Document:

Exhibit 10.4

 

MERCEDES-BENZ AUTO RECEIVABLES TRUST 2016-1,

 as Issuer,

 

MERCEDES-BENZ FINANCIAL SERVICES USA LLC,

 as Servicer and Administrator,

 

and

 

CLAYTON FIXED INCOME SERVICES LLC,

 as Asset Representations Reviewer

 

 ASSET REPRESENTATIONS REVIEW 

AGREEMENT

 

Dated as of September 1, 2016

 

 

TABLE OF CONTENTS

 

Page

 

	
ARTICLE ONE

	 
	
DEFINITIONS

	 
	
Section 1.01. Capitalized Terms; Rules of Usage

	
1

	
Section 1.02. Definitions

	
1

	 
	
ARTICLE TWO

	 
	
ENGAGEMENT; ACCEPTANCE

	 
	
Section 2.01. Engagement; Acceptance

	
2

	
Section 2.02. Confirmation of Status

	
2

	 
	
ARTICLE THREE

	 
	
ASSET REPRESENTATIONS REVIEW PROCESS

	 
	
Section 3.01. Review Notices and Identification of Review Assets

	
2

	
Section 3.02. Review Materials

	
3

	
Section 3.03. Performance of Reviews

	
3

	
Section 3.04. Review Representatives

	
4

	
Section 3.05. Dispute Resolution

	
4

	
Section 3.06. Limitations on Review Obligations

	
5

	 
	
ARTICLE FOUR

	 
	
ASSET REPRESENTATIONS REVIEWER

	 
	
Section 4.01. Representations and Warranties of the Asset Representations Reviewer

	
5

	
Section 4.02. Covenants

	
6

	
Section 4.03. Fees and Expenses

	
7

	
Section 4.04. Limitation on Liability

	
8

	
Section 4.05. Indemnification by Asset Representations Reviewer

	
8

	
Section 4.06. Indemnification of Asset Representations Reviewer

	
8

	
Section 4.07. Inspections of Asset Representations Reviewer

	
9

	
Section 4.08. Delegation of Obligations

	
9

	
Section 4.09. Confidential Information

	
9

	
Section 4.10. Personally Identifiable Information

	
11

	 

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ARTICLE FIVE

	 
	
REMOVAL, RESIGNATION

	 
	
Section 5.01. Eligibility of the Asset Representations Reviewer

	
13

	
Section 5.02. Resignation and Removal of Asset Representations Reviewer

	
13

	
Section 5.03. Successor Asset Representations Reviewer

	
14

	
Section 5.04. Merger, Consolidation or Succession

	
14

	 
	
ARTICLE SIX

	 
	
OTHER AGREEMENTS

	 
	
Section 6.01. Independence of the Asset Representations Reviewer

	
15

	
Section 6.02. No Petition

	
15

	
Section 6.03. Limitation of Liability of Owner Trustee

	
15

	
Section 6.04. Termination of Agreement

	
15

	 
	
ARTICLE SEVEN

	 
	
MISCELLANEOUS PROVISIONS

	 
	
Section 7.01. Amendments

	
16

	
Section 7.02. Assignment; Benefit of Agreement; Third Party Beneficiaries

	
16

	
Section 7.03. Notices

	
16

	
Section 7.04. GOVERNING LAW

	
17

	
Section 7.05. WAIVER OF JURY TRIAL

	
17

	
Section 7.06. No Waiver; Remedies

	
17

	
Section 7.07. Severability

	
17

	
Section 7.08. Headings

	
17

	
Section 7.09. Counterparts

	
18

	 	 
	
SCHEDULES

	 
	
Schedule A –  Representations and Warranties, Review Materials and Procedures to be Performed

	
SA-1

 

 

ii

This ASSET REPRESENTATIONS REVIEW AGREEMENT, dated as of September 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is among MERCEDES-BENZ AUTO RECEIVABLES TRUST 2016-1, a Delaware statutory trust (the “Issuer”), MERCEDES-BENZ FINANCIAL SERVICES USA, a Delaware limited liability company, as servicer and administrator (in such capacities, the “Servicer” and the “Administrator” respectively), and CLAYTON FIXED INCOME SERVICES LLC, a Delaware limited liability company (the “Asset Representations Reviewer”).

 

WHEREAS, the Issuer will engage the Asset Representations Reviewer to perform reviews of certain receivables arising in connection with motor vehicle installment sales contracts and installment loans for compliance with certain representations and warranties made with respect thereto; and

 

WHEREAS, the Asset Representations Reviewer desires to perform such reviews of certain such receivables in accordance with the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:

 

 

ARTICLE ONE

 DEFINITIONS

 

Section 1.01.  Capitalized Terms; Rules of Usage.  Capitalized terms used in this Agreement that are not otherwise defined shall have the meanings ascribed thereto in Appendix A to the Sale and Servicing Agreement, dated as of September 1, 2016, among the Issuer, the Depositor, and Mercedes-Benz Financial Services USA LLC, which Appendix is hereby incorporated into and made a part of this Agreement.  Appendix A also contains rules as to usage applicable to this Agreement.

 

Section 1.02.  Definitions.  Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Agreement.  In the event of any conflict between a definition appearing below and any other Basic Document, the definition appearing below shall control for purposes of this Agreement.

 

“Annual Fee” has the meaning stated in Section 4.03(a).

 

“Annual Period” means each annual period commencing on the Closing Date, in the case of the first such period, and otherwise on the most recent anniversary of the Closing Date and ending on the next anniversary of the Closing Date.

 

“Confidential Information” has the meaning stated in Section 4.09(b).

 

“Eligible Representations” shall mean those representations identified within the “Tests” included in Schedule A.

 

“Information Recipients” has the meaning stated in Section 4.09(a).

 

“Indemnified Person” has the meaning stated in Section 4.06(a).

 

“Issuer PII” means PII furnished by the Issuer, the Servicer or their Affiliates to the Asset Representations Reviewer and PII developed or otherwise collected or acquired by the Asset Representations Reviewer in performing its obligations under this Agreement.

 

“Personally Identifiable Information” or “PII” means information in any format about an identifiable individual, including, name, address, phone number, e-mail address, account number(s), identification number(s), any other actual or assigned attribute associated with or identifiable to an individual and any information that when used separately or in combination with other information could identify an individual.

 

“Review Fee” has the meaning stated in Section 4.03(b).

 

“Review Materials” means the documents, data, and other information required for each “Test” in Schedule A.

 

“Tests” mean the procedures listed in Schedule A as applied to the process described in Section 3.03.

 

ARTICLE TWO

 ENGAGEMENT; ACCEPTANCE

 

Section 2.01.  Engagement; Acceptance.  The Issuer hereby engages Clayton Fixed Income Services LLC to act as the Asset Representations Reviewer for the Issuer.  Clayton Fixed Income Services LLC accepts the engagement and agrees to perform the obligations of the Asset Representations Reviewer on the terms stated in this Agreement.

 

Section 2.02.  Confirmation of Status.  The parties confirm that the Asset Representations Reviewer is not responsible for (a) reviewing the Receivables for compliance with the representations and warranties under the Sale and Servicing Agreement, except as otherwise described in this Agreement, or (b) determining whether noncompliance with the representations or warranties constitutes a breach of the Sale and Servicing Agreement.

 

ARTICLE THREE

 ASSET REPRESENTATIONS REVIEW PROCESS

 

Section 3.01.  Review Notices and Identification of Review Assets.  On receipt of a Review Notice from the Indenture Trustee according to Section 7.02 of the Indenture, the Asset Representations Reviewer will start a Review.  Once a Review Notice has been issued, the Servicer will provide the list of Review Assets to the Asset Representations Reviewer within ten Business Days.  The Asset Representations Reviewer will not be obligated to start a Review until a Review Notice and the related list of Review Assets is received.  The Asset Representations Reviewer is not obligated to verify (i) whether the Indenture Trustee properly determined that a Review Notice was required or (ii) the accuracy or completeness of the list of Review Assets provided by the Servicer.

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Section 3.02.  Review Materials.

 

(a)            Access to Review Materials.  Within 60 days of the delivery of a Review Notice, the Servicer will provide the Asset Representations Reviewer with access to the Review Materials for all Review Assets in one or more of the following ways: (i) by providing access to the Servicer’s systems, either remotely or at an office of the Servicer, (ii) by electronic posting to a password-protected website to which the Asset Representations Reviewer has access, (iii) by providing originals or photocopies at an office of the Servicer or (iv) in another manner agreed by the Servicer and the Asset Representations Reviewer.  The Servicer may redact or remove Personally Identifiable Information from the Review Materials without changing the meaning or usefulness of the Review Materials.  The Asset Representations Reviewer shall be entitled to rely in good faith, without independent investigation or verification, that the Review Materials are accurate and complete in all material respects, and not misleading in any material respect.

 

(b)            Missing or Insufficient Review Materials.  The Asset Representations Reviewer will review the Review Materials to determine if any Review Materials are missing or insufficient for the Asset Representations Reviewer to perform any Test.  If the Asset Representations Reviewer determines that any Review Materials are missing or insufficient, it will notify the Servicer promptly, and in any event no less than 30 days before completing the Review.  The Servicer will have 60 days to give the Asset Representations Reviewer access to the missing Review Materials or other documents or information to correct the insufficiency.  If the missing Review Materials or other documents have not been provided by the Servicer within 60 days, the related Review Report will report a Test Fail for each Test that requires use of the missing or insufficient Review Materials.

 

Section 3.03.  Performance of Reviews.

 

(a)            Test Procedures. For a Review, the Asset Representations Reviewer will perform, for each Review Asset, the procedures listed under “Tests” in Schedule A for each Eligible Representation.  In the course of its review, the Asset Representations Reviewer will use the Review Materials listed in Schedule A.  For each Test and Review Asset, the Asset Representations Reviewer will determine if the Test has been satisfied (a “Test Pass”) or if the Test has not been satisfied (a “Test Fail”).

 

(b)            Review Period.  The Asset Representations Reviewer will complete the Review within 60 days of receiving access to the Review Materials.  However, if additional Review Materials are provided to the Asset Representations Reviewer as described in Section 3.02(b), the Review period will be extended for an additional 30 days.

 

(c)            Completion of Review for Certain Review Assets.  Following the delivery of the list of the Review Assets and before the delivery of the Review Report by the Asset Representations Reviewer, the Servicer may notify the Asset Representations Reviewer if a Review Asset has been paid in full by the Obligor or purchased from the Issuer in accordance with the terms of the Sale and Servicing Agreement.  On receipt of such notice, the Asset Representations Reviewer will immediately terminate all Tests of the related Review Asset, the Review of such Review Assets will be considered complete (a “Test Complete”) and the related Review Report will indicate a Test Complete for such Review Asset and the related reason.

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(d)            Duplicative Tests.  If the same Test is required for more than one representation and warranty, the Asset Representations Reviewer will only perform the Test once for each Review Asset, but will report the results of the Test for each applicable representation and warranty on the Review Report.

 

(e)            Termination of Review.  If a Review is in process and the Notes will be paid in full on the next Payment Date, the Servicer will notify the Asset Representations Reviewer no less than five days before that Payment Date.  On receipt of such notice, the Asset Representations Reviewer will terminate the Review immediately and will not be obligated to deliver a Review Report.

 

(f)            Review Report.  Within five Business Days after the end of the applicable Review period, the Asset Representations Reviewer will deliver to the Issuer, the Servicer and the Indenture Trustee a report (the “Review Report”) indicating for each Review Asset whether there was a Test Pass, Test Fail or Test Complete for each related Test.  For each Test Fail or Test Complete, the Review Report will indicate the related reason, including (for example) whether the Review Asset was a Test Fail as a result of missing or incomplete Review Materials.  The Review Report will contain a summary of the Review results to be included in the Issuer’s Form 10-D report for the Collection Period in which the Review Report is received.  The Asset Representations Reviewer will ensure that the Review Report does not contain any Personally Identifiable Information.  On reasonable request of the Servicer, the Asset Representations Reviewer will provide additional details on the Test results.

 

Section 3.04.  Review Representatives.

 

(a)            Servicer Representative.  The Servicer will designate one or more representatives who will be available to assist the Asset Representations Reviewer in performing the Review, including responding to requests and answering questions from the Asset Representations Reviewer about access to Review Materials on the Servicer’s originations, receivables or other systems, obtaining missing or insufficient Review Materials and/or providing clarification of any Review Materials or Tests.

 

(b)            Asset Representations Review Representative.  The Asset Representations Reviewer will designate one or more representatives who will be available to the Issuer, the Servicer and the Administrator during the performance of a Review.

 

(c)            Questions About Review.  The Asset Representations Reviewer will make appropriate personnel available to respond in writing to written questions or requests for clarification of any Review Report from the Indenture Trustee or the Servicer until the earlier of (i) the payment in full of the Notes and (ii) one year after the delivery of such Review Report.  The Asset Representations Reviewer will not be obligated to respond to questions or requests for clarification from Noteholders, Note Owners or any other Person and will direct such Persons to submit written questions or requests to the Servicer.

 

Section 3.05.  Dispute Resolution.  If a Review Asset that was the subject of a Review becomes the subject of a dispute resolution proceeding under Section 3.17 of the Sale and Servicing Agreement, the Asset Representations Reviewer will participate in the dispute 

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resolution proceeding on request of a party to the proceeding.  The reasonable out-of-pocket expenses of the Asset Representations Reviewer for its participation in any dispute resolution proceeding will be considered expenses of the requesting party for the dispute resolution and will be paid, in the case of (i) an arbitration, by a party to the dispute resolution as determined by the arbitrator for the dispute resolution, and (ii) a mediation, as parties shall mutually determine, in each case according to Section 3.17 of the Sale and Servicing Agreement.  If not paid by a party to the dispute resolution, the expenses will be reimbursed by the Issuer according to Section 4.03(d) of this Agreement.

 

Section 3.06.  Limitations on Review Obligations.

 

(a)            Review Process Limitations.  The Asset Representations Reviewer will have no obligation (i) to determine whether a Delinquency Trigger has occurred or whether the required percentage of Noteholders has voted to direct a Review under the Indenture; (ii) to determine which Receivables are subject to a Review, (iii) to obtain or confirm the validity of the Review Materials, (iv) to obtain missing or insufficient Review Materials, (v) to take any action or cause any other party to take any action under any of the Basic Documents to enforce any remedies for breaches of representations or warranties about the Eligible Representations, (vi) to determine the reason for the delinquency of any Review Asset, the creditworthiness of any Obligor, the overall quality of any Review Asset or the compliance by the Servicer with its covenants with respect to the servicing of such Review Asset or (vii) to establish cause, materiality or recourse for any failed Test.

 

(b)            Testing Procedure Limitations.  The Asset Representations Reviewer will only be required to perform the “Tests” listed under Schedule A, and will not be obligated to perform additional procedures on any Review Asset or to provide any information other than a Review Report.  However, the Asset Representations Reviewer may provide additional information in a Review Report about any Review Asset that it determines in good faith to be material to the Review.

 

ARTICLE FOUR

 ASSET REPRESENTATIONS REVIEWER

 

Section 4.01.  Representations and Warranties of the Asset Representations Reviewer.  The Asset Representations Reviewer hereby makes the following representations and warranties as of the Closing Date:

 

(a)            Organization and Qualification.  The Asset Representations Reviewer is duly organized and validly existing as a limited liability company in good standing under the laws of State of Delaware.  The Asset Representations Reviewer is qualified as a foreign limited liability company in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its properties or the conduct of its activities requires the qualification, license or approval, unless the failure to obtain the qualifications, licenses or approvals would not reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement.

 

(b)            Power, Authority and Enforceability.  The Asset Representations Reviewer has the power and authority to execute, deliver and perform its obligations under this Agreement.  

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The Asset Representations Reviewer has authorized the execution, delivery and performance of this Agreement.  This Agreement is the legal, valid and binding obligation of the Asset Representations Reviewer, enforceable against the Asset Representations Reviewer in accordance with its terms, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles.

 

(c)            No Conflicts and No Violation.  The completion of the transactions contemplated by this Agreement and the performance of the Asset Representations Reviewer’s obligations under this Agreement will not (i) conflict with, or be a breach or default under, any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document under which the Asset Representations Reviewer is a debtor or guarantor, (ii) result in the creation or imposition of a Lien on the properties or assets of the Asset Representations Reviewer under the terms of any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document, (iii) violate the organizational documents of the Asset Representations Reviewer or (iv) violate any Applicable Law or, to the Asset Representations Reviewer’s knowledge, an order, rule or regulation of a Governmental Authority having jurisdiction over the Asset Representations Reviewer or its properties that applies to the Asset Representations Reviewer, which, in each case, would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement.

 

(d)            No Proceedings.  To the Asset Representations Reviewer’s knowledge, there are no proceedings or investigations pending or threatened in writing before a Governmental Authority having jurisdiction over the Asset Representations Reviewer or its properties (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the completion of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under, or the validity or enforceability of, this Agreement.

 

(e)            Eligibility.  The Asset Representations Reviewer meets the eligibility requirements in Section 5.01.

 

Section 4.02.  Covenants.  The Asset Representations Reviewer covenants and agrees that:

 

(a)            Eligibility.  It will notify the Issuer and the Servicer promptly if it no longer meets, or reasonably expects that it will no longer meet, the eligibility requirements in Section 5.01.

 

(b)            Review Systems; Personnel.  It will (i) maintain business process management and/or other systems necessary to ensure that it can perform each Test and, on execution of this Agreement, will load each Test into these systems, (ii) ensure that these systems allow for each Review Asset and the related Review Materials to be individually tracked and stored as contemplated by this Agreement and (iii) maintain adequate staff that is properly trained to conduct Reviews as required by this Agreement.

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(c)            Maintenance of Review Materials.  It will maintain copies of any Review Materials, Review Reports and other documents relating to a Review, including internal correspondence and work papers, for a period of at least two years after any termination of this Agreement.

 

Section 4.03.  Fees and Expenses.

 

(a)            Annual Fee.  As compensation for its activities hereunder, the Asset Representations Reviewer shall be entitled to receive an annual fee (the “Annual Fee”) with respect to each Annual Period prior to the termination of the Issuer, in an amount equal to $7,500.00.  The Annual Fee will be paid by the Issuer on the Closing Date and on each anniversary of the Closing Date until this Agreement is terminated; provided, however, that if the Asset Representations Reviewer resigns or is removed in accordance with Section 5.02, then the Asset Representations Reviewer shall refund to the Issuer a portion of the Annual ARR Fee attributable to the portion of the annual period during which the Asset Representations Reviewer will no longer act as the Asset Representations Reviewer, assuming for purposes of such calculation that the Annual Fee for each day during the Annual Period is an amount equal to the Annual Fee divided by 365.

 

(b)            Review Fee.  Following the completion of a Review and the delivery of the related Review Report pursuant to Section 3.03, or the termination of a Review according to Section 3.03(e), and the delivery to the Indenture Trustee and the Servicer of a detailed invoice, the Asset Representations Reviewer will be entitled to a fee of $200.00 for each Review Asset for which the Review was started (the “Review Fee”), payable by the Issuer.  However, no Review Fee will be charged for any Review Asset which was included in a prior Review or for which no Tests were completed prior to the Asset Representations Reviewer being notified of a termination of the Review according to Section 3.03(e) or due to missing or insufficient Review Materials under Section 3.02(b).  If the detailed invoice is submitted on or before the first day of a month, the Review Fee will be paid by the Issuer according to the priority of payments in the Indenture on the Payment Date in that month.  However, if a Review is terminated according to Section 3.03(e), the Asset Representations Reviewer must submit its invoice for the Review Fee for the terminated Review no later than ten Business Days before the final Payment Date to be reimbursed on such final Payment Date.

 

(c)            Reimbursement of Travel Expenses.  If the Servicer provides access to the Review Materials at one of its properties, the Issuer will reimburse the Asset Representations Reviewer for its reasonable travel expenses incurred in connection with the Review upon receipt of a detailed invoice.

 

(d)            Dispute Resolution Expenses.  If the Asset Representations Reviewer participates in a dispute resolution proceeding under Section 3.06 and its reasonable out-of-pocket expenses for participating in such proceeding are not paid by a party to the dispute resolution within 90 days after the end of such proceeding, the Issuer will reimburse the Asset Representations Reviewer for such expenses upon receipt of a detailed invoice.

 

(e)            Payment of Invoices.  When applicable pursuant to this Section, the fees and expenses of the Asset Representations Reviewer are to be paid pursuant to Section 2.08 of the 

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Indenture.  The Asset Representations Reviewer will issue invoices to the Issuer at the notices addresses set forth in Section 11.04 of the Indenture and Issuer shall pay all invoices submitted by the Asset Representations Reviewer within 30 days following the receipt by the Issuer, in accordance with Section 2.08 of the Indenture.  The Administrator shall promptly pay to the Asset Representations Reviewer the amount of any fees, expenses and indemnification amounts not otherwise paid or reimbursed by the Issuer on any Payment Date in accordance with the terms of Section 2.08 of the Indenture; provided, that the Asset Representations Reviewer shall promptly reimburse the Administrator for any such amounts to the extent it subsequently receives payment or reimbursement in respect thereof from the Issuer in accordance with Section 2.08 of the Indenture, as applicable.  For the avoidance of doubt, the aggregate limit on the Asset Representations Reviewer fees, expenses and indemnities specified in Section 2.08 of the Indenture shall not apply to payments made or to be made by the Administrator to the Asset Representations Reviewer pursuant to this subsection.

 

Section 4.04.  Limitation on Liability.  The Asset Representations Reviewer will not be liable to any Person for any action taken, or not taken, in good faith under this Agreement or for errors in judgment.  However, the Asset Representations Reviewer will be liable for its willful misconduct, bad faith or negligence in performing its obligations under this Agreement.  In no event will the Asset Representations Reviewer be liable for special, indirect or consequential losses or damages (including lost profit), even if the Asset Representations Reviewer has been advised of the likelihood of the loss or damage and regardless of the form of action.

 

Section 4.05.  Indemnification by Asset Representations Reviewer.  The Asset Representations Reviewer will indemnify each of the Issuer, the Seller, the Servicer, the Administrator, the Owner Trustee, the Indenture Trustee and their respective directors, officers, employees and agents for all fees, expenses, losses, damages and liabilities, including any legal fees or expenses incurred in connection with the enforcement of the Asset Representations Reviewer’s indemnification or other obligations hereunder, resulting from (a) the willful misconduct, bad faith or negligence of the Asset Representations Reviewer in performing its obligations under this Agreement and (b) the Asset Representations Reviewer’s breach of any of its representations or warranties in this Agreement.  The Asset Representations Reviewer’s obligations under this Section will survive the termination of this Agreement, the termination of the Issuer and the resignation or removal of the Asset Representations Reviewer.

 

Section 4.06.  Indemnification of Asset Representations Reviewer.

 

(a)            Indemnification.  The Issuer will, or will cause the Administrator to, indemnify the Asset Representations Reviewer and its officers, directors, employees and agents (each, an “Indemnified Person”), for all costs, expenses, losses, damages and liabilities resulting from the performance of its obligations under this Agreement (including the fees and expenses of defending itself against any loss, damage or liability), but excluding any cost, expense, loss, damage or liability resulting from the Asset Representations Reviewer’s (i) willful misconduct, bad faith or negligence or (ii) breach of any of its representations or warranties in this Agreement.

 

(b)            Proceedings.  Promptly on receipt by an Indemnified Person of notice of a Proceeding against it, the Indemnified Person will, if a claim is to be made under Section 4.06(a), 

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notify the Issuer and the Administrator of the Proceeding.  The Administrator may participate in and assume the defense and settlement of a Proceeding at its expense.  If the Administrator notifies the Indemnified Person of its intention to assume the defense of the Proceeding with counsel reasonably satisfactory to the Indemnified Person, and so long as the Administrator assumes the defense of the Proceeding in a manner reasonably satisfactory to the Indemnified Person, the Administrator will not be liable for fees and expenses of counsel to the Indemnified Person unless there is a conflict between the interests of the Administrator and an Indemnified Person.  If there is a conflict, the Administrator will pay for the reasonable fees and expenses of separate counsel to the Indemnified Person.  No settlement of a Proceeding may be made without the approval of the Administrator and the Indemnified Person, which approval will not be unreasonably withheld, conditioned or delayed.

 

(c)            Survival of Obligations.  The Issuer’s and the Administrator’s obligations under this Section will survive the resignation or removal of the Asset Representations Reviewer and the termination of this Agreement.

 

(d)            Repayment.  If the Issuer or the Administrator makes any payment under this Section and the Indemnified Person later collects any of the amounts for which the payments were made to it from others, the Indemnified Person will promptly repay the amounts to the Issuer or the Administrator, as applicable.

 

Section 4.07.  Inspections of Asset Representations Reviewer.  The Asset Representations Reviewer agrees that, with reasonable advance notice not more than once during any year, it will permit authorized representatives of the Issuer, the Servicer or the Administrator, during the Asset Representations Reviewer’s normal business hours, to examine and review the books of account, records, reports and other documents and materials of the Asset Representations Reviewer relating to (a) the performance of the Asset Representations Reviewer’s obligations under this Agreement, (b) payments of fees and expenses of the Asset Representations Reviewer for its performance and (c) a claim made by the Asset Representations Reviewer under this Agreement.  In addition, the Asset Representations Reviewer will permit the Issuer’s, the Servicer’s or the Administrator’s representatives to make copies and extracts of any of those documents and to discuss them with the Asset Representations Reviewer’s officers and employees.  Each of the Issuer, the Servicer and the Administrator will, and will cause its authorized representatives to, hold in confidence the information except if disclosure may be required by Applicable Law or if the Issuer, the Servicer or the Administrator reasonably determines that it is required to make the disclosure under this Agreement or the other Basic Documents.  The Asset Representations Reviewer will maintain all relevant books, records, reports and other documents and materials for a period of at least two years after the termination of its obligations under this Agreement.

 

Section 4.08.  Delegation of Obligations.  The Asset Representations Reviewer may not delegate or subcontract its obligations under this Agreement to any Person without the consent of the Issuer and the Servicer.

 

Section 4.09.  Confidential Information.

 

(a)            Treatment.  The Asset Representations Reviewer agrees to hold and treat 

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Confidential Information given to it under this Agreement in confidence and under the terms and conditions of this Section, and will implement and maintain safeguards to further assure the confidentiality of the Confidential Information.  The Confidential Information will not, without the prior consent of the Issuer and the Servicer, be disclosed or used by the Asset Representations Reviewer, or its officers, directors, employees, agents, representatives or Affiliates, including legal counsel (collectively, the “Information Recipients”) other than for the purposes of performing Reviews of Review Assets or performing its obligations under this Agreement.  The Asset Representations Reviewer agrees that it will not, and will cause its Information Recipients to not (i) purchase or sell securities issued by the Servicer or its Affiliates or special purpose entities on the basis of Confidential Information or (ii) use the Confidential Information for the preparation of research reports, newsletters or other publications or similar communications.

 

(b)            Definition.  “Confidential Information” means oral, written and electronic materials (irrespective of its source or form of communication) furnished before, on or after the date of this Agreement to the Asset Representations Reviewer for the purposes contemplated by this Agreement, including:

 

(i)            lists of Review Assets and any related Review Materials;

 

(ii)            origination and servicing guidelines, policies and procedures, and form contracts; and

 

(iii)            notes, analyses, compilations, studies or other documents or records prepared by the Servicer, which contain information supplied by or on behalf of the Servicer or its representatives.

 

However, Confidential Information will not include information that (A) is or becomes generally available to the public other than as a result of disclosure by the Information Recipients, (B) was available to, or becomes available to, the Information Recipients on a non-confidential basis from a Person or entity other than the Issuer or the Servicer before its disclosure to the Information Recipients who, to the knowledge of the Information Recipient is not bound by a confidentiality agreement with the Issuer or the Servicer and is not prohibited from transmitting the information to the Information Recipients, (C) is independently developed by the Information Recipients without the use of the Confidential Information, as shown by the Information Recipients’ files and records or other evidence in the Information Recipients’ possession or (D) the Issuer or the Servicer provides permission to the applicable Information Recipients to release.

 

(c)            Protection.  The Asset Representations Reviewer will take reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of Confidential Information, including those measures that it takes to protect its own confidential information and not less than a reasonable standard of care.  The Asset Representations Reviewer acknowledges that Personally Identifiable Information is also subject to the additional requirements in Section 4.10.

 

(d)            Disclosure.  If the Asset Representations Reviewer is required by Applicable Law to disclose part of the Confidential Information, it may disclose the Confidential Information.  

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However, before a required disclosure, the Asset Representations Reviewer, if permitted Applicable Law, will use its reasonable efforts to provide the Issuer and the Servicer with notice of the requirement and will cooperate, at the Servicer’s expense, in the Issuer’s and the Servicer’s pursuit of a proper protective order or other relief for the disclosure of the Confidential Information.  If the Issuer or the Servicer is unable to obtain a protective order or other proper remedy by the date that the information is required to be disclosed, the Asset Representations Reviewer will disclose only that part of the Confidential Information that it is advised by its legal counsel it is legally required to disclose.

 

(e)            Responsibility for Information Recipients.  The Asset Representations Reviewer will be responsible for a breach of this Section by its Information Recipients.

 

(f)            Violation.  The Asset Representations Reviewer agrees that a violation of this Agreement may cause irreparable injury to the Issuer and the Servicer and the Issuer and the Servicer may seek injunctive relief in addition to legal remedies.  If an action is initiated by the Issuer or the Servicer to enforce this Section, the prevailing party will be reimbursed for its fees and expenses, including reasonable attorney’s fees, incurred for the enforcement.

 

Section 4.10.  Personally Identifiable Information.

 

(a)            Use of Issuer PII.  The Issuer does not grant the Asset Representations Reviewer any rights to Issuer PII except as provided in this Agreement.  The Asset Representations Reviewer will use Issuer PII only to perform its obligations under this Agreement or as specifically directed in writing by the Issuer and will only reproduce Issuer PII to the extent necessary for these purposes.  The Asset Representations Reviewer must comply with all Applicable Law relating to PII, Issuer PII and the Asset Representations Reviewer’s business, including any legally required codes of conduct, including those relating to privacy, security and data protection.  The Asset Representations Reviewer will protect and secure Issuer PII.  The Asset Representations Reviewer will implement privacy or data protection policies and procedures that comply with Applicable Law and this Agreement.  The Asset Representations Reviewer will implement and maintain reasonable and appropriate practices, procedures and systems, including administrative, technical and physical safeguards to (i) protect the security, confidentiality and integrity of Issuer PII, (ii) ensure against anticipated threats or hazards to the security or integrity of Issuer PII, (iii) protect against unauthorized access to or use of Issuer PII and (iv) otherwise comply with its obligations under this Agreement.  These safeguards include a written data security plan, employee training, information access controls, restricted disclosures, systems protections (e.g., intrusion protection, data storage protection and data transmission protection) and physical security measures.

 

(b)            Additional Limitations.  In addition to the use and protection requirements described in Section 4.10(a), the Asset Representations Reviewer’s disclosure of Issuer PII is also subject to the following requirements:

 

(i)            The Asset Representations Reviewer will not disclose Issuer PII to its personnel or allow its personnel access to Issuer PII except (A) for the Asset Representations Reviewer personnel who require Issuer PII to perform a Review, (B) with the prior consent of the Issuer or (C) as required by Applicable Law.  When 

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permitted, the disclosure of or access to Issuer PII will be limited to the specific information necessary for the individual to complete the assigned task.  The Asset Representations Reviewer will inform personnel with access to Issuer PII of the confidentiality requirements in this Agreement and train its personnel with access to Issuer PII on the proper use and protection of Issuer PII.

 

(ii)            The Asset Representations Reviewer will not sell, disclose, provide or exchange Issuer PII with or to any third party without the prior consent of the Issuer.

 

(c)            Notice of Breach.  The Asset Representations Reviewer will notify the Issuer, Administrator and Servicer promptly in the event of an actual or reasonably suspected security breach, unauthorized access, misappropriation or other compromise of the security, confidentiality or integrity of Issuer PII and, where applicable, immediately take action to prevent any further breach.

 

(d)            Return or Disposal of Issuer PII.  Except where return or disposal is prohibited by Applicable Law, promptly on the earlier of the completion of the Review or the request of the Issuer, Administrator or Servicer, all Issuer PII in any medium in the Asset Representations Reviewer’s possession or under its control will be (i) destroyed in a manner that prevents its recovery or restoration or (ii) if so directed by the Issuer, returned to the Issuer without the Asset Representations Reviewer retaining any actual or recoverable copies, in both cases, without charge to the Issuer.  Where the Asset Representations Reviewer retains Issuer PII, the Asset Representations Reviewer will limit the Asset Representations Reviewer’s further use or disclosure of Issuer PII to that required by Applicable Law.

 

(e)            Compliance; Modification.  The Asset Representations Reviewer will cooperate with and provide information to the Issuer, Administrator and Servicer regarding the Asset Representations Reviewer’s compliance with this Section.  The Asset Representations Reviewer and the Issuer agree to modify this Section as necessary for either party to comply with Applicable Law.

 

(f)            Audit of Asset Representations Reviewer.  The Asset Representations Reviewer will permit the Issuer, the Administrator, or the Servicer, and any of their authorized representatives, to audit the Asset Representations Reviewer’s compliance with this Section during the Asset Representations Reviewer’s normal business hours on reasonable advance notice to the Asset Representations Reviewer, and not more than once during any year unless circumstances necessitate additional audits.  The Issuer, Administrator and Servicer agree to make reasonable efforts to schedule any audit described in this Section with the inspections described in Section 4.07.  The Asset Representations Reviewer will also permit the Issuer, the Administrator and the Servicer during normal business hours on reasonable advance notice to audit any service providers used by the Asset Representations Reviewer to fulfill the Asset Representations Reviewer’s obligations under this Agreement.

 

(g)            Affiliates and Third Parties.  If the Asset Representations Reviewer processes the PII of the Issuer’s Affiliates or a third party when performing a Review, and if such Affiliate or third party is identified to the Asset Representations Reviewer, such Affiliate or third party is an intended third-party beneficiary of this Section, and this Agreement is intended to benefit the 

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Affiliate or third party.  The Affiliate or third party may enforce the PII related terms of this Section against the Asset Representations Reviewer as if each were a signatory to this Agreement.

 

ARTICLE FIVE

 REMOVAL, RESIGNATION

 

Section 5.01.  Eligibility of the Asset Representations Reviewer.  The Asset Representations Reviewer must be a Person who (a) is not Affiliated with the Issuer, the Depositor, the Servicer, the Indenture Trustee, the Owner Trustee or any of their respective Affiliates and (b) was not, and is not Affiliated with a Person that was, engaged by the Issuer, the Depositor, the Servicer or any Underwriter to perform any due diligence on the Receivables prior to the Closing Date.

 

Section 5.02.  Resignation and Removal of Asset Representations Reviewer.

 

(a)            No Resignation.  The Asset Representations Reviewer will not resign as Asset Representations Reviewer unless it determines it is legally unable to perform its obligations under this Agreement and there is no reasonable action that it could take to make the performance of its obligations under this Agreement permitted under Applicable Law.  In such event, the Asset Representations Reviewer will deliver a notice of its resignation to the Issuer and the Servicer, together with an Opinion of Counsel supporting its determination.

 

(b)            Removal.  If any of the following events occur, the Issuer, by notice to the Asset Representations Reviewer, may remove the Asset Representations Reviewer and terminate its rights and obligations under this Agreement:

 

(i)            the Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.01;

 

(ii)            the Asset Representations Reviewer breaches of any of its representations, warranties, covenants or obligations in this Agreement; or

 

(iii)            an  Insolvency Event with respect to the Asset Representations Reviewer occurs.

 

(c)            Notice of Resignation or Removal.  The Issuer will notify the Servicer and the Indenture Trustee of any resignation or removal of the Asset Representations Reviewer.

 

(d)            Continue to Perform After Resignation or Removal.  The Asset Representations Reviewer will continue to perform its obligations under this Agreement, until a successor Asset Representations Reviewer has accepted its engagement according to Section 5.03(b).

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Section 5.03.  Successor Asset Representations Reviewer.

 

(a)            Engagement of Successor Asset Representations Reviewer.  Following the resignation or removal of the Asset Representations Reviewer, the Issuer will engage a successor Asset Representations Reviewer who meets the eligibility requirements of Section 5.01.

 

(b)            Effectiveness of Resignation or Removal.  No resignation or removal of the Asset Representations Reviewer will be effective until the successor Asset Representations Reviewer has executed and delivered to the Issuer, the Servicer and the Administrator an agreement accepting its engagement and agreeing to perform the obligations of the Asset Representations Reviewer under this Agreement or entering into a new agreement with the parties hereto on substantially the same terms as this Agreement.

 

(c)            Transition and Expenses.  If the Asset Representations Reviewer resigns or is removed, the Asset Representations Reviewer will cooperate with the Issuer, the Servicer and the Administrator and take all actions reasonably requested to assist the Issuer in making an orderly transition of the Asset Representations Reviewer’s rights and obligations under this Agreement to the successor Asset Representations Reviewer.  The Asset Representations Reviewer will pay the reasonable expenses of transitioning the Asset Representations Reviewer’s obligations under this Agreement and preparing the successor Asset Representations Reviewer to take on the obligations on receipt of an invoice with reasonable detail of the expenses from the Issuer, the Servicer, the Administrator or the successor Asset Representations Reviewer.

 

Section 5.04.  Merger, Consolidation or Succession.  Any Person (a) into which the Asset Representations Reviewer is merged or consolidated, (b) resulting from any merger or consolidation to which the Asset Representations Reviewer is a party or (c) succeeding to the business of the Asset Representations Reviewer, if that Person meets the eligibility requirements in Section 5.01, will be the successor to the Asset Representations Reviewer under this Agreement.  Such Person will execute and deliver to the Issuer, the Servicer and the Administrator an agreement to assume the Asset Representations Reviewer’s obligations under this Agreement (unless the assumption happens by operation of law).

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ARTICLE SIX

 OTHER AGREEMENTS

 

Section 6.01.  Independence of the Asset Representations Reviewer.  The Asset Representations Reviewer will be an independent contractor and will not be subject to the supervision of the Issuer for the manner in which it accomplishes the performance of its obligations under this Agreement.  Unless expressly authorized by the Issuer, the Asset Representations Reviewer will have no authority to act for or represent the Issuer and will not be considered an agent of the Issuer.  Nothing in this Agreement will make the Asset Representations Reviewer and the Issuer members of any partnership, joint venture or other separate entity or impose any liability as such on any of them.  For the avoidance of doubt, the Indenture Trustee will not be responsible for monitoring the performance by the Asset Representations Reviewer of its obligations under this Agreement.

 

Section 6.02.  No Petition.  Each of the parties agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after payment in full of the Notes and other Securities, it will not institute or pursue against, or join any other Person in instituting or pursuing against, the Depositor or the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings or other Proceedings under any Insolvency Law in connection with any obligations relating to the Notes or any Basic Document and agrees that it will not cooperate with or encourage others to institute any such Proceeding.

 

Section 6.03.  Limitation of Liability of Owner Trustee.  It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and delivered by Wilmington Trust, National Association, not individually or personally but solely as Owner Trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust, National Association, but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein of the Issuer, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (d) Wilmington Trust, National Association has not verified and has made no investigation as to the accuracy or completeness of any representations and warranties made by the Issuer in this Agreement and (e) under no circumstances shall Wilmington Trust, National Association be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Agreement or any other related documents.

 

Section 6.04.  Termination of Agreement.  This Agreement will terminate, except for the obligations under Section 4.05, on the earlier of (a) the payment in full of all outstanding Notes and the satisfaction and discharge of the Indenture and (b) the date the Issuer is terminated under the Trust Agreement.

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ARTICLE SEVEN

 MISCELLANEOUS PROVISIONS

 

Section 7.01.  Amendments.  The parties may amend this Agreement:

 

(i)            to clarify an ambiguity, correct an error or correct or supplement any term of this Agreement that may be defective or inconsistent with the other terms of this Agreement or to provide for, or facilitate the acceptance of this Agreement by, a successor Asset Representations Reviewer, in each case without the consent of the Noteholders or any other Person;

 

(ii)            to add, change or eliminate terms of this Agreement, in each case without the consent of the Noteholders or any other Person, if the Administrator delivers an Officer’s Certificate to the Issuer and the Trustees stating that the amendment will not have a material adverse effect on the Noteholders; or

 

(iii)            to add, change or eliminate terms of this Agreement for which an Officer’s Certificate is not or cannot be delivered under Section 7.01(a)(ii), with the consent of a majority of the principal amount of the Notes of the Controlling Class then Outstanding.

 

Notwithstanding anything to the contrary in this Section, any amendment to this Agreement that affects the rights or the obligations of either the Indenture Trustee or the Owner Trustee will require the consent of the Indenture Trustee or the Owner Trustee, as applicable.

 

Section 7.02.  Assignment; Benefit of Agreement; Third Party Beneficiaries.

 

(a)            Assignment.  Except as stated in Section 5.04, this Agreement may not be assigned by the Asset Representations Reviewer without the consent of the Issuer and the Servicer.

 

(b)            Benefit of Agreement; Third-Party Beneficiaries.  This Agreement is for the benefit of and will be binding on the parties and their permitted successors and assigns.  The Owner Trustee and the Indenture Trustee, for the benefit of the Noteholders, will be third-party beneficiaries of this Agreement and may enforce this Agreement against the Asset Representations Reviewer and the Servicer.  No other Person will have any right or obligation under this Agreement.

 

Section 7.03.  Notices.  Unless otherwise specified in this Agreement, all notices, requests, demands, consents, waivers or other communications to or from the parties to this Agreement will be in writing.  Notices, requests, demands, consents and other communications will be deemed to have been given and made, (i) upon delivery or, in the case of a letter mailed via registered first class mail, postage prepaid, three days after deposit in the mail and (ii) in the case of (a) a facsimile, when receipt is confirmed by telephone or by reply e-mail or reply facsimile from the recipient, (b) an e-mail, when receipt is confirmed by telephone or by reply e‐mail from the recipient and (c) an electronic posting to a password-protected website, upon printed confirmation of the recipient’s access to such password-protected website, or when 

16

notification of such electronic posting is confirmed in accordance with clauses (ii)(b) through (ii)(c) above.  Unless otherwise specified in this Agreement, any such notice, request, demand, consent or other communication will be delivered or addressed, in the case of: (i) the Issuer or the Owner Trustee, at the Corporate Trust Office (e-mail: cmay@wilmingtontrust.com, telecopier: (302) 636-4140), (ii) the Servicer, at 36455 Corporate Drive, Farmington Hills, Michigan 48331, Attention: Steven C. Poling (e-mail: steven.c.poling@daimler.com, telecopier: (817) 224-3587), (iii) the Administrator, at 36455 Corporate Drive, Farmington Hills, Michigan  48331, Attention: Steven C. Poling (e-mail: steven.c.poling@daimler.com, telecopier: (817) 224-3587), (iv) the Asset Representations Reviewer, at  Clayton Fixed Income Services LLC, 1700 Lincoln Street, Suite 2600, Denver, Colorado 80203, Attention: SVP, Surveillance (e‐mail: jharrison@clayton.com) and (v) as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

 

Section 7.04.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 7.05.  WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

 

Section 7.06.  No Waiver; Remedies.  No party’s failure or delay in exercising a power, right or remedy under this Agreement will operate as a waiver.  No single or partial exercise of a power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy.  The powers, rights and remedies under this Agreement are in addition to any powers, rights and remedies under law.

 

Section 7.07.  Severability.  If any one or more of the covenants, agreements, provisions or terms of this Agreement is held invalid, illegal or unenforceable, then such covenants, agreements, provisions or terms will be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement and will in no way affect the validity, legality or enforceability of the other covenants, agreements, provisions and terms of this Agreement.

 

Section 7.08.  Headings.  The headings in this Agreement are included for convenience and will not affect the meaning or interpretation of this Agreement.

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Section 7.09.  Counterparts.  This Agreement may be executed in multiple counterparts. Each counterpart will be an original and all counterparts will together be one document.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers, thereunto duly authorized, as of the day and year first above written.

 

	 	MERCEDES-BENZ AUTO RECEIVABLES TRUST 2016-1, as Issuer	 
	 	 	 	 
	 	By:	WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner Trustee	 
	 	 	 	 
	
 

	
By: 

	/s/ Chad May	 
	 	 	Name: Chad May	 
	 	 	Title:   Assistant Vice President	 
	 	 	 	 

 

	 	MERCEDES-BENZ FINANCIAL SERVICES USA LLC, as Servicer and Administrator	 
	 	 	 	 
	
 

	
By: 

	/s/ Kenneth D. Casper	 
	 	 	Name: Kenneth D. Casper	 
	 	 	Title:   Vice President	 
	 	 	 	 

 

	 	CLAYTON FIXED INCOME SERVICES LLC, as Asset Representations Reviewer	 
	 	 	 	 
	
 

	
By: 

	/s/ Robert Hams	 
	 	 	Name: Robert Hams	 
	 	 	Title:   Secretary	 
	 	 	 	 

 

 

 

Asset Representations Review Agreement

SCHEDULE A

 

REPRESENTATIONS AND WARRANTIES, REVIEW MATERIALS AND PROCEDURES TO BE PERFORMED

 

Representation

 

	(i)	Characteristics of Receivables.  Each Receivable (a) was originated in the United States by the Seller or a Dealer located in the United States for the retail sale of a Financed Vehicle in the ordinary course of the Seller’s or the applicable Dealer’s business in accordance with the Seller’s credit policies as of the date of origination or acquisition of the related Receivable, is payable in United States dollars, has been fully and properly executed by the parties thereto, if not originated by the Seller, has been purchased by the Seller from such Dealer under an existing Dealer Agreement (or approved form of assignment) and has been validly assigned by such Dealer to the Seller, (b) has created a valid, subsisting and enforceable first priority security interest in favor of the Seller in the Financed Vehicle, which security interest shall be perfected and prior to any other interest in such Financed Vehicle, and which security interest is assignable by the Seller and reassignable by the assignee, (c) contains customary and enforceable provisions such that the rights and remedies of the holder thereof are adequate for realization against the collateral of the benefits of the security, (d) shall, except as otherwise provided in the Sale and Servicing Agreement, provide for level Monthly Payments (provided that the payment in the first or last month in the life of the Receivable may be minimally different from the level payment) that fully amortize the Amount Financed over its original term and shall provide for a finance charge or shall yield interest at its APR, (e) shall provide for, in the event that such Receivable is prepaid, a prepayment that fully pays the Principal Balance and includes accrued but unpaid interest at least through the date prior to the date of prepayment in an amount calculated by using an interest rate at least equal to its APR, (f) is a Simple Interest Receivable, (g) is due from an Obligor with a mailing address within the United States or its territories, and (h) to the best of the Seller’s knowledge, is not assumable by another Person in a manner which would release the Obligor thereof from such Obligor’s obligations to the Seller with respect to such Receivable.

 

Documents

 

Contract

 

Data Tape

 

List of Approved Contracts

 

Title

 

Procedures to be Performed

 

	i)	Confirm the Dealer’s address on the Contract is located within the United States.

 

	ii)	Confirm the Contract form number appears on the List of Approved Contracts.

 

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	iii)	Confirm that the Contract is payable in United States dollars.

 

	iv)	Confirm the Buyer, Co-buyer (if applicable) and Dealer have signed the Contract.

 

	v)	Confirm that the title reports the Seller as the first lien holder.

 

	vi)	Confirm that the VIN on the Contract matches the Vehicle Identification Number on the title.

 

	vii)	Confirm the Buyer’s name as stated on the Contract matches the name on the title.

 

	viii)	Confirm all payments are equivalent with the possible exception of the first and last schedule payments which may be less than or greater than the level payments.

 

	ix)	Calculate the product of the Number of Payments and the Amount of Payments, together with any first and last scheduled payments (if applicable), and confirm this amount equals the sum of the Finance Charge and the Amount Financed as stated within the Truth in Lending section of the Contract.

 

	x)	Confirm the Finance Charge amount is based on the APR as stated on the Contract.

 

	xi)	Confirm the Contract allows for prepayment.

 

	xii)	Confirm the Contract is a simple interest loan Contract.

 

	xiii)	Confirm the Buyer’s address as of the Cutoff Date is located within the United States.

 

	xiv)	Confirm that there is no indication that the Receivable is not assumable by another Person that is not the Obligor and would release the Obligor from their legal obligations.

 

	xv)	If sections (i) through (xiv) are confirmed, then Test Pass.

 

 

SA-2

Representation

 

	(ii)	Compliance with Law.  Each Receivable complied at the time it was originated or made, and at the Cutoff Date complies, in all material respects with all requirements of applicable federal, State and, to the best knowledge of the Seller, local laws, rulings and regulations thereunder (including usury laws).

 

Documents

 

Contract

 

List of Approved Contracts

 

Procedures to be Performed

 

	i)	Confirm the Contract form number and revision date are on the List of Approved Contract Forms.

 

	ii)	Confirm the following sections of the Contract are present and completed:

 

		a)	Name and address of Dealer

 

		b)	Name and address of Obligor and Co-Obligor (if applicable)

 

		c)	Vehicle description

 

		d)	Amount of monthly payment

 

		e)	Number of monthly payments

 

		f)	Annual Percentage Rate

 

		g)	Total of Payments

 

	iii)	Confirm there is an itemization of the amount financed.

 

	iv)	Confirm the following disclosures are included on the Contract:

 

		a)	Insurance requirements

 

		b)	Security interest disclosure

 

		c)	Prepayment disclosure

 

		d)	Late payment policy

 

	v)	If sections (i) through (iv) are confirmed, then Test Pass

 

SA-3

 

Representation

 

	(iii)	Binding Obligation.  Each Receivable represents the genuine, legal, valid and binding payment obligation in writing of the related Obligor, enforceable by the holder thereof in accordance with its terms, except as (a) enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a Proceeding in equity or at law and (b) such Receivable may be modified by the application after the Cutoff Date of the Servicemembers’ Civil Relief Act or by any similar applicable State law.

 

Documents

 

Contract

 

Data Tape

 

List of Approved Contracts

 

Procedures to be Performed

 

	i)	Confirm the Contract form number and revision date are on the List of Approved Contract Forms.

 

	ii)	Confirm the borrower and co-borrower (if applicable) signed the Contract.

 

	iii)	If sections (i) and (ii) are confirmed, then Test Pass.

 

SA-4

 

Representation

 

	(iv)	No Government Obligor.  No Receivable is due from the United States or any State or any agency, department, subdivision or instrumentality thereof.

 

Documents

 

Contract

 

Procedures to be Performed

 

	i)	Confirm the Buyer section of the Contract reports a natural person’s name.

 

	ii)	If the Buyer section of the Contract does not report a person’s name, confirm internet search results do not indicate the Buyer is the United States or any State or any agency, department or instrumentality of the United State or any State.

 

	iii)	If sections (i) and (ii) are confirmed, then Test Pass.

 

SA-5

 

Representation

 

	(v)	 Obligor Bankruptcy.  To the best of the Seller’s knowledge, at the Cutoff Date, no Obligor is the subject of a bankruptcy Proceeding.

 

Documents

 

Contract

 

Data Tape

 

Procedures to be Performed

 

	i)	Confirm the Receivable File does not contain evidence that the Receivable was the subject of any bankruptcy proceeding or insolvency proceeding as of the Cutoff Date.

 

	ii)	If sections (i) is confirmed, then Test Pass.

 

SA-6

 

Representation

 

	(vi)	Security Interest in Financed Vehicles.  Immediately prior to the transfer of the Receivables by the Seller to the Depositor, each Receivable was secured by a valid, binding and enforceable first priority perfected security interest in favor of the Seller as secured party in the related Financed Vehicle or all necessary action with respect to such Receivable has been taken to perfect a first priority security interest in the related Financed Vehicle in favor of the Seller as secured party, which security interest has been validly assigned by the Seller to the Depositor. The Servicer has received, or will receive within 180 days after the Closing Date, the original certificate of title for each Financed Vehicle or notice from the applicable State entity issuing such certificate of title, that such certificate of title is being processed (other than any Financed Vehicle that is subject to a certificate of title statute or motor vehicle registration law that does not require that the original certificate of title for such Financed Vehicle be delivered to the Seller).

 

Documents

 

Contract

 

List of Approved Contracts

 

Title

 

Procedures to be Performed

 

	i)	Confirm the title reports the Seller, as the first lien holder.

 

	ii)	Confirm the Buyer’s name as stated on the Contract matches the name on the title .

 

	iii)	Confirm the Vehicle Identification Number (VIN) on the Contract matches the VIN number as reported on the title.

 

	iv)	If (i) through (iii) are confirmed, then Test Pass.

 

 

 

SA-7

 

Representation

 

	(vii)	Receivables in Force.  No Receivable shall have been satisfied, subordinated or rescinded, nor shall any Financed Vehicle have been released in whole or in part from the Lien granted by the related Receivable.

 

Documents

 

Contract

 

Data Tape

 

Title

 

Receivable File

 

Procedures to be Performed

 

	i)	Confirm the Receivable is listed as an active account as of the Cutoff Date.

 

	ii)	Confirm there is no evidence within the Receivable File that the Receivable was satisfied prior to the Cutoff Date.

 

	iii)	Confirm there is no evidence within the Receivable File that the Receivable was subordinated or rescinded prior to the Cutoff Date.

 

	iv)	Confirm there is no evidence within the Receivable File that the Financed Vehicle has been released from the Lien in whole or in part prior to the Cutoff Date.

 

	v)	If sections (i) through (iv) are confirmed, then Test Pass.

 

SA-8

 

Representation

 

	(viii)	No Waivers.  No provision of a Receivable shall have been waived in such a manner that such Receivable fails to meet all of the other representations and warranties made by the Seller herein with respect thereto.

 

Documents

 

Contract

 

Data Tape

 

Receivable File

 

Procedures to be Performed

 

	i)	Confirm there is no evidence within the Receivable File that any provision of the Receivable has been waived, altered or modified, except by instruments or documents identified within the Receivable File.

 

	ii)	If sections (i) is confirmed, then Test Pass.

 

SA-9

 

Representation

 

	(ix)	No Amendments. No Receivable shall have been amended or modified in such a manner that the total number of Monthly Payments has been increased or decreased or that the related Amount Financed has been increased or decreased or that such Receivable fails to meet all of the other representations and warranties made by the Seller herein with respect thereto.

 

Documents

 

Contract

 

Data Tape

 

Procedures to be Performed

 

	i)	Confirm that no modifications or amendments have changed the number of monthly payments or that the related amount financed has been increased or decreased.

 

	ii)	If (i) can be confirmed, then Test Pass.

 

SA-10

 

Representation

 

	(x)	  No Defenses.  No Receivable is subject to any right of rescission, setoff, counterclaim or defense, including the defense of usury, and the operation of any of the terms of any Receivable, or the exercise of any right thereunder, will not render such Receivable unenforceable in whole or in part or subject to any right of rescission, setoff, counterclaim or defense, including the defense of usury, and the Seller has not received written notice of the assertion with respect to any Receivable of any such right of rescission, setoff, counterclaim or defense.

 

Documents

 

Contract

 

Data Tape

 

Procedures to be Performed

 

	i)	Confirm there is no evidence within the Receivable File that the Receivable is subject to any right of rescission, setoff, counterclaim or defense that could cause the Receivable to become invalid.

 

	ii)	Confirm there is no evidence within the Receivable File of litigation or other attorney involvement as of the Cutoff Date.

 

	iii)	If sections (i) and (ii) are confirmed, then Test Pass.

 

SA-11

 

Representation

 

	(xi)	No Liens.  No Liens or claims shall have been filed, including Liens for work, labor or materials or for unpaid local, State or federal taxes relating to any Financed Vehicle that shall be prior to, or equal or coordinate with, the security interest in such Financed Vehicle granted by the related Receivable.

 

Documents

 

Contract

 

Title

 

Receivable File

 

Procedures to be Performed

 

	i)	Confirm there is no evidence within the Receivable File of a lien or a claim filed for work, labor or materials that is prior to or equal to the security interest in the Financed Vehicle created by the Receivable.

 

	ii)	Confirm there is no evidence within the Receivable File of a tax lien that is prior to or equal to the security interest in the Financed Vehicle created by the Receivable.

 

	iii)	If sections (i) and (ii) are confirmed, then Test Pass.

 

SA-12

 

Representation

 

	(xii)	No Defaults; Repossessions.  Except for payment defaults that, as of the Cutoff Date, have been continuing for a period of not more than 30 days, no default, breach or violation under the terms of any Receivable, permitting acceleration, shall have occurred as of the Cutoff Date and no continuing condition that with notice or the lapse of time or both would constitute a default, breach or violation under the terms of any Receivable, permitting acceleration, shall have arisen; and the Seller shall not have waived any of the foregoing except as otherwise permitted hereunder. On or prior to the Cutoff Date, no Financed Vehicle has been repossessed.

 

Documents

 

Contract

 

Data Tape

 

Receivable File

 

Procedures to be Performed

 

	i)	Confirm the Receivable was not more than [30] days delinquent as of the Cutoff Date.

 

	ii)	Confirm there is no evidence of a continuing condition within the Receivable File which would constitute a default, breach, violation or event permitting acceleration under the terms of the Receivable.

 

	iii)	Confirm that no evidence of a repossession event exists that indicates a repossession prior to the Cutoff Date.

 

	iv)	If sections (i) through (iii) are confirmed, then Test Pass.

 

SA-13

 

Representation

 

	(xiii)	Insurance.  Each Receivable requires the related Obligor to obtain physical damage insurance covering the related Financed Vehicle and to maintain such insurance.

 

Documents

 

Contract

 

Procedures to be Performed

 

	i)	Confirm the Contract contains language that required the Obligor to obtain and maintain physical damage insurance  to the Financed Vehicle.

 

	ii)	If section (i) is confirmed, then Test Pass.

 

SA-14

 

Representation

 

	(xiv)	Title.  It is the intention of the Seller that the transfers and assignments contemplated by the Receivables Purchase Agreement constitute a sale of the Receivables from the Seller to the Purchaser and that the beneficial interest in and title to the Receivables not be part of the debtor’s estate in the event of the appointment of a receiver or conservator for the Seller under any receivership, bankruptcy law, insolvency or banking law; no Receivable has been sold, transferred, assigned or pledged by the Seller to any Person other than the Purchaser; immediately prior to the transfer and assignment contemplated by the Receivables Purchase Agreement, the Seller had good and marketable title to each Receivable free and clear of all Liens and rights of others, except for Liens that shall be released on or before the Closing Date; immediately upon the transfer and assignment thereof, the Purchaser shall have good and marketable title to each Receivable, free and clear of all Liens and rights of others; and the transfer and assignment herein contemplated has been perfected under the UCC.

 

 Documents

 

Contract

 

Title

 

Receivable File

 

Procedures to be Performed

 

	i)	Confirm there is no indication within the Receivable File that the Receivable has been sold, transferred, assigned or pledged to any Person or entity other than the Seller.

 

	ii)	Confirm the title designates the Seller as the sole lien holder and no other lien holder is listed.

 

	iii)	If section (i) is confirmed, then Test Pass.

 

SA-15

 

Representation

 

	(xv)	Lawful Assignment.  No Receivable has been originated in, or is subject to the laws of, any jurisdiction under which the sale, transfer, assignment and conveyance of such Receivable under the Receivables Purchase Agreement or the Sale and Servicing Agreement or the pledge of such Receivables hereunder, thereunder or under the Indenture is unlawful, void or voidable or under which such Receivable would be rendered void or voidable as a result of any such sale, transfer, assignment, conveyance or pledge. The Seller has not entered into any agreement with any account debtor that prohibits, restricts or conditions the assignment of the Receivables.

 

Documents

 

Contract

 

Title

 

Procedures to be Performed

 

	i)	Confirm the Contract form number and revision date are on the List of Approved Contracts.

 

	ii)	Confirm the Contract does not contain language preventing the sale, transfer, assignment, conveyance or pledge of the Receivable without the consent of the owner.

 

	iii)	If section (i) and (ii) are confirmed, then Test Pass.

 

SA-16

 

Representation

 

	(xvi)	One Original.  There shall be only one original executed copy of each Receivable.

 

Documents

 

Contract

 

Procedures to be Performed

 

	i)	Confirm that the Contract is clearly marked as the original Contract.

 

	ii)	Confirm that the Contract was signed by the Buyer, Co-buyer (if applicable) and Dealer.

 

	iii)	If section (i) and (ii) are confirmed, then Test Pass.

 

SA-17

 

Representation

 

	(xvii)	Principal Balance.  As of the Cutoff Date, each Receivable had a remaining Principal Balance of not more than $200,000.00 and not less than $2,000.00.

 

Documents

 

Data Tape

 

Procedures to be Performed

 

	i)	Confirm from the data tape that the Receivable has a remaining Principal Balance within the allowable parameters.

 

	ii)	If section (i) is confirmed, then Test Pass.

 

 

SA-18

Representation

 

	(xviii)	Original Term to Maturity.  Each Receivable had an original term to maturity of not more than 72 months and not less than 12 months and, based on the number of remaining Monthly Payments, a remaining term to maturity as of the Cutoff Date, of not more than 71 months and not less than 2 months.

 

Documents

 

Contract

 

Data Tape

 

Procedures to be Performed

 

	i)	Confirm the sum of the Number of Payments together with any first and last scheduled monthly payments (if applicable) is within the allowable number of payments to maturity.

 

	ii)	Confirm the remaining terms to maturity as stated within the data tape or servicing system is within the allowable number of payments to maturity.

 

	iii)	If sections (i) and (ii) are confirmed, then Test Pass.

 

 

SA-19

Representation

 

	(xix)	Annual Percentage Rate.  Each Receivable has an APR of at least 0.00% and not more than 12.00%.

 

Documents

 

Contract

 

Data Tape

 

Procedures to be Performed

 

	i)	Confirm the Annual Percentage Rate (APR) as stated within the “Federal Truth-In-Lending Disclosures” section of the Contract does not exceed the maximum allowable APR.

 

	ii)	If section (i) is confirmed, then Test Pass.

 

SA-20

Representation

 

	(xx)	Simple Interest Method.  All payments with respect to the Receivables have been allocated consistently in accordance with the Simple Interest Method.

 

Documents

 

Contract

 

Procedures to be Performed

 

	i)	Confirm the Contract utilizes a Simple Interest Method of calculating the interest due.

 

	ii)	If section (i) through (iv) is confirmed, then Test Pass.

 

 

SA-21

Representation

 

	(xxi)	Marking Records.  As of the Closing Date, the Seller will have caused its computer and accounting records relating to each Receivable to be marked to show that the Receivables have been sold to the Purchaser by the Seller and transferred and assigned by the Purchaser to the Issuer in accordance with the terms of the Sale and Servicing Agreement and pledged by the Issuer to the Indenture Trustee in accordance with the terms of the Indenture.

 

Documents

 

Data Tape

 

Receivable File

 

Procedures to be Performed

 

	i)	Observe the Receivable in the Seller’s Receivables systems as of the end of the month in which the sale and assignment of the Receivable to the Depositor occurred and confirm it is marked as sold and the pool number indicated matches the pool number for the securitization transaction related to the Agreement.

 

	ii)	If section (i) is confirmed, then Test Pass.

 

 

 

SA-22

Representation

 

	(xxii)	Chattel Paper.  Each Receivable constitutes “tangible chattel paper” within the meaning of the UCC as in effect in the State of origination.

 

Documents

 

Contract

 

Title

 

Data Tape

 

Procedures to be Performed

 

	i)	Confirm the title reports the Seller as the first lien holder.

 

	ii)	Confirm there is a signed retail installment contract or loan agreement.

 

	iii)	If sections (i) through (ii) are confirmed, then Test Pass.

 

SA-23

Representation

 

	(xxiii)	Final Scheduled Payment Date.  No Receivable has a final scheduled payment date later than six months prior to the Class A-4 Final Scheduled Payment Date.

 

Documents

 

Contract

 

Data Tape

 

Procedures to be Performed

 

	i)	Confirm that the final scheduled payment date on the Receivable is six months or greater prior to the Class A-4 Final Scheduled Payment Date.

 

	ii)	If section (i) is confirmed, then Test Pass.

 

SA-24

Representation

 

	(xxiv)	No Fraud or Misrepresentation.  Each Receivable that was originated by a Dealer and was sold by the Dealer to the Seller, to the best of the Seller’s knowledge, was so originated and sold without fraud or misrepresentation on the part of such Dealer in either case.

 

Documents

 

Receivable File

 

Procedures to be Performed

 

	i)	Confirm that there is no indication of fraud or misrepresentation contained within the Receivable File.

 

	ii)	If section (i) is confirmed, then Test Pass.

 

SA-25

Representation

 

	(xxv)	No Impairment.  The Seller has not done anything to convey any right to any Person that would result in such Person having a right to payments due under a Receivable or otherwise to impair the rights of the Depositor in any Receivable or the proceeds thereof.

 

Documents

 

Receivable File

 

Data Tape

 

Eligibility Criteria

 

Procedures to be Performed

 

	i)	Confirm the Receivable File contains no evidence that the rights to payments have been transferred by the Seller to any entity other than the Depositor

 

	ii)	If section (i) is confirmed, then Test Pass.

 

 

 

SA-26

Representation

 

	(xxvi)	Servicing.  Each Receivable has been serviced in conformity with all Applicable Laws, rules and regulation and in conformity with the Seller’s policies and procedures which are consistent with customary, prudent industry standards.

 

Documents

 

Receivable File

 

Data Tape

 

Procedures to be Performed

 

	i)	Confirm that there is no indication that the Receivable does not conform with all Applicable Laws, rules or regulations.

 

	ii)	Confirm that there is no indication that the Receivable does not conform with the Seller’s policies and procedures.

 

	iii)	If section (i) and (ii) are confirmed, then Test Pass.

 

 

 

 

SA-27

Representation

 

	(xxvii)	No Consent.  To the best of the Seller’s knowledge, no notice to or consent from any Obligor is necessary to effect the acquisition of the Receivables by the Purchaser or the Issuer or the pledge of the Receivables by the Issuer to the Indenture Trustee.

 

Documents

 

Contract

 

Procedures to be Performed

 

	i)	Confirm that there is no language on the Contract requiring consent from the Obligor in order to effect the acquisition of the Receivable by the Purchaser or the Issuer, or to pledge the Receivables by the Issuer to the Indenture Trustee.

 

	ii)	If section (i) is confirmed, then Test Pass.

 

SA-28EX-10.34

 Exhibit 10.34 

SECURITIES PURCHASE AGREEMENT 

This Securities Purchase Agreement (this “Agreement”) is dated as of September 15, 2016, between Histogenics
Corporation, a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”). 
 WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully described in this Agreement. 
 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 each Purchaser agree as follows: 

ARTICLE I. 
 DEFINITIONS

 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not
otherwise defined herein have the meanings given to such terms in the Certificate of Designation (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1: 

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5. 

“Action” shall have the meaning ascribed to such term in Section 3.1(j). 

“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 405 under the Securities Act. 

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

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

“Certificate of Designation” means the Certificate of Designation to be filed prior to the Closing by the
Company with the Secretary of State of the State of Delaware, in the form of Exhibit A attached hereto. 

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

  
 1 

 “Closing Date” means the Trading Day on which all of the
Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to
deliver the Securities, in each case, have been satisfied or waived. 
 “Commission” means the United States
Securities and Exchange Commission. 
 “Common Stock” means the common stock of the Company, par value $0.01
per share, and any other class of securities into which such securities may hereafter be reclassified or changed. 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the
holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles
the holder thereof to receive, Common Stock. 
 “Company Counsel” means Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP, with offices located at One Marina Park Drive, Suite 900, Boston, MA 02210. 

“Conversion Price” shall have the meaning ascribed to such term in the Certificate of Designation. 

“Conversion Shares” shall have the meaning ascribed to such term in the Certificate of Designation. 

“EGS” means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New
York, New York 10105-0302. 
 “Effective Date” means the earliest of the date that (a) the initial
Registration Statement has been declared effective by the Commission, (b) all of the Shares and Underlying Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in
compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (c) following the one year anniversary of the Closing Date provided that a holder of Shares or Underlying Shares is not an
Affiliate of the Company, or (d) all of the Shares and Underlying Shares may be sold pursuant to an exemption from registration under Section 4(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has
delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of the Shares and Underlying Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such
holders. 
 “Escrow Agent” means Signature Bank, a New York State chartered bank, with offices at 261
Madison Avenue, New York, New York 10016. 

  
 2 

 “Escrow Agreement” means the escrow agreement entered into prior
to the date hereof, by and among the Company, the Escrow Agent and the Placement Agent pursuant to which the Purchasers shall deposit Subscription Amounts with the Escrow Agent to be applied to the transactions contemplated hereunder. 

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s). 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder. 
 “Exempt Issuance” means the issuance of (a) shares of Common Stock or
options to employees, officers directors or other service providers (provided issuances to other service providers shall not exceed 75,000 shares in the aggregate (subject to adjustment for forward and reverse stock splits and the like after the
date hereof) of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for
such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common
Stock 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 such securities or to decrease the exercise price, exchange price or
conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of
the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business
synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of
raising capital or to an entity whose primary business is investing in securities. 
 “FCPA” means the
Foreign Corrupt Practices Act of 1977, as amended. 
 “FDA” shall have the meaning ascribed to such term in
Section 3.1(kk). 
 “FDCA” shall have the meaning ascribed to such term in Section 3.1(kk). 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h). 

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(bb). 

“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(p). 

“Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c). 

  
 3 

 “Liens” means a lien, charge pledge, security interest,
encumbrance, right of first refusal, preemptive right or other restriction. 
 “Lock-Up Agreement” means the
Lock-Up Agreement, dated as of the date hereof, by and among the Company and the directors and officers, in the form of Exhibit D attached hereto. 

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b). 

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n). 

“Maximum Rate” shall have the meaning ascribed to such term in Section 5.17. 

“Participation Maximum” shall have the meaning ascribed to such term in Section 4.11(a). 

“Per Share Purchase Price” equals $2.25, subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 

“Pharmaceutical Product” shall have the meaning ascribed to such term in Section 3.1(kk). 

“Placement Agent” means H.C. Wainwright & Co., LLC. 

“Preferred Stock” means the up to 24,158.8688 shares of the Company’s Series A Convertible Preferred
Stock issued hereunder having the rights, preferences and privileges set forth in the Certificate of Designation, in the form of Exhibit A hereto. 

“Pre-Notice” shall have the meaning ascribed to such term in Section 4.11(b). 

“Pro Rata Portion” shall have the meaning ascribed to such term in Section 4.11(e). 

“Pro Rata Share Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the
Closing Date by a Purchaser and (y) the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by all of the Purchasers. 

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

  
 4 

 “Public Information Failure” shall have the meaning ascribed to
such term in Section 4.2(b). 
 “Public Information Failure Payments” shall have the meaning ascribed
to such term in Section 4.2(b). 
 “Purchaser Party” shall have the meaning ascribed to such term in
Section 4.8. 
 “Registration Rights Agreement” means the Registration Rights Agreement, dated the date
hereof, among the Company and the Purchasers, in the form of Exhibit B attached hereto. 
 “Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Shares and the Underlying Shares. 

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e). 

“Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued
or potentially issuable in the future pursuant to the Transaction Documents, including the Shares and any Underlying Shares issuable upon exercise in full of all Warrants or conversion in full of all shares of Preferred Stock, ignoring any
conversion or exercise limits set forth therein, and assuming that any previously unconverted shares of Preferred Stock are held until the third anniversary of the Closing Date. 

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

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be
amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be
amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h). 

“Securities” means the Shares, the Preferred Stock, the Warrants and the Underlying Shares. 

  
 5 

 “Securities Act” means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder. 
 “Shares” means the shares of Common Stock issued or
issuable to each Purchaser pursuant to this Agreement. 
 “Shareholder Approval” means such approval as may
be required by the applicable rules and regulations of the Nasdaq Stock Market (or any successor entity) from the shareholders of the Company with respect to the transactions contemplated by the Transaction Documents, including the issuance of all
of the Underlying Shares in excess of 19.99% of the issued and outstanding Common Stock on the Closing Date, without regard to any restrictions or limitations set forth in the Certificate of Designation or Warrants. 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

“Stated Value” means $1,000 per share of Preferred Stock. 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares, or Preferred
Stock, as applicable, and Warrants purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately
available funds. 
 “Subsequent Financing” shall have the meaning ascribed to such term in
Section 4.11(a). 
 “Subsequent Financing Notice” shall have the meaning ascribed to such term in
Section 4.11(b). 
 “Subsidiary” means any subsidiary of the Company as set forth in the SEC Reports
and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof. 

“Trading Day” means a day on which the principal Trading Market is open for trading. 

“Trading Hour Period” means the time period that the primary Trading Market is open. 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing). 

  
 6 

 “Transaction Documents” means this Agreement, the Certificate of
Designation, the Warrants, the Registration Rights Agreement, the Lock-Up Agreements, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder. 

“Transfer Agent” means Broadridge Corporate Issuer Solutions, Inc., the current transfer agent of the Company,
with a mailing address of 1717 Arch St., Ste 1300, Philadelphia, PA 19103 and an email address relating to issuances of issuance@broadridge.com, and any successor transfer agent of the Company. 

“Underlying Shares” means the shares of Common Stock issued and issuable upon conversion of the Preferred
Stock and upon exercise of the Warrants. 
 “Variable Rate Transaction” shall have the meaning ascribed to
such term in Section 4.12(b). 
 “VWAP” means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the
“Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company. 
 “Warrants” means, collectively, the Common Stock purchase
warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable immediately upon Shareholder Approval and have a term of exercise equal to five years from the date of such
Shareholder Approval, in the form of Exhibit C attached hereto. 
 “Warrant Shares” means the shares
of Common Stock issuable upon exercise of the Warrants. 
 ARTICLE II. 

PURCHASE AND SALE 
 2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the 

  
 7 

 
parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $30,000,000 of Shares, Preferred Stock and Warrants, as
calculated pursuant to Section 2.2(a). Each Purchaser shall deliver to the Escrow Agent, via wire transfer, immediately available funds equal to its Subscription Amount pursuant to Section 2.2(b)(ii), and the Company shall deliver to each
Purchaser its respective Shares or shares of Preferred Stock and Warrants, as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon
satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree. Each Purchaser shall deliver to the Escrow Agent, via wire
transfer, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser its respective Shares and a Warrant, as
determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and
2.3, the Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree. 
 2.2 Deliveries.

 (a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

 (i) this Agreement duly executed by the Company; 

(ii) a legal opinion of Company Counsel, in the form and substance reasonably satisfactory to the Purchasers; 

(iii) a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited
basis, a certificate or in book entry form, at the Purchaser’s election (unless a Purchaser indicates otherwise, Shares shall be delivered in book entry form), evidencing a number of Shares equal to the lesser of (A) such Purchaser’s
Pro Rata Share Portion of 2,653,553 (“Share Issuance Cap”), registered in the name of such Purchaser and (B) unless such Purchaser elects not to be subject to the this clause (B) as indicated on such Purchaser’s
signature page hereto (unless otherwise indicated, clause (B) shall apply), the number of Shares that would not cause such Purchaser’s beneficial ownership of Common Stock to be more than 4.99% of the issued and outstanding shares of
Common Stock as of the date hereof; 
 (iv) for each Purchaser, as applicable, a copy of the irrevocable instructions to the
Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, a certificate or in book entry form, at the Purchaser’s election (unless a Purchaser indicates otherwise, shares of Preferred Stock shall be delivered in book
entry form), evidencing a number of shares of Preferred Stock equal to such Purchaser’s Subscription Amount (less such Purchaser’s Subscription Amount used to purchase such Purchaser’s Shares) divided by the Stated Value, registered
in the name of such Purchaser and evidence of the filing 

  
 8 

 
and acceptance of the Certificate of Designation from the Secretary of State of the State of Delaware (such shares of Preferred Stock may be delivered within three Trading Days of the Closing
Date); 
 (v) a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal
to 100% of such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, with an exercise price equal to $2.25, subject to adjustment therein (such Warrant may be delivered within three Trading Days of the Closing Date); 

(vi) the Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and
executed by the Chief Executive Officer or Chief Financial Officer; and 
 (vii) the delivery of support agreements with
respect to the Shareholder Approval, in form and substance satisfactory to the Purchasers (the “Support Agreement(s)”), from shareholders representing at least 40% of the issued and outstanding Common Stock as of the date hereof;

 (viii) the Lock-Up Agreements; and 

(ix) the Registration Rights Agreement duly executed by the Company. 

(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company or the Escrow Agent,
as applicable, the following: 
 (i) this Agreement duly executed by such Purchaser; 

(ii) to Escrow Agent, such Purchaser’s Subscription Amount by wire transfer to the account specified in the Escrow
Agreement; and 
 (iii) the Registration Rights Agreement duly executed by such Purchaser. 

2.3 Closing Conditions. 

(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 (i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date); 

(ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall
have been performed; and 

  
 9 

 (iii) the delivery by each Purchaser of the items set forth in
Section 2.2(b) of this Agreement. 
 (b) The respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met: 
 (i) the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in
which case they shall be accurate as of such date); 
 (ii) all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing Date shall have been performed; 
 (iii) the delivery by the Company of the items
set forth in Section 2.2(a) of this Agreement; 
 (iv) there shall have been no Material Adverse Effect with respect to
the Company since the date hereof; 
 (v) the Company shall have filed with Nasdaq a Notification Form: Listing of Additional
Shares for the listing of Shares on Nasdaq; 
 (vi) the Company shall have received aggregate Subscription Amounts of at
least $30 million; and 
 (vii) from the date hereof to the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall
not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred
any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such
Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing. 
 ARTICLE III. 

REPRESENTATIONS AND WARRANTIES 

3.1 Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to each
Purchaser: 
 (a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on
Schedule 3.1(a). The Company owns, directly or indirectly, all of the 

  
 10 

 
capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are
fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be
disregarded. 
 (b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and 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 nor default 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 conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 

(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of this Agreement and the other
Transaction Documents 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 action is required by the Company, the
Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except:
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. 

  
 11 

 (d) No Conflicts. The execution, delivery and performance by the Company
of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it 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, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or 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), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse Effect. 

(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction
Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission pursuant to the Registration Rights Agreement, (iii) the notice and/or application(s) to each
applicable Trading Market for the issuance and sale of the Securities and the listing of the Shares and Underlying Shares for trading thereon in the time and manner required thereby, (iv) the filing of Form D with the Commission and such
filings as are required to be made under applicable state securities laws, (v) Shareholder Approval and the filing of the Certificate of Designation with the Secretary of State of the State of Delaware (collectively, the “Required
Approvals”). 
 (f) Issuance of the Securities. The Securities are duly authorized and, when issued and paid
for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction
Documents. The Underlying Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer
provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required Minimum on the date hereof. 

  
 12 

 (g) Capitalization. The capitalization of the Company is as set forth on
Schedule 3.1(g), including the number of shares of Common Stock owned beneficially by Affiliates of the Company as of the date hereof. The Company has not issued any capital stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the issuance or exercise of stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant
to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip 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 giving any Person any right to subscribe for or acquire any shares of Common Stock or the capital stock of any
Subsidiary, or contracts, commitments, binding understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary.
The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom
stock” plans or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all applicable federal and state
securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or
others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s stockholders. 
 (h) SEC Reports; Financial Statements. The
Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding
the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”) 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 

  
 13 

 
Exchange Act, as applicable, 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. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. 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 except that unaudited financial statements may not contain all footnotes required by GAAP, 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, immaterial, year-end audit adjustments. 

(i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in Schedule 3.1(i): (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made
any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities
contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists, or is reasonably expected to occur or exist, with respect to the Company or its Subsidiaries or their respective businesses,
properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1
Trading Day prior to the date that this representation is made. 
 (j) Litigation. There is no action, suit, inquiry,
notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) would, if there were an unfavorable decision, have or 

  
 14 

 
reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof (in his or her capacity as such), is or 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 knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former director or officer of the Company (in his or her capacity as such). The Commission 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 Exchange Act or the Securities Act. 
 (k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which would reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its
Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and, to the Company’s knowledge,
the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable
U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. 
 (l) Compliance. Neither the Company nor any
Subsidiary: (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 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 judgment, decree, or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and
labor matters, except in each case as would not have or reasonably be expected to result in a Material Adverse Effect. 

(m) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and
foreign laws relating to pollution or 

  
 15 

 
protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or
regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect. 
 (n) 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 would not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of
any Material Permit. 
 (o) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee
simple to all real property owned by them 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
as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other
taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance. 

(p) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as described in the SEC Reports as necessary or required for use
in connection with their respective businesses and which the failure to so have would have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has
received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.
Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC 

  
 16 

 
Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have or reasonably
be expected to not 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. The Company
and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. 
 (q) 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 in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers
insurance coverage. Neither the Company nor any Subsidiary has been notified in writing 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. 
 (r) Transactions With Affiliates and
Employees. Except as set forth in the Schedule 3.1(r), none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of the lesser of $120,000 or one percent (1.0%) of the Company’s total assets at year-end
for the last two completed fiscal years other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company. 
 (s) Sarbanes-Oxley; Internal Accounting
Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. 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 

  
 17 

 
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it
files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the
disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented
in its most recently filed periodic report under the Exchange 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 changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the
internal control over financial reporting of the Company or its Subsidiaries. 
 (t) Certain Fees. Other than the
Placement Agent, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect
to the transactions contemplated by the Transaction Documents. No Purchasers shall have any obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by such Purchaser pursuant to agreements entered
into by such Purchaser, which fees or commissions shall be the sole responsibility of such Purchaser) made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions
contemplated by the Transaction Documents due to an arrangement or agreement made by the Company. 
 (u) Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market. 

(v) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the
Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment
company” subject to registration under the Investment Company Act of 1940, as amended. 
 (w) Registration
Rights. Other than each of the Purchasers, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary. 

  
 18 

 (x) Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has
the Company received any notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice 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, and has no reason to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of
the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer. 

(y) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the
Company’s certificate of incorporation, as amended to date (or similar charter documents), or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers 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 Purchasers’ ownership of the Securities. 

(z) Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material,
non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the
Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this
Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof. 

  
 19 

 (aa) No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers
to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities
under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated. 

(bb) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect
to the receipt by the Company of the proceeds from the sale of the Securities hereunder: (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted
including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and currently planned capital requirements and capital availability thereof, and (iii) the current cash
flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities
when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company
has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule
3.1(bb) sets forth all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means
(x) any liabilities for borrowed money or amounts owed in excess of $200,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of
indebtedness for borrowed money of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $200,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness. 
 (cc) Tax Status. Except for matters that would not,
individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and
franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or

  
 20 

 
determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no
basis for any such claim. 
 (dd) No General Solicitation. Neither the Company nor any Person acting on behalf of the
Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the
meaning of Rule 501 under the Securities Act. 
 (ee) Foreign Corrupt Practices. Neither the Company nor any
Subsidiary, to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect
any provision of FCPA. 
 (ff) Accountants. The Company’s accounting firm is as set forth in the SEC Reports. To
the knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm as required by the Exchange Act and (ii) is expected express its opinion with respect to the financial statements to be included in
the Company’s Annual Report for the fiscal year ending December 31, 2016. 
 (gg) No Disagreements with
Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company which would
reasonably be likely to affect the Company’s ability to perform any of its obligations under any of the Transaction Documents. The Company is current with respect to any fees owed to its accountants or lawyers which would reasonably be expected
to adversely affect the Company’s ability to perform any of its obligations under any of the Transaction Documents. 

(hh) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of
the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in
connection with the Transaction Documents and the transactions contemplated thereby is 

  
 21 

 
merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives. 

(ii) Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the
contrary notwithstanding (except for Sections 3.2(g) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from
purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other
transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of
the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently have a “short” position in
the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that
(y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Underlying Shares deliverable with
respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being
conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents. 

(jj) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has,
(i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the
case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Securities. 

(kk) FDA. To the Company’s knowledge, as to each product subject to the jurisdiction of the U.S. Food and Drug
Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the
Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with
all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, 

  
 22 

 
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling,
advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company’s knowledge, threatened, enforcement action (including
any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning
letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing
of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials
relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries,
(v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries,
and which, either individually or in the aggregate, would have a Material Adverse Effect. To the Company’s knowledge, the properties, business and operations of the Company have been and are being conducted in all material respects in
accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed,
produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company. 

(ll) Form S-3 Eligibility. The Company is eligible to register the resale of the Securities for resale by the Purchasers
on Form S-3 promulgated under the Securities Act, subject to any cutback limitations that may be imposed under Rule 415 as contemplated by Section 2(b) of the Registration Rights Agreement. 

(mm) Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted
(i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and
applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or
otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects. 

(nn) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any
director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”). 

  
 23 

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

(pp) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank
Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates
owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal
Reserve. 
 (qq) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at
all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations
thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened. 
 (rr) No Disqualification
Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, or any affiliated issuer, nor any director, executive officer, other officer
of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405
under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any
disclosures provided thereunder. 
 (ss) Other Covered Persons. Other than the Placement Agent, the Company is not
aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Securities. 

  
 24 

 (tt) Notice of Disqualification Events. The Company will notify the
Purchasers and the Placement Agent in writing, prior to the Closing Date of (i) any Disqualification Event of which it becomes aware relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a
Disqualification Event relating to any Issuer Covered Person. 
 3.2 Representations and Warranties of the Purchasers. Each Purchaser, for
itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date): 

(a) Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar 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 execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except:
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. 

(b) Own Account. Such Purchaser understands that the Securities are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of
the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right
to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. 

  
 25 

 (c) Purchaser Status. At the time such Purchaser was offered the
Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants or converts any Preferred Stock, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. 

(d) Experience of Such Purchaser. Such Purchaser, 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 Purchaser 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. Such Purchaser and its advisors, if any, have been furnished with all materials relating to the
business, financial condition and results of operations of the Company, and materials relating to the offer and sale of the Securities, that have been requested by such Purchaser or its advisors, if any. Such Purchaser acknowledges and understands
that its investment in the Securities involves a significant degree of risk. 
 (e) General Solicitation. Such
Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at
any seminar or, to such Purchaser’s knowledge, any other general solicitation or general advertisement. 
 (f) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports 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 about the Company and its 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. Such Purchaser acknowledges and agrees that neither the Placement Agent
nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or
makes any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to
it. In connection with the issuance of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser. 

(g) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such
Purchaser has not directly or indirectly, nor 

  
 26 

 
has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the
period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending
immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives (including, without limitation,
its officers, directors, partners, legal and other advisors, employees, agents and Affiliates), bound by a duty of confidentiality to such Purchaser and whom such Purchaser has taken reasonable actions to cause them to maintain such confidentiality,
such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the
future. 
 (h) No Governmental Review. Such Purchaser 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. 
 (i) No Conflicts. The execution, delivery and performance by such Purchaser of this
Agreement and the consummation by such Purchaser of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Purchaser 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 Purchaser 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 Purchaser, 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 Purchaser to consummate the transactions contemplated hereby. 
 (j)
No Legal, Tax or Investment Advice. Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes
legal, tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities. Such Purchaser understands
that the 

  
 27 

 
Placement Agent has acted solely as the agents of and advisors to the Company in this placement of the Securities and not as agents to or advisors of the Purchaser, and that the Placement Agent
makes no representation or warranty with regard to the merits of this transaction or as to the accuracy of any information such Purchaser may have received in connection therewith. Such Purchaser acknowledges that he/she has not relied on any
information or advice furnished by or on behalf of the Placement Agent. 
 (k) Beneficial Ownership. Following the
Closing Date, such Purchaser (together with such Purchaser’s Affiliates, and any other Persons acting as a group together with the Purchaser or any of the Purchaser’s Affiliates) will not beneficially own in excess of 19.9% of the number
of shares of Common Stock outstanding immediately after the Closing Date. Beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. 

The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right
to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection
with this Agreement or the consummation of the transactions contemplated hereby. 
 ARTICLE IV. 

OTHER AGREEMENTS OF THE PARTIES 

4.1 Transfer Restrictions. 

(a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any
transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and the Registration Rights Agreement
and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement. 
 (b)
The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form: 

[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [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, 

  
 28 

 
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 ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF
THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR
OTHER LOAN SECURED BY SUCH SECURITIES. 
 The Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or
secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required
of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the
Securities, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder. 

(c) Instruments, whether certificated or uncertificated, evidencing the Shares and Underlying Shares shall not contain any
legend (including the legend set forth in Section 4.1(b) hereof), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, (ii) following any
sale of such Shares or Underlying Shares pursuant to Rule 144, (iii) if such Shares or Underlying Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information
required under Rule 144 as to such Shares and Underlying Shares and without volume or manner-of-sale restrictions, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission). Promptly after the Effective Date, the Company shall cause its counsel to issue a legal opinion to the Transfer Agent if required by the Transfer Agent to effect the removal of the legend
hereunder. If all or any Preferred Stock is converted or all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Underlying Shares, or if such Shares or Underlying Shares
may be sold under Rule 144 and the Company is then in compliance 

  
 29 

 
with the current public information required under Rule 144, or if the Shares or Underlying Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the
current public information required under Rule 144 as to such Shares or Underlying Shares or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued
by the staff of the Commission) then such Underlying Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no
later than three Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate or book entry (at the election of such Purchaser, provided absent instructions to the contrary the default shall be book-entry)
representing Shares or Underlying Shares, as the case may be, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate or unrestricted
book entry (at the election of such Purchaser, provided absent instructions to the contrary the default shall be book-entry) representing such shares 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 4. Instruments, whether certificated or uncertificated, for Securities subject to legend removal hereunder shall be
transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser. 

(d) In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as
partial liquidated damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject
to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such evidence representing the Underlying
Shares, whether certificated or uncertificated, is delivered without a legend and (ii) if the Company fails to (A) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date evidence, whether certificated or
uncertificated, representing the Underlying Shares so delivered to the Company by such Purchaser that is free from all restrictive and other legends and (B) if after the Legend Removal Date such Purchaser purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the
number of shares of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive legend, then, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (1) such number of Underlying
Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (2) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such
Purchaser to the Company of the applicable Underlying Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii). 

  
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 (e) Each Purchaser, severally and not jointly with the other Purchasers, agrees
with the Company that such Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are
sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from instruments representing Securities as set forth in this
Section 4.1 is predicated upon the Company’s reliance upon this understanding. 
 4.2 Furnishing of Information; Public
Information. 
 (a) Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants
have expired, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and 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 even if the Company is not then subject to the reporting requirements of the Exchange Act. 

(b) At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time
that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy
the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a
“Public Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or
reduction of its ability to sell the Securities, an amount in cash equal to 1.5% of the aggregate Subscription Amount of such Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public
information is no longer required for the Purchasers to transfer the Shares and Underlying Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to herein as
“Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and
(ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public
Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right
to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

  
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 4.3 Integration. The Company shall not 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 or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such subsequent transaction. 
 4.4 Securities Laws Disclosure;
Publicity. The Company shall (a) by 9:30 a.m. (New York City time) on the Trading Day immediately following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a
Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that
it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents. In addition, effective upon the
issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate (unless otherwise agreed between such parties in separate written confidentiality or
similar agreements, the terms of which shall not otherwise be modified by this provision). The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and
neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each
Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with
prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency
or Trading Market, without the prior written consent of such Purchaser, except: (a) as required by federal securities law in connection with (i) any registration statement contemplated by the Registration Rights Agreement and (ii) the
filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (b). 
 4.5 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the
consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or
under any other agreement between the Company and the Purchasers. 

  
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 4.6 Non-Public Information. Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents
or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the
Company to keep such information confidential. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any
material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such purchaser shall not have any duty of confidentiality to Company, any of its Subsidiaries, or any of their
respective officers, directors, agents, employees or Affiliates, or a duty to the Company, and of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material,
non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company. 
 4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than (i) payment of trade payables in the ordinary course of the Company’s
business and prior practices and (ii) the Company’s equipment line of credit with Silicon Valley Bank as set forth Schedule 3.1(bb), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the
settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations. 
 4.8 Indemnification of Purchasers.
Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees
and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company 

  
 33 

 
who is not an Affiliate of such Purchaser Parties, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser
Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Parties may have with any such stockholder or any violations by such Purchaser Parties of state or federal
securities laws or any conduct by such Purchaser Parties which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser
Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the
employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable
opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such
separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or
delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to (A) any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents, or (B) any conduct by such Purchaser Party which constitutes gross negligence or willful misconduct. The indemnification required by this Section 4.8 shall be made by
periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law. 
 4.9 Reservation and
Listing of Securities. 
 (a) The Company shall maintain a reserve of the Required Minimum from its duly authorized
shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents. 

(b) If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 130%
of (i) the Required Minimum on such date, minus (ii) the number of shares of Common Stock previously issued pursuant to the Transaction Documents, then the Board of Directors shall use reasonable best efforts to amend the Company’s
certificate of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time (minus the number of shares of Common Stock previously issued pursuant to the Transaction Documents),
as soon as reasonably practicable and in any event not later than the 60th day after such date, provided that the Company will not be required at any

  
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time to authorize a number of shares of Common Stock greater than the maximum remaining number of shares of Common Stock that could possibly be issued after such time pursuant to the Transaction
Documents. 
 (c) The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market,
prepare and file with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the date of such application, (ii) take all steps necessary to cause such
shares of Common Stock to be approved for listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or quotation and (iv) maintain the listing or quotation of such
Common Stock on any date at least equal to the Required Minimum on such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust
Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer. In addition,
the Company shall hold a special meeting of stockholders (which may also be at the annual meeting of shareholders) at the earliest practical date for the purpose of obtaining Shareholder Approval, with the recommendation of the Company’s Board
of Directors that such proposal be approved, and the Company shall solicit proxies from its stockholders in connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders
shall vote their proxies in favor of such proposal. The Company shall use its reasonable best efforts to obtain such Shareholder Approval within 60 days of the Closing Date. If the Company does not obtain Shareholder Approval at the first meeting,
the Company shall call a meeting every four months thereafter to seek Shareholder Approval until the earlier of the date Shareholder Approval is obtained or the Preferred Stock is no longer outstanding. In the event that the Company has not obtained
Shareholder Approval on or prior to the earlier of the six-month anniversary of the Closing Date and March 31, 2017, commencing thereafter, to the extent that a Purchaser is unable to convert any Preferred Stock because of the Exchange Cap (as
defined in the Certificate of Designation) limitation included therein, a Purchaser may require the Company to pay to such Purchaser, within three (3) Trading Days of written notice, cash by wire transfer of immediately available funds, in
exchange for cancellation of the applicable portion of the Preferred Stock subject to conversion, which cash amount for each share of Common Stock that the Company is unable to deliver pursuant to the Exchange Cap therein shall be equal to the
highest trading price of the Common Stock in effect at any time during the period beginning on the earlier of (i) the six month anniversary of the Closing Date and (ii) March 31, 2017 and ending on the date the Company makes the
payment provided for in this sentence. 
 4.10 Listing of Common Stock. The Company hereby agrees to use reasonable best efforts to
maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares and Underlying Shares on such Trading Market
and promptly secure the listing of all of the Shares and Underlying Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market,

  
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it will then include in such application all of the Shares and Underlying Shares, and will take such other action as is necessary to cause all of the Shares and Underlying Shares to be listed or
quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing or quotation and trading of its Common Stock on a Trading Market and will comply in all respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another
established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer. 

4.11 Conversion and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of
Conversion included in the Certificate of Designation set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants or convert the Preferred Stock. Without limiting the preceding sentences, no ink-original
Notice of Exercise or Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise or Notice of Conversion form be required in order to exercise the Warrants or
convert the Preferred Stock, unless required by the Transfer Agent. No additional legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants or convert their Preferred Stock. The Company shall
honor exercises of the Warrants and conversions of the Preferred Stock and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents. 

4.12 Participation in Future Financing. 

(a) From the date hereof until the later of (i) twelve months following the Effective Date and (ii) the date that
Shareholder Approval is obtained and deemed effective, upon any issuance by the Company or any of its Subsidiaries of Common Stock, Common Stock Equivalents for cash consideration, Indebtedness or a combination of units hereof (a “Subsequent
Financing”), each Purchaser which, along with its Affiliates, has a Subscription Amount of at least $1.95 million (“Qualified Purchaser”) shall have the right to participate in up to an amount of the Subsequent Financing
equal to 50% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing.

(b) During or prior to the Trading Hour Period on the Trading Day prior to the Trading Day of the expected announcement of the
Subsequent Financing, the Company shall deliver to each Qualified Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”); provided, however, the Company may deliver a Pre-Notice
during such time other than during the Trading Hour Period, provided that such Pre-Notice shall be deemed to have been delivered at 9:30 a.m. on the next Trading Day, which Pre-Notice shall ask such Qualified Purchaser if it wants to receive
material non-public information about the Company without providing any material non-public information to such Qualified Purchaser in such Pre-Notice. Upon the consent of a Qualified Purchaser, and only upon a consent of such Qualified Purchaser,
to receive material non-public information about the Company, the Company 

  
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shall promptly deliver a notice to such Qualified Purchaser (a “Subsequent Financing Notice”), which shall describe in reasonable detail the proposed terms of such Subsequent
Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an
attachment. If a Qualified Purchaser does not, within 3 hours after the later of (i) the actual delivery of a Pre-Notice and (ii) the deemed delivery of a Pre-Notice, deliver notice to the Company consenting to the receipt of
non-public information about the Company, the Company’s obligations pursuant to this Section 4.11 with respect to such Qualified Purchaser shall cease.

(c) Any Qualified Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by
not later than 24 hours after receipt of the applicable Subsequent Financing Notice) (the “Notice Termination Time”) that such Qualified Purchaser is willing to participate in the Subsequent Financing, the amount of such Qualified
Purchaser’s participation, and representing and warranting that such Qualified Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If the Company receives no such
notice from a Qualified Purchaser as of the Notice Termination Time, such Qualified Purchaser shall be deemed to have notified the Company that it does not elect to participate. 

(d) If by the Notice Termination Time, notifications by the Qualified Purchasers of their willingness to participate in the
Subsequent Financing (or to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the remaining portion of such Subsequent Financing on the terms and with the
Persons set forth in the Subsequent Financing Notice.
 (e) If by the Notice Termination Time, the Company receives responses
to a Subsequent Financing Notice from Qualified Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, each such Qualified Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the
Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased hereunder by a Qualified Purchaser participating under this Section 4.12 and (y) the sum of the
aggregate Subscription Amounts of Securities purchased hereunder by all Qualified Purchasers participating under this Section 4.12. 

(f) The Company must provide the Qualified Purchasers with a second Subsequent Financing Notice, and the Qualified Purchasers
will again have the right of participation set forth above in this Section 4.12, if the definitive agreement subject to the initial Subsequent Financing Notice is not entered into for any reason on the terms set forth in such Subsequent
Financing Notice within three (3) Trading Days after the date of the initial Subsequent Financing Notice. 
 (g) The
Company and each Qualified Purchaser agree that if any Qualified Purchaser elects to participate in the Subsequent Financing, the transaction documents 

  
 37 

 
related to the Subsequent Financing shall not include any term or provision whereby such Qualified Purchaser shall be required to agree to any restrictions on trading as to any of the Securities
purchased hereunder or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of such Qualified Purchaser. 

(h) Notwithstanding anything to the contrary in this Section 4.12 and unless otherwise agreed to by such Qualified
Purchaser, the Company shall either confirm in writing to such Qualified Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent
Financing, in either case in such a manner such that such Qualified Purchaser will not be in possession of any material, non-public information, by the fifth (5th) Business Day following
delivery of the Subsequent Financing Notice. If by such fifth (5th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no
notice regarding the abandonment of such transaction has been received by such Qualified Purchaser, such transaction shall be deemed to have been abandoned and such Qualified Purchaser shall not be deemed to be in possession of any material,
non-public information with respect to the Company or any of its Subsidiaries. 
 (i) Notwithstanding the foregoing, this
Section 4.12 shall not apply in respect of any Exempt Issuance. 
 4.13 Subsequent Equity Sales. 

(a) From the date hereof until 90 days after the Effective Date, neither the Company nor any Subsidiary shall issue, enter into
any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents. 

(b) From the date hereof until the earlier of (i) such time as no Purchaser holds any of the Warrants or (ii) the one
year anniversary of the Effective Date, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of
units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity
security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including,
but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be
in addition to any right to collect damages. 

  
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 (a) Unless Shareholder Approval has been obtained and deemed effective, neither
the Company nor any Subsidiary shall make any issuance whatsoever of Common Stock or Common Stock Equivalents other than Exempt Issuances. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance,
which remedy shall be in addition to any right to collect damages. 
 (c) Notwithstanding the foregoing, this
Section 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance. 

4.14 Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in
concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise. 
 4.15 Certain Transactions and
Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short
Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press
release as described in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to
the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents. Notwithstanding the
foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting
transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be
restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of
the initial press release as described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such 

  
 39 

 
Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement. 
 4.16 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to
the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to
qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser. 

4.17 Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares and
Underlying Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have
against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company. 

4.18 Amendment, Modification or Waiver of Lock-Up and Support Agreements. The Company shall not agree to any amendments, modifications
or waivers of the Lock-Up Agreements and Support Agreements without the prior written consent of at least 67% in interest of the Purchasers. 

ARTICLE V. 

MISCELLANEOUS 
 5.1
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice
to the other parties, if the Closing has not been consummated on or before September 30, 2016; provided, however, that the right to terminate this Agreement under this Section 5.1 shall not be available to a Purchaser whose
failure to fulfill any obligation under this Agreement has been the proximate cause of or resulted in the failure of the transactions contemplated hereunder to occur on or before such date; provided further, however, that such
termination will not affect the right of any party to sue for any breach by any other party (or parties). 
 5.2 Fees and Expenses.
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 (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the
Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers. 

  
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 5.3 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 thereof 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. 
 5.4 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 facsimile number or
email attachment as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City 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 or email attachment as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains material, non-public
information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. 

5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Purchasers holding at least 67% in interest of the Securities then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought,
provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No
waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the
rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser, Any amendment effected in accordance with accordance with
this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company. 
 5.6 Headings. The headings
herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. 

5.7 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 

  
 41 

 
this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this
Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to
the “Purchasers.” 
 5.8 No Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the
representations and warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. 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 as otherwise set forth in Section 4.8 and this Section 5.8. 

5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or
agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits 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 hereunder or 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
waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such 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 other manner permitted by law. If any party hereto shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the
prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or
Proceeding. 
 5.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the
Securities. 
 5.11 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 each other party, it being understood that the parties need not sign the same counterpart. In the event that any

  
 42 

 
signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof. 

5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall
use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 

5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein
provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights;
provided, however, that in the case of a rescission of an exercise of a Warrant or a conversion of the Preferred Stock, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded
conversion or exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such
Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right). 
 5.14 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 (in the case of
mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities. 

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

  
 43 

 5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to any
Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights 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, 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. 
 5.17 Usury. To the extent it may lawfully do so, the
Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in
connection with any Action or Proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is
expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum
Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the
Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent
to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under
any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal
balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election. 

5.18 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing
contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereof or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers 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 Purchaser 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 Purchaser to be joined as an additional party in any proceeding for
such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each 

  
 44 

 
Purchaser and its respective counsel have chosen to communicate with the Company through EGS. EGS does not represent any of the Purchasers and only represents the Placement Agent. The Company has
elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers. 

5.19 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the
Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such
partial liquidated damages or other amounts are due and payable shall have been canceled. 
 5.20 Saturdays, Sundays, Holidays, etc.
If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day. 

5.21 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise
the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement. 
 5.22 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES
FOREVER TRIAL BY JURY.  
 (Signature Pages Follow) 

  
 45 

 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. 
  

							
	HISTOGENICS CORPORATION	 		 	Address for Notice:
				
	By:	 	 /s/ Adam Gridley
	 		 	 Histogenics Corporation
 830 Winter
Street
 3rd Floor

Waltham, MA 02451
 Attn: Chief Financial Officer

		 	Name: Adam Gridley	 		 
		 	Title: President and Chief Executive Officer	 		 
	  
 With a copy to (which shall not constitute
notice):
	 		 
	  
 Gunderson Dettmer Stough Villeneuve

Franklin & Hachigian, LLP
 One Marina Park Drive

Suite 900
 Boston, MA 02210

Attn: Marc F. Dupré
	 		 

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 

SIGNATURE PAGE FOR PURCHASER FOLLOWS] 

  
 46 

 [PURCHASER SIGNATURE PAGES TO HSGX SECURITIES PURCHASE AGREEMENT] 

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

			
	Name of Purchaser:	 	  

  

			
	Signature of Authorized Signatory of Purchaser:	 	  

  

			
	Name of Authorized Signatory:	 	  

  

			
	Title of Authorized Signatory:	 	  

  

			
	Email Address of Authorized Signatory:	 	  

  

			
	Facsimile Number of Authorized Signatory:	 	  

  

			
	Address for Notice to Purchaser:	 	

 Address for Delivery of Securities to Purchaser (if not same as address for notice): 

 

					
	Subscription Amount: $	 	  
	 	

  

					
	Shares (lesser of pro-rata share of 20% and 4.9%):	 	  
	 	

  

					
	Shares of Preferred Stock:	 	  
	 	

  

					
	Warrant Shares:	 	  
	 	

  

					
	No beneficial ownership blocker:	 	  
	 	

					
	9.99% beneficial ownership blocker:	 	  
	 	

					
	4.99% beneficial ownership blocker:	 	  
	 	

 If no box is checked, Purchaser shall be deemed to have checked the 4.99%. 

 

					
	EIN Number:	 	  
	 	

 [SIGNATURE PAGES CONTINUE] 

  
 47 

 EXHIBIT A 

CERTIFICATE OF DESIGNATION 

[Filed Separately] 

  
 48 

 EXHIBIT B 

REGISTRATION RIGHTS AGREEMENT 

[To be filed] 

  
 49 

 EXHIBIT C 

FORM OF COMMON STOCK WARRANT 
 [To
be filed] 

  
 50

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