Document:

DC10571.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing

	
EXHIBIT 10.1

	
EXECUTION VERSION

PLAN SUPPORT AND RESTRUCTURING AGREEMENT

     THIS PLAN SUPPORT AND RESTRUCTURING AGREEMENT (the “Agreement”), dated as of April 28, 2011, is entered into by and between RASER
TECHNOLOGIES, INC.

(“Raser”), RASER TECHNOLOGIES OPERATING COMPANY, INC, RASER POWER

SYSTEMS, LLC, RT PATENT COMPANY, INC., PACIFIC RENEWABLE POWER, LLC, WESTERN RENEWABLE POWER, LLC, INTERMOUNTAIN RENEWABLE POWER, LLC

(“IRP”), LOS LOBOS RENEWABLE POWER, LLC, COLUMBIA RENEWABLE POWER, LLC (“Columbia”), TRUCKEE
GEOTHERMAL NO. 1 SV-01, LLC, TRUCKEE GEOTHERMAL NO. 2, SV-04, LLC, TRAIL CANYON GEOTHERMAL NO. 1 SV 02, LLC, DEVIL’S CANYON GEOTHERMAL NO. 1 SV-03, LLC, THERMO NO. 1 BE-01, LLC, THERMO NO. 2 BE-02, LLC, THERMO NO. 3 BE-03, LLC, CRICKET
GEOTHERMAL NO.

1 MI-01, LLC, HARMONY GEOTHERMAL NO. 1 IR-01, LLC, LIGHTNING DOCK

GEOTHERMAL HI-01, LLC, and KLAMATH GEOTHERMAL NO. 1 KL-01, LLC (collectively with Raser, the “Debtors”), LINDEN CAPITAL L.P. (collectively, the
“Prepetition Lender”), TENOR OPPORTUNITY MASTER FUND, LTD., ARIA OPPORTUNITY FUND, LTD. and PARSOON OPPORTUNITY FUND, LTD. (collectively, “Tenor”; together with the Prepetition Lender, the “Sponsors”), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA and ZURICH AMERICAN
INSURANCE COMPANY (together, the “Thermo Lenders”; collectively with the Sponsors, the “Creditors”) and
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent and Collateral Agent (the “Thermo Lenders’ Agent”). Each of the foregoing shall be referred to herein as a
“Party” and collectively as the “Parties.”

	
RECITALS

     A. Raser issued certain 8% Senior Convertible Notes due 2013 in the aggregate original principal amount of $55 million (the “Convertible Notes”), which represent unsecured obligations of Raser. The Sponsors hold approximately $25 million in aggregate face amount of the Convertible Notes. 

     B. On April 18, 2011, Raser and Debtor Thermo No. 1 BE-01, LLC (the “Thermo 1 Project Entity”) and the Prepetition Lender, entered
into that certain Bridge Loan Agreement (the “Bridge Facility”) and certain related security agreements, pursuant to which, among other things, the Prepetition Lender loaned to the
Debtors $750,000. The Debtors’ obligations to the Prepetition Lender are secured by (i) first-priority blanket liens and security interests on certain assets of the Debtors (other than the Existing Collateral (defined herein)) (a) that are
not subject to existing liens, and (b) for which no third-party consents or waivers are required to provide or perfect such liens or security interests, and (ii) junior liens and security interests on all assets of the Debtors, including the
Existing Collateral, that are subject to existing liens or security interests and for which no third-party consents or waivers are required to provide such liens or security interests (other than the consent of the Thermo Lenders).

     C. The Thermo 1 Project Entity is the maker of that certain Promissory Note, dated as of August 31, 2008, in the original principal amount of $31,175,092.00 (the “Thermo 1 Note”), and is party to, among other documents, (i) that certain Credit Agreement, dated as of August 31, 2008, among the Thermo 1 Project Entity, the Thermo Lenders, The Prudential Insurance
Company of America, as Administrative Lender, and Deutsche Bank Trust Company Americas, as Administrative Agent and Collateral Agent, (ii) that certain Deed of Trust, Leasehold Deed of Trust, Security Agreement, Financing Statement, Fixture Filing
and Assignment of Production, dated as of August 31, 2008, (iii) that certain Account and Security Agreement, and (iv) other security documents and agreements related thereto (collectively with the Thermo 1 Note, the “Thermo 1 Financing Documents”). Pursuant to the Thermo 1 Financing Documents, among other things, the Thermo 1 Project Entity borrowed $31,175,092.00, the repayment of which is secured by a
first-priority, properly perfected, unavoidable lien and security interest in assets of the Thermo 1 Project Entity (the “Thermo 1 Collateral”), the equity interests in the Thermo
1 Project Entity held by IRP and Columbia (the “Pledged Equity”), and other assets of various Debtors (collectively with the Thermo 1 Collateral and the Pledged Equity, the
“Existing Collateral”).

     D. As of the date hereof, (i) the Thermo Lenders are the holder of the Thermo 1 Note and the beneficiaries of the properly perfected liens and security interests in the Existing Collateral, and (ii)
the outstanding obligations owed under the terms of the Thermo 1 Financing Documents, including accrued interest, are $10,326,878.25.

     E. The Debtors are in default of, among other things, their obligations under the Convertible Notes and the Thermo 1 Financing Documents (the “Existing
Defaults”).  In addition, the Debtors face a liquidity crisis that, without additional capital, makes it impossible for the Debtors to be able to continue as going concerns.

     F. After good faith, arms’ length negotiations, the Parties have agreed, subject to the terms and conditions of this Agreement, to engage in various transactions intended to restructure the
Debtors’ obligations and recapitalize the Debtors’ businesses (collectively, the “Restructuring Transactions”). 

     G. To implement the Restructuring Transactions, (i) the Debtors have agreed (a) to commence voluntary bankruptcy cases (the “Chapter 11 Cases”) under chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sec. 101-1532 (as amended, the “Bankruptcy Code”) in the United States Bankruptcy Court for
the District of Delaware (the “Bankruptcy Court”), and (b) propose and prosecute to confirmation a plan of reorganization (the “Plan”) that contains the terms and conditions set forth on the Term Sheet attached as Exhibit A hereto (the “Plan Term Sheet”), (ii) the Sponsors have agreed (a) to provide or cause to be provided a debtor-in-possession financing facility (the “DIP Facility”) to the Debtors on the terms and conditions set forth on Exhibit B hereto (the “DIP Facility Term Sheet”), and (b) to act as the stalking horse bidder with respect to an auction and sale of the equity of reorganized Raser to be issued pursuant to the Plan on the terms and conditions set forth on the Plan Term Sheet, and (iii) the
Thermo Lenders have agreed to enter into an agreement with the Debtors to settle and resolve

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any and all claims, rights and causes of action arising from or related to the Thermo 1 Financing Documents, the principal terms of which are set forth on Exhibit E hereto
(the “Thermo Settlement Agreement”).

     H. To facilitate the implementation of the Restructuring Transactions, the Creditors have agreed, subject to the terms and conditions of this Agreement, to cast all votes that they or any of their
affiliates are entitled to cast in favor of the Plan.

	
AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

     1. Schedule and Deadlines. So long as this Agreement remains in effect and shall not have been terminated by a Termination Event (as defined
below), the Debtors shall: 

	
(a)      		
Commence the Chapter 11 Cases on or before April 29, 2011 (such date, the “Petition Date”);	
	 
	
(b)      		
Propose and file the Plan and a related disclosure statement satisfying the requirements of Sec. 1125 of the Bankruptcy Code (the “Disclosure Statement”) no
later than May 27, 2011;	
	 
	
(c)      		
File and prosecute a motion seeking approval of the DIP Facility in accordance with the terms set forth in the DIP Facility Term Sheet, no later than the deadlines specified therein;	
	 
	
(d)      		
File and prosecute a motion seeking approval of auction procedures and the stalking horse protections in accordance with the terms set forth in the Plan Term Sheet, no later than the deadlines set forth therein; and	
	 
	
(e)      		
Use all reasonable best efforts to expedite the Chapter 11 Cases whenever possible, to obtain confirmation of the Plan as soon as reasonably practicable, and to cause the Effective Date of the Plan to occur on or before August 26,
2011.	
	 

     2. Support of the Plan by the Creditors. So long as this Agreement remains in effect and shall not have terminated as a result of the
occurrence and continuance of a Termination Event (as defined below), each of the Creditors agrees and commits, to the extent applicable to such Creditor, to:

	
(a)      		
Cast all votes with respect to any claims held or controlled by such Creditor to accept, and otherwise support the timely confirmation of, the Plan in accordance with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure
and this Agreement;	
	 

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(b)      		
Refrain from (i) proposing its own plan of reorganization or supporting, consenting to or participating in the formulation of any plan of reorganization other than the Plan, (ii) directly or indirectly seeking or supporting
dismissal of the Chapter 11 Cases or converting the Chapter 11 Cases to cases under Chapter 7 of the Bankruptcy Code, and (iii) directly or indirectly seeking or supporting the appointment of a Chapter 11 trustee or an examiner of any
type;	
	 
	
(c)      		
Permit accurate disclosure by the Debtors of the contents of this Agreement as may be necessary or advisable in the discretion of the Debtors after consultation with their professionals;	
	 
	
(d)      		
Refrain from (i) directly or indirectly objecting to or otherwise opposing approval of the Disclosure Statement, so long as the Disclosure Statement does not contradict this Agreement, (ii) directly or indirectly objecting to or
otherwise opposing confirmation of the Plan, so long as the Plan does not contradict this Agreement, (iii) directly or indirectly joining or supporting any other party in objecting to or otherwise opposing the Plan, so long as the Plan does not
contradict this Agreement, (iv) directly or indirectly joining or supporting any other party in directly or indirectly objecting to confirmation of or otherwise opposing the Plan, so long as the Plan does not contradict this Agreement, (v) seeking
any modification of the Plan without obtaining the express prior written consent and support of the Debtors, so long as the Plan does not contradict this Agreement, (vi) directly or indirectly objecting to or supporting an objection to the approval
of the DIP Facility, so long as the DIP Facility, the Interim Order and the Final Order do not contradict this Agreement; and (vii) directly or indirectly taking any action inconsistent with the terms set forth herein; and	
	 
	
(e)      		
Refrain from knowingly causing any entity owned or controlled by such Creditors to take any action inconsistent with this Agreement.	
	 

     3. Restrictions on Transfer. So long as this Agreement remains in effect and shall not have been terminated by a Termination Event (as
defined below), each of the Creditors hereby agrees not to (i) sell, transfer, assign, pledge, or otherwise dispose of any of its claims, arising both pre- and post-Petition Date (the “Claims”) relating to the Debtors, in whole or in part, or any interest therein, unless the transferee accepts in writing, by way of an unconditional joinder agreement in the form of Exhibit D hereto (each, a “Joinder Agreement”), delivered to the Debtors, the Claims subject to the terms of this Agreement, provided that nothing herein shall be deemed to
prohibit customary securities brokerage account arrangements (such as with a prime broker) pursuant to which the Convertible Notes may be pledged as collateral, it being understood, however, that any pledge made by a Convertible Noteholder on or
after the date hereof may be made only pursuant to a Joinder Agreement with the pledge; (ii) sell transfer, assign, pledge, or otherwise dispose of any of its equity interests in the Debtors, including warrants to purchase equity interests in the
Debtors (collectively, “Interests”), or (iii) grant any proxies, deposit any of its Claims and Interests into a voting trust, or enter into a voting

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agreement with respect to the Claims and Interests.

     4. Forbearance. For so long as this Agreement is in effect and has not terminated as a result of the occurrence and continuance of a
Termination Event (as defined below), each of the Creditors hereby agrees to forbear from (i) further exercising any of their rights or remedies under either the Convertible Notes and the Thermo 1 Financing Documents, or applicable non-bankruptcy
law against any of the Debtors or their assets in respect of the Existing Defaults, or (ii) commencing any lawsuit, arbitration or other proceeding asserting any cause of action against or seeking any equitable or other relief from any of the other
Creditors arising out of or in any way relating to the Debtors.

     5. Financing Facility to be Provided by Sponsors.  So long as this Agreement remains in effect and shall not have been terminated by a
Termination Event (as defined below), the Sponsors hereby agree, following the Petition Date, to provide the DIP Facility to the Debtors in the amounts and on the terms and conditions set forth in the DIP Facility Term Sheet. The Sponsors and the
Debtors agree to work cooperatively in good faith to obtain expedited Bankruptcy Court approval of the DIP Facility in accordance with the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. The Sponsors hereby acknowledge and agree that
the DIP Facility is a fully underwritten committed facility, subject only to the terms and conditions set forth in the DIP Facility Term Sheet. 

     6. Thermo Lenders’ Consent to the DIP Facility .  So long as this Agreement remains in effect and shall not have been terminated by a
Termination Event (as defined below), and subject to negotiation of the language to be inserted into the Interim and Final DIP Financing Orders that is reasonably acceptable to all Parties, the Thermo Lenders hereby consent to, and agree to be bound
by, the terms and conditions of the DIP Facility as set forth in the DIP Facility Term Sheet, including without limitation the subordination of the Thermo Lenders’ remaining Claims, liens and security interests under the Thermo 1 Financing
Documents following the final approval of the DIP Facility and the finding that the Thermo Lenders have a valid first priority, properly perfected, unavoidable lien and security interest in the Thermo 1 Collateral, the indefeasible payment of $6
million of the Thermo 1 Note plus payment and/or reimbursement of the reasonable, documented out-of-pocket attorneys’ fees and expenses incurred by the Thermo Lenders and the Thermo Lenders’ Agent, and any reasonable outstanding
attorneys’ fees and expenses of the Thermo Lenders’ Agent, in conjunction with this Agreement and the transactions contemplated thereby as provided for and required by the DIP Facility Term Sheet (the “Thermo Lenders Payment”).

     7. Sponsors’ Stalking Horse Bid for Reorganized Equity. So long as this Agreement remains in effect and shall not have been terminated
by a Termination Event (as defined below), the Sponsors shall serve as the stalking horse bidder in connection with the auction and sale of the equity in reorganized Raser on the terms and conditions set forth in the Plan Term Sheet.

     8. Representations, Warranties and Acknowledgments by the Debtors. Each of the Debtors hereby represents, warrants, acknowledges and agrees
as follows:

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(a)      		
the obligations under the Convertible Notes are valid and enforceable obligations for which the Debtors received significant value;	
	 
	
(b)      		
the obligations under the Thermo 1 Financing Documents are valid and enforceable obligations for which the Debtors received significant value;	
	 
	
(c)      		
it has all requisite power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;	
	 
	
(d)      		
the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate, partnership or limited liability company action on its part;	
	 
	
(e)      		
the execution, delivery and performance of this Agreement by it does not and shall not: (i) violate any provision of law, rule or regulation applicable to it; (ii) violate its certificate of incorporation, bylaws, or other
organizational documents or those of any of its subsidiaries; or (iii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it is a party;
and	
	 
	
(f)      		
each of the Recitals set forth above is true and accurate as of the date hereof.	
	 

     9. Representation, Warranties and Acknowledgments by the Creditors. Each of the Creditors hereby represents, warrants, acknowledges and
agrees as follows:

	
(a)      		
it is the sole, legal owner of the Claims attributed to it in the Recitals;	
	 
	
(b)      		
it has all requisite power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;	
	 
	
(c)      		
the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate, partnership, trust or limited liability company action on its part;	
	 
	
(d)      		
the execution, delivery and performance of this Agreement by it does not and shall not: (i) violate any provision of law, rule or regulation applicable to it; (ii) violate its certificate of incorporation, bylaws, or other
organizational documents or those of any of its subsidiaries; or (iii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it is a party;
and	
	 
	
(e)      		
to the extent the Recitals above are applicable to such Creditor, each such Recital is true and accurate as of the date hereof.	
	 

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     10. Termination. This Agreement automatically shall terminate without further notice or action on the part of any Party upon the occurrence
of any of the following events (each a “Termination Event”), unless such Termination Event is waived in a writing for that purpose signed by all Parties:

	
(a)      		
The Debtors propose and/or seek confirmation of a plan other than the Plan, unless such plan (i) provides treatment of the Claims against and Interests in the Debtors, if any, that is no less favorable than the treatment of such
Claims and Interests provided under the Plan Term Sheet, and (ii) does not contain any provision not set forth in the Plan Term Sheet that would materially and adversely affect the treatment of the Claims as contemplated by the Term Sheet without
the Creditors’ consent;	
	 
	
(b)      		
A plan of reorganization other than the Plan is confirmed, unless such plan (i) provides treatment of the Claims against and Interests in the Debtors, if any, that is no less favorable than the treatment of such Claims and
Interests provided under the Plan Term Sheet, and (ii) does not contain any provision not set forth in the Plan Term Sheet that would materially and adversely affect the treatment of the Claims as contemplated by the Term Sheet without each
Creditor’s consent;	
	 
	
(c)      		
The Effective Date of the Plan (or a plan of reorganization other than the Plan that otherwise meets the specifications of the foregoing clause (b)), does not occur on or before August 26, 2011;	
	 
	
(d)      		
An Event of Default occurs under the terms of the DIP Facility and the Sponsors terminate the commitment under that facility and accelerates the Debtors’ Obligations thereunder;	
	 
	
(e)      		
Any of the parties hereto materially breaches this Agreement and fails or refuses to cure such breach within five (5) business days after written notice of such breach has been provided by another party to this
Agreement;	
	 
	
(f)      		
The Bankruptcy Court enters an order appointing a trustee or an examiner with expanded powers in the Chapter 11 Cases;	
	 
	
(g)      		
The Bankruptcy Court enters an order converting the Chapter 11 Cases to cases under Chapter 7 of the Bankruptcy Code or dismissing the Chapter 11 Cases;	
	 
	
(h)      		
The Bankruptcy Court enters an order on its docket denying final approval of the DIP Facility, refusing to approve the Thermo Lenders Payment, or refusing to confirm the validity and priority of the Thermo Lenders’ liens on
and security interests in the collateral for the Thermo 1 Note, and such order has become a final and non-appealable order under applicable law;	
	 

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(i)      		
On or before August 1, 2011, the Bankruptcy Court has not entered an order on its docket approving the DIP Facility on a final basis confirming the validity and priority of the Thermo Lenders’ liens on and security interests
in the collateral for the Thermo 1 Note and approving the Thermo Lenders Payments; or	
	 
	
(j)      		
On or before August 3, 2011, the Thermo Lenders Payment has not been made.	
	 

Upon a termination of this Agreement as a result of the occurrence and continuance of a Termination Event hereunder, (i) nothing in this Agreement shall constitute or be construed as a waiver by any Party of any or all of such
Party’s respective rights or remedies under applicable law, (ii) the provisions of this Agreement and all of the obligations of the Parties hereunder shall be of no further force and effect, and (iii) pursuant to Rule 408 of the Federal Rules
of Evidence and any other applicable rules of evidence, neither the provisions of this Agreement, nor any of the negotiations relating to the entirety of this Agreement, shall be admissible into evidence in any litigation, arbitration or other
proceeding other than litigation, arbitration or other proceeding seeking to enforce the terms of this Agreement following the occurrence and continuance of a material breach of this Agreement.

     11. No Solicitation of Plan Acceptance.  The Parties acknowledge and agree that neither the negotiation nor the execution and delivery of
this Agreement is intended by the Parties to be a solicitation of the acceptance of the Plan or any plan of reorganization within the meaning of Section 1125 of the Bankruptcy Code, and such solicitation shall occur only in conjunction with the
delivery of the Plan and related Disclosure Statement. 

     12. No Waiver of Participation. Each of the Parties hereto expressly acknowledges and agrees that, except as expressly provided in this
Agreement, nothing herein is intended to, nor does anything herein, in any manner waive, limit, impair or restrict the ability of each of the Parties to protect and to preserve all of its rights, remedies and interests, including, without
limitation, with respect to any of the Claims against the Debtors, or each Creditor’s full participation in the Chapter 11 Cases. Nothing herein shall be deemed to affect any of the rights and obligations of each of the Parties in any other
capacity it may have in the Chapter 11 Cases or otherwise.

     13. Consideration.  It is hereby acknowledged by the Parties that no consideration shall be due or paid to the Creditors for their agreement
to vote in favor of the Plan in accordance with the terms and conditions of this Agreement, other than the Debtors’ obligations under this Agreement, which consideration the Creditors hereby accept as good and valuable and acknowledge and agree
is sufficient under applicable law.

     14. No Third Party Beneficiaries.  Subject to Section 3 hereof, the terms and conditions of this Agreement are intended solely for the
benefit of the Parties and their respective successors and permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any other person.

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15. Miscellaneous Provisions.

	
(a)      		
The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, without the written
consent thereto of the Parties.	
	 
	
(b)      		
The Parties agree to execute and deliver from time to time such other documents and take such other actions as may be reasonably necessary, without payment of further consideration, in order to effectuate the transactions provided
for herein.	
	 
	 	
The parties shall cooperate fully with each other and with their respective counsel in connection with any steps required to be taken as part of their respective obligations under this Agreement.	
	 
	
(c)      		
This Agreement shall be binding upon, and inure to the benefit of, the Parties. No rights or obligations of any Party under this Agreement may be assigned or transferred to any other person or entity without the express written
consent of the other Parties.	
	 
	
(d)      		
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, notwithstanding its conflict of laws principles or any other rule, regulation or principle that would result in the
application of any other state’s law. Each of the Parties hereby irrevocably and unconditionally agrees that any litigation, action, suit or other proceeding arising under or in any way related to this Agreement must be filed in the United
States District Court for the Southern District of New York (the “District Court”), if such litigation or other proceeding is commenced prior to the commencement of the Chapter 11
Cases.	
	 
	 	
Each of the Parties hereby irrevocably accepts and submits itself to the exclusive jurisdiction of the District Court, generally and unconditionally, with respect to any such litigation, action, suit or other proceeding.
Notwithstanding the foregoing, the Parties hereby acknowledge and agree that following the commencement of the Chapter 11 Cases, the Bankruptcy Court shall have exclusive jurisdiction of all matters arising under or in any way relating to this
Agreement.	
	 
	
(e)      		
All notices, demands, requests, consents or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when (i) delivered
personally to the recipient, (ii) sent by facsimile to the recipient (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if sent by facsimile before 5:00 p.m. prevailing Eastern Time on a
business day, and otherwise on the next business day, or (iii) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands, requests, consents and other communications shall be
sent to	
	 

9

	
the following addresses:

(i) if to the Debtors:

Raser Technologies, Inc. Attn: Mr. Nick Goodman 5152 North Edgewood Drive Provo, Utah 84604 Facsimile: (801) 374-3314

	
with a copy to:

Hunton & Williams LLP

200 Park Avenue

New York, NY 10166 

Attn: Peter S. Partee, Esq.

Facsimile: (212) 309-1875

	 	
-and-

Hunton & Williams LLP 951 E. Byrd. St. Richmond, VA 23219 Attn: Michael G. Wilson, Esq. Facsimile: (804) 343-4719 

	
(ii) if to the Sponsors:

Tenor Capital Management Company, LP 1180 Avenue of Americas, Suite 1940 New York, NY 10036 Attn: David Kay Facsimile: (212) 918-5301

	 	
-and-

	
Linden Capital LP

c/o Linden Advisors LP

590 Madison Avenue

15th Floor

New York, NY 10022

Attn: Robert G. Lennon

Facsimile: (646) 840-3625

10

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

	
Hogan Lovells US LLP

875 Third Avenue

New York, NY 10022

Attn: Christopher R. Donoho, III, Esq.

Facsimile: (212) 918-3100

	 	
(iii) if to the Thermo Lenders:

	 	
Prudential Capital Group

2200 Ross Avenue

Dallas, TX 75201-2758

Attn: William H. Bulmer, Esq.

Facsimile: (214) 720-6296

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

	 	
Baker Botts LLP

2001 Ross Avenue

 Dallas, Texas 75201-2980 

Attn: Judith Ross, Esq.

Facsimile: (214) 661-4605

or to such other address or to the attention of such other person as the receiving Party has specified by prior written notice to the sending Party.

	
(f)      		
This Agreement contains the entire agreement of the Parties with respect to the subject matter of this Agreement, and no Party shall be liable or bound to any other Party in any manner by any representations, warranties, covenants
and agreements except as specifically set forth herein.	
	 
	
(g)      		
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile transmission or by electronic mail in portable document format (.pdf) shall be effective as delivery of an original executed counterpart of this Agreement.	
	 
	
(h)      		
The Thermo Lenders hereby direct the Thermo Lenders’ Agent to acknowledge this Agreement.	
	 

11

12

IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement

	
as of the date first above written.

	
RASER TECHNOLOGIES, INC.

By: /s/ Nicholas Goodman

Name: Nicholas Goodman

Title: CEO

	
RASER TECHNOLOGIES OPERATING

COMPANY, INC.

	
By: /s/ Nicholas Goodman

Name: Nicholas Goodman

Title: President

	
RASER POWER SYSTEMS, LLC

	
By: /s/ Nicholas Goodman

Name: Nicholas Goodman

Title: President

	
RT PATENT COMPANY, INC.

	
By: /s/ Nicholas Goodman

Name: Nicholas Goodman

Title: President

	
PACIFIC RENEWABLE POWER, LLC

	
By: /s/ Nicholas Goodman

Name: Nicholas Goodman

Title: President

[SIGNATURE PAGE TO PLAN SUPPORT AND RESTRUCTURING AGREEMENT]

WESTERN RENEWABLE POWER, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

INTERMOUNTAIN RENEWABLE POWER, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

COLUMBIA RENEWABLE POWER, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

LOS LOBOS RENEWABLE POWER, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

TRUCKEE GEOTHERMAL NO. 1 SV-01, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

[SIGNATURE PAGE TO PLAN SUPPORT AND RESTRUCTURING AGREEMENT]

TRUCKEE GEOTHERMAL NO. 2, SV-04, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

LIGHTNING DOCK GEOTHERMAL HI-01, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

TRAIL CANYON GEOTHERMAL NO. 1 SV 02, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

DEVIL’S CANYON GEOTHERMAL NO. 1 SV-03, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

THERMO NO. 1 BE-01, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

[SIGNATURE PAGE TO PLAN SUPPORT AND RESTRUCTURING AGREEMENT]

THERMO NO. 2 BE-02, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

THERMO NO. 3 BE-03, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

CRICKET GEOTHERMAL NO. 1 MI-01, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

HARMONY GEOTHERMAL NO. 1 IR-01, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

KLAMATH GEOTHERMAL NO. 1 KL-01, LLC

By: /s/ Nicholas Goodman Name: Nicholas Goodman Title: President

[SIGNATURE PAGE TO PLAN SUPPORT AND RESTRUCTURING AGREEMENT]

LINDEN CAPITAL, L.P.

	
By: 
		
 		
_/s/ Craig Jarvis_____________ 
	
	
 
		
 		
Name: 
		
 		
Craig Jarvis 
	
	
 
		
 		
Title: 
		
 		
Authorized Signatory 
	

[SIGNATURE PAGE TO PLAN SUPPORT AND RESTRUCTURING AGREEMENT]

TENOR OPPORTUNITY MASTER FUND, LTD.

	
By: 
		
 		
/s/ Daniel H. Kochav_ 
	
	
 
		
 		
Name: Daniel H. Kochav 
	
	
Title: Director
	

ARIA OPPORTUNITY FUND, LTD.

	
By: 
		
 		
/s/ Daniel H. Kochav_ 
	
	
 
		
 		
Name: Daniel H. Kochav 
	
	
Title: Director
	

PARSOON OPPORTUNITY FUND, LTD.

	
By: 
		
 		
/s/ Daniel H. Kochav_ 
	
	
 
		
 		
Name: Daniel H. Kochav 
	
	
Title: Director
	

[SIGNATURE PAGE TO PLAN SUPPORT AND RESTRUCTURING AGREEMENT]

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

	
By: 
		
 		
/s/ Richard Carrell 
	
	
 
		
 		
Name: 
		
 		
Richard Carrell 
	
	
 
		
 		
Title: 
		
 		
Vice President 
	

ZURICH AMERICAN INSURANCE COMPANY

	
By: 
		
 		
Prudential Private Placement Investors, 
	
	
 
		
 		
L.P. (as Investment Advisor) 
	
	
 
	
	
By: 
		
 		
Prudential Private Placement Investors, Inc. 
	
	
 
		
 		
(as its General Partner) 
	
	
 
	
	
By: 
		
 		
/s/ Richard Carrell 
	
	
 
		
 		
Name: 
		
 		
Richard Carrell 
	
	
 
		
 		
Title: 
		
 		
Vice President 
	

DEUTSCHE BANK TRUST COMPANY AMERICAS, AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT

	
By: 
		
 		
_/s/ Stanley Burg 
	
	
 
		
 		
Name: 
		
 		
Stanley Burg 
	
	
 
		
 		
Title: 
		
 		
Vice President 
	
	
 
	
	
By: 
		
 		
/s/ Rodney Gaughan_________ 
	
	
 
		
 		
Name: 
		
 		
Rodney Gaughan 
	
	
 
		
 		
Title: 
		
 		
Vice President 
	

[SIGNATURE PAGE TO PLAN SUPPORT AND RESTRUCTURING AGREEMENT]

	
EXHIBIT A

PLAN TERM SHEET

THIS TERM SHEET DOES NOT CONSTITUTE A SOLICITATION OF VOTES FOR A PLAN OF REORGANIZATION FOR PURPOSES OF SECTIONS 1125 AND 1126 OF THE BANKRUPTCY CODE OR AN OFFER OR SOLICITATION OF AN OFFER WITH RESPECT TO ANY SECURITIES.  SUCH
OFFER OR SOLICITATION MAY ONLY BE MADE IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE AND AFTER PUBLICATION AND DELIVERY OF THE PLAN AND DISCLOSURE STATEMENT WITH RESPECT TO THE PLAN.

This term sheet presents the material terms for a restructuring of Raser Technologies, Inc.

(“Raser”) and certain of its direct and indirect subsidiaries (collectively with Raser, the “Debtors”) under a plan of reorganization (the “Plan”) under title 11 of the United States Code (the “Bankruptcy Code”).  Terms herein with an initial capital not required by standard capitalization rules are defined terms, and each such term not parenthetically or otherwise defined
herein shall have the meaning ascribed to it in that certain Plan Support and Restructuring Agreement, dated as of April 28, 2011 (the “Plan Support Agreement”), by and among Raser
and its affiliates, Linden Capital, L.P. (the “Prepetition Lender”), Tenor Opportunity Master Fund, Ltd., Aria Opportunity Fund, Ltd., and Parsoon Opportunity Fund, Ltd.
(collectively, “Tenor”; together with the Prepetition Lender, the “Sponsors”), and The Prudential Insurance
Company of America and Zurich American Insurance Company (together, the “Thermo Lenders”) and Deutsche Bank Trust Company Americas, as Administrative Agent and Collateral Agent
(the “Thermo Lenders’ Agent”), to which this Plan Term Sheet is attached.

Classification and Treatment of Claims and Interests Under Plan of Reorganization

Secured Claims Arising from Thermo 1 Financing Documents

Secured Claims Against Raser Power Systems

On the effective date of a Plan (the “Effective Date”), in full and final satisfaction and discharge of all subordinated secured claims of the Thermo Lenders
arising under the Thermo 1 Financing Documents that remain after the Thermo Lenders Payment (the “Subordinated Thermo 1 Claims”), the Thermo Lenders shall receive (i) in the event
the Sponsors are the Successful Bidder (as defined below), the releases and other consideration provided for in the Thermo 1 Settlement Agreement, or (ii) in the event the Sponsors are not the Successful Bidder, Cash in an amount equal to the
outstanding balance of the Subordinated Thermo 1 Claims.

On the Effective Date, holders of allowed secured claims against Raser Power Systems, LLC, shall, at the sole discretion of the Debtors, receive in full satisfaction, settlement, and release of, and in exchange for such secured
claims, at the sole 

A-1

Secured Claims Against Lightning Dock Project Entity

Other Secured Claims

Secured Claims of (I) Prepetition Lender Arising Under the Bridge Facility (II) the Sponsors Under the DIP Facility

Administrative Expense Claims (Restructuring 

option of the Debtors, (i) a new promissory note secured by a lien on the property serving as collateral security for such secured claims and providing for payments thereunder having an aggregate present value as of the Effective
Date equal to the judicially determined value of such collateral, (ii) turnover of the collateral for such allowed secured claims, or (iii) such other, less favorable treatment as is agreed upon by the Debtors and the holder of such allowed secured
claims.

On the Effective Date, the holders of allowed secured claims against Debtor Lightning Dock Geothermal HI-01, LLC (the “Lightning Dock Project Entity”), shall, at
the sole discretion of the Debtors, receive in full satisfaction, settlement, and release of, and in exchange for, such secured claims, at the sole option of the Debtors, (i) a new promissory note secured by a lien on the property serving as
collateral security for such secured claims and providing for payments thereunder having an aggregate present value as of the Effective Date equal to the judicially determined value of such collateral, (ii) turnover of the collateral for such
allowed secured claims, or (iii) such other, less favorable treatment as is agreed upon by the Debtors and the holder of such allowed secured claims.

The holder(s) of any other allowed secured claims against any of the Debtors shall, at the sole discretion of the Debtors, (i) have the legal equitable and contractual rights of such holder reinstated in full, or (ii) receive in
full satisfaction, settlement, and release of, and in exchange for, such holder’s claim, at the sole option of the Debtors, (a) cash in the amount of the allowed secured claim, (b) turnover of the collateral for such allowed secured claim, or
(c) such other, less favorable treatment as is agreed upon by the Debtors and the holder of such allowed secured claim.

On the Effective Date, in full and final satisfaction and discharge of all secured claims of the Prepetition Lender arising under the Bridge Facility and the Sponsors arising under the DIP Facility, the Sponsors shall receive (i)
in the event the Sponsors are the Successful Bidder with respect to the auction of the Reorganized Raser Equity, the consideration provided for in the Stalking Horse Bid, or (ii) in the event the Sponsors are not the Successful Bidder, Cash in an
amount equal to the outstanding balance of the Bridge Facility and the DIP Facility.

Each holder of an allowed administrative expense claim 

(“Administrative Expense Claims”) shall receive payment in 

A-2

Costs and Unpaid Post-Bankruptcy Trade Claims)

Priority Tax Claims

Other Priority Claims

General Unsecured Claims Against Raser

General Unsecured Claims Against Subsidiary Debtors

Convenience Class Claims Against the Debtors

Interests (Common Shares and Warrants) in Debtors

Means for Implementation

Sale of Reorganized Raser Equity

full in cash of the unpaid portion of such allowed administrative expense claim (i) on the Effective Date or as soon thereafter as reasonably practicable, (ii) in the ordinary course of the Debtors’ business, (iii) in the
case of professional fees, after court approval thereof, or (iv) as otherwise agreed by the Debtors and such holder.

Allowed claims under Bankruptcy Code section 507(a)(8) 

(“Priority Tax Claims”) shall receive regular cash installment payments of a present value, as of the Effective Date of the Plan, equal to the allowed amount of
such Priority Tax Claims over a period of 6 years, or such other, less favorable treatment as is agreed upon by the Debtors and the holder of such claims.

On the Effective Date, each holder of an allowed Claim under Bankruptcy Code section 507(a) other than an Administrative Expense Claim or a Priority Tax Claim shall receive payment in full in cash.

The treatment of holders of allowed general unsecured claims (the “General Unsecured Claims”) against Raser shall be determined by the Debtors and the Sponsors,
and disclosed in connection with the Plan and disclosure statement in support of the Plan (the “Disclosure Statement”).

The treatment of holders of allowed General Unsecured Claims against subsidiary Debtors shall be determined by the Debtors and the Sponsors, and disclosed in connection the Plan and Disclosure Statement.

The treatment of holders of allowed General Unsecured Claims against the Debtors that qualify as convenience claims shall be determined by the Debtors and the Sponsors, and disclosed in connection with the Plan and Disclosure
Statement.

Holders of Interests in the Debtors shall receive no property or other consideration under the Plan on account of such Interests.

On the Effective Date, the Debtors shall consummate the sale of equity in the reorganized Raser (the “Reorganized Raser Equity”) to the Sponsors or to the party submitting a higher and better offer following an auction (the “Successful Bidder”) to be
conducted pursuant to an auction procedures order (the “Auction Procedures Order”) entered by the Bankruptcy Court 

A-3

no later than the hearing on final approval of the DIP Facility, which order shall approve the Bid Protections (as defined below) and otherwise be in form and substance reasonably acceptable to the Debtors and the Sponsors.

Subject to and contingent upon final approval of the DIP Facility, confirmation of the Plan, and no Termination Event having occurred with respect to the Plan Support Agreement, the Sponsors irrevocably offer to purchase the
Reorganized Raser Equity on the Effective Date in exchange for the aggregate purchase price of $19,768,180.59 (the “Purchase Price”), payable as follows: (i) crediting the outstanding balance of the DIP Facility, including all fees and interest paid in kind pursuant to the terms thereof, (ii) crediting the outstanding balance of the Bridge Facility, (iii) the
waiver of the Subordinated Thermo 1 Claims under the terms of the Thermo Settlement Agreement, (iv) Cash in the amount of $2.5 million, subject to a reduction in an amount equal to any
unused Commitment under the DIP Facility, and (v) the provision by the Sponsors of the Exit Facility (as defined herein). In addition, subject to the same conditions, the Sponsors irrevocably offer to provide to the Debtors on the Effective Date
with a fully committed $3.0 million two-year senior, secured convertible preferred voting term loan facility on customary terms and conditions to fund working capital and further development needs of Reorganized Raser and its subsidiaries
pursuant to a budget approved by the Board of Directors of Reorganized Raser (the “Exit Facility”). The Exit Facility
will be governed by definitive documentation in form and substance reasonably satisfactory to Reorganized Raser and the Sponsors entered into within 90 days following the Effective Date. The interest rate applicable to the loans outstanding under
the Exit Facility will be 10% per annum.

As an incentive for the Sponsors to make the Stalking Horse Bid, the Sponsors shall be entitled to the following minimum bidding protections (the “Bid Protections”): 

	
·      		
In the event the Sponsors are not the Successful Bidder, the Sponsors shall be entitled to a break-up fee (the “Breakup Fee”) equal to 5% of the Purchase Price;
and	
	 
	
·      		
The Auction Procedures Order shall provide that the minimum initial overbid shall be equal to the Breakup Fee plus $500,000.	
	 

A-4

Thermo Settlement Agreement

Sponsor Relief From Stay for Certain Subsidiary Debtors

Releases and Exculpations

Corporate Governance of Reorganized Raser

Employee Incentive Plan

On the Effective Date, in the event the Sponsors are the Successful Bidder, the Thermo 1 Lenders shall receive the consideration provided for in the Thermo Settlement Agreement, including the releases, exculpations and
indemnifications provide for therein.

In the event the Plan is not confirmed with respect to any Subsidiary Debtor as a result of the failure by the Holders of Allowed Claims against the estate of such Subsidiary Debtor to vote in favor of the Plan, such Subsidiary
Debtor shall be deemed to have been removed from the terms of the Plan and the Plan shall become effective with respect to each of the remaining Debtors.  Further, the Confirmation Order shall provide that the Sponsors shall be granted immediate
relief from stay with respect to the estate of any Subsidiary Debtor that is removed from the Plan to permit the Sponsors to exercise their rights under the terms of the DIP Financing Documents with respect to the Assets of such Subsidiary Debtor.
Any recoveries from the exercise of such rights shall be applied to reduce the obligations of the Debtors under the DIP Financing Documents or the New Sponsor Note.

	
·      		
In addition to the releases described in the Thermo Settlement Agreement, on the Effective Date, the Debtors shall provide or shall be deemed to have provided releases of their current directors, officers and agents, the Sponsors,
Wilmington Trust (as Administrative Agent under the DIP	
	 
	 	
Facility), the Thermo Lenders, the Thermo Lenders’ Agent and their respective directors, officers and agents, for any claim or cause of action arising out of or relating to the Debtors or the Chapter 11 Cases; and	
	 
	
·      		
Each of the Parties shall be exculpated for all actions taken in drafting, negotiating and soliciting the Plan, or for actions taken during or in connection with the Chapter 11 cases, which exculpations shall be customary in form
and substance for confirmed reorganizing chapter 11 plans.	
	 

The board of directors of Reorganized Raser shall consist of five (5) members, selected by the Sponsors or the Successful Bidder, as applicable.

The Debtors and the Sponsors shall determine whether to seek approval of an employee incentive plan during the bankruptcy cases.

A-5

EXHIBIT B

SUMMARY OF INDICATIVE TERMS AND
CONDITIONS FOR DIP CREDIT FACILITY (“DIP FACILITY”)

APRIL 28, 2011(1)

	
(1)      		
Capitalized terms used and not otherwise defined in this Exhibit shall have the meanings attributed thereto in the Plan Support and Restructuring Agreement dated as of the date of this Exhibit and to which this Exhibit is
attached (as amended, restated, supplemented or otherwise modified from time to time, the”PSA”).	
	 

	
Borrower: 
		
 		
Raser Technologies, Inc., a Delaware corporation, as a Debtor-in- 
	
	
 
		
 		
Possession in a case (the “Debtor’s Case”) pending under Chapter 11 of 
	
	
 
		
 		
the Bankruptcy Code (the “Borrower” or the “Debtor”) in the United 
	
	
 
		
 		
States Bankruptcy Court for the District of Delaware (the “Bankruptcy 
	
	
 
		
 		
Court”). 
	
	
Guarantors and 
		
 		
All subsidiaries of the Debtor (collectively, the “Guarantors”, together 
	
	
Guarantee: 
		
 		
with the Borrower, the “Debtors”), which will be Debtors-in-Possession 
	
	
 
		
 		
in cases (the “Guarantors’ Cases”, and together with the Debtor’s Case, 
	
	
 
		
 		
the “Cases”) pending under Chapter 11 of the Bankruptcy Code. All 
	
	
 
		
 		
obligations of the Borrower under the DIP Facility will be 
	
	
 
		
 		
unconditionally guaranteed by the Guarantors. 
	
	
Lenders: 
		
 		
Linden Capital L.P. (or one or more of its affiliates) (“Linden”) and 
	
	
 
		
 		
Tenor Opportunity Master Fund, Ltd and Aria Opportunity Fund, Ltd (or 
	
	
 
		
 		
one or more of its affiliates) (“Tenor”, and collectively with Linden, the 
	
	
 
		
 		
“Lenders”). Linden and Tenor each has a commitment equal to 50% (in 
	
	
 
		
 		
a constant and not varying percentage) of the Commitment Amount (as 
	
	
 
		
 		
defined below). The Commitments (as defined below) of the Lenders 
	
	
 
		
 		
shall be several and not joint. 
	
	
Administrative 
		
 		
Wilmington Trust Company will serve as the administrative agent for the 
	
	
Agent: 
		
 		
Lenders (in such capacity, the “Administrative Agent”). 
	
	
 
	
	
Commitments, 
		
 		
Subject to the terms and conditions of this Exhibit, the Lenders hereby 
	
	
Availability, and 
		
 		
agree to provide the Borrower with multiple draw loans (the 
	
	
Purposes: 
		
 		
“Commitments”) in an aggregate amount of up to $8.75 million plus the 
	
	
 
		
 		
amount of Expense Payments (as defined below) added thereto (the 
	
	
 
		
 		
“Commitment Amount”) as set forth below. 
	
	
 
		
 		
Subject to the terms and conditions of this Exhibit, upon entry by the 
	
	
 
		
 		
Bankruptcy Court of an interim order satisfactory to the Lenders in their 
	
	
 
		
 		
sole discretion approving this Term Sheet and the DIP Facility (the 
	
	
 
		
 		
“Interim Order”), and until entry by the Bankruptcy Court of a final order 
	
	
 
		
 		
satisfactory to the Lenders in their sole discretion (i) approving the DIP 
	
	
 
		
 		
Loan Documentation (as defined below) and the DIP Facility (including, 
	
	
 
		
 		
without limitation, the Thermo Lender Payment (as defined below)), (ii) 
	
	
 
		
 		
finding that the liens securing the claims of the Thermo Lenders under 
	
	
 
		
 		
the Thermo 1 Financing Documents are valid, enforceable and 
	

B-1

	
 
		
 		
unavoidable and (iii) barring any further challenges to the validity, 
	
	
 
		
 		
enforceability or unavoidability of such liens (the “Final Order”), the 
	
	
 
		
 		
Borrower shall be permitted to borrow from the Lenders a term loan in 
	
	
 
		
 		
an initial aggregate principal amount of $750,000 (the “Initial DIP 
	
	
 
		
 		
Loan”) in a single draw-down to fund working capital needs of the 
	
	
 
		
 		
Debtors, in accordance with the Budget (as defined below). 
	
	
 
		
 		
Subject to the terms and conditions of this Exhibit, upon the occurrence 
	
	
 
		
 		
of both the Definitive Documentation Date (as defined below) and the 
	
	
 
		
 		
entry by the Bankruptcy Court of the Final Order and prior to the 
	
	
 
		
 		
“Effective Date” of the Plan (as defined below), the Borrower shall be 
	
	
 
		
 		
permitted to borrow from Lenders up to $8.75 million (the “Subsequent 
	
	
 
		
 		
Loans” and together with the Initial DIP Loan and any Expense 
	
	
 
		
 		
Payments added to the principal amount thereof as more fully described 
	
	
 
		
 		
below, the “DIP Loans”): 
	
	
 
		
 		
(a) (i) a term loan in an initial aggregate principal amount of $6.0 million 
	
	
 
		
 		
to pay and satisfy in full a $6.0 million portion of the principal 
	
	
 
		
 		
obligations owing by the Thermo 1 Project Entity to the Thermo Lenders 
	
	
 
		
 		
under the Thermo 1 Financing Documents in accordance with the PSA 
	
	
 
		
 		
plus (ii) an amount sufficient to pay or reimburse the Thermo Lenders 
	
	
 
		
 		
and the Thermo Lenders’ Agent their reasonable, documented out-of- 
	
	
 
		
 		
pocket attorneys’ fees and expenses in documenting this transaction to 
	
	
 
		
 		
the extent such amounts are not covered by the retainer previously 
	
	
 
		
 		
provided to them by the Debtors (the “Thermo Lender Reimbursement 
	
	
 
		
 		
Amount”) (the aggregate payment under this clause (a) is referred to 
	
	
 
		
 		
herein as “Thermo Lender Payment”); and 
	
	
 
		
 		
(b) a multiple draw term loan of up to $2.75 million (less the Thermo 
	
	
 
		
 		
Lender Reimbursement Amount), including the Initial DIP Loan, (i) to 
	
	
 
		
 		
fund day-to-day working capital needs of the Debtors and (ii) the costs, 
	
	
 
		
 		
expenses and other payments associated with the Cases, the Plan and the 
	
	
 
		
 		
other restructuring transactions contemplated by the PSA (other than 
	
	
 
		
 		
Expense Payments), in accordance with the Budget. 
	
	
Documentation: 
		
 		
Definitive documentation reasonably satisfactory in form and substance 
	
	
 
		
 		
to the Lenders, Administrative Agent and the Borrower with respect to 
	
	
 
		
 		
the terms and conditions governing the DIP Loans as set forth in this 
	
	
 
		
 		
Exhibit (the “DIP Loan Documentation”), and approved by the 
	
	
 
		
 		
Bankruptcy Court. Such DIP Loan Documentation shall be executed and 
	
	
 
		
 		
delivered by the parties thereto on or prior to May 20, 2011 (the date on 
	
	
 
		
 		
which such events occur, the “Definitive Documentation Date”), and 
	
	
 
		
 		
shall be approved by the Bankruptcy Court upon the entry of the Final 
	
	
 
		
 		
Order; provided that, in the event no such DIP Loan Documentation is 
	
	
 
		
 		
executed and delivered on or prior to May 20, 2011, the Debtors shall be 
	
	
 
		
 		
considered in default and the DIP Loans shall become immediately due 
	
	
 
		
 		
and payable. 
	

B-2

	
Collateral: 
		
 		
Prior to the entry of the Final Order, all obligations of the Debtors under 
	
	
 
		
 		
the DIP Facility shall be secured by (i) first-priority blanket liens and 
	
	
 
		
 		
security interests on all assets of the Debtors (other than the Existing 
	
	
 
		
 		
Collateral) that are not subject to existing liens, and (ii) junior liens and 
	
	
 
		
 		
security interests on all assets of the Debtors that are subject to existing 
	
	
 
		
 		
liens or security interests, including the Existing Collateral (the “DIP 
	
	
 
		
 		
Facility Junior Liens”). The DIP Facility Junior Liens arising under the 
	
	
 
		
 		
DIP Facility are junior in all respects to the Thermo Lenders’ liens on the 
	
	
 
		
 		
Existing Collateral prior to the Thermo Lender Payment. 
	
	
 
		
 		
Following the Thermo Lender Payment, the DIP Facility obligations 
	
	
 
		
 		
shall be secured by (i) a first-priority priming lien and security interest on 
	
	
 
		
 		
the Existing Collateral, (ii) first-priority blanket liens and security 
	
	
 
		
 		
interests on all other assets of the Debtors that are not subject to existing 
	
	
 
		
 		
liens, (iii) junior liens and security interests on all assets of the Debtors 
	
	
 
		
 		
that are subject to existing liens or security interests except as otherwise 
	
	
 
		
 		
described herein, and (iv) super-priority administrative expense claims 
	
	
 
		
 		
against the Debtors’ bankruptcy estates. 
	
	
 
		
 		
The foregoing liens securing the DIP Facility shall be entitled to the 
	
	
 
		
 		
benefits and protections of the appropriate provisions of Section 364 of 
	
	
 
		
 		
the Bankruptcy Code. 
	
	
 
		
 		
Without limiting the generality of the foregoing, upon the entry of the 
	
	
 
		
 		
Final Order, the foregoing liens shall be subject to (x) all accrued and 
	
	
 
		
 		
unpaid fees that arise pursuant to 28 U.S.C. Sec. 1930, plus (y) the 
	
	
 
		
 		
payment of allowed and unpaid fees of professionals retained in the 
	
	
 
		
 		
Cases (other than ordinary course professionals) that are incurred after 
	
	
 
		
 		
the delivery of a written notice of the occurrence of one or more Events 
	
	
 
		
 		
of Default in an amount not to exceed $100,000, plus (z) any allowed 
	
	
 
		
 		
accrued but unpaid fees and expenses owed to professionals retained in 
	
	
 
		
 		
the Cases (regardless of when allowed) that were accrued on or before 
	
	
 
		
 		
the date of delivery by the Lenders to the Debtors of a written notice of 
	
	
 
		
 		
the occurrence of one or more Events of Default to the extent consistent 
	
	
 
		
 		
with the Budget ((x), (y) and (z), collectively, the “Carve-Out”). 
	
	
Budget: 
		
 		
A 13-week rolling cash budget (with such supporting detail as the 
	
	
 
		
 		
Lenders may reasonably request), as approved by the Required Lenders 
	
	
 
		
 		
in their sole but reasonable discretion prior to the entry of the Interim 
	
	
 
		
 		
Order (and any subsequent approved budget, the “Budget”), shall be 
	
	
 
		
 		
attached to the Interim DIP Motion (as defined below) and shall reflect 
	
	
 
		
 		
on a line-item basis the Debtors’ anticipated aggregate cash receipts and 
	
	
 
		
 		
aggregate working capital expenses as determined by Debtors in their 
	
	
 
		
 		
reasonable judgment as necessary or required for each week covered by 
	
	
 
		
 		
the Budget. For each two week period in the Budget the aggregate 
	
	
 
		
 		
disbursements shall not exceed 110% of the aggregate amount of 
	
	
 
		
 		
projected disbursements for such two week period (“Permitted 
	
	
 
		
 		
Variance”). Upon the prior written request of the Debtors, or upon its 
	

B-3

	
 
		
 		
own initiative, the Required Lenders in their sole but reasonable 
	
	
 
		
 		
discretion may, without further Bankruptcy Court approval, authorize the 
	
	
 
		
 		
Debtors in writing to exceed the Permitted Variance. Any unused 
	
	
 
		
 		
amounts in the Budget may carry forward to successive weeks on a line- 
	
	
 
		
 		
by-line basis, with no carry-over surplus to any other line item. On each 
	
	
 
		
 		
bi-weekly anniversary of the Petition Date (or, if such anniversary is not 
	
	
 
		
 		
a Business Day, then on the next succeeding Business Day), the 
	
	
 
		
 		
Borrower shall provide the Administrative Agent with an updated 
	
	
 
		
 		
Budget, including a report of variances on a line-item basis. 
	
	
Term: 
		
 		
Unless otherwise agreed by the Lenders, borrowings shall be repaid in 
	
	
 
		
 		
full, and the Commitments shall terminate (the “Termination Date”), on 
	
	
 
		
 		
the earliest of (i) May 4, 2011 if the Interim Order has not been entered 
	
	
 
		
 		
by 11:59 p.m. (Wilmington, Delaware time) on such date, (ii) May 20, 
	
	
 
		
 		
2011 if the Final Order has not been entered by 11:59 p.m. (Wilmington, 
	
	
 
		
 		
Delaware time) on such date, (iii) August 11, 2011 if an order confirming 
	
	
 
		
 		
the Plan in accordance with the PSA and the Plan Term Sheet is not 
	
	
 
		
 		
entered by 11:59 p.m. (Wilmington, Delaware time) on such date, (iv) 
	
	
 
		
 		
the “Effective Date” of the Plan, (iv) August 26, 2011 (the “Final 
	
	
 
		
 		
Maturity Date”) and (v) the acceleration of the loans and the termination 
	
	
 
		
 		
of the Commitments in accordance with the terms of the DIP Loan 
	
	
 
		
 		
Documentation. 
	
	
Closing Date: 
		
 		
Closing Date for the DIP Facility to occur upon entry of the Interim 
	
	
 
		
 		
Order, but no later than May 4, 2011. 
	
	
Compensation: 
		
 		
As a material inducement to the Lenders to make the Commitments, the 
	
	
 
		
 		
Borrower agrees to compensate the Lenders, from and after the Interim 
	
	
 
		
 		
Order, as set forth below. 
	
	
Interest Rate: 
		
 		
15% per annum on the outstanding principal amount of the DIP Loans 
	
	
 
		
 		
and the Commitment Fees, compounded monthly (the “Interest Rate”). 
	
	
 
		
 		
Payable at maturity of the DIP Facility (whether at stated maturity, by 
	
	
 
		
 		
acceleration or otherwise). At all times that an Event of Default exists, 
	
	
 
		
 		
the Interest Rate applicable to the DIP Facility (and all amounts 
	
	
 
		
 		
outstanding thereunder) shall equal 17% per annum. Interest after 
	
	
 
		
 		
maturity shall be payable upon demand. 
	
	
 
		
 		
As described below, upon the occurrence of Plan Completion (as defined 
	
	
 
		
 		
below), all of the accrued interest on the DIP Loans and the Commitment 
	
	
 
		
 		
Fees will be credited in accordance with the PSA and the Plan Term 
	
	
 
		
 		
Sheet. 
	
	
Commitment Fees: 
		
 		
A fee equal to 10% of the Initial DIP Loans earned upon entry of the Initial 
	
	
 
		
 		
Order. 
	
	
 
	
	
 
		
 		
A fee equal to 10% of the Commitment Amount (less the amount of the Initial 
	
	
 
		
 		
DIP Loans) earned upon entry of the Final Order. 
	
	
 
	
	
 
		
 		
Once earned, all Commitment Fees will accrue interest at the Interest Rate. All 
	

B-4

	
 
		
 		
Commitment Fees (together with accrued interest) will be payable upon 
	
	
 
		
 		
maturity of the DIP Facility (whether at stated maturity, by acceleration or 
	
	
 
		
 		
otherwise). 
		
 		
 
	
	
 
	
	
 
		
 		
As described below, upon the occurrence of Plan Completion, 100% of the 
	
	
 
		
 		
Commitment Fees and all of the accrued interest on the Commitment Fees will 
	
	
 
		
 		
be credited in accordance with the PSA and the Plan Term Sheet. 
	
	
 
	
	
Credit of Interest and 
		
 		
If (a) no Event of Default has occurred and is continuing under the DIP Loan 
	
	
Commitment Fees: 
		
 		
Documentation or the PSA, (b) the DIP Facility obligations are satisfied in 
	
	
 
		
 		
accordance with the terms of the PSA and the Plan Term Sheet, and (c) the Plan 
	
	
 
		
 		
is confirmed and goes effective in accordance with the PSA and the Plan Term 
	
	
 
		
 		
Sheet (the occurrence of all of the events described in clauses (a), (b) and (c) 
	
	
 
		
 		
being referred to herein collectively as “Plan Completion”), then (i) all of the 
	
	
 
		
 		
accrued interest on the DIP Loans and the Commitments, and (ii) 100% of the 
	
	
 
		
 		
Commitment Fees, will be credited in accordance with the PSA and the Plan 
	
	
 
		
 		
Term Sheet. 
		
 		
 
	
	
 
	
	
Amortization: 
		
 		
None. 
		
 		
 
	
	
 
	
	
Optional 
		
 		
No early repayment or prepayment of any obligations under the DIP 
	
	
Prepayments: 
		
 		
Facility. 
		
 		
 
	
	
 
	
	
Minimum 
		
 		
$200,000, or such lesser amount as is then available for borrowing under 
	
	
Borrowing; Notice: 
		
 		
the Commitments; upon at least one (1) Business Days prior written 
	
	
 
		
 		
notice in the case of the Initial DIP Loan and the advance to make the 
	
	
 
		
 		
Thermo Lender Payment and upon at least three (3) Business Days’ prior 
	
	
 
		
 		
written notice in the case of all other requested advances. 
	
	
Conditions of Initial 
		
 		
The obligation to provide the Initial DIP Loan (the “Initial Conditions”) 
	
	
DIP Loan: 
		
 		
shall be subject to the satisfaction of the following conditions: 
	
	
 
		
 		
                (a) 
		
 		
The commencement of the Cases at or prior to 11:59 p.m. 
	
	
 
		
 		
(Wilmington, Delaware time) on April 29, 2011 (the “Petition Date”); 
	
	
 
	
	
 
		
 		
                (b) 
		
 		
The filing of a motion for entry of the Interim Order on the 
	
	
 
		
 		
Petition Date (the “Interim DIP Motion”); 
	
	
 
	
	
 
		
 		
                (c) 
		
 		
The entry of the Interim Order by the Bankruptcy Court at or 
	
	
 
		
 		
prior to 11:59 p.m. (Wilmington, Delaware time) on May 4, 2011; 
	
	
 
	
	
 
		
 		
                (d) 
		
 		
All of the “first day orders” entered at the time of 
	
	
 
		
 		
commencement of the Cases shall be consistent with the PSA and reasonably 
	
	
 
		
 		
satisfactory in form and substance to the Lenders in all respects; 
	

	
(e)      		
The PSA is in full force and effect;	
	 
	
(f)      		
Receipt and approval of the Budget;	
	 
	
(g)      		
The Debtors shall have granted the Administrative Agent and	
	 

each Lender access to and the right to inspect all reports, audits and other

B-5

	
 
		
 		
internal information of the Debtors relating to environmental matters and any 
	
	
 
		
 		
third party verification of certain matters relating to compliance with 
	
	
 
		
 		
environmental laws and regulations reasonably requested by the Administrative 
	
	
 
		
 		
Agent or any Lender; 
	
	
 
	
	
 
		
 		
                (h) 
		
 		
All corporate and judicial proceedings and all instruments and 
	
	
 
		
 		
agreements in connection with the transactions among the Debtors, the 
	
	
 
		
 		
Administrative Agent and the Lenders contemplated by this Exhibit as being 
	
	
 
		
 		
required on or before such date and the PSA shall be reasonably satisfactory in 
	
	
 
		
 		
form and substance to the Lenders in all respects, and the Lenders shall have 
	
	
 
		
 		
received all information (financial or otherwise) and copies of all documents 
	
	
 
		
 		
reasonably requested by the Lenders or their counsel; and 
	
	
 
	
	
 
		
 		
                (i) 
		
 		
Such other conditions as are reasonably required by the 
	
	
 
		
 		
Lenders. 
		
 		
 
	
	
 
	
	
Conditions of Each 
		
 		
The obligation to provide each DIP Loan (including the Initial DIP Loan) 
	
	
DIP Loan: 
		
 		
shall be subject to the satisfaction of the Initial Conditions and each of 
	
	
 
		
 		
the following conditions: 
	
	
 
		
 		
                (a) 
		
 		
If after giving effect to a request for, and the borrowing of, such 
	
	
 
		
 		
DIP Loan , usage of the Commitments would not exceed $8.75 million; 
	
	
 
	
	
 
		
 		
                (b) 
		
 		
In connection with the Initial DIP Loan, the Interim Order shall 
	
	
 
		
 		
have been entered and the Interim Order shall be in full force and effect, and 
	
	
 
		
 		
shall not have been amended, vacated, reversed, modified or rescinded or 
	
	
 
		
 		
subject to a presently effective stay pending appeal; 
	
	
 
	
	
 
		
 		
                (c) 
		
 		
For any Subsequent Loan, (i) the Definitive Documentation 
	
	
 
		
 		
Date shall have occurred and (ii) the Final Order and the Auction Procedures 
	
	
 
		
 		
Order (as defined in the Plan Term Sheet) shall have been entered, shall be in 
	
	
 
		
 		
full force and effect, and shall not have been amended, vacated, reversed, 
	
	
 
		
 		
modified or rescinded or subject to a presently effective stay pending appeal; 
	
	
 
	
	
 
		
 		
                (d) 
		
 		
No Event of Default and no condition which would constitute 
	
	
 
		
 		
an Event of Default with the giving of notice or lapse of time or both shall exist; 
	
	
 
	
	
 
		
 		
                (e) 
		
 		
Representations and warranties shall be true and correct in all 
	
	
 
		
 		
material respects on and as of the date of each DIP Loan, except to the extent 
	
	
 
		
 		
such representations and warranties specifically relate to an earlier date; 
	
	
 
	
	
 
		
 		
                (f) 
		
 		
Receipt of a notice of borrowing from the Borrower in form 
	
	
and substance reasonably satisfactory to the Lenders;
	
	
 
	
	
 
		
 		
                (g) 
		
 		
The PSA has not been terminated in accordance with its terms 
	
	
 
		
 		
and no party thereto has issued a notice of termination that will, by the terms of 
	
	
 
		
 		
the PSA, become effective upon the passage of time without any further action 
	
	
 
		
 		
by, or notice to or from, any other party; and 
	
	
 
	
	
 
		
 		
                (h) 
		
 		
Such other customary conditions as are reasonably required by 
	

B-6

	
 
		
 		
the Administrative Agent of the Lenders. 
	
	
 
	
	
 
		
 		
The request by the Borrower for, and the acceptance by the Borrower of, 
	
	
 
		
 		
each DIP Loan under the DIP Facility shall be deemed to be a 
	
	
 
		
 		
representation and warranty by the Borrower that the conditions specified 
	
	
 
		
 		
above have been satisfied. 
	
	
Representations and 
		
 		
The DIP Loan Documentation shall contain representations and 
	
	
Warranties: 
		
 		
warranties customary for debtor-in-possession financings and other terms 
	
	
 
		
 		
reasonably deemed appropriate by the Lenders (in each case subject to 
	
	
 
		
 		
materiality, knowledge and other qualifiers as are customary or otherwise 
	
	
 
		
 		
reasonably deemed appropriate by the Lenders), including, without 
	
	
 
		
 		
limitation: 
	

	
1.      		
Entity existence, status, power and authority.	
	 
	
2.      		
Due authorization, execution and delivery of the DIP Loan Documentation; legality, validity, binding affect and enforceability of the DIP Loan Documentation.	
	 
	
3.      		
Execution, delivery, and performance of the DIP Loan Documentation do not violate law or other contractual obligations enforceable against the Debtors without further action by the Bankruptcy Court.	
	 
	
4.      		
No default under the DIP Loan Documentation.	
	 
	
5.      		
Use of proceeds.	
	 
	
6.      		
Insurance.	
	 
	
7.      		
Ownership of the Borrower and its subsidiaries.	
	 
	
8.      		
Validity, priority and perfection of security interests in the Collateral.	
	 
	
9.      		
No any event, act or condition subsequent to the Petition Date that has or is reasonably expected to have a Material Adverse Effect (as defined below). “Material Adverse
Effect” means (a) a material adverse effect on the business, operations, properties, assets, or condition (financial or otherwise) of the Debtors, taken as whole, or (b) the impairment of the ability of the
Debtors to perform, or the Lender to enforce, the obligations under the DIP Facility, excluding, in each case, any such effect or impairment resulting from or arising out of or in connection with (i) general economic events or industry events
(including changes in the loan and securities markets), (ii) changes in accounting standards, principles or interpretations, (iii) acts of war, whether or not declared, armed hostilities and terrorism, (iv) actions taken or not taken at the request
of the Lender and (v) the disclosure of the PSA or the commencement of the Cases. Any determination as to whether any circumstance, change or effect has a Material Adverse Effect shall be made only after taking into account all effective insurance
coverage and third-party indemnifications with respect	
	 

B-7

	
 
		
 		
            to such circumstance, change or effect. 
	
	
 
	
	
Affirmative 
		
 		
The DIP Loan Documentation shall contain affirmative covenants 
	
	
Covenants: 
		
 		
customary for debtor-in-possession financings and other terms (including 
	
	
 
		
 		
customary exceptions) reasonably deemed appropriate by the Lenders 
	
	
(subject to the PSA), including, without limitation:
	

	
1.      		
Delivery of financial statements, reports, accountants’ letters, projections, budgets, officers’ certificates and other information concerning the Debtors and their finances and operations, in each case to the
extent reasonably requested by the Lenders.	
	 
	
2.      		
Compliance with the Budget to the extent set forth above.	
	 
	
3.      		
Delivery of notices of defaults under the DIP Loan Documentation, litigation and other material events.	
	 
	
4.      		
Subject to the Budget and the other terms and conditions of the DIP Loan Documentation, continuation of business and maintenance of existence and material rights and privileges of the Debtors.	
	 
	
5.      		
Maintenance of property and insurance of the Debtors.	
	 
	
6.      		
Right of the Administrative Agent and the Lenders to inspect property and books and records of the Debtors upon reasonable prior written notice and during normal business hours.	
	 
	
7.      		
Compliance with applicable laws in all material respects (including, without limitation, applicable ERISA and environmental laws and regulations).	
	 
	
8.      		
Further assurances reasonably requested by Required Lenders (including, without limitation, with respect to security interests in after-acquired property).	
	 
	
9.      		
Use of proceeds.	
	 
	
10.      		
Subject to the Budget and the other terms and conditions of the DIP Loan Documentation, payment of post-petition taxes.	
	 

	
Negative Covenants: 
		
 		
The DIP Loan Documentation shall contain negative covenants 
	
	
 
		
 		
customary for debtor-in-possession financings (other than financial 
	
	
 
		
 		
covenants) and other terms (including exceptions) reasonably deemed 
	
	
 
		
 		
appropriate by the Lenders (subject to the PSA), including, without 
	
	
 
		
 		
limitation: 
	

	
1.      		
Limitation on indebtedness, preferred stock and contingent obligations relating thereto.	
	 
	
2.      		
Limitation on liens and further negative pledges.	
	 

B-8

	
3.      		
Limitation on guarantee obligations.	
	 
	
4.      		
Unless the DIP Loans and all other amounts owing to the Lenders and the Administrative Agent shall have been paid in full in cash, limitation on mergers, consolidations, liquidations, dissolutions, acquisitions and non-
ordinary course asset sales.	
	 
	
5.      		
Limitation on leases.	
	 
	
6.      		
Limitation on dividends, other payment restrictions affecting subsidiaries and other payments in respect of capital stock.	
	 
	
7.      		
Limitation on capital expenditures, except to the extent contemplated by the Budget.	
	 
	
8.      		
Limitation on investments, acquisitions, loans and advances (other than intercompany loans).	
	 
	
9.      		
Limitation on transactions with affiliates; limitation on sale and leasebacks.	
	 
	
10.      		
Limitation on change of fiscal year.	
	 
	
11.      		
Limitation on changes in business conducted.	
	 
	
12.      		
Prohibition on payment of prepetition claims (other than as approved by the Bankruptcy Court and reasonably acceptable to the Lenders or as otherwise set forth in the Budget or permitted by the DIP Loan Documentation) and
payment of non-budgeted postpetition items.	
	 
	
13.      		
Prohibition on consenting to the granting of adequate protection payments or liens, superpriority administrative expense claims or liens having a priority senior or pari passu with the liens granted to the Lenders or the
Thermo Lenders, except as otherwise expressly permitted by the DIP Loan Documentation.	
	 

	
Events of Default: 
		
 		
Upon the occurrence and continuance of any of the following Events of 
	
	
 
		
 		
Default beyond the applicable grace period (if any) set forth below, and 
	
	
 
		
 		
subject to the Subordination Agreement between the Thermo Lenders 
	
	
 
		
 		
and the Pre-Petition Lender, the Administrative Agent may take all or 
	
	
 
		
 		
any of the following actions without further order of or application to the 
	
	
 
		
 		
Bankruptcy Court, provided that with respect to items (iii) and 
	
	
 
		
 		
(iv) below, the Administrative Agent shall provide the Borrower, any 
	
	
 
		
 		
Committee in the Cases and the United States Trustee for the District of 
	
	
 
		
 		
Delaware with five (5) Business Days’ prior written notice and provided, 
	
	
 
		
 		
further, that upon receipt of the notice referred to in the immediately 
	
	
 
		
 		
preceding clause, the Borrower may continue to make ordinary course 
	
	
 
		
 		
disbursements from such accounts referred to in (iii) below to the extent 
	
	
 
		
 		
and at the times set forth in the Budget, but may not withdraw or disburse 
	
	
 
		
 		
any other amounts from such account (in any hearing after the giving 
	
	
B-9
	

effect of the aforementioned notice, the only issue that may be raised by any party in opposition thereto being whether, in fact, an Event of Default has occurred and is continuing);

     (i) declare the principal of and accrued interest on the outstanding borrowings to be immediately due and payable;

	
(ii)      		
terminate the Commitments;	
	 
	
(iii)      		
set-off any amounts held for the account of the Debtors	
	 

as cash collateral or in any accounts maintained with the Administrative Agent, any other Lender or their respective affiliates; and

     (iv) take any other action or exercise any other right or remedy (including, without limitation, with respect to the liens in favor of the Administrative Agent and the Lenders) permitted under
the DIP Loan Documentation, or by applicable law.

     (a) Failure by the Borrower to pay principal, interest or fees when due;

     (b) Breach by any Debtor of any of the negative covenants described above;

     (c) Breach by any Debtor of any other covenant or agreement contained in the DIP Loan Documentation after written notice thereof from Required Lenders (subject, in the case of certain
affirmative covenants, to a 10 day grace period; provided, that grace periods shall not apply to any notice or Budget reporting provisions);

(d) Failure of the Debtors to obtain the Interim Order by 11:59

	
p.      		
m. (Wilmington, Delaware time) on May 4, 2011;	
	 
	 	
(e) Failure of the Definitive Documentation Date to occur on	
	 

	
or prior to May 20, 2011;

(f) Failure of the Debtors to obtain the Final Order by 11:59

	
p.      		
m. (Wilmington, Delaware time) on May 20, 2011;	
	 
	 	
(g) Failure of the Debtors to obtain confirmation of a Chapter	
	 

11 plan of reorganization in conformance with the PSA and the Plan Term Sheet (the “Plan”) before 11:59 p.m. (Wilmington, Delaware time) on
August 11, 2011;

     (h) Failure of the Debtors to have the Plan become effective before 11:59 p.m. (Wilmington, Delaware time) on August 26, 2011;

     (i) Any representation or warranty made by any Debtor shall prove to have been incorrect in any material respect when made;

(j) Any of the Cases shall be dismissed or converted to a

B-10

Chapter 7 Case; a Chapter 11 Trustee, a responsible officer or an examiner with enlarged powers relating to the operation of the business of the Borrower (powers beyond those set forth in Section 1106(a)(3) and (4) of the
Bankruptcy Code) shall be appointed in any of the Cases; or any other superpriority Claim (other than the Carve-Out upon entry of the Final Order) or lien which is pari passu
with or senior to the claims or liens of the Administrative Agent and the Lenders shall be granted in any of the Cases;

	
 
		
 		
(k) 
		
 		
Other than (a) payments authorized by the Bankruptcy 
	
	
Court 
		
 		
(i) in 
		
 		
respect of accrued payroll and related expenses as of the 
	

commencement of the Cases or (ii) in respect of certain creditors, in each case to the extent authorized by one or more “first day” orders reasonably satisfactory to the Lenders), (b) payments authorized by the
Bankruptcy Court with respect to any settlement or other stipulation with any creditor of any Borrower, other than the Lender, as adequate protection or otherwise individually or in the aggregate not in excess of $100,000 for any and all such
creditors unless approved in writing by the Lenders; and (c) the making of the Thermo Lender Payment on the terms and conditions set forth above, or (d) as otherwise contemplated by the Budget, any Debtor shall make any payment (whether by way of
adequate protection or otherwise) of principal or interest or otherwise on account of any pre-petition indebtedness or payables of a Debtor;

     (l) The Bankruptcy Court shall enter an order granting relief from the automatic stay to the holder or holders of any security interest to permit foreclosure (or the granting of a deed in lieu
of foreclosure or the like) on any assets of the Borrower or any Guarantor which have an aggregate value in excess of $350,000;

     (m) A Change of Control (to be defined in a manner mutually agreeable to the Lenders and Debtors) shall occur;

     (n) Any material provision of the DIP Loan Documentation, the Interim Order or the Final Order shall cease to be valid and binding on any Debtor, or any Debtor shall so assert in any pleading
filed in any court;

     (o) An order (i) shall be entered reversing, staying for a period in excess of fifteen (15) days, vacating or rescinding the Interim Order or the Final Order or (ii) shall be entered amending,
modifying or supplementing the Interim Order or the Final Order without the prior written consent of the Lenders;

	
(p)      		
The PSA is terminated; or	
	 
	
(q)      		
Such other reasonable and customary Events of Default as	
	 

	 	
are reasonably required by the Lenders.

	
Credit Bidding: 
		
 		
The Administrative Agent and the Lenders shall have the right to credit bid in 
	
	
 
		
 		
any sale of Collateral and shall have standing with respect to any such sale or 
	
	
 
		
 		
hearing related thereto. 
	
	
 
	
	
Yield Protection and 
		
 		
Standard yield protection and indemnification including capital adequacy 
	
	
B-11
	

	
Increased Costs; 
		
 		
requirements will be incorporated that will satisfactorily compensate the 
	
	
Taxes: 
		
 		
Lenders in the event that any changes in law, requirement, guideline or 
	
	
 
		
 		
request of relevant governmental authorities shall increase costs, reduce 
	
	
 
		
 		
payments or earnings, or increase capital requirements. All payments to 
	
	
 
		
 		
be made by the Borrower or the Guarantors under the DIP Facility shall 
	
	
 
		
 		
be made free and clear of any deduction, withholding or set off by reason 
	
	
 
		
 		
of any taxes or other amounts, except as required by applicable law. If 
	
	
 
		
 		
any taxes or other amounts are required by applicable law to be deducted 
	
	
 
		
 		
or withheld from any payments made by the Borrower or the Guarantors 
	
	
 
		
 		
under the DIP Facility to the original Lenders (or any assignee of such 
	
	
 
		
 		
Lender that is an affiliate of such Lender) (a “Sponsor Lender”), then the 
	
	
 
		
 		
amount payable by the Borrower or the applicable Guarantor(s) shall be 
	
	
 
		
 		
increased as necessary so that, net of any such withholding or deduction, 
	
	
 
		
 		
such Sponsor Lender receives the amount it would have received had no 
	
	
 
		
 		
such withholding or deduction been made; provided that income or 
	
	
 
		
 		
franchise taxes imposed on (or measured by) overall net income and 
	
	
 
		
 		
imposed by the United States or the jurisdiction under the laws of which 
	
	
 
		
 		
the Lender is organized, has its principal place or business or has its 
	
	
 
		
 		
applicable lending office, or any branch profits taxes imposed by the 
	
	
 
		
 		
United States, shall be “excluded taxes” and shall not be eligible for the 
	
	
 
		
 		
gross-up payable by the Borrower and/or the Guarantors pursuant to this 
	
	
 
		
 		
section. Each foreign Lender shall furnish to the Borrower and the 
	
	
 
		
 		
Administrative Agent appropriate certificates or tax forms as will permit 
	
	
 
		
 		
such payments to be made without being subject to U.S. federal tax 
	
	
 
		
 		
withholding to the extent such Lender is legally able to do so. 
	
	
Costs and Expenses; 
		
 		
All reasonable and documented out-of-pocket costs and expenses of the 
	
	
Indemnification: 
		
 		
Administrative Agent and the Lenders (including, without limitation, 
	
	
 
		
 		
reasonable fees and disbursements of counsel) incurred in connection 
	
	
 
		
 		
with the transactions contemplated hereby shall be payable by the 
	
	
 
		
 		
Borrower and the Guarantors on demand whether or not the transactions 
	
	
 
		
 		
contemplated hereby are consummated. The Borrower shall also pay all 
	
	
 
		
 		
reasonable and documented out-of-pocket costs and expenses of the 
	
	
 
		
 		
Administrative Agent and the Lenders (including, without limitation, 
	
	
 
		
 		
reasonable fees and disbursements of counsel) in connection with (i) the 
	
	
 
		
 		
negotiation, preparation and execution of all documentation executed on 
	
	
 
		
 		
or before the Closing Date in connection with the transactions 
	
	
 
		
 		
contemplated hereunder, whether or not consummated, and (ii) the 
	
	
 
		
 		
enforcement of any rights and remedies under the DIP Loan 
	
	
 
		
 		
Documentation. All costs and expenses required to be paid by the 
	
	
 
		
 		
Borrower and Guarantors hereunder are collectively referred to as the 
	
	
 
		
 		
“Expense Payments”. All Expense Payments that become due and owing 
	
	
 
		
 		
under the DIP Loan Documentation prior to the maturity of the DIP 
	
	
 
		
 		
Loans shall be automatically added to the principal amount of the DIP 
	
	
 
		
 		
Loans (and begin to bear interest) on the third Business Day following 
	
	
 
		
 		
the Borrower’s receipt of a reasonably detailed invoice therefor from the 
	
	
 
		
 		
Administrative Agent. All Expenses Payments that become due and 
	

B-12

	
 
		
 		
owing after maturity of the DIP Loans (whether at stated maturity, by 
	
	
 
		
 		
acceleration or otherwise) shall be due and payable on demand. 
	
	
 
		
 		
The Borrower and the Guarantor shall indemnify the Administrative 
	
	
 
		
 		
Agent and each Lender against any liability arising in connection with 
	
	
 
		
 		
the transactions contemplated hereby (other than in the case of the gross 
	
	
 
		
 		
negligence, bad faith or willful misconduct of any indemnified person). 
	
	
Assignments and 
		
 		
Usual and customary assignment and participation provisions reasonably 
	
	
Participations: 
		
 		
satisfactory to the Administrative Agent and the Lenders, subject to the 
	
	
 
		
 		
Borrower’s prior written consent, not to be unreasonably withheld or 
	
	
 
		
 		
delayed, except that no such consent shall be required if an Event of 
	
	
 
		
 		
Default has occurred and is continuing or in the case of any such 
	
	
 
		
 		
assignment or participation to an affiliate of any Lender. 
	
	
Voting: 
		
 		
“Required Lenders” shall mean Lenders holding more than 50% of the 
	
	
 
		
 		
Commitments except as to customary matters requiring unanimity (e.g., 
	
	
 
		
 		
the reduction of interest rates, the reduction of fees, the extension of the 
	
	
 
		
 		
maturity of the Borrower’s obligations and amend or modify the super- 
	
	
 
		
 		
priority status of the Debtors’ obligations). 
	
	
Agency: 
		
 		
Usual and customary agency provisions satisfactory to the 
	
	
 
		
 		
Administrative Agent. 
	
	
Miscellaneous: 
		
 		
The DIP Loan Documentation will include (a) waiver of consequential 
	
	
 
		
 		
and punitive damages and right to a jury trial and (b) customary set-off 
	
	
 
		
 		
and sharing provisions. 
	
	
Documentation: 
		
 		
Reasonably satisfactory in form and substance to the Lenders and the 
	
	
 
		
 		
Borrower. 
	
	
Governing Law: 
		
 		
New York except as governed by the Bankruptcy Code. 
	

B-13

EXHIBIT C

RESERVED

C-1

	
EXHIBIT D

[FORM OF] JOINDER AGREEMENT

	
_____________________
, 20___ [DATE]

     Reference is made to that certain PLAN SUPPORT AND RESTRUCTURING AGREEMENT (as amended, supplemented or otherwise modified from time to time, the “Plan Support and
Restructuring Agreement”), dated as of April 28, 2011, entered into by and among RASER TECHNOLOGIES, INC. (“Raser”), RASER TECHNOLOGIES OPERATING
COMPANY, INC, RASER POWER SYSTEMS, LLC, RT PATENT COMPANY, INC., PACIFIC RENEWABLE POWER, LLC, WESTERN RENEWABLE POWER, LLC, INTERMOUNTAIN RENEWABLE POWER, LLC, LOS LOBOS RENEWABLE POWER, LLC, COLUMBIA RENEWABLE POWER, LLC, TRUCKEE GEOTHERMAL NO. 1
SV-01, LLC, TRUCKEE GEOTHERMAL NO. 2, SV-04, LLC, TRAIL CANYON GEOTHERMAL NO. 1 SV 02, LLC, DEVIL’S CANYON GEOTHERMAL NO. 1 SV-03, LLC, THERMO NO.

1 BE-01, LLC, THERMO NO. 2 BE-02, LLC, THERMO NO. 3 BE-03, LLC, CRICKET

GEOTHERMAL NO. 1 MI-01, LLC, HARMONY GEOTHERMAL NO. 1 IR-01, LLC, LIGHTNING DOCK GEOTHERMAL HI-01, LLC, and KLAMATH GEOTHERMAL NO. 1 KL-01, LLC (collectively with Raser, the “Debtors”), LINDEN CAPITAL, L.P. (the “Prepetition Lender”), TENOR OPPORTUNITY MASTER FUND, LTD., ARIA OPPORTUNITY FUND, LTD. and
PARSOON OPPORTUNITY FUND, LTD. (collectively, “Tenor”; together with the Prepetition Lender, the “Sponsors”),
and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, and ZURICH AMERICAN INSURANCE COMPANY (the “Thermo Lenders” and, together with the Debtors and the Sponsors, the
“Parties”) and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent and Collateral Agent (the “Thermo Lenders’ Agent”). Any capitalized terms used but not defined herein shall have the meanings set forth in the Plan Support and Restructuring Agreement.

For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned agrees as follows: Section 1. Transfer of Claims. The
undersigned represents that, as of the date hereof and subject to the condition precedent of validly executing and delivering this Joinder Agreement to the Parties under the Plan Support and Restructuring Agreement, it is taking transfer of the
following Claims:

     [Specify exact claims, including name of security, if applicable and principal amounts] (the “Transferred
Claims”) originally owned by [Specify original claim holder per the Plan Support and Restructuring Agreement] (the “Original Claim Holder”)
from

[Specify Transferor] (the “Transferor”)

     Section 2. Joinder. The undersigned hereby confirms that, as of the date hereof, it agrees to be a party to the Plan Support and Forbearance
Agreement and agrees to be bound by all terms, conditions and obligations set forth in the Plan Support and Restructuring Agreement, as if it had been an original Party to the Plan Support and Restructuring Agreement.

D-1

     Section 3. Representations and Warranties. The undersigned hereby represents and warrants for the benefit of the other Parties to the Plan
Support and Restructuring Agreement, that the following statements are true, correct and complete as of the date hereof:

     (a) The undersigned has all requisite power and authority to enter into this Joinder Agreement and the Plan Support and Restructuring Agreement, and to carry out the transactions contemplated by, and
perform its respective obligations under, this Joinder Agreement and the Plan Support and Restructuring Agreement. The execution and delivery of this Joinder Agreement and the performance of its obligations hereunder and under the Plan Support and
Restructuring Agreement have been duly authorized by all necessary corporate, partnership, trust or limited liability company action on its part; and 

     (b) The execution, delivery of this Joinder Agreement by the undersigned, and performance by the undersigned of this Joinder Agreement and the Plan Support and Restructuring Agreement each does not
and shall not: (i) violate any provision of law, rule or regulation applicable to it; (ii) violate its certificate of incorporation, bylaws, or other organizational documents or those of any of its subsidiaries; or (iii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it is a party.

     Section 4. Counterparts and Delivery. This Joinder Agreement may be executed in one or more counterparts, each of which shall be deemed an
original and all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Joinder Agreement by facsimile transmission or by electronic mail in portable document format
(.pdf) shall be effective as delivery of an original executed counterpart of this Joinder Agreement.  Transferee agrees to promptly deliver copies of this Joinder Agreement to each of Raser and the Sponsors in accordance with the notice provisions
of the Plan Support and Restructuring Agreement.

     Section 5. Governing Law.  This Joinder Agreement shall be governed by, and construed in accordance with, the laws of the State of New
York.

	
[Remainder of this page intentionally left blank]

D-2

IN WITNESS WHEREOF, the undersigned has duly executed this Joinder Agreement as of the date first above written.

	
[TRANSFEREE]

	
By: 
________________________

Name:

Title:

D-3

	
EXHIBIT E

THERMO SETTLEMENT AGREEMENT TERM SHEET

     This term sheet presents the principal terms upon which Raser and the Thermo 1 Project Entity and the Thermo Lenders have agreed to satisfy in full the Debtors’ obligations under the Thermo 1
Financing Documents. Terms herein with an initial capital not required by standard capitalization rules are defined terms, and each such term not parenthetically or otherwise defined herein shall have the meaning ascribed to it in that certain Plan
Support and Restructuring Agreement, dated as of April 28, 2011 (the “Plan Support Agreement”), by and among Raser and its affiliates, Linden Capital, LP (the “Prepetition Lender”), Tenor Opportunity Master Fund, Ltd., Aria Opportunity Fund, Ltd., and Parsoon Opportunity Fund, Ltd. (collectively, “Tenor”; together with the Prepetition Lender, the “Sponsors”), and The Prudential Insurance Company of America, and Zurich American Insurance Company (together, the
“Thermo Lenders”) and Deutsche Bank Trust Company Americas, as Administrative Agent and Collateral Agent (the “Thermo Lenders’
Agent”), to which this Plan Term Sheet is attached.

	
 
		
 		
· 
		
 		
The Debtors shall make an indefeasible payment of $6.0 
	
	
 
		
 		
 
		
 		
million of the Thermo 1 Note, plus payment and/or 
	
	
 
		
 		
 
		
 		
reimbursement of the reasonable, documented out-of-pocket 
	
	
 
		
 		
 
		
 		
attorneys’ fees and expenses incurred by the Thermo Lenders 
	
	
 
		
 		
 
		
 		
and the Thermo Lenders’ Agent, and any reasonable 
	
	
 
		
 		
 
		
 		
outstanding attorneys’ fees and expenses of the Thermo 
	
	
 
		
 		
 
		
 		
Lenders’ Agent, in conjunction with this Agreement and the 
	
	
 
		
 		
 
		
 		
transactions contemplated thereby (the “Thermo Lenders 
	
	
Payment and 
		
 		
 
		
 		
Payment”) to the Thermo Lenders immediately upon the entry 
	
	
Subordination 
		
 		
 
		
 		
of the final order approving the DIP Facility; and 
	
	
 
	
	
 
		
 		
· 
		
 		
Upon the receipt by the Thermo Lenders of the Thermo 
	
	
 
		
 		
 
		
 		
Lenders Payment, the Thermo Lenders agree that all liens and 
	
	
 
		
 		
 
		
 		
security interests of the Thermo Lenders in the assets of the 
	
	
 
		
 		
 
		
 		
Thermo 1 Project Entity shall be subject and subordinate to (i) 
	
	
 
		
 		
 
		
 		
the liens and security interests granted to the Sponsors under 
	
	
 
		
 		
 
		
 		
the DIP Facility, and (ii) the liens and security interests 
	
	
 
		
 		
 
		
 		
granted to the Prepetition Lender under the Bridge Facility. 
	
	
 
	
	
 
		
 		
· 
		
 		
The Plan shall provide that upon the Effective Date of the 
	
	
 
		
 		
 
		
 		
Plan, each of the Debtors, their bankruptcy estates, the 
	
	
 
		
 		
 
		
 		
Reorganized Debtors and the Sponsors, and the successors 
	
	
Releases and 
		
 		
 
		
 		
and assigns of any of them, and any other person that claims 
	
	
Indemnification 
		
 		
 
		
 		
or might claim through, on behalf of, or for the benefit of any 
	
	
Provisions 
		
 		
 
		
 		
of the foregoing, shall be deemed to have irrevocably and 
	
	
 
		
 		
 
		
 		
unconditionally, fully, finally and forever waived, released, 
	
	
 
		
 		
 
		
 		
acquitted and discharged the Thermo Lenders, including the 
	
	
 
		
 		
 
		
 		
Administrative Lender, the Thermo Lenders’ Agent and each 
	
	
 
		
 		
 
		
 		
of their respective affiliates, directors, officers, employees, 
	

E-1

	
 
		
 		
 
		
 		
advisors, counsel, agents, attorneys-in-fact, controlling 
	
	
 
		
 		
 
		
 		
persons, and their respective successors and assigns (each, an 
	
	
 
		
 		
 
		
 		
“Indemnified and Released Party,” and collectively, 
	
	
 
		
 		
 
		
 		
“Indemnified and Released Parties”) from any and all claims 
	
	
 
		
 		
 
		
 		
(as defined in the Bankruptcy Code), counterclaims, demands, 
	
	
 
		
 		
 
		
 		
debts, actions, obligations, rights, debts, accounts, remedies, 
	
	
 
		
 		
 
		
 		
avoidance actions, agreements, promises, judgments, causes 
	
	
 
		
 		
 
		
 		
of action, suits, losses, damages or liabilities of any nature 
	
	
 
		
 		
 
		
 		
whatsoever, whether known or unknown, that arise from or in 
	
	
 
		
 		
 
		
 		
any way relate to the Thermo 1 Financing Documents; 
	
	
 
	
	
 
		
 		
· 
		
 		
The Plan shall provide that the Debtors shall indemnify the 
	
	
 
		
 		
 
		
 		
Indemnified and Released Parties for a period of three years 
	
	
 
		
 		
 
		
 		
after the Effective Date against any claim, demand or liability 
	
	
 
		
 		
 
		
 		
arising from any action, failure or omission to act, and arising 
	
	
 
		
 		
 
		
 		
from any claim against the Indemnified and Released Parties 
	
	
 
		
 		
 
		
 		
being released pursuant to the Plan; and 
	
	
 
	
	
 
		
 		
· 
		
 		
The Plan shall include provisions permanently enjoining all 
	
	
 
		
 		
 
		
 		
creditors and entities in the bankruptcy proceeding from 
	
	
 
		
 		
 
		
 		
initiating a suit against the Indemnified and Released Parties 
	
	
 
		
 		
 
		
 		
for any matters that are released under the Plan or for which 
	
	
 
		
 		
 
		
 		
there is indemnification of said parties under the Plan. 
	
	
 
	
	
 
		
 		
· 
		
 		
Provided that the Thermo Lender Payment has been made, 
	
	
 
		
 		
 
		
 		
and the Plan as confirmed by the Bankruptcy Court contains 
	
	
Wavier of Claims of 
		
 		
 
		
 		
the foregoing releases, exculpations, injunctions and 
	
	
Thermo Lenders 
		
 		
 
		
 		
indemnifications, the Thermo Lenders agree to waive and 
	
	
 
		
 		
 
		
 		
release all remaining claims, rights and causes of action 
	
	
 
		
 		
 
		
 		
arising under or related to the Thermo Financing Documents. 
	

E-2ex10-33.htm

Exhibit 10.33

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”), is dated as of March 28, 2011, among Lattice Incorporated, a Delaware (the “Company”), and Barron Partners LP, a Delaware limited partnership (the “Purchaser”). This Agreement reflects the date of closing and other conforming corrections.

 

WHEREAS, on February 14, 2011, the Company entered into a certain Securities Purchase Agreement (the “Initial SPA”) with Purchaser pursuant to which Purchaser purchased 454,546 shares of Series D Convertible Preferred Stock (the “Series D Stock”) for $1,000,000.00;

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(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 Purchaser, and Purchaser desires to purchase from the Company, additional Series D Stock 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 Purchaser agree as follows:

 

Article 1

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 Series D Designations (as defined herein), and (b) the following terms have the meanings indicated in this Section 1.1:

 

“4.9% Limitation” means the limitation in Section 6(b) of the Certificate of Designation providing for limitation upon conversion rights of Series D Preferred Stock into shares of Common Stock to the extent that such conversion or exercise would result in beneficial ownership by Purchaser and its Affiliates of more than 4.9% of the then outstanding number of shares of Common Stock on such date.

 

“Affiliate” means any Person that, directly or indirectly through one (1) or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

 

“Articles” means the Certificate of Incorporation of the Company, as the same may be amended from time to time.

 

  

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“Big Four” shall mean the auditing firms KPMG, Deloitte Touche Tohmatsu, PricewaterhouseCoopers and Ernst and Young.

 

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

 

“Certificate of Designation” means the certificate of the rights, preferences and privileges, subject to the limitations, with respect to the Series D Preferred Stock filed with the Secretary of State of the State of Delaware on February 10, 2011, as amended by the Amended Certificate of Designation to be filed with the Secretary of State of the State of Delaware in substantially the form of Exhibit A to this Agreement.

 

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

 

“Closing Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities have been satisfied or waived, which is deemed as of March 28, 2011.

 

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

 

“Common Stock” means the common stock of the Company, par value $.01 per share, and any other class of securities into which such securities may hereafter be reclassified or changed into.

 

“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, rights, options, warrants 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.

 

“EBITDA” means consolidated earnings before interest, taxes, depreciation and amortization, share-based compensation, and non-recurring extraordinary items, each determined in accordance with GAAP.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

  

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“Exempt Issuance” means: (a) shares of Common Stock or options to purchase Common Stock to employees, officers, directors and consultants of the Company pursuant to a stock or option plan adopted by the Board of Directors of the Company, at the amount not exceeding two and one-half percent (2.5%) per year of the outstanding common stock for any given year and not exceeding five percent (5%) for a five year period, (b) securities issued upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities (including the stock rights referenced in current SEC Reports as referenced in Section 3.1(h)) exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that, unless set forth in current SEC Reports as referenced in Section 3.1(h), such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the directors, provided that any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company, as determined by a majority of the directors, and in which the Company receives 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.

 

“First Closing” and “First Closing Date” means February 14, 2011.

 

“Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

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

 

“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.

 

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

 

“Public Information Failure” shall have the meaning ascribed to such term in Section 4.14 (b).

 

“Public Information Failure Payments” shall have the meaning ascribed to such term in Section 4.14(b).

 

“Purchase Price” shall mean the $200,000 in United States dollars payable by wire transfer at the time of the closing.

 

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

 

  

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“Required Minimum” means, as of any date, one hundred and ten percent (110%) of the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise or conversion in full of all Series D Convertible Preferred Stock (including a reasonable reserve for Underlying Shares issuable as payment of dividends), ignoring any conversion or exercise limits set forth therein.

 

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

 

“Securities” means the Series D Convertible Preferred Stock and the Underlying Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated hereunder.

 

“Series D Convertible Preferred Stock” means the Series D Convertible Preferred Stock of the Company and such designations, preferences and limitations as are set forth in the Series D Designations.

 

“Series D Designations” means the Certificate of Designation, Preferences and Rights of Series D Convertible Preferred Stock filed with the State of Delaware on February 11, 2011, as amended by the form of Amended Certificate of Designation attached hereto as Exhibit A to this Agreement.

 

“Shares” means the shares of common stock issuable upon conversion

 

“Short Sales” shall include 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).

 

“Subsidiary” means any subsidiary of the Company as described on Exhibit 21.1 to the Company’s Form 10-K.

 

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

 

“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq Capital Market, the NYSE Amex, the New York Stock Exchange, the Nasdaq National Market, the OTC Bulletin Board, or “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices).

 

“Transaction Documents” means this Agreement, the Series D Designations and any other documents or agreements executed in connection with the transactions contemplated hereunder.

  

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“Underlying Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Series D Convertible Preferred Stock.

 

“VWAP” of a share of Common Stock as of a particular date (the “Determination Date”) shall mean the price determined by the first of the following clauses that applies: (a) if shares of Common Stock are traded on a national securities exchange (an “Exchange”), the weighted average of the closing sale price of a share of the Common Stock of the Company on the last five (5) Trading Days prior to the Determination Date reported on such Exchange as reported in The Wall Street Journal (weighted with respect to the trading volume with respect to each such day); (b) if shares of Common Stock are not traded on an Exchange but trade in the over-the-counter market and such shares are quoted on the National Association of Securities Dealers Automated Quotations System (“NASDAQ”), the weighted average of the closing sale price of a share of the Common Stock of the Company on the last five (5) Trading Days prior to the Determination Date reported on NASDAQ as reported in The Wall Street Journal (weighted with respect to the trading volume with respect to each such day); (c) if such shares are an issue for which last sale prices are not reported on NASDAQ, the average of the closing sale price, in each case on the last five (5) Trading Days (or if the relevant price or quotation did not exist on any of such days, the relevant price or quotation on the next preceding Business Day on which there was such a price or quotation) prior to the Determination Date as reported by the Over the Counter Bulletin Board (the “OTCBB”), or any other successor organization; (d) if no closing sales price is reported for the Common Stock by the OTCBB or any other successor organization for such day, the average of the closing sale price, in each case on the last five (5) Trading Days (or if the relevant price or quotation did not exist on any of such days, the relevant price or quotation on the next preceding business day on which there was such a price or quotation) prior to the Determination Date as reported by the “pink sheets” by the Pink Sheets, LLC, or any successor organization, (e) if no closing sales price is reported for the Common Stock by the OTCBB or any other successor organization for such day, then the average of the high and low bid and asked price of any of the market makers for the Common Stock as reported on the OTCBB or in the “pink sheets” by the Pink Sheets, LLC on the last five (5) Trading Days; or (e) 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 holder and reasonably acceptable to the Company.

 

ARTICLE 2

PURCHASE AND SALE

 

2.1           Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, concurrent with the execution and delivery of this Agreement by the parties hereto, the Purchaser agrees to purchase, and the Company agrees to sell 90,910 shares of Series D Convertible Preferred Stock for aggregate consideration consisting of $200,000 (the “Purchase Price”). On the Closing Date, subject to the terms of this Agreement, Purchaser shall cause the Purchase Price to be delivered to the Company. The Purchase Price shall be delivered via wire transfer. The Company shall deliver to the Purchaser the Series D Convertible Preferred Stock and the other items set forth in Section 2.2 issuable at the Closing or within specified periods subsequent, otherwise described in Section 2.2(c). Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Becker Meisel LLC, 354 Eisenhower Parkway, Eisenhower Plaza II, Suite 1500, Livingston, New Jersey 07037, or such other location as the parties shall mutually agree.

  

5

  

 

2.2           Deliveries.

 

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

 

(i)             this Agreement duly executed by the Company;

 

(ii)            a form of stock certificate for shares of Series D Convertible Preferred Stock;

 

(iii)           any required consents or waivers;

 

(iv)           such other documents or certificates as may reasonably be requested by Purchaser; and

 

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

 

(i)             this Agreement duly executed by such Purchaser;

 

(ii)            the Purchase Price; and

 

(iii)           such other documents as may reasonably be requested by the Company or its counsel.

 

(c)           Within ten days of the Closing Date, the Company shall deliver or caused to be delivered to the Purchaser the following:

 

(i)           The Certificate of Designation, as amended and filed; and

 

(ii)           A stock certificate for 90,910 shares of Series D Convertible Preferred Stock.

 

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 when made and on the Closing Date of the representations and warranties of the Purchaser contained herein;

  

6

  

 

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

 

(iii)           the delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

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

 

(i)             the accuracy in all material respects on the Closing Date of the representations and warranties of the Company contained herein;

 

(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; and

 

(iv)           there shall have been no Material Adverse Effect with respect to the Company since the date of the balance sheet (the “Balance Sheet”) included in the annual report on Form 10-K for the year ended December 31, 2010 filed with the Commission on March 31, 2011 (the “Form 10-K”).

 

Article 3

REPRESENTATIONS AND WARRANTIES

 

3.1           Representations and Warranties of the Company. Except as set forth under the corresponding section of the disclosure schedules delivered to the Purchaser concurrently herewith (the “Disclosure Schedules”) which Disclosure Schedules shall be deemed a part hereof and to qualify any representation or warranty otherwise made herein to the extent of such disclosure, the Company hereby makes the representations and warranties set forth below to Purchaser.

 

(a)           Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Exhibit 21.1 of the Form 10-K of the Company, as filed with the Commission. The Company owns, directly or indirectly, such capital stock or other equity interests in SMEI and in each other Subsidiary as reflected on Exhibit 21.1 and otherwise disclosed in the Form 10-K free and clear of any Liens, and all 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, then all other references in the Transaction Documents to the Subsidiaries or any of them will be disregarded.

  

7

  

 

(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 (as applicable), with the requisite corporate 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 or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. The Company and each of 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, could 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 corporate power and authority or qualification.

 

(c)           Independent Board. As of the date of this Agreement, the Board of Directors of the Company consists of three (3) directors with 2 being “independent”, as defined in the rules promulgated under the 1934 Act.

 

(d)           Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection therewith other than in connection with the Required Approvals. Each Transaction Document 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.

  

8

  

 

(e)           No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the other 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, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien 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 could not have or reasonably be expected to result in a Material Adverse Effect.

 

(f)           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 pursuant to Section 4.9 hereof, and the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (the “Required Approvals”).

 

(g)           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. The Company will have 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.

 

(h)           Capitalization. The capitalization of the Company is as set forth in Item 8 (Financial Statements and Supplementary Data, inclusive of footnote) in the Form 10-K . Except as disclosed in the Form 10-K, 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 and as otherwise disclosed in the Form 10-K, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, 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. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser) 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. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all 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 of the Company 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.

  

9

  

 

(i)           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 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 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.

 

(j)           Litigation. Except as set forth in the SEC Reports, 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) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor, to the best of the knowledge of the Company, any director or officer thereof, 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.

  

10

  

 

(k)           Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company or any Subsidiary which could 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, 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. No executive officer, to the knowledge of the Company, 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, and, to the knowledge of the Company, 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. To the knowledge of the Company, the Company and its Subsidiaries are in compliance with all 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 could 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 material 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 order of any court, arbitrator or governmental body, or (iii) to the knowledge of the Company, is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(m)           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 could not have or 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.

  

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(n)           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 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, Liens for the payment of federal, state or other taxes, 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.

	  	  
	  	
(o)           Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a notice (written or otherwise) that the Intellectual Property Rights used by the Company or any Subsidiary violate or infringe upon the rights of any Person unless such notice has been resolved without 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 could not, individually or in the aggregate, reasonably be expecting to have a Material Adverse Effect.

	  	  
	  	
(p)           Insurance. Except as set forth on Schedule 3.1(p), 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 at least equal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

	  	  
	  	
(q)           Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, 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 or partner, other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company or a Subsidiary and (iii) for other employee benefits, including stock option or stock grant agreements under any stock plans of the Company.

  

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(r)           No Disagreements with Auditors and Lawyers. To the knowledge of the Company, there are no material disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the auditors and lawyers formerly or presently employed by the Company.

	  	  
	  	
(s)           Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

	  	  
	  	
(t)           Private Placement. Assuming the accuracy of the Purchaser’s 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 Purchaser as contemplated hereby.

	  	  
	  	
(u)           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 subject to the Investment Company Act.

	  	  
	  	
(v)           Disclosure. All disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that Purchaser has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

	  	  
	  	
(w)           No Integrated Offering. Assuming the accuracy of the Purchaser’s 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 the Securities Act.

  

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(x)           All outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments is set forth in the SEC Reports. For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed (other than trade accounts payable incurred in the ordinary course of business) in excess of $25,000, (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s 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 (c) the present value of any lease payments in excess of $25,000 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.

	  	  
	  	
(y)           Tax Status. The Company has timely filed all tax returns, reports, declarations, statements, and other information required by law to be filed with or supplied to any taxing authority with respect to the Taxes (as defined below) owed by the Company (the “Tax Returns”). All Taxes due and payable on or before the Closing have been paid or will be paid prior to the time they become delinquent. All Taxes that the Company is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper governmental entity. The Company has not been advised (a) that any of the Tax Returns have been or are being examined or audited as of the date hereof, (b) that any such examination or audit is currently threatened or contemplated, or (c) of any deficiency in assessment or proposed judgment to its Taxes. The Company has no knowledge of any liability for any Taxes to be imposed upon its properties or assets as of the date of this Agreement that are not adequately provided for on the Balance Sheet. The Company has delivered or made available to the Purchaser true and complete copies of all federal income Tax Returns, examination reports, and statements of deficiencies filed by, assessed against or agreed to by the Company in the past three years. The Company has never been a member of a consolidated or affiliated group of corporations filing a consolidated or combined income Tax Return, nor does the Company have any liability for Taxes of any other person or entity. The Company is not a party to any tax allocation or sharing arrangement or tax indemnity agreement. For purposes of this Agreement, the term “Taxes” shall mean all taxes, charges, fees, levies, or other similar assessments or liabilities, including, without limitation, income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, withholding, employment, payroll, and franchise taxes imposed by the United States of America or any other governmental entity, and any interest, fines, penalties, assessments, or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof.

	  	  
	  	
(z)           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 Purchaser and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

  

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(aa)           Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser 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 Purchaser is not 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 Purchaser or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchaser’s purchase of the Securities. The Company further represents to 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.

	  	  
	  	
(bb)           Acknowledgement Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding, it is understood and acknowledged by the Company (i) that Purchaser has not been asked to agree, nor has 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) that past or future open market or other transactions by Purchaser, including Short Sales, and 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) that Purchaser, and counter-parties in “derivative” transactions to which Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv) that 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 (a) Purchaser 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 (b) 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.

	  	  
	  	
(cc)           Manipulation of Price. 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) except in private transactions not involving a market maker, sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the securities of the Company 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 Company’s placement agent in connection with the placement of the Securities.

  

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  3.2           Representations and Warranties of the Purchaser. Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows:

	  	  
	  	
(a)           Organization; Authority. Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership 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, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of Purchaser. Each Transaction Document to which it is a party has been duly executed by Purchaser, and when delivered by Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of 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. 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 (this representation and warranty not limiting such Purchaser’s right to sell the Securities in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law. Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

	  	  
	  	
(c)           Purchaser Status. At the time Purchaser was offered the Securities, it was, and at the date hereof it is, and on each date on which it converts any Series D Convertible Preferred Stock it will be either: (i) an “accredited investor” as defined in Rule 501 under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A (a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

	  	  
	  	
(d)           Experience of Such Purchaser. 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. 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.

  

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(e)           General Solicitation. 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 any other general solicitation or general advertisement.

	  	  
	  	
(f)           Short Sales and Confidentiality Prior To The Date Hereof. Other than the transaction contemplated hereunder, Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with Purchaser, executed any disposition, including Short Sales, in the securities of the Company during the period commencing from the time that Purchaser first received a term sheet (written or oral) from the Company or any other Person setting forth the material terms of the transactions contemplated hereunder until the date hereof (“Discussion Time”). Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of 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, Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

	  	  
	  	
(g)           Risk Factors. Purchaser hereby agrees and acknowledges that it has been informed of the following: (i) there are factors relating to the subsequent transfer of any Securities acquired hereunder that could make the resale of such Securities difficult; and (ii) there is no guarantee that Purchaser will realize any gain from the purchase of the Securities. The purchase of the Securities involves a high degree of risk and is subject to many uncertainties. These risks and uncertainties may adversely affect the Company’s business, operating results and financial condition. In such an event, the trading price for the Common Stock could decline substantially and Purchaser could lose all or part of its investment.

	  	  
	  	
(h)           Due Diligence. Purchaser hereby agrees and acknowledges that Purchaser has reviewed the SEC Reports and has had an opportunity to meet with representatives of the Company and to ask questions and receive answers to Purchaser’s satisfaction regarding the Company’s proposed business and the Company’s financial condition in order to assist Purchaser in evaluating the merits and risks of purchasing the Securities. All material documents and information pertaining to the Company and the purchase of Securities hereunder that have been requested by Purchaser have been made available to Purchaser.

	  	  
	  	
(i)           Certain Fees. Purchaser has not employed any broker or finder or incurred any liability for any brokerage or investment banking fees, commissions, finders’ structuring fees, financial advisory fees or other similar fees in connection with the Transaction Documents.

  

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ARTICLE 4

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 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 shall have the rights of a Purchaser under this Agreement.

	  	  	  	  
	  	
(b)           The Purchaser agrees 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 CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

	  
	  	  	  	  
	  	
(c)           The Company acknowledges and agrees that 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, if required under the terms of such arrangement, 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, provided, however, the Company may require the Purchaser to provide to the Company an opinion of counsel selected by the Purchaser 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 or pledge does not require registration of such transferred or pledged Securities under the Securities Act. At 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.

  

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 4.2           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 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.

	  	  	  	  
	
 4.3           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 to the Purchaser.

	  	  	  	  
	
 4.4           Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that 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 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 Purchaser.

	  	  	  	  
	
 4.5           Additional Company Covenants.

	  
	  	  	  	  
	  	
(a)           Retention of “Big Four” Audit Firm. The Company shall retain a “Big Four” audit firm by June 30, 2012.

	  	  	  	  
	  	
(b)           Exchange Act Registration. The Company (a) will continue its obligation to report to the SEC under Section E 12(d) of the 1934 Act and will use its best efforts to comply in all respects with its reporting and filing obligations under the 1934 Act, and will not take any action or file any document (whether or not permitted by the 1934 Act or the rules thereunder) to terminate or suspend any such registration or to terminate or suspend its reporting and filing obligations under the 1934 until the Purchasers have disposed of all of their Shares.

  

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4.6           Reimbursement. If Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the Company (except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any other stockholder), solely as a result of Purchaser’s acquisition of the Securities from the Company under this Agreement, the Company will reimburse Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and conditions to any Affiliates of the Purchaser who are actually named in such action, proceeding or investigation, and partners, directors, agents, employees and controlling persons (if any), as the case may be, of the Purchaser and any such Affiliate, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, the Purchaser and any such Affiliate and any such Person. The Company also agrees that neither the Purchaser nor any such Affiliates, partners, directors, agents, employees or controlling persons shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company solely as a result of acquiring the Securities under this Agreement.

 

4.7           Indemnification of Purchaser. Subject to the provisions of this Section 4.7, the Company will indemnify and hold 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 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 person (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 Purchaser, or any of its Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, solely as a result of such Purchaser’s acquisition of the Securities pursuant to this Agreement (unless such action is based upon a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities laws or any conduct by such Purchaser 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 such separate 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 (1) such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to 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, except if such claim arises primarily from a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance.

 

  

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4.8           Reservation and Listing of Securities.

 

(a)           The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents.

 

(b)           If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date, then the Board of Directors of the Company shall use commercially reasonable efforts to amend the Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible and in any event not later than the ninetieth (90th) day after such date.

 

4.9           Waiver of Anti-Dilution Rights. The Company and the Purchaser hereby acknowledge that the issuance and sale of the Securities may trigger certain anti-dilution rights that the Purchaser is entitled to under certain other agreements pursuant to which the Purchaser acquired other securities of the Company. The Purchaser hereby waives any and all such anti-dilution rights and hereby acknowledges that the issuance and sale of the Securities will not result in adjustments to the purchase prices, conversion prices, or exercise prices of any other outstanding securities of the Company held by the Purchaser.

 

4.10          Reserved.

 

4.11          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 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 Purchaser 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 Purchaser.

  

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4.12           Short Sales and Confidentiality After The Date Hereof. The Purchaser covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period commencing at the Discussion Time and ending at the time that the transactions contemplated by this Agreement are first publicly announced. The Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, Purchaser does not make any representation, warranty or covenant hereby that it will not engage in Short Sales in the securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced.

 

4.13           Securities Laws Disclosure Publicity. The Company shall, within 4 Business Days of the Closing Date, file the Form 8-K with the Commission. 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 the 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 and (ii) the filing of final Transaction Documents (including signature pages thereto) 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).

 

4.14           Furnishing of Information; Public Information.

 

(a) Until the earliest of the time that (i) Purchaser does not own any Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as Purchaser owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchaser to sell the Securities under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the requirements of the exemption provided by Rule 144.

  

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(b) At any time during the period commencing from the one year anniversary of the date hereof and ending on the earlier of (i) at such time that all of the Securities may be sold without 22 the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144 and (ii) two years from the date hereof, if the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (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 one percent (1%) of the aggregate Purchase Price 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 Purchaser to transfer the Underlying Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 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 fifth (5th) 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 1.0% 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.

 

4.15           Listing, Securities Exchange Act of 1934 and Rule 144 Requirements.

 

(a) The Company is required to maintain their current listing on the OTC Bulletin Board or a listing on a higher exchange, maintain their status as a public company subject to the reporting requirements of the 1934 Act and shall not take any action which would cause its Common Stock not to be traded on their current exchange, except that the Company may list the Common Stock on the Nasdaq Stock Market, NYSE Amex Equities or New York Stock Exchange ( and if the Company’s Common Stock is current on the Pink Sheets the Company must be fully reporting per Rule 144 until such time as they are regulated by the 1934 Act.) If for any time after the Closing Date the Company is no longer in compliance with this Section 4.15, then the Company shall pay to the Purchaser as liquidated damages and not as a penalty, an amount equal to two percent (2%) per month of the Purchase Price.

 

(b) Not later than June 30, 2012, the Company shall use its commercially reasonably best efforts to cause its Common Stock, to be listed on the Nasdaq Market (the “Listing Upgrade Event”), and, from and after the date of such listing, (ii) to continue to be listed on this market. If, for any time after the Closing Date, the Company is not in compliance with this Section 4.15(b), then the Company shall pay to the Purchaser as liquidated damages and not as a penalty, an amount equal to three percent (3%) per month of the Purchase Price for the Shares then held by the Purchaser.

  

23

  

 

Liquidated damages payable pursuant to Sections 4.15(a) and 4.15(b) shall be payable in shares of Preferred Stock or cash, as the Purchaser may request. If, pursuant to this Agreement, 23 in any section of this Agreement, shares of Preferred Stock are to be delivered for liquidating damages, each share of Preferred Stock shall be valued at the lesser of (a) amount equal to the Conversion Ratio, as set forth in the Certificate of Designation, which initially shall be twenty (20), multiplied by the average closing price of the Common Stock for the five (5) trading days preceding the date on which the computation is required to be made or (b) Conversion Price in effect on the date on which the computation is required to be made as stated in the Certificate of Designations. Such damages shall be payable monthly on the tenth (10th) day of the following month, provided, further, however, that the liquidated damages payables pursuant to the terms hereof shall apply on a daily pro-rata basis for the time period that the Company is in default of such Sections and shall cease to accrue immediately upon the Company’s compliance with the terms of this Sections.

 

4.16           Rule 144 Sales/Registration. At a date no earlier than October 30, 2011, the Company shall either (a) notify the transfer agent that the Shares may be treated as freely transferable without restriction and otherwise cooperate with such transfer agents requests for information, or, alternatively, (b) cause an effective registration statement to be filed to permit disposition by the Purchaser. The Company’s obligations under (a) of this Section 4.16 are conditioned upon the delivery of a legal opinion by Company’s legal counsel with supporting affidavits from Purchaser with support for the supporting legal opinions to the effect that such Shares may be transferred in reliance in Rule 144 or other available exemption and such form of opinion and support being reasonably satisfactory to the transfer agent. The Company’s obligations under (b) of this Section 4.16 are conditioned upon the reasonable cooperation of Purchaser in provide any information reasonably necessary to prepare, file and maintain an effective registration statement for such Shares, including responding to information requests and comments from the SEC.

 

4.17           Preferred Stock. For a period of three (3) years from the First Closing Date, the Company will not issue any preferred stock of the Company with the exception of Preferred Stock issued to the Investors and preferred stock issued and outstanding prior to the Closing.

 

4.18           Convertible Debt. On or prior to the Closing Date, the Company will cause to be cancelled all convertible debt in the Company. For a period of three (3) years from the First Closing Date, the Company will not issue any convertible debt.

 

4.19           No Outside Interests. The Company’s chairman and chief executive officer will devote his full time and attention to the business of the Company and shall not have any business interests or activities other than as chairman or chief executive officer, as the case may be, except that he may devote time, which shall not be material and which shall not interfere with his duties as the Company’s chairman or chief executive officer, as the case may be, to personal passive investments and charitable and community activities. Furthermore, none of the Company Stockholders or executives and directors shall have any interests or engage in any business which is directly or indirectly competitive with that of the Company or any Subsidiary. The chief executive office may, upon approval by Board, serve as a member of the board of directors of other companies.

  

24

  

 

4.20           Independent Directors; Committees. At Closing, the Company shall have (i) caused the appointment of the board of directors (the “Board”), which shall not consist of more than five (5) members, the majority of whom to be qualified independent directors, as defined in the rules promulgated under the 1934 Act, (ii) caused the appointment of a majority of independent directors to the audit and compensation committees of the Company and (iii) obtained a directors and officers insurance policy with appropriate levels of coverage, as determined by the Board and provided such coverage is available on commercially reasonable terms. All independent directors elected to the board of directors will be individuals of substantial net worth who also have served as directors of at least one other public company which has a history of reporting a profit on its annual financial statements. If anytime after Closing Date, the Company fails to have a majority of qualified independent directors on the Board or majority of independent directors comprising the audit and compensation committee pursuant to this Section 4.20, the Company shall pay to the Purchaser, as liquidated damages and not as a penalty, an amount equal to fourteen percent (14%) per annum of the Purchase Price for the Shares then held by Purchaser, payable monthly in cash or Preferred Stock at the option of Purchaser. Such liquidated damages shall not accrue and become payable until after the Company has (a) received a demand notifying the Company of a breach of the provisions of this Section 4.20 and (b) thereafter not cured such breach within sixty (60) days. The parties hereto agree that the only damages payable for a violation of the terms of this Agreement with respect to which liquidated damages are expressly provided shall be such liquidated damages. Nothing shall preclude the Investor from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement. The parties hereto agree that the liquidated damages provided for in this Section 4.20 constitute a reasonable estimate of the damages that may be incurred by the Purchaser by reason of the failure of the Company to comply with provisions in this Section 4.20.

 

4.21           Use of Proceeds. The Company will use the proceeds from the sale of the Preferred Stock (excluding amounts paid by the Company for legal and administrative fees in connection with the sale of such securities) to expand production capacity, establish sales offices and fund promotional efforts and fund working capital and acquisitions needs.

 

4.22           Right of First Refusal. For a period of twenty four (24) months from the First Closing, Purchaser shall have the right to participate in any subsequent funding by the Company on a pro rata basis at ninety percent (90%) of the offering price.

 

4.23           Price Adjustment. For a period of four (4) years from the First Closing the Company can not sell or issue Common Stock at a price, or warrants, options, convertible debt or equity securities with an exercise price per share or a conversion price per share (such lower sales price, conversion or exercise price, as the case may be, being referred to as the “Subsequent Financing Price”), which is less than the Protection Price then in effect (the Protection Price shall be calculated as:

 

	
  

	
●

	
the Year 1 Protection Price shall be twice the Conversion Price as defined in the Certificate of Designation in effect as of the Closing Date.

	
  

	
●

	
the Year 2 Protection Price shall be the Year 1 Protection Price plus 50%. 25

  

25

  

 

	
  

	
●

	
the Year 3 Protection Price shall be the Year 2 Protection Price plus 50%.

	
  

	
●

	
the Year 4 Protection Price shall be the Year 2 Protection Price plus 50%.

 

If during the period of four (4) years from the First Closing the Company closes on the sale or issuance of Common Stock at a price, or warrants, options, convertible debt or equity securities with an exercise price per share or a conversion price per share which is less than the Protection Price then in effect then the Conversion Price shall be lowered by the percentage difference between the Protection Price and Subsequent Financing Price. The Company shall file such amendments requires to conform the Certificate of Designation so as effectuate this Protected Price provision in this Section 4.23, as and when required.

 

The following table demonstrates the Protection Price and adjustment to Conversion Price through year 3 with an initial Conversion Price of $0.11 and an example of a subsequent financing of $0.30 in Year 2 and a further financing of $0.60 in Year 4:

 

	
Year

	 	
Protection

Price

	 	 	
Examples of

Subsequent

Financing

Prices:

	 	 	
% diff between

Protection Price

and Subsequent

Financing Price

	 	 	
Current

Conversion

Price

	 
	
Initial Preferred Conversion Price

 

	 	$	0.11	 
	
Year 1

	 	$	0.22	 	 	
none

	 	 	
na

	 	 	$	0.11	 
	
Year 2

	 	$	0.33	 	 	$	0.30	 	 	 	9.00 	% 	 	$	0.10	 
	
Year 3

	 	$	0.50	 	 	
none

	 	 	
na

	 	 	$	0.10	 
	
Year 4

	 	$	0.74	 	 	$	0.60	 	 	 	19.00 	%	 	$	0.08	 

 

4.24           Issuance of Additional Preferred Shares Based on Revenues and EBITDA

 

In addition to the shares of Series D Convertible Preferred Stock delivered post-closing in connection with the Closing, the Company shall deliver additional shares of such Series D Preferred Stock upon the occurrence of the following events:

 

(a)           for the fiscal year ended December 31, 2011, the Company’s consolidated gross revenues does not equal or exceed $22,693,000 (the “Target 2011 Revenue”), upon which event the Company shall issue to Purchaser additional Preferred Series D Preferred as described below.

 

(b)           for the fiscal year ended December 31, 2012, the Company’s EBITDA does not equal or exceed $4,926,000 (the “Target 2012 EBITDA”), upon which event the Company shall issue to Purchaser additional Preferred Series D Preferred as described below.

 

Should either event (a) or (b) occur, then the number of additional Series D Preferred Shares which are to be issued to Purchaser shall equal seven and one-half percent (7.5%) of the number Series D Preferred Shares issued to Purchaser under this Agreement. If both events (a) and (b) occur, then the cumulative number of additional Series D Preferred Shares which Company will issue to Purchaser will equal, but not exceed fifteen percent (15%).

  

26

  

 

In the event that the Company does not file its Form 10-KSB for the year ended December 31, 2011 or 2012 with the SEC within thirty (30) days after the date that filing was required, after giving effect to any extension pursuant to Rule 12b-25 of the Exchange Act, than additional shares of Series D Convertible Preferred Stock equal to 15% of Series D Preferred Shares issued to the Purchaser under this Agreement shall be delivered to the Purchaser immediately.

 

The date for determining whether the Company has meet its Target 2011 Revenue, or its Target 2012 EBITDA shall be date on which the Company files its Form 10-KSB with the SEC, after giving effect to any extension pursuant to Rule 12b-25 of the Exchange Act.

 

4.25           Insider Selling. For a period of three (3) years, no executive, officer or director of the Company will sell any shares of Common Stock during the period in which such person serves as an executive, director or officer or the Company. Andrew Barron Worden shall not be, directly nor indirectly, subject to this restriction. The Company further agrees to secure undertakings from any executive, officer or director to company with this provision. Without limiting the generality of the foregoing, the undertaking shall contain language which states that the holders of common shares who otherwise falls into this category shall not to directly or indirectly offer to sell, grant an option for the purchase or sale of, transfer, pledge assign, hypothecate, distribute or otherwise encumber or dispose of any securities in the Company in a transaction which is not in the public market unless the transferee agrees to be bound by the provisions of this Section 4.25.

 

4.26           Employment and Consulting Contracts. For five (5) years after the First Closing Date, the Company must obtain unanimous approval from the Compensation Committee of the Board regarding any awards of compensation for any officer, director, employee or consultants that exceeds $175,000 per annum.

 

4.27           Retention of Investor Relations. The Company must retain an investor relations firm within 60 days post First Closing Date.

 

4.28           No Loans or Advances. Until the earlier of five (5) years from the Closing Date, the Company and its Subsidiaries will not make any loans, advances or other extensions of credit to the executive officers or directors of the Company, any Subsidiary or any Related Company or any family member or Affiliate of any of such executive officers or directors.

 

4.29           Subsequent Transactions. From the date hereof, the Company shall be prohibited from effecting or entering into or being in any agreement to effect any transaction involving a “Variable Rate Transaction” or an “MFN Transaction” (each as defined below). The term “Variable Rate Transaction” shall mean a transaction in which the Company issues or sells (i) 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, exercise 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. The term “MFN Transaction” shall mean a transaction in which the Company issues or sells any securities in a capital raising transaction or series of related transactions which grants to an investor the right to receive additional shares based upon future transactions of the Company on terms more favorable than those granted to such investor in such offering. 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.

  

27

  

 

Article 5

MISCELLANEOUS

 

5.1           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, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.

 

5.2           Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.3           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 set forth on the signature pages attached hereto 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 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.

 

5.4           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 Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

  

28

  

 

5.5           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.

 

5.6           Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of Purchaser (other than by merger). 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 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 “Purchaser”.

 

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

 

5.8           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 Florida, 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, employees or agents) shall be commenced exclusively in the state and federal courts sitting in Hillsborough County, Florida. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Hillsborough County, Florida 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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, 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 suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

  

29

  

 

5.9           Survival. The representations, warranties, covenants and other agreements contained herein shall survive the Closing and the delivery, exercise and/or conversion of the Securities, as applicable for a period of two (2) years from the date of this Agreement.

 

5.10           Execution. This Agreement may be executed in two (2) or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission 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.

 

5.11           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.

 

5.12           Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser 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 agrees 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.

 

5.13           Construction. The parties agree that each of them and/or their respective counsel has 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 hereto.

 

(Remainder of Page Intentionally Left Blank)

(Signature Pages Follow)

  

30

  

 

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.

 

	
LATTICE INCORPORATED

	  	
Address for Notice:

	
By:

	  /s/ Paul Burgess	  	
7150 N. Park Drive, Suite 500

	
Name:  Paul Burgess

	  	
Pennsauken, NJ 08109

	
Title:    Chief Executive Officer

	  	  

 

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

 

James M. McCarrick, Esq.

Becker Meisel LC

354 Eisenhower Parkway

Eisenhower Plaza II, Suite 1500

Livingston, New Jersey 07039

Tel: (973) 422-1100

Fax: (973) 422-9122

 

(Remainder of Page Intentionally Left Blank)

(Signature Page For Purchaser Follows)

  

3

  

[PURCHASER SIGNATURE PAGE TO 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 dates first indicated above.

 

	
Name of Purchaser: Barron Partners LP

	  
	  
	
Signature of Authorized Signatory of Purchaser:  

	  /s/ Andrew Barron Worden

	
Name of Authorized Signatory:  

	   Andrew Barron Worden

	
Title of Authorized Signatory:  

	  Chairman & CEO

	
Email Address of Purchaser:  

	  abw@barronpartners.com

	
Facsimile Number of Purchaser:  

	  212-359-0222
	  
	
Jurisdiction of Organization of Purchaser: New York

	  
	
Address for Notice of Purchaser: 730 Fifth Avenue, 26th Floor, New York, NY 10019

 

 

 

Address for Delivery of Securities for Purchaser (if not same as above):

 

  

 

3

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