Purchase Agreement



 Exhibit 10.4 
 PURCHASE AGREEMENT 
 THIS PURCHASE AGREEMENT
(“Agreement”) is made as of the 19th day of December, 2011, by and among Mattersight Corporation, a Delaware corporation (the “Company”), and the Investors set forth on the signature pages affixed hereto (each an
“Investor” and collectively the “Investors”). 
 Recitals 

A. The Company and the Investors are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the provisions of Regulation D (“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended; and 

B. The Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, upon the terms and
conditions stated in this Agreement, an aggregate of 1,252,609 shares of the Company’s Common Stock, par value $0.01 per share (together with any securities into which such shares may be reclassified, whether by merger, charter amendment or
otherwise, the “Common Stock”), at a purchase price of $4.79 per share; and 
 C. Contemporaneous with the sale
of the Common Stock, the parties hereto will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company will agree to
provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, and applicable state securities laws. 
 In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 1. Definitions. In addition to those terms defined above and elsewhere in this Agreement, for the purposes of this
Agreement, the following terms shall have the meanings set forth below: 
 “Affiliate” means, with respect to
any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common Control with, such Person. 
 “Business Day” means a day, other than a Saturday or Sunday, on which banks in Palo Alto, California are open for the general transaction of business. 

“Common Stock Equivalents” means shall mean any evidences of indebtedness, shares or other securities directly or
indirectly convertible into or exchangeable for Common Stock. 







 “Company’s Knowledge” means the actual knowledge of the executive
officers (as defined in Rule 405 under the 1933 Act) of the Company. 
 “Confidential Information” means trade
secrets, confidential information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications, support
documentation, drawings, specifications, designs, business and marketing plans, and customer and supplier lists and related information). 
 “Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 
 “Intellectual Property” means all of the following: (i) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to
practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works;
(iv) registrations, applications and renewals for any of the foregoing; and (v) proprietary computer software (including but not limited to data, data bases and documentation). 

“Material Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations,
condition (financial or otherwise), business, or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obligations under the Transaction Documents. 

“Material Contract” means any contract, instrument or other agreement to which the Company or any Subsidiary is a party
or by which it is bound which is material to the business of the Company and its Subsidiaries, taken as a whole, including those that have been filed or were required to have been filed as an exhibit to the SEC Filings pursuant to
Item 601(b)(4) or Item 601(b)(10) of Regulation S-K. 
 “Nasdaq” means The Nasdaq Global Market.

 “Person” means an individual, corporation, partnership, limited liability company, trust, business trust,
association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein. 

“Purchase Price” means Five Million Nine Hundred Ninety-Nine Thousand Nine Hundred Ninety-Seven Dollars and Eleven Cents
($5,999,997.11). 
 “Registration Statement” has the meaning set forth in the Registration Rights Agreement.


  
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 “SEC Filings” has the meaning set forth in Section 4.6.

 “Shares” means the shares of Common Stock being purchased by the Investors hereunder. 

“Subsidiary” of any Person means another Person, an amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by
such first Person. 
 “Transaction Documents” means this Agreement and the Registration Rights Agreement.

 “1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and
regulations promulgated thereunder. 
 “1934 Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder. 
 2. Purchase and Sale of the Shares. Subject to
the terms and conditions of this Agreement, on the Closing Date, each of the Investors shall severally, and not jointly, purchase, and the Company shall sell and issue to the Investors, the Shares in the respective amounts set forth opposite the
Investors’ names on the signature pages attached hereto in exchange for the Purchase Price as specified in Section 3 below. 
 3. Closing. The closing of the purchase and sale of the Shares by the Investors (the “Closing”) shall occur at 8:00 a.m., Palo Alto time, on December 20, 2011, at the offices of
Lowenstein Sandler LLP, 390 Lytton Avenue, Palo Alto, California 94301, or at such other location and on such other date as the Company and IGC shall mutually agree. At the Closing, (a) the Company will deliver the Shares in restricted
book-entry form to the Investors, and (b) the Investors will cause a wire transfer in same day funds to be sent to the account of the Company as instructed in writing by the Company, in an amount representing such Investor’s pro rata
portion of the Purchase Price as set forth on the signature pages to this Agreement. 
 4. Representations and Warranties of
the Company. The Company hereby represents and warrants to the Investors that, except as set forth in the schedules delivered herewith (collectively, the “Disclosure Schedules”) or in the SEC Filings: 

4. 1 Organization, Good Standing and Qualification. Each of the Company and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own or lease its properties. Each of the Company and
its Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless
the failure to so qualify has not had and could not reasonably be expected to have a Material Adverse Effect. The Company’s Subsidiaries are listed on Schedule 4.1 hereto. 

  
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 4.2 Authorization. The Company has full power and authority and has taken all
requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) the authorization of the performance of all obligations of
the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Shares. The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally and to
general equitable principles. 
 4.3 Capitalization. Schedule 4.3 sets forth as of the date hereof (a) the
authorized capital stock of the Company; (b) the number of shares of capital stock issued and outstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (d) the number of shares of
capital stock issuable and reserved for issuance pursuant to securities (other than the Shares) exercisable for, or convertible into or exchangeable for any shares of capital stock of the Company. All of the issued and outstanding shares of the
Company’s capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights and were issued in full compliance with applicable state and federal securities law and any rights of third
parties. Except as described on Schedule 4.3, all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights, were
issued in full compliance with applicable state and federal securities law and any rights of third parties and are owned by the Company, beneficially and of record, subject to no lien, encumbrance or other adverse claim. No Person is entitled to
pre-emptive or similar statutory or contractual rights with respect to any securities of the Company or any Subsidiary of the Company. Except as set forth in the SEC Filings, there are no outstanding warrants, options, convertible securities or
other rights, agreements or arrangements of any character under which the Company or any of its Subsidiaries is or may be obligated to issue any equity securities of any kind and except as contemplated by this Agreement, neither the Company nor any
of its Subsidiaries is currently in negotiations for the issuance of any equity securities of any kind. Except for the Registration Rights Agreement, there are no voting agreements, buy-sell agreements, option or right of first purchase agreements
or other agreements of any kind among the Company and any of the securityholders of the Company relating to the securities of the Company held by them. Except as set forth in the SEC Filings and as provided in the Registration Rights Agreement, no
Person has the right to require the Company to register any securities of the Company under the 1933 Act, whether on a demand basis or in connection with the registration of securities of the Company for its own account or for the account of any
other Person. 
 The issuance and sale of the Shares hereunder will not obligate the Company to issue shares of Common Stock or
other securities to any other Person (other than the Investors) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security. 

  
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 The Company does not have outstanding stockholder purchase rights or “poison pill”
or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events. 
 4.4 Valid Issuance. The Shares have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and shall be
free and clear of all encumbrances and restrictions (other than those created by the Investors), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws. 

4.5 Consents. The execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale
of the Shares require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than filings that have been made pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws which the Company undertakes to file within the applicable time periods. Subject to the accuracy of the representations and warranties of each Investor set forth in Section 5 hereof, the Company has
taken all action necessary to exempt (i) the issuance and sale of the Shares, and (ii) the other transactions contemplated by the Transaction Documents from the provisions of any stockholder rights plan or other “poison pill”
arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties may be subject and any provision of the Company’s Certificate of
Incorporation or Bylaws that is or could reasonably be expected to become applicable to the Investors as a result of the transactions contemplated hereby, including without limitation, the issuance of the Shares and the ownership, disposition or
voting of the Shares by the Investors or the exercise of any right granted to the Investors pursuant to this Agreement or the other Transaction Documents. 
 4.6 Delivery of SEC Filings; Business. The Company has made available to the Investors through the EDGAR system, true and complete copies of the Company’s most recent Annual Report on Form
10-K for the fiscal year ended December 31, 2010 (the “10-K”), and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof (collectively, the “SEC
Filings”). The SEC Filings are the only filings required of the Company pursuant to the 1934 Act for such period. The Company and its Subsidiaries are engaged in all material respects only in the business described in the SEC Filings and
the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and its Subsidiaries, taken as a whole. 
 4.7 Use of Proceeds. 50% of the net proceeds of the sale of the Shares hereunder shall be used by the Company for the partial repayment of promissory notes issued to Technology Crossover Ventures
(of the series of notes issued to Technology Crossover Ventures which as of the date hereof had an aggregate principal amount of approximately $6.5 million). The remaining net proceeds of the sale of the Shares hereunder shall be used by the Company
for: (a) working capital and general corporate purposes; and (b) the redemption or repurchase of up to 115,000 shares of outstanding Series B Preferred Stock of the Company for the cash purchase price per share of $8.60 plus accrued and
unpaid dividends pursuant to a cash tender offer expected to commence in the first quarter of 2012. 

  
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 4.8 No Material Adverse Change. Since October 1, 2011, except as set forth in
the SEC Filings, there has not been: 
 (i) any change in the consolidated assets, liabilities, financial condition or operating
results of the Company from that reflected in the financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, except for changes in the ordinary course of business which have not
had and could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate; 
 (ii) any
declaration or payment of any dividend, or any authorization or payment of any distribution, on any of the capital stock of the Company, or any redemption or repurchase of any securities of the Company; 

(iii) any material damage, destruction or loss, whether or not covered by insurance to any assets or properties of the Company or its
Subsidiaries; 
 (iv) any waiver, not in the ordinary course of business, by the Company or any Subsidiary of a material right
or of a material debt owed to it; 
 (v) any satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company or a Subsidiary, except in the ordinary course of business and which is not material to the assets, properties, financial condition, operating results or business of the Company and its Subsidiaries taken as a whole (as
such business is presently conducted and as it is proposed to be conducted); 
 (vi) any change or amendment to the
Company’s Certificate of Incorporation or Bylaws, or material change to any material contract or arrangement by which the Company or any Subsidiary is bound or to which any of their respective assets or properties is subject; 

(vii) any material labor difficulties or labor union organizing activities with respect to employees of the Company or any Subsidiary;

 (viii) any material transaction entered into by the Company or a Subsidiary other than in the ordinary course of business;

 (ix) the loss of the services of any key employee, or material change in the composition or duties of the senior management
of the Company or any Subsidiary; 
 (x) the loss or threatened loss of any customer which has had or could reasonably be
expected to have a Material Adverse Effect; or 

  
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 (xi) any other event or condition of any character that has had or could reasonably be
expected to have a Material Adverse Effect. 
 4.9 SEC Filings; S-3 Eligibility. 

(a) At the time of filing thereof, the SEC Filings complied as to form in all material respects with the requirements of the 1934 Act and
did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not
misleading. 
 (b) Each registration statement and any amendment thereto filed by the Company since January 1, 2011 pursuant
to the 1933 Act and the rules and regulations thereunder, as of the date such statement or amendment became effective, complied as to form in all material respects with the 1933 Act and did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order to make the statements made therein not misleading; and each prospectus filed pursuant to Rule 424(b) under the 1933 Act, as of its issue date and as of the closing of
any sale of securities pursuant thereto did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. 
 (c) The Company is eligible to use Form S-3 to register the
Registrable Securities (as such term is defined in the Registration Rights Agreement) for sale or other disposition by the Investors as contemplated by the Registration Rights Agreement. 

4.10 No Conflict, Breach, Violation or Default. The execution, delivery and performance of the Transaction Documents by the Company
and the issuance and sale of the Shares will not (i) conflict with or result in a breach or violation of (a) any of the terms and provisions of, or constitute a default under the Company’s Certificate of Incorporation or the
Company’s Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to Investors’ counsel by the Company), or (b) any statute, rule, regulation or order of any governmental agency or body
or any court, domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or properties, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would
become a default) under, result in the creation of any lien, encumbrance or other adverse claim upon any of the properties or assets of the Company or any Subsidiary or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any Material Contract. 
 4.11 Tax Matters. The Company
and each Subsidiary has timely prepared and filed all tax returns required to have been filed by the Company or such Subsidiary with all appropriate governmental agencies and timely paid all taxes shown thereon or otherwise owed by it, except as
would not have a material adverse effect on the Company or such Subsidiary. The charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal periods are adequate in all material respects, and there are no material
unpaid assessments 

  
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against the Company or any Subsidiary nor, to the Company’s Knowledge, any basis for the assessment of any additional taxes, penalties or interest for any fiscal period or audits by any
federal, state or local taxing authority except for any assessment which is not material to the Company and its Subsidiaries, taken as a whole. All taxes and other assessments and levies that the Company or any Subsidiary is required to withhold or
to collect for payment have been duly withheld and collected and paid to the proper governmental entity or third party when due. There are no tax liens or claims pending or, to the Company’s Knowledge, threatened against the Company or any
Subsidiary or any of their respective assets or property. There are no outstanding tax sharing agreements or other such arrangements between the Company and any Subsidiary or other corporation or entity. 

4.12 Title to Properties. Except as disclosed in the SEC Filings, the Company and each Subsidiary has good and marketable title to
all real properties and all other properties and assets owned by it, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or currently planned to be made
thereof by them; and except as disclosed in the SEC Filings, the Company and each Subsidiary holds any leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or
currently planned to be made thereof by them. 
 4.13 Certificates, Authorities and Permits. The Company and each
Subsidiary possess adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by it, and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or such Subsidiary, could reasonably be expected to have a Material Adverse Effect, individually or in
the aggregate. 
 4.14 Labor Matters. 
 (a) The Company is not a party to or bound by any collective bargaining agreements or other agreements with labor organizations. The Company has not violated in any material respect any laws, regulations,
orders or contract terms, affecting the collective bargaining rights of employees, labor organizations or any laws, regulations or orders affecting employment discrimination, equal opportunity employment, or employees’ health, safety, welfare,
wages and hours. 
 (b) (i) There are no labor disputes existing, or to the Company’s Knowledge, threatened, involving
strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any other disruptions of or by the Company’s employees, (ii) there are no unfair labor practices or petitions for election pending or, to the Company’s Knowledge,
threatened before the National Labor Relations Board or any other federal, state or local labor commission relating to the Company’s employees, (iii) no demand for recognition or certification heretofore made by any labor organization or
group of employees is pending with respect to the Company and (iv) to the Company’s Knowledge, the Company enjoys good labor and employee relations with its employees and labor organizations. 

  
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 (c) The Company is, and at all times has been, in compliance in all material respects with
all applicable laws respecting employment (including laws relating to classification of employees and independent contractors) and employment practices, terms and conditions of employment, wages and hours, and immigration and naturalization. There
are no claims pending against the Company before the Equal Employment Opportunity Commission or any other administrative body or in any court asserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act of 1967,
42 U.S.C. §§ 1981 or 1983 or any other federal, state or local Law, statute or ordinance barring discrimination in employment. 
 (d) The Company is not a party to, or bound by, any employment or other contract or agreement that contains any severance, termination pay or change of control liability or obligation, including, without
limitation, any “excess parachute payment,” as defined in Section 280G(b) of the Internal Revenue Code. 
 (e)
Each of the Company’s employees working in the United States is a Person who is either a United States citizen or a permanent resident entitled to work in the United States. To the Company’s Knowledge, the Company has no liability for the
improper classification by the Company of such employees as independent contractors or leased employees prior to the Closing. 

4.15 Intellectual Property. 
 (a) All Intellectual Property of the Company and its Subsidiaries is currently in compliance with all legal requirements (including timely filings, proofs and payments of fees) and is valid and
enforceable. No Intellectual Property of the Company or its Subsidiaries which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted
has been or is now involved in any cancellation, dispute or litigation, and, to the Company’s Knowledge, no such action is threatened. No patent of the Company or its Subsidiaries has been or is now involved in any interference, reissue,
re-examination or opposition proceeding. 
 (b) All of the licenses and sublicenses and consent, royalty or other agreements
concerning Intellectual Property which are necessary for the conduct of the Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted to which the Company or any
Subsidiary is a party or by which any of their assets are bound (other than generally commercially available, non-custom, off-the-shelf software application programs having a retail acquisition price of less than $10,000 per license) (collectively,
“License Agreements”) are valid and binding obligations of the Company or its Subsidiaries that are parties thereto and, to the Company’s Knowledge, the other parties thereto, enforceable in accordance with their terms, except
to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally, and there exists no event or
condition which will result in a material violation or breach of or constitute (with or without due notice or lapse of time or both) a default by the Company or any of its Subsidiaries under any such License Agreement. 

  
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 (c) The Company and its Subsidiaries own or have the valid right to use all of the
Intellectual Property that is necessary for the conduct of the Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted and for the ownership, maintenance and operation
of the Company’s and its Subsidiaries’ properties and assets, free and clear of all liens, encumbrances, adverse claims or obligations to license all such owned Intellectual Property and Confidential Information, other than licenses
entered into in the ordinary course of the Company’s and its Subsidiaries’ businesses. The Company and its Subsidiaries have a valid and enforceable right to use all third party Intellectual Property and Confidential Information used or
held for use in the respective businesses of the Company and its Subsidiaries. 
 (d) The conduct of the Company’s and its
Subsidiaries’ businesses as currently conducted does not infringe or otherwise impair or conflict with (collectively, “Infringe”) any Intellectual Property rights of any third party or any confidentiality obligation owed to a
third party, and, to the Company’s Knowledge, the Intellectual Property and Confidential Information of the Company and its Subsidiaries which are necessary for the conduct of Company’s and each of its Subsidiaries’ respective
businesses as currently conducted or as currently proposed to be conducted are not being Infringed by any third party. There is no litigation or order pending or outstanding or, to the Company’s Knowledge, threatened or imminent, that seeks to
limit or challenge or that concerns the ownership, use, validity or enforceability of any Intellectual Property or Confidential Information of the Company and its Subsidiaries and the Company’s and its Subsidiaries’ use of any Intellectual
Property or Confidential Information owned by a third party, and, to the Company’s Knowledge, there is no valid basis for the same. 
 (e) The consummation of the transactions contemplated hereby and by the other Transaction Documents will not result in the alteration, loss, impairment of or restriction on the Company’s or any of
its Subsidiaries’ ownership or right to use any of the Intellectual Property or Confidential Information which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted. 
 (f) The Company and its Subsidiaries have taken reasonable steps to protect the
Company’s and its Subsidiaries’ rights in their Intellectual Property and Confidential Information. Each employee, consultant and contractor who has had access to Confidential Information which is necessary for the conduct of
Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted has executed an agreement to maintain the confidentiality of such Confidential Information and has executed
appropriate agreements that are substantially consistent with the Company’s standard forms thereof. Except under confidentiality obligations, there has been no material disclosure of any of the Company’s or its Subsidiaries’
Confidential Information to any third party. 
 4.16 Environmental Matters. Neither the Company nor any Subsidiary is in
violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic


  
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substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), owns or
operates any real property contaminated with any substance that is subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claim relating to any Environmental
Laws, which violation, contamination, liability or claim has had or could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate; and there is no pending or, to the Company’s Knowledge, threatened
investigation that might lead to such a claim. 
 4.17 Litigation. There are no material pending actions, suits or
proceedings against or affecting the Company, its Subsidiaries or any of its or their properties; and to the Company’s Knowledge, no such actions, suits or proceedings are threatened or contemplated. Neither the Company nor any Subsidiary, nor
any director or officer thereof, is or since January 1, 2002, has been the subject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been,
and to the Company’s Knowledge, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the 1933 Act or the 1934 Act. 
 4.18 Financial Statements. The financial statements included in each SEC Filing comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with
respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement) and present fairly, in all material respects, the consolidated financial position of the Company as of the dates shown and its consolidated
results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis (“GAAP”) (except as
may be disclosed therein or in the notes thereto, and, in the case of quarterly financial statements, as permitted by Form 10-Q under the 1934 Act). Except as set forth in the financial statements of the Company included in the SEC Filings filed
prior to the date hereof, neither the Company nor any of its Subsidiaries has incurred any liabilities, contingent or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since
the date of such financial statements, none of which, individually or in the aggregate, have had or could reasonably be expected to have a Material Adverse Effect. 
 4.19 Insurance Coverage. The Company and each Subsidiary maintains in full force and effect insurance coverage that is customary for comparably situated companies for the business being conducted
and properties owned or leased by the Company and each Subsidiary, and the Company reasonably believes such insurance coverage to be adequate against all liabilities, claims and risks against which it is customary for comparably situated companies
to insure. 
 4.20 Compliance with Nasdaq Continued Listing Requirements. The Company is in compliance with applicable
Nasdaq continued listing requirements in all material respects. There are no proceedings pending or, to the Company’s Knowledge, threatened against the Company relating to the continued listing of the Common Stock on Nasdaq and the Company has
not received any notice of, nor to the Company’s Knowledge is there any basis for, the delisting of the Common Stock from Nasdaq. 

  
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 4.21 Brokers and Finders. No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company. 
 4.22 No Directed Selling Efforts or General Solicitation. Neither the Company nor
any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Shares. 

4.23 No Integrated Offering. Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Company on Section 4(2) for the exemption from registration
for the transactions contemplated hereby or would require registration of the Shares under the 1933 Act. 
 4.24 Private
Placement. The offer and sale of the Shares to the Investors as contemplated hereby is exempt from the registration requirements of the 1933 Act. 
 4.25 Questionable Payments. Neither the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any of their respective current or former stockholders, directors,
officers, employees, agents or other Persons acting on behalf of the Company or any Subsidiary, has on behalf of the Company or any Subsidiary or in connection with their respective businesses: (a) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established or maintained
any unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious entries on the books and records of the Company or any Subsidiary; or (e) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment of any nature. 
 4.26 Transactions with Affiliates. Except as disclosed in the SEC
Filings, none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than as holders of stock options
and/or warrants, and for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or such employee or, to the Company’s Knowledge, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or
partner. 

  
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 4.27 Internal Controls. The Company is in material compliance with the provisions of
the Sarbanes-Oxley Act of 2002 currently applicable to the Company. 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 GAAP 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. The Company has established disclosure controls and procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material information relating
to the Company, including the Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s most recently filed periodic report under the 1934 Act, as the case may
be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of the end of the period covered by the most recently filed periodic report under the 1934 Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the 1934 Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 308 of Regulation S-K) or, to the Company’s Knowledge,
in other factors that could significantly affect the Company’s internal controls. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP and the applicable
requirements of the 1934 Act. 
 4.28 Investment Company. The Company is not required to be registered as, and is not an
Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 

5. Representations and Warranties of the Investors. Each of the Investors hereby severally, and not jointly, represents and
warrants to the Company that: 
 5.1 Organization and Existence. Such Investor is a validly existing corporation, limited
partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority to invest in the Shares pursuant to this Agreement. 

5.2 Authorization. The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is
a party have been duly authorized and each will constitute the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally. 

  
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 5.3 Purchase Entirely for Own Account. The Shares to be received by such Investor
hereunder will be acquired for such Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Shares in compliance with
applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Shares for any period of time. Such Investor is not a broker-dealer registered with the SEC under
the 1934 Act or an entity engaged in a business that would require it to be so registered. 
 5.4 Investment Experience.
Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Shares and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the
investment contemplated hereby. 
 5.5 Disclosure of Information. Such Investor has had an opportunity to receive all
information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Shares. Such Investor acknowledges receipt of
copies of the SEC Filings. Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, limit or otherwise affect such Investor’s right to rely on the Company’s representations and warranties
contained in this Agreement. 
 5.6 Restricted Securities. Such Investor understands that the Shares are characterized as
“restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be
resold without registration under the 1933 Act only in certain limited circumstances. 
 5.7 Legends. It is understood
that, except as provided below, certificates evidencing the Shares may bear the following or any similar legend: 
 (a) “THE
SECURITIES REPRESENTED HEREBY 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, AND,
ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.” 

  
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 (b) If required by the authorities of any state in connection with the issuance of sale of
the Shares, the legend required by such state authority. 
 5.8 Accredited Investor. Such Investor is an accredited
investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act. 
 5.9 No General Solicitation. Such
Investor did not learn of the investment in the Shares as a result of any general solicitation or general advertising. 
 5.10
Ownership. As of the date of this Agreement, neither the Investors nor any of its Affiliates are the owners of record or the beneficial owners of any shares of Common Stock or securities convertible into or exchangeable for Common Stock.

 5.11 Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction
Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such
Investor. 
 6. Conditions to Closing. 
 6.1 Conditions to the Investors’ Obligations. The obligation of each Investor to purchase the Shares at the Closing is subject to the fulfillment to such Investor’s satisfaction, on or
prior to the Closing Date, of the following conditions, any of which may be waived by such Investor (as to itself only): 
 (a)
The representations and warranties made by the Company in Section 4 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly
speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the Company in Section 4 hereof not qualified as to materiality shall
be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true
and correct in all material respects as of such earlier date. The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date. 

(b) The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for
consummation of the purchase and sale of the Shares and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect. 

(c) The Company shall have executed and delivered the Registration Rights Agreement. 

  
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 (d) No judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing
the consummation of the transactions contemplated hereby or in the other Transaction Documents. 
 (e) The Company shall have
delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in subsections (a), (b), (c),
(d) and (g) of this Section 6.1. 
 (f) The Company shall have delivered a Certificate, executed on behalf of the
Company by its Secretary, dated as of the Closing Date, certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the
Shares, certifying the current versions of the Certificate of Incorporation and Bylaws of the Company and certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company.

 (g) No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any other governmental or regulatory
body with respect to public trading in the Common Stock. 
 6.2 Conditions to Obligations of the Company. The
Company’s obligation to sell and issue the Shares at the Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

 (a) The representations and warranties made by the Investors in Section 5 hereof, other than the representations and
warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the
Closing Date with the same force and effect as if they had been made on and as of said date. The Investment Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing Date with
the same force and effect as if they had been made on and as of said date. The Investors shall have performed in all material respects all obligations and covenants herein required to be performed by them on or prior to the Closing Date. 

(b) The Investors shall have executed and delivered the Registration Rights Agreement. 

(c) The Investors shall have delivered the Purchase Price to the Company. 

6.3 Termination of Obligations to Effect Closing; Effects. 

  
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 (a) The obligations of the Company, on the one hand, and the Investors, on the other hand,
to effect the Closing shall terminate as follows: 
 (i) Upon the mutual written consent of the Company and the Investors;

 (ii) By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and
shall not have been waived by the Company; 
 (iii) By an Investor (with respect to itself only) if any of the conditions set
forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor; or 
 (iv)
By either the Company or any Investor (with respect to itself only) if the Closing has not occurred on or prior to December 21, 2011; 

provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then
be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its
obligation to effect the Closing. 
 (b) In the event of termination by the Company or any Investor of its obligations to effect
the Closing pursuant to this Section 6.3, written notice thereof shall forthwith be given to the other Investors by the Company and the other Investors shall have the right to terminate their obligations to effect the Closing upon written
notice to the Company and the other Investors. Nothing in this Section 6.3 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or
to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents. 
 7. Covenants and Agreements. 
 7.1 Reports. The Company will furnish
to the Investors and/or their assignees such information relating to the Company and its Subsidiaries as from time to time may reasonably be requested by the Investors and/or their assignees; provided, however, that the Company shall not disclose
material nonpublic information to the Investors, or to advisors to or representatives of the Investors, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the
Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement
with the Company with respect thereto. 
 7.2 No Conflicting Agreements. The Company will not take any action, enter into
any agreement or make any commitment that would conflict or interfere in any material respect with the Company’s obligations to the Investors under the Transaction Documents. 

  
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 7.3 Insurance. The Company shall not materially reduce the insurance coverages
described in Section 4.19. 
 7.4 Compliance with Laws. The Company will comply in all material respects with all
applicable laws, rules, regulations, orders and decrees of all governmental authorities. 
 7.5 Listing of Shares and Related
Matters. The Company shall submit to the Nasdaq Stock Market a Notification Form: Listing if Additional Shares, if required by the Nasdaq Stock Market. Further, if the Company applies to have its Common Stock or other securities traded on any
other principal stock exchange or market, it shall include in such application the Shares and will take such other action as is necessary to cause such Common Stock to be so listed. The Company will use commercially reasonable efforts to continue
the listing and trading of its Common Stock on the Nasdaq Global Market and, in accordance, therewith, will use commercially reasonable efforts to comply in all respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of such market or exchange, as applicable. 
 7.6 Termination of Covenants. The provisions of Sections 7.2
through 7.5 shall terminate and be of no further force and effect on the date on which the Company’s obligations under the Registration Rights Agreement to register or maintain the effectiveness of any registration covering the Registrable
Securities (as such term is defined in the Registration Rights Agreement) shall terminate. 
 7.7 Removal of Legends. In
connection with any sale or disposition of the Shares by an Investor pursuant to Rule 144 or pursuant to any other exemption under the 1933 Act such that the purchaser acquires freely tradable shares and upon compliance by the Investor with the
requirements of this Agreement, the Company shall cause the transfer agent for the Common Stock (the “Transfer Agent”) to reissue the shares sold or disposed of in book-entry form without restrictive legends. Upon the earlier of
(i) registration for resale pursuant to the Registration Rights Agreement or (ii) the Shares becoming freely tradable by a non-affiliate pursuant to Rule 144, the Company shall (A) deliver to the Transfer Agent irrevocable
instructions that the Transfer Agent shall reissue shares of Common Stock in unrestricted book entry form upon receipt by such Transfer Agent of the restricted book entry shares, together with either (1) a customary representation by the
Investor that Rule 144 applies to the shares of Common Stock represented thereby or (2) a statement by the Investor that such Investor has sold the shares of Common Stock represented thereby in accordance with the Plan of Distribution contained
in the Registration Statement, and (B) cause its counsel to deliver to the Transfer Agent one or more blanket opinions to the effect that the removal of such legends in such circumstances may be effected under the 1933 Act. From and after the
earlier of such dates, upon an Investor’s written request, the Company shall promptly instruct the Transfer Agent to replace restricted book-entry shares with unrestricted book-entry shares which do not bear such restrictive legends. The
Investor acknowledges that the Shares have not been registered under the Securities Act or under any state securities laws and agrees that it will not sell or otherwise dispose of any of the Shares, except in compliance with the registration
requirements or exemption provisions of the Securities Act and any other applicable securities laws. 

  
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 7.8 Standstill Agreement. 

(a) Each Investor agrees that, without the prior written approval of the Company, until the date that is twelve months from the Closing
Date, neither the Investor nor any of its Affiliates will, directly or indirectly, except as set forth on Schedule 7.8(a): (a) acquire or make any proposal to acquire any securities or property of the Company, (b) propose to enter
into any merger or business combination involving the Company or purchase a material portion of the assets of the Company, (c) make or participate in any solicitation of proxies to vote, or seek to advise or influence any person with respect to
the voting of any securities of the Company, (d) form, join or participate in a “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) with respect to any voting securities of the
Company, (e) otherwise act or seek to control or influence the management, board of directors, or policies of the Company, (f) disclose any intention, plan, or arrangement inconsistent with the foregoing, or (g) take any action which
might require the Company to make a public announcement regarding the possibility of a business combination, merger, acquisition of securities or assets, or any other similar transaction. 

(b) Except as provided above, each Investor also agrees during such period not to request the Company to amend or waive any provision of
this paragraph or bring any action or otherwise act to contest the validity of this Section 7.8 or seek a release of the restrictions contained herein, or make a request to amend or waive any provision of this Section 7.8;
provided, that (i) Section 7.8(a) shall not apply to any investment activity related to employee benefit or retirement plans conducted in the ordinary course of business by any portfolio company with respect to which such
Investor is not the party exercising control over either the day to day operations of such portfolio company or the decision to purchase securities; provided that such Investor does not (A) directly or indirectly provide or make
available to such entity any non-public information concerning the Company and such portfolio company is not acting at the request or direction of or in coordination with such Investor or (B) cause such portfolio company or its directors,
officers, managers, members or other representatives to take any action that Investor would be prohibited from doing hereby; and (ii) nothing in this Section 7.8 shall prevent the Investor or its Affiliates from voting any
securities beneficially owned by the Investor or its Affiliates in any manner. 
 7.9 Director Designee. 

(a) On or prior to the Closing Date, the board of directors of the Company shall appoint one person designated by IGC Fund VI, L.P.
(“IGC”) to the board of directors of the Company (the “IGC Designee”), effective immediately following the Closing Date. The initial IGC Designee shall be Philip Dur. 

 

  
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 (b) So long as IGC and/or one or more of its Affiliates collectively continues to be the
beneficial owners of at least 50,000 shares of the Company’s Common Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock):

 (i) at each subsequent meeting of the stockholders of the Company at which the IGC Designee is considered for re-election,
the Company shall recommend that the stockholders re-elect the IGC Designee to the board of directors of the Company; 
 (ii)
the Company shall cause the IGC Designee to be elected to the committees of the board as IGC may request, provided that the IGC Designee is eligible to serve on such committees under applicable SEC, NASDAQ, and other regulations applicable to the
Company; and 
 (iii) in the event there is any vacancy on the board of directors as a result of the IGC Designee no longer
serving as a member of the board of directors of the Company, the Company shall cause such vacancy to be filled by a person designated by IGC. 
 (c) If the IGC Designee is not an employee of the Company and is elected to the board of directors of the Company, subject to any limitations imposed by applicable law, the IGC Designee shall be entitled
to the same perquisites, including stock options, reimbursement of expenses and other similar rights in connection with such person’s membership on the Board of Directors of the Company, as other non-employee member of the Board of Directors of
the Company. 
 7.10 Right of First Refusal on Future Financings. Except as set forth on Schedule
7.10, from the date hereof until one (1) year after the Closing Date, upon any financing by the Company of its Common Stock or Common Stock Equivalents (a “Subsequent Financing”), each Investor shall have the right to
participate in such Subsequent Financing as provided herein. At least five (5) Business Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Investor a written notice of its intention to effect a Subsequent
Financing (“Pre-Notice”), which Pre-Notice shall ask such Investor if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request of an Investor, and
only upon a request by such Investor, for a Subsequent Financing Notice, the Company shall promptly, but no later than one Business Day after such request, deliver a Subsequent Financing Notice to such Investor. The Subsequent Financing Notice shall
describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the Person(s) with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a
term sheet or similar document relating thereto. Each Investor shall notify the Company by 6:30 p.m. (Palo Alto time) on the fifth (5th) Business Day after their receipt of the Subsequent Financing Notice of its willingness to provide the Subsequent
Financing on the terms described in the Subsequent Financing Notice, subject to completion of mutually acceptable documentation. If one or more Investors shall fail to so notify the Company of their willingness to participate in the Subsequent
Financing, the Investors agreeing to participate in the Subsequent Financing (the “Participating Investors”) shall have the right to provide all of the Subsequent Financing. If one or more Investors fail to notify the Company of
their willingness to provide all of the Subsequent Financing and the Participating Investors do not agree to provide all of the Subsequent 

  
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Financing, the Company may effect the remaining portion of such Subsequent Financing on the terms and to the Persons set forth in the Subsequent Financing Notice; provided that the Company must
provide the Investors with a second Subsequent Financing Notice, and the Investors will again have the right of first refusal set forth above in this Section 7.10, if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 90 Business Days after the date of the initial Subsequent Financing Notice with the Person identified in the Subsequent Financing Notice. In the
event the Company receives responses to Subsequent Financing Notices from Investors seeking to purchase more than the financing sought by the Company in the Subsequent Financing such Investors shall have the right to purchase their Pro Rata Portion
(as defined below) of the Common Stock or Common Stock Equivalents to be issued in such Subsequent Financing. “Pro Rata Portion” is the ratio of (x) the amount invested by such Investor pursuant to this Agreement (the
“Subscription Amount”) and (y) the aggregate sum of all of the Subscription Amounts. Notwithstanding the foregoing, this Section 7.10 shall not apply in respect of the issuance of (a) shares of Common Stock or options
to employees, consultants, officers or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose and (b) securities upon the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date of this Agreement, provided that such securities
have not been amended since the date of this Agreement to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof. 

8. Survival and Indemnification. 
 8.1 Survival. The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement for a period of
twelve (12) months. 
 8.2 Indemnification. 
 (a) The Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective directors, officers, trustees, members, managers, employees and agents, and their respective
successors and assigns, from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other expenses incurred in connection with investigating, preparing
or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject as a result of any breach of representation, warranty,
covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person. 

(b) The Investors agree to indemnify and hold harmless each of the Company and its Affiliates and each of their officers, directors,
partners, members and employees, and each person who controls the Company within the meaning of the Exchange Act, and the rules 

  
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and regulations promulgated thereunder, and their respective successors and assigns, to the fullest extent lawful, from and against any and all Losses to which such Person may become subject as a
result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such
Person. 
 8.3 Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder
shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person
or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the
indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and
provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall
materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of
more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. 
 8.4 Limitations. Neither the Company nor the Investors shall not be required to indemnify the indemnified parties pursuant to Section 8.2, unless the aggregate amount of all Losses
incurred with respect to all claims by the Company or by the Investors pursuant to Section 8.2 exceed $250,000 (the “Threshold Amount”), in which event the Company or Investors shall be responsible for only the amount of
such Losses in excess of the Threshold Amount. The cumulative indemnification obligation of (1) the Company to Investor and all of the Indemnified Parties affiliated with (or whose claims are permitted by virtue of their relationship with)
Investor or (2) Investor to the Company and the Indemnified Parties affiliated with (or whose claims are permitted by virtue of their relationship with the) Company, in each case for inaccuracies in or breaches of representations and
warranties, shall in no event exceed the Purchase Price (and in no case shall an Investor’s liability exceed the portion of the Purchase Price paid by the Investor hereunder). 

 

  
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 8.5 Exclusive Remedy. The indemnity provided for in this Section 8 shall
be the sole and exclusive monetary remedy of indemnified parties after the Closing for any inaccuracy of any representation or warranty or any other breach of any covenant or agreement contained in this Agreement; provided, that nothing
herein shall limit in any way any such party’s remedies in respect of actual fraud by any other party in connection with the transactions contemplated hereby. No party to this Agreement (or any of its Affiliates) shall, in any event, be liable
or otherwise responsible to any other party (or any of its Affiliates) for any special, consequential or punitive damages of such other party (or any of its Affiliates) arising out of or relating to this Agreement or the performance or breach
hereof. 
 9. Miscellaneous. 
 9.1 Successors and Assigns. This Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investors, as applicable, provided, however, that an
Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Shares in a transaction complying with applicable securities laws without the prior written consent
of the Company or the other Investors. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Without limiting the generality of the foregoing, in the event
that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person, from and after the effective time of such
transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Shares” shall be deemed
to refer to the securities received by the Investors in connection with such transaction. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 
 9.2 Counterparts; Faxes. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement may also be executed via facsimile, which shall be deemed an original. 
 9.3 Titles and
Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 
 9.4 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if
given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by
mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an
internationally recognized overnight air courier, then such notice shall be deemed given one Business Day after delivery to such carrier. All notices shall be addressed to the party to be notified at the address as follows, or at such other address
as such party may designate by ten days’ advance written notice to the other party: 

  
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 If to the Company: 

Mattersight Corporation 
 200 South Wacker Drive 
 Suite 820 

Chicago, IL 60606 
 Fax: (775) 252-9987 
 Attention: Kelly D. Conway 

With a copy (which shall not constitute notice) to: 
 Winston & Strawn LLP 
 35 West Wacker Drive 

Chicago, IL 60601 
 Fax: (312) 558-5700 
 Attention: Steven J. Gavin, Esq. 

If to the Investors: to the addresses set forth on the signature pages hereto. 

9.5 Expenses. The parties hereto shall pay their own costs and expenses in connection herewith, except that the Company shall pay
on or after the Closing the reasonable fees and expenses of IGC not to exceed $50,000.00 (including without limitation travel fees, consulting fees and the legal expenses of Lowenstein Sandler PC, it being understood that Lowenstein Sandler PC has
only rendered legal advice to IGC and not to the Company in connection with the transactions contemplated hereby, and that each of the Company and each Investor has relied for such matters on the advice of its own respective counsel). Such expenses
shall be paid upon demand. The Company shall reimburse the Investors upon demand for all reasonable out-of-pocket expenses incurred by the Investors, including without limitation reimbursement of attorneys’ fees and disbursements, in connection
with any amendment, modification or waiver of this Agreement or the other Transaction Documents. In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this
Agreement or the other Transaction Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable out-of-pocket costs
and expenses incurred by the prevailing party in such proceedings. 
 9.6 Amendments and Waivers. Any term of this
Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investors holding
a majority of the then outstanding Shares. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Shares purchased under this Agreement at the time outstanding, each future holder of all such
Shares, and the Company. 

  
 24 









 9.7 Publicity. Except as set forth below, no public release or announcement
concerning the transactions contemplated hereby shall be issued by the Company or the Investors without the prior consent of the Company (in the case of a release or announcement by the Investors) or the Investors holding a majority of the then
outstanding Shares (in the case of a release or announcement by the Company) (which consents shall not be unreasonably withheld), except as such release or announcement may be required by law or the applicable rules or regulations of any securities
exchange or securities market, in which case the Company or the Investors, as the case may be, shall allow the Investors or the Company, as applicable, to the extent reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance. By 8:30 a.m. (Palo Alto time) on the trading day immediately following the Closing Date, the Company shall issue a press release disclosing the consummation of the transactions contemplated by
this Agreement. No later than the fourth trading day following the Closing Date, the Company will file a Current Report on Form 8-K attaching the press release described in the foregoing sentence as well as copies of the Transaction Documents. In
addition, the Company will make such other filings and notices in the manner and time required by the SEC or Nasdaq. 
 9.8
Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect. 

9.9 Entire Agreement. This Agreement, including the Exhibits and the Disclosure Schedules, and the other Transaction Documents
constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter
hereof and thereof. 
 9.10 Further Assurances. The parties shall execute and deliver all such further instruments and
documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained. 

9.11 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the federal courts of the United States of America located in
the City and County of New York or the courts of the State of New York, in each case located in City and County of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action or proceeding 

  
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may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to
the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such
courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH
RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER. 
 9.12
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 Shares pursuant to the Transaction Documents has been made by such Investor independently of any other
Investor. Nothing contained herein or in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor acknowledges that no other Investor has acted as
agent for such Investor in connection with making its investment hereunder and that no Investor will be acting as agent of such Investor in connection with monitoring its investment in the Shares or enforcing its rights under the Transaction
Documents. 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. The Company acknowledges that each of the Investors has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple
Investors and not because it was required or requested to do so by any Investor. 
 9.13. Acquisition of Common Stock from
TCV. IGC has advised the Company that it is planning to purchase certain shares of Company common stock from Technology Crossover Ventures and its affiliates (“TCV”). The parties acknowledge that such transaction is separate and
distinct from the transactions contemplated by this Agreement. IGC acknowledges that it has conducted its own diligence relating to its transaction with TCV. The Company makes no representations, warranties or agreements hereunder with respect to
those transactions. However, IGC agrees that counsel to the Company may rely on the representations made by IGC in this Agreement in connection with preparation of the opinion of counsel to the Company requested for the transfer of common stock from
TCV to IGC. 
 [signature page follows] 

  
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 IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized
officers to execute this Agreement as of the date first above written. 
  

							
	The Company:	 		 	MATTERSIGHT CORPORATION
				
		 		 	By:	 	/s/ Kelly D. Conway
		 		 	Name:	 	Kelly D. Conway
		 		 	Title:	 	President and Chief Executive Officer









							
	The Investors:	 		 	IGC FUND VI, L.P.
		 		 	By: Investor Growth Capital, LLC,
            its general partner
				
		 		 	By:	 	/s/ Michael V. Oporto
		 		 	Name:	 	Michael V. Oporto
		 		 	Title:	 	Secretary

 Aggregate Purchase Price: $5,999,997.11 
 Number of Shares: 1,252,609 
  

			
	 Address for Notice:
	  	 One Rockefeller Plaza
 Suite
2801
 New York, New York 10020
  

with a copy to:
  
 Lowenstein Sandler PC
 1251 Avenue of the Americas

New York, New York 10020
 Attn: Anthony O.
Pergola, Esq.
 Telephone: (212) 204-8689
 Facsimile: (973) 597-2445