an outdated or defective Prospectus after
the Company has notified such Investor in writing that the Prospectus is outdated or defective and prior to the receipt by such Investor of the Advice contemplated in Section 6.5. The Company’s indemnification obligations under this
Section 6.4(a) shall not apply to any Losses to the extent such Losses resulted directly from the gross negligence or willful misconduct of any Investor Indemnified Person or any Losses to the extent such Losses resulted directly from any
representation or warranty made by any Investor contained in any of the Transaction Documents being untrue or incorrect in any material respect. The Company shall notify the Investors promptly of the institution of any Proceeding of which the
Company is aware in connection with the transactions contemplated by this Agreement. 
  
 (b) Indemnification by Investors. Each Investor shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses (as determined by a court of competent jurisdiction in a final judgment not subject to appeal or review) arising solely out of any untrue statement of a material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or arising solely out of any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were made) not misleading to the extent, but only to the 
  

 -25- 








 
extent, that such untrue statement or omission is contained in any information so furnished by such Investor to the Company specifically for inclusion in
such Registration Statement or such Prospectus or to the extent that (i) such untrue statements or omissions are based solely upon information regarding such Investor furnished to the Company by such Investor expressly for use therein, or to the
extent that such information relates to such Investor or such Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved by such Investor expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 6.2(c)(v)-(vii), the use by such Investor of an outdated or defective Prospectus
after the Company has notified such Investor in writing that the Prospectus is outdated or defective and prior to the receipt by such Investor of the Advice contemplated in Section 6.5. In no event shall the liability of any selling Investor
hereunder be greater in amount than the dollar amount of the net proceeds received by such Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation. 
  
 (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in
writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a
court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. 
  
 An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in writing to pay such fees and expenses;
or (ii) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (iii) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not
have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). It being understood, however, that the Indemnifying Party shall not, in connection with any one such Proceeding be liable for the fees
and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties, which firm shall be appointed by a majority of the Indemnified Parties; provided, however, that in the case a single firm of attorneys would be
inappropriate due to actual or potential differing interests of conflicts between such 

  

 -26- 








 
Indemnified Parties and any other party represented by such counsel in such Proceeding or otherwise, then the Indemnifying Party shall be liable for the fees
and expenses of one additional firm of attorneys with respect to such Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  
 All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally
judicially determined that such Indemnified Party is not entitled to indemnification hereunder). 
  
 (d) Contribution. If a claim for indemnification under Section 6.4(a) or (b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 6.4(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.4(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6.4(d), no Investor shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Investor from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 
  

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 The indemnity and contribution agreements contained in this Section are in addition to any liability that
the Indemnifying Parties may have to the Indemnified Parties. 
  
 6.5 Dispositions. Each Investor agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement.
Each Investor further agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 6.2(c)(v), (vi) or (vii), such Investor will discontinue disposition of such
Registrable Securities under the Registration Statement until such Investor’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 6.2(j), or until it is advised in writing
(the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. 
  
 6.6 No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Investors in such capacity pursuant hereto)
may include securities of the Company in the Registration Statement other than the Registrable Securities [and the securities held by the Persons listed in Schedule 3.1(p), and the Company shall not after the date hereof enter into any
agreement providing any such right to any of its security holders. 
  
 6.7 Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or
their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company
shall send to each Investor written notice of such determination and if, within ten days after receipt of such notice, any such Investor shall so request in writing, the Company shall include in such registration statement all or any part of such
Registrable Securities such Investor requests to be registered; provided, however, that nothing herein shall prevent the Company from, at any time, abandoning or delaying any such registration initiated by it. If any registration pursuant to this
Section 6.7 shall be underwritten in whole or in part, the Company may require that the Registrable Securities requested for inclusion pursuant to this Section 6.7 be included in the underwriting on the same terms and conditions as the securities
otherwise being sold through the underwriters. 
  
 6.8
Cut-Back. If an offering covered by a request for registration under Section 6.7 is underwritten in whole or in part and the managing underwriter of such offering advises the Company 

  

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that in its opinion the total number of securities proposed to be sold in such offering exceeds the maximum number of securities which can be marketed at a
price reasonably related to the then current market value of such securities and without materially and adversely affecting such offering, then the number of securities to be sold by each prospective seller (other than the Company) in the offering
shall be reduced as follows: first, the number of securities proposed to be registered by Persons other than the Company having no registration rights or rights to registration subordinate, by their terms, to those of the Registrable Securities
shall be reduced, pro rata (or on such other basis as provided in any agreement between such Persons and the Company), to zero, if necessary; second, the number of Registrable Securities proposed to be registered, together with the securities
proposed to be registered by Persons having registration rights equal to those of the Registrable Securities, shall be reduced, pro rata, to zero, if necessary; and third, the number of the remaining securities proposed to be registered may be
reduced, if necessary. 
  
 ARTICLE VII 
 MISCELLANEOUS 
  
 7.1 Termination. This Agreement may be terminated by the Company or any Investor (with respect to such Investor), by written notice to the other
parties, if the Closing has not been consummated by the third Business Day following the date of this Agreement; provided that no such termination will affect the right of any party to sue for any breach by the other party (or parties). 

 
 7.2 Fees and Expenses. At the Closing, the Company shall pay to the
Lead Investor an aggregate of $25,000 for the Lead Investor Counsel legal fees and expenses incurred in connection with its due diligence and the preparation and negotiation of the Transaction Documents. In lieu of the foregoing payment, the Lead
Investor may retain such amount at the Closing or require the Company to pay such amount directly to Lead Investor Counsel. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the sale and issuance of their applicable Securities. 
  
 7.3 Entire Agreement. The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. At or after
the Closing, and without further consideration, the Company and each Investor will execute and deliver to the other party such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under
the Transaction Documents. 
  
 7.4 Notices. Any and all
notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered
via facsimile at the 

  

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facsimile number specified in this Section prior to 6:30 p.m. (Minneapolis, Minnesota time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (Minneapolis, Minnesota time) on any Trading Day, (c) the Trading
Day following the date of deposit with a nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses and facsimile numbers for such notices and communications
are those set forth on the signature pages hereof, or such other address or facsimile number as may be designated in writing hereafter, in the same manner, by any such Person. 
  
 7.5 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument
signed, in the case of an amendment, by the Company and each of the Investors or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such right. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Investors
under Article VI may be given by Investors holding at least a majority of the Registrable Securities to which such waiver or consent relates. 
  
 7.6 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
  
 7.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investors. Any Investor may assign its rights
under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the
“Investors.” Notwithstanding anything to the contrary herein, Securities may be assigned to any Person in connection with a bona fide margin account or other loan or financing arrangement secured by such Securities. 
  
 7.8 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except that each Indemnified Party is an intended third party
beneficiary of Section 6.4 and (in each case) may enforce the provisions of such Sections directly against the parties with obligations thereunder. 
  

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 7.9 Governing Law; Venue; Waiver of Jury Trial. THE CORPORATE LAWS OF THE STATE OF MINNESOTA SHALL
GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS SHAREHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY AND INVESTORS HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE
BROUGHT BY THE COMPANY OR ANY INVESTOR HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE,
AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY INVESTOR, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH
PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO
SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND INVESTORS HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY. 
  
 7.10 Survival. The representations and warranties, agreements and covenants contained herein shall survive the Closing. 
  
 7.11 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof. 
  
 7.12 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in
any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

  

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 7.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and
without limiting any similar provisions of) the Transaction Documents, whenever any Investor exercises a right, election, demand or option owed to such Investor by the Company under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then, prior to the performance by the Company of the Company’s related obligation, such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to
such Seller, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights. 
  
 7.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company for any losses in connection therewith. The applicants for a
new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. 
  
 7.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including
recovery of damages, each of the Investors and the Company will be entitled to seek specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation (other than in connection with any action for temporary restraining order) the defense that a remedy
at law would be adequate. 
  
 7.16 Payment Set Aside. To
the extent that the Company makes a payment or payments to any Investor hereunder or any Investor enforces or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company by a trustee, receiver or any other person under any
law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
  
 7.17 Adjustments in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common
Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares of Common Stock), combination or other similar recapitalization or event occurring after the date hereof, each reference
in any Transaction Document to a number of shares or a price per share shall be amended to appropriately account for such event. 
  

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

  
 [SIGNATURE PAGES TO FOLLOW] 
  

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

					
	 	 	BUCA, INC.
			
	 	 	 By:
	 	  


	 	 	 Name:
	 	 Greg A. Gadel

	 	 	 Title:
	 	 Executive Vice President,
 Chief Financial Officer, Secretary and Treasurer

		
	 	 	 Address for Notice:

		
	 	 	 1300 Nicollet Mall

	 	 	 Minneapolis, Minnesota 55403

		
	 	 	 Facsimile No.: (612) 225-3523

	 	 	 Telephone No.: (612) 225-3423

	 	 	 Attn: Greg A. Gadel

		
	 With a copy to:
	 	 Faegre & Benson LLP

	 Facsimile:
	 	 (612) 766-1600

	 Telephone:
	 	 (612) 766-7212

	 Attn:
	 	 Douglas P. Long










 Investor Signature Page 
  
 By its execution and delivery of this signature page, the undersigned Investor hereby joins in and agrees to be bound by the
terms and conditions of the Securities Purchase Agreement dated as of                     , 2004 (the “Purchase Agreement”) by and
among BUCA, Inc. and the Investors (as defined therein), as to the number of shares of Common Stock set forth below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts thereof. 
  

			
	 Name of Investor:

	
	  


		
	 By:
	 	  


	 	 	 Name:

	 	 	 Title:

	
	 Address:


	  


	  


	
	 Telephone No.:


	
	 Facsimile No.:


	
	 Number of Shares:


	
	 Aggregate Purchase Price: $




  
 Agreed to and accepted this 
      day of
                    , 2004 
  

			
	BUCA, INC.
		
	 By:
	 	  


	 	 	 Name:









 Exhibits: 
  

	A	Schedule of Investors 

  

	B	Instruction Sheet For Investors 

  

	C	Opinion of Company Corporate Counsel 

  

	D	Plan of Distribution 

  

	E	Company Transfer Agent Instructions