Document:

Amended and Restated Securities Purchase Agreement

 Exhibit 10.1 
 Execution Copy 
 AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT 
 AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of July 13, 2007, by and among Devcon International
Corp., a Florida corporation, with headquarters located at 595 South Federal Highway, Suite 500, Boca Raton, Florida 33432 (the "Company"), and the investors listed on the Schedule of Buyers attached hereto (individually, a
"Buyer" and collectively, the "Buyers"). 
 WHEREAS: 
 A. The Company's board of directors authorized a new series of convertible preferred stock of the Company designated as Series A Convertible Preferred
Stock, the terms of which are set forth in the certificate of designation, dated as of October 16, 2006, for such series of preferred stock (the "Original Certificate of Designations") (together with any convertible preferred shares
issued in replacement thereof in accordance with the terms thereof (the "Preferred Shares"), which Preferred Shares are convertible into the Company's common stock, par value $0.10 per share (the "Common Stock"), in accordance with the
terms of the Certificate of Designations. 
 B. The Company and certain of the Buyers (the "Original Buyers") entered into that
certain Securities Purchase Agreement, dated as of February 10, 2006 (the "Original Closing Date") (as amended from time to time in accordance with its terms, the "Original Securities Purchase Agreement"), whereby the Company,
among other things, issued to each Buyer (i) at the Initial Closing (as defined in the Original Securities Purchase Agreement), warrants (the "Warrants") to acquire up to that number of additional shares of the Common Stock set forth
opposite such Buyer's name in column (5) of the Schedule of Buyers attached thereto (as exercised, collectively, the "Warrant Shares") and (ii) at the Additional Closing (as defined in the Original Securities Purchase Agreement,
that aggregate number of Preferred Shares set forth opposite such Buyer's name in column (4) on the Schedule of Buyers attached thereto (which aggregate number for all Buyers shall be 45,000) (as converted, collectively, the "Conversion
Shares"). 
 B. The Preferred Shares may be entitled to dividends, which the Company, subject to certain conditions set forth in the
Original Certificate of Designations, was permitted to pay in shares of Common Stock (the "Dividend Shares"). 
 C. On March 30,
2007, the Company and certain Buyers entered into those certain Forbearance and Amendment Agreements (collectively, the "Forbearance Agreements"), whereby, among other things, the Company and each of such Buyers agreed to amend and restate
the Original Certificate of Designations as set forth in that certain Amended and Restated Certificate of Designations that is attached hereto as Exhibit A hereto (the "Certificate of Designations"). 

 D. The Company desires to redeem the outstanding Warrants held by certain Buyers for a purchase price
equal to $0.13 per each Warrant Share issuable thereunder as of the Closing Date (the "Warrant Price"). 
 E. Contemporaneously with
the execution and delivery of this Agreement, the parties hereto are executing and delivering an Amended and Restated Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (as amended or modified from time to
time in accordance with its terms, the "Registration Rights Agreement"), pursuant to which the Company has agreed to provide certain registration rights with respect to the Conversion Shares, the Warrant Shares and the Dividend Shares under
the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "1933 Act"). The Registration Rights Agreement amends and restates the terms and conditions of that certain
Registration Rights Agreement, by and among the Company and the Original Buyers, dated as of the Original Closing Date (the "Original Registration Rights Agreement"). 
 F. Capitalized terms used but not defined herein shall have the meaning ascribed thereto in the Securities Purchase Agreement. 
 NOW, THEREFORE, the Company and each Buyer hereby agree as follows: 
  

	 	1.	WARRANT REDEMPTION; WAIVER; CONSENT. 

 (a)
Warrant Redemption. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, on the Closing Date (as defined below), (i) to the extent the Buyers have elected to have their Warrants (the
"Purchased Warrants") redeemed by the Company at the aggregate Warrant Price by written notice to the Company on or prior to the Closing Date, the Buyers shall surrender to the Company at the Closing all such Purchased Warrants of such Buyer,
and (ii) the Company shall pay to each such Buyer in cash by wire transfer of immediately available funds an aggregate amount equal to $0.13 per Warrant Share issuable upon exercise of such Purchased Warrant on the Closing Date. 
 (b) Acknowledgment of Satisfaction of Dividend Payment Obligations. The parties hereto expressly acknowledge and agree that the Company's dividend
payment obligations with respect to the Preferred Shares accruing prior to the Closing Date and outstanding on the date hereof have been satisfied by adding such Dividends (the “Capitalized Dividends”) to the Stated Value (as
defined in the Certificate of Designations) of the Preferred Shares in such amounts set forth opposite each Buyer’s name in column (6) of the Schedule of Buyers. 
  

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 (c) Waiver. Effective as of the Closing Date, each of the Buyers hereby waives (x) such
Triggering Events (as defined in the Certificate of Designations) that may have occurred prior to the Closing Date arising from the Company's failure to satisfy any Registration Delay Payments (as defined in the Original Registration Rights
Agreement) or otherwise comply with the terms of the Original Registration Rights Agreement; (y) any right to receive any Registration Delay Payments (as defined in the Original Registration Rights Agreement) to the extent incurred prior to the
Closing Date; and (z) any provision in the Original Certificate of Designations and the Certificate of Designations breached by addition of the Capitalized Dividends to the Stated Value of the Preferred Shares on the Closing Date in the amounts
set forth opposite such Buyers name in column (6) of the Schedule of Buyers in satisfaction of the Company's dividend payment obligations with respect to the Preferred Shares accruing prior to the Closing Date. Any claims, rights or causes of
action arising out of or based upon events, facts or circumstances occurring, or actions taken or failed to be taken, after the date hereof or, except as set forth in the preceding sentence, prior to the date hereof, whether or not such events,
facts or circumstances constitute a Triggering Event, are not waived or released hereby. 
 (d) Closing. The date (the "Closing
Date") and time of the closing (the “Closing”) shall be 10:00 a.m., New York City time, on the date hereof (or such later date as is mutually agreed to by the Company and the Buyers after notification of satisfaction (or waiver)
of the conditions to the Closing set forth in Sections 6 and 7 below at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022. 
 (e) Issuance of Warrants and Preferred Shares. For the avoidance of doubt, the Warrants and Preferred Shares were issued previously and are not being issued hereunder. 
  

	 	2.	BUYER'S REPRESENTATIONS AND WARRANTIES. 

 Each Buyer
represents and warrants with respect to only itself that: 
 (a) Organization; Authority. Such Buyer is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents (as defined below) to
which it is a party and otherwise to carry out its obligations hereunder and thereunder. 
 (b) No Public Sale or Distribution. Such
Buyer (i) acquired the Preferred Shares and the Warrants, (ii) upon conversion of the Preferred Shares will acquire the 

  

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Conversion Shares, and (iii) upon exercise of the Warrants will acquire the Warrant Shares, in each case, for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933 Act; provided, however, that by making the representations herein, such Buyer does not agree to hold
any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. Such Buyer acquired the
Securities hereunder in the ordinary course of its business. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
 (c) Accredited Investor Status. Such Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D. 
 (d) Reliance on Exemptions. Such Buyer understands that the Securities were being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Company relied in part upon the truth and accuracy of, and such Buyer's compliance with, the representations, warranties, agreements, acknowledgments and
understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities. 
 (e) Information. Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the
Securities and the amendments, waivers and consents incorporated herein which have been requested by such Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer's right to rely on the Company's representations and warranties contained herein. Such Buyer
understands that its investment in the Securities involves a high degree of risk. Such Buyer sought such accounting, legal and tax advice as it had considered necessary to make an informed investment decision with respect to its acquisition of the
Securities. 
 (f) No Governmental Review. Such Buyer understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the
offering of the Securities. 
  

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 (g) Transfer or Resale. Such Buyer understands that except as provided in the Registration Rights
Agreement: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder,
(B) such Buyer shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule
thereto) (collectively, "Rule 144"); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under
circumstances in which the seller (or the Person (as defined in Section 3(s)) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder. The Securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Securities and such pledge of Securities shall not be deemed to be a transfer,
sale or assignment of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other
Transaction Document (as defined in Section 3(b)), including, without limitation, this Section 2(f). 
 (h) Legends. Such
Buyer understands that the certificates or other instruments representing the Preferred Shares and the Warrants and, until such time as the resale of the Conversion Shares and the Warrant Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates representing the Conversion Shares and the Warrant Shares, except as set forth below, shall bear any legend as required by the "blue sky" laws of any state and a restrictive
legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates): 
 [NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE 

  

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REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144(K) UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED PURSUANT TO AN AVAILABLE EXEMPTION
FROM REGISTRATION UNDER THE 1933 ACT IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 
 The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Securities are
registered for resale under the 1933 Act, (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of counsel, in a generally acceptable form, to the effect that such sale, assignment or
transfer of the Securities may be made without registration under the applicable requirements of the 1933 Act, or (iii) such holder provides the Company with reasonable assurance that the Securities can be sold, assigned or transferred pursuant
to Rule 144(k). 
 (i) Validity; Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly
authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

 (j) No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and
the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or
violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder. 
  

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 (k) Residency. Such Buyer is a resident of that jurisdiction specified below its address on the
Schedule of Buyers. 
  

	 	3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

 The
Company represents and warrants to each of the Buyers: 
 (a) Organization and Qualification. The Company and its "Subsidiaries"
(which for purposes of this Agreement means any entity listed on Schedule 3(a)(i)) are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, except to the extent that
the failure to be in good standing would not have a Material Adverse Effect, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted. Each of the Company and its Subsidiaries is
duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the
failure to be so qualified or be in good standing would not have a Material Adverse Effect. Except as set forth in Schedule 3(a)(ii), the Company has no Material Subsidiaries (as defined in SEC Regulation S-X) other than the Subsidiaries. As
used in this Agreement, "Material Adverse Effect" means any material adverse effect on the business, properties, assets, operations, results of operations or condition (financial or otherwise) of the Company, its Subsidiaries, individually or
taken as a whole, or on the transactions contemplated hereby or in the other Transaction Documents or by the agreements and instruments to be entered into in connection herewith or therewith, or on the authority or ability of the Company to perform
its obligations under the Transaction Documents (as defined below). 
 (b) Authorization; Enforcement; Validity. The Company has the
requisite power and authority to enter into and perform its obligations under this Agreement, the Certificate of Designations, the Warrants, the Registration Rights Agreement, the Forbearance Agreements, the Irrevocable Transfer Agent Instructions
(as defined in Section 5(b) and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the "Transaction Documents") and to issue the Securities in
accordance with the terms hereof and thereof. The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance
of the Preferred Shares, the reservation for issuance and the issuance of the Conversion Shares issuable upon conversion of the Preferred Shares, the issuance of the Warrants and the reservation for issuance and issuance of the Warrant Shares
issuable upon exercise of the Warrants, have been duly authorized by the Company's board of directors and (other than the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration 

  

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Rights Agreement, any other filings as may be required by any state securities agencies, the filing of an additional listing application with the Principal
Market) no further filing, consent, or authorization is required by the Company, its board of directors or its shareholders. This Agreement and the other Transaction Documents of even date herewith have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be
limited by federal or state securities law. 
 (c) Issuance of Securities. The issuance of the Preferred Shares and the Warrants are
duly authorized and upon issuance in accordance with the terms of the Transaction Documents shall be free from all taxes, liens and charges with respect to the issue thereof, and the Preferred Shares shall be entitled to the rights and preferences
set forth in the Certificate of Designations. As of the Additional Closing, the Company has reserved from its duly authorized capital stock not less than the sum of (i) 120% of the maximum number of shares of Common Stock issuable upon
conversion of the Preferred Shares (assuming for purposes hereof, that the Preferred Shares are convertible at the Conversion Price and without taking into account any limitations on the conversion of the Preferred Shares set forth in the
Certificate of Designations), and (ii) 120% of the maximum number of shares of Common Stock issuable upon exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth in the Warrants). Upon
issuance or conversion in accordance with the Certificate of Designations or exercise in accordance with the Warrants, as the case may be, the Conversion Shares and the Warrant Shares, respectively, will be validly issued, fully paid and
nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Subject to the representations and
warranties of the Buyers in this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act. 
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Preferred Shares, the Warrants and reservation for issuance of the Conversion Shares and the Warrant Shares) will not (i) result in a violation of the Articles of Incorporation (as defined in Section 3(r)) of the Company or
any of its Subsidiaries, any capital stock of the Company or Bylaws (as defined in Section 3(r)) or the Certificate of Designations of the Company or any of its Subsidiaries or (ii) except as set forth on Schedule 3(d), conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, 

  

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indenture or instrument to which the Company or any of its Subsidiaries is a party, except to the extent such conflict, default or termination right would
not reasonably be expected to have a Material Adverse Effect, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of
The Nasdaq Global Market (the "Principal Market") applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected except, in the case of clause (ii) or
(iii) above, to the extent such violations that would not reasonably be expected to have a Material Adverse Effect. 
 (e)
Consents. Except set forth on Schedule 3(e), other than the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, any other filings as may be required by
any state securities agencies and the filing of an additional listing application with the Principal Market, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms
hereof or thereof. Except as otherwise contemplated in the Registration Rights Agreement, all consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence will be obtained or
effected on or prior to the Closing Date, and the Company and its Subsidiaries are unaware of any facts or circumstances which might prevent the Company from obtaining or effecting any of the registration, application or filings pursuant to the
preceding sentence. Except as disclosed in the Company's Current Report on Form 8-K, as filed with the SEC on January 31, 2006 with a Date of Report of January 25, 2006, the Company is not in violation of the requirements of the Principal
Market and has no knowledge of any facts which would reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. 
 (f) Acknowledgment Regarding Buyer's Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the capacity of arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that, to the Company's knowledge, no Buyer is (i) an officer or director of the Company, (ii) an "affiliate" of the Company or any of its Subsidiaries (as defined in Rule 144) or
(iii) to the knowledge of the Company, a "beneficial owner" of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the "1934 Act")). The Company further
acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any
advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and 

  

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thereby is merely incidental to such Buyer's purchase of the Securities. The Company further represents to each Buyer that the Company's decision to enter
into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives. 
 (g) No
General Solicitation; Placement Agent's Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent's fees, financial advisory fees, or brokers' commissions (other than for persons engaged by any
Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, attorney's fees and
out-of-pocket expenses) arising in connection with any such claim. The Company acknowledges that it has engaged an investment bank of international standing and reputation as placement agent (the "Agent") in connection with the sale of the
Securities. Other than the Agent, neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the sale of the Securities. 
 (h) No Integrated Offering. None of the Company, its Subsidiaries, any of their affiliates, and any Person acting on 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 require registration of any of the Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any
of the securities of the Company are listed or designated. None of the Company, its Subsidiaries, their affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require
registration of any of the Securities under the 1933 Act or cause the offering of the Securities to be integrated with other offerings. 
 (i) Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares issuable upon conversion of the Preferred Shares, and, the Warrant Shares issuable upon exercise of the Warrants, will increase in
certain circumstances. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Preferred Shares in accordance with this Agreement and the Certificate of Designations and its obligation to issue the
Warrant Shares upon exercise of the Warrants in accordance with this Agreement and the Warrants is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other
shareholders of the Company. 
  

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 (j) Application of Takeover Protections; Rights Agreement. The Company and its board of directors
have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the
Articles of Incorporation or the laws of the jurisdiction of its incorporation which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company's issuance of
the Securities and any Buyer's ownership of the Securities. The Company has not adopted a shareholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company.

 (k) SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial
statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the "SEC Documents"). The Company has delivered to the Buyers or their respective representatives true, correct and
complete copies of each of the SEC Documents not available on the EDGAR system that have been requested by each Buyer. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other information provided on or behalf of the Company to the Buyers which is not included in the SEC
Documents, including, without limitation, information referred to in Section 2(e) of this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein not
misleading, in the light of the circumstance under which they are or were made. 
  

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 (l) Absence of Certain Changes. Except as disclosed in the SEC Documents, since the Company's most
recently filed audited financial statements contained in a Form 10-K, there has been no material adverse change and no material adverse development in the business, assets, properties, operations, condition (financial or otherwise), results of
operations or prospects of the Company. Except as disclosed in the SEC Documents, since the Company's most recently filed audited financials statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared
or paid any dividends (except dividends paid directly to the Company by its Subsidiaries), (ii) sold any assets, individually or in the aggregate, in excess of $1,000,000 outside of the ordinary course of business or (iii) had capital
expenditures, individually or in the aggregate, in excess of $1,000,000. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to
believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually and on a consolidated basis, are not
as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the applicable Closing, will not be, Insolvent (as defined below). For purposes of this Section 3(l), "Insolvent" means, with respect to
any Person (as defined in Section 3(s)) (i) the present fair saleable value of such Person's assets is less than the amount required to pay such Person's total Indebtedness (as defined in Section 3(s)), (ii) such Person is unable
to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay
as such debts mature or (iv) such Person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted. 
 (m) No Undisclosed Events, Liabilities, Developments or Circumstances. Except to the extent such violation would not, individually or in the
aggregate, have a Material Adverse Effect, no event, liability, development or circumstance has occurred or exists, or is contemplated to occur with respect to the Company, its Subsidiaries or their respective business, properties, prospects,
operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock
and which has not been publicly announced. 
 (n) Conduct of Business; Regulatory Permits. Neither the Company nor its Subsidiaries is
in violation of any term of or in default under its Articles of Incorporation, the Certificate of Designations, any other certificate of designation, preferences or rights of any other outstanding series of preferred stock of the Company or Bylaws
or their organizational charter or articles of incorporation or bylaws, respectively. Except as set forth on Schedule 3(n), neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order 

  

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or any statute, ordinance, rule or regulation applicable to the Company or its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation of any of the foregoing, except in all cases for possible violations which would not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality of the foregoing, except as set forth
on Schedule 3(n), the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that would reasonably lead to delisting or suspension of the Common
Stock by the Principal Market in the foreseeable future. During the two (2) years prior to the date hereof, (i) the Common Stock has been designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been
suspended by the SEC or the Principal Market and (iii) except for communication from the Principal Market regarding the Company's compliance with Marketplace Rule 4350 of the Principal Market concerning the independence of the Company's board
after the death of Robert Armstrong and the resignation of James Cast, the two directors of the Company, the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the
Common Stock from the Principal Market. The Company and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure
to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit. 
 (o) Foreign Corrupt Practices. Neither the Company nor any of its
Subsidiaries nor any director, officer, agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company or any of its Subsidiaries (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee; except in all cases to the extent such actions would not, individually or in the aggregate, have a Material Adverse Effect. 
 (p) Sarbanes-Oxley Act. The Company is in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley Act
of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof. 
  

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 (q) Transactions With Affiliates. Except as set forth in the SEC Documents filed at least ten
(10) days prior to the date hereof, the grant of stock options disclosed on Schedule 3(q) and those certain Consulting Agreements entered into between the Company and Donald L. Smith, Jr., the Company's former Chairman of the Board, and
James R. Cast, a former director of the Company (which Consulting Agreements were immaterial and did not require filing as part of the SEC Documents), none of the officers, directors or employees of the Company or any of its Subsidiaries is
presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company or any of its Subsidiaries, any corporation,
partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner. 
 (r) Equity Capitalization. As of the date hereof, the authorized capital stock of the Company consists of 50,000,000 shares of Common Stock, of which as of the date hereof, 6,235,609 are issued and outstanding,
1,142,350 shares are reserved and available for future issuance pursuant to the Company’s stock option and purchase plans, and 5,650,956 shares are reserved and available for future issuance pursuant to securities (other than the aforementioned
options and the Preferred Shares) exercisable or exchangeable for, or convertible into, shares of Common Stock. All of such outstanding or reserved shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable.
Except as set forth on Schedule 3(r), (i) none of the Company's share capital is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company and (ii) there are no
securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities. Except as disclosed in the SEC Documents: (i) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any share capital of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional share capital of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any share capital of the Company or any of its Subsidiaries; (ii) there are no outstanding debt securities,
notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness (as defined in Section 3(s)) of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or
may become bound; (iii) there are no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with the Company or any of its Subsidiaries; (iv) there are no agreements or
arrangements under 

  

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which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to the
Registration Rights Agreement); (v) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (vi) the Company does not have any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement; and (vii) the Company and its Subsidiaries have no liabilities or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other than those incurred in the
ordinary course of the Company's or its Subsidiaries' respective businesses and which, individually or in the aggregate, do not or would not have a Material Adverse Effect. The Company has furnished to the Buyer true, correct and complete copies of
the Company's Articles of Incorporation, as amended and as in effect on the date hereof (the "Articles of Incorporation"), and the Company's Bylaws, as amended and as in effect on the date hereof (the "Bylaws"), and the terms of all
securities convertible into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders thereof in respect thereto. 
 (s) Indebtedness and Other Contracts. Except as disclosed in the SEC Documents or Schedule 3(s), neither the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness (as defined
below) with an outstanding principal amount in excess of $250,000 individually, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or
instrument could reasonably be expected to result in a Material Adverse Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company's
officers, has or is expected to have a Material Adverse Effect. The SEC Documents provide a detailed description of the material terms of any such outstanding Indebtedness. For purposes of this Agreement: (x) "Indebtedness" of any Person
means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, "capital leases" in accordance
with generally accepted accounting principles) (other than trade payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations except with respect to letters of credit, surety bonds and other similar
instruments arising in the ordinary course of business, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or
businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the 

  

 - 15 - 

 
proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is
classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable
for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) "Contingent Obligation" means, as
to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; and (z) "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof. 
 (t) Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit,
proceeding, inquiry or investigation before or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company or any
of its Subsidiaries, the Common Stock or any of the Company's Subsidiaries or any of the Company's or its Subsidiaries' officers or directors, except as would not, either individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. 
 (u) Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary
has been refused any insurance coverage sought or applied for and neither the Company nor any such 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 at a cost that would not have a Material Adverse Effect. 
  

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 (v) Employee Relations. 
 (i) Except as set forth on Schedule 3(v), neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer of the Company or any of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the
Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer's employment with the Company or any such Subsidiary. No executive officer of the Company or any of its
Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and 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. 
 (ii) The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 (w) Title. Except as set forth under "Management Discussion And Analysis Of Financial Condition and Results Of
Operations—Liquidity and Related Party Transactions" in the Company's Annual Report on Form 10-K for the fiscal year ended on December 31, 2006 and Quarterly Report on Form 10-Q for the fiscal quarter ended on March 31, 2007 and as
set forth on Schedule 3(w), the Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the
Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by
the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries. 
 (x)
Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights ("Intellectual Property Rights") necessary to conduct their respective businesses as now conducted except where the failure to
so own or possess would not reasonably be expected to result in a Material Adverse Effect. None of the Company's or its Subsidiaries' Intellectual 

  

 - 17 - 

 
Property Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned, within three years from the date of this
Agreement. The Company does not have any knowledge of any infringement by the Company or any of its Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the
Company, being threatened, against the Company or any of its Subsidiaries regarding its Intellectual Property Rights. The Company is unaware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions
or proceedings. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights. 
 (y) Environmental Laws. To the knowledge of the Company, the Company and its Subsidiaries (i) are in compliance with any and all
Environmental Laws (as hereinafter defined), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms
and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The
term "Environmental Laws" means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment, including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, "Hazardous Materials") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials. 
 (z) Subsidiary Rights. Except for certain restrictions set forth
in the CapitalSource Credit Agreements (as defined in the Certificate of Designations) dated November 10, 2005, as amended prior to the date hereof, and as set forth in Schedule 3(z) which set forth certain minority holders and rights
held by such minority holders pursuant to shareholder agreements, the Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all
capital securities of its Subsidiaries as owned by the Company or such Subsidiary. 
 (aa) Tax Status. Except set forth on Schedule
3(aa) and except to the extent any violations hereof would not, either individually or in the aggregate, have a Material Adverse Effect, the Company and each of its Subsidiaries (i) has made or filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which 

  

 - 18 - 

 
such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim. 
 (bb) Internal Accounting and Disclosure Controls. The Company
and each of its Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence
of liabilities is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and
appropriate action is taken with respect to any difference. The Company is not an "accelerated filer" as defined in Rule 12b-2 under the Exchange Act and, accordingly, has not complied with Section 404 of the Sarbanes-Oxley Act of 2002. Except
as set forth in the SEC Documents, the Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and procedures designed in to ensure
that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company's management, including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. Except as set forth in the SEC Documents, during the twelve months prior to the date hereof neither the Company nor any of its Subsidiaries have
received any notice or correspondence from any accountant relating to any potential material weakness in any part of the system of internal accounting controls of the Company or any of its Subsidiaries. 
 (cc) Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated or
other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed or that otherwise would be reasonably likely to have a Material Adverse Effect. 
 (dd) Investment Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an "investment company," a
company controlled by an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended. 
  

 - 19 - 

 (ee) Transfer Taxes. On the applicable Closing Date, all stock transfer or other taxes (other than
income or similar taxes) which are required to be paid in connection with the sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such
taxes will be or will have been complied with. 
 (ff) Acknowledgement Regarding Buyers' Trading Activity. It is understood and
acknowledged by the Company (i) that none of the Buyers have been asked by the Company or its Subsidiaries to agree, nor has any Buyer agreed with the Company or its Subsidiaries, 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 any Buyer, and counter parties in "derivative" transactions to which any such Buyer is a
party, directly or indirectly, presently may have a "short" position in the Common Stock, and (iii) that each Buyer 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 one or more Buyers may engage in hedging and/or trading activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that
the value of the Conversion Shares and the Warrant Shares deliverable with respect to Securities are being determined and (b) such hedging and/or trading activities, if any, can reduce the value of the existing Shareholders' equity interest in
the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Warrants or any
of the documents executed in connection herewith. 
 (gg) Registration Eligibility. The Company is eligible to register the Conversion
Shares and the Warrant Shares for resale by the Buyers using Form S-3 promulgated under the 1933 Act. 
 (hh) 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) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company. 
 (ii) U.S. Real Property Holding Corporation. The Company is
not, nor has ever been, a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Buyer's request. 
  

 - 20 - 

 (jj) Disclosure. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their business and the transactions contemplated hereby, including the Schedules to this Agreement, furnished by or on behalf of the Company 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 the light of the circumstances under which they were made, not misleading. Each press release issued by the Company or its Subsidiaries during the twelve (12) months
preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial
conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed. 
 (kk) ERISA. The Company and each Person required to be aggregated with the Company and its Subsidiaries under Sections 414(b),(c), (m) or
(o) of the Internal Revenue Code of 1986 (each such Person, an "ERISA Affiliate") is in compliance with ERISA, except for such failures to comply that, in the aggregate, would reasonably be expected to have an Material Adverse Effect and
no contributions required to be made by the Company or any ERISA Affiliate to any pension plan are overdue. No liability to the Pension Benefit Guaranty Corporation ("PBGC") has been or is expected to be incurred by the Company or any ERISA
Affiliate with respect to any pension plan that, individually or in the aggregate would reasonably be expected to have a Material Adverse Effect. No circumstance exists that constitutes grounds under Section 4042 of ERISA entitling the PBGC to
institute proceedings to terminate, or appoint a trustee to administer, any pension plan or trust created thereunder, nor has the PBGC instituted any such proceeding. Neither the Company nor any ERISA Affiliate has incurred or presently expects to
incur any withdrawal liability under Title IV of ERISA with respect to any multiemployer plan except for such withdrawal liability that, in the aggregate of all such liabilities, would not reasonably be expected to have a Material Adverse Effect.
There have been no "reportable events" (as such term is defined in section 4043 of ERISA) with respect to any multiemployer plan that could result in the termination of such multiemployer plan and give rise to a liability of the Company or any ERISA
Affiliate in respect thereof except for such "reportable events" that in the aggregate, would not reasonably be expected to have a Material Adverse Effect. 
 (ll) Shareholder Approval. The Company has received (i) the Shareholder Approval (as defined in the Original Securities Purchase Agreement) approving the Resolutions (as defined in the Original Securities
Purchase Agreement") and (ii) the approval of the Company's stockholders of a proposal providing for the amendment and restatement of the 

  

 - 21 - 

 
Certificate of Designations (the "Amendment Shareholder Approval", and together with the Shareholder Approval, the "Shareholder Approvals"). As
of the Closing Date, the Shareholder Approvals are effective and in full force and effect in compliance with the requirements of the Exchange Act. The Shareholder Approvals are sufficient to authorize to consummation the transactions contemplated
hereby and pursuant to the Original Securities Purchase Agreement pursuant to applicable law and the rules and regulations of the Principal Market, including, without limitation, the issuance of the Preferred Shares, the reservation for issuance and
the issuance of the Conversion Shares issuable upon conversion of the Preferred Shares, the issuance of the Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrants. 
  

	 	4.	COVENANTS. 

 (a) Best Efforts. Each party
shall use its best efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 6 and 7 of this Agreement. 
 (b) Form D and Blue Sky. The Company agrees to file any amendments to the Form D previously filed with respect to the Securities to the extent such amendments are required under Regulation D and to provide a copy thereof to each
Buyer promptly after such filing. The Company shall make all filings and reports relating to such Securities required under applicable securities or "Blue Sky" laws of the states of the United States following the applicable Closing Date.

 (c) Reporting Status. Until the date on which the Buyers shall have sold all the Conversion Shares, Dividend Shares and Warrant
Shares, and none of the Preferred Shares or Warrants is outstanding (the "Reporting Period"), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status
as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination, and the Company shall take all actions necessary to maintain its
eligibility to register the Conversion Shares and Warrant Shares for resale by the Buyers on Form S-3. 
 (d) Use of Proceeds. The
Company will continue to use the proceeds from the sale of the Securities as set forth in the private placement memorandum previously delivered to the Buyers, and not for, except with respect to any of the indebtedness owed by the Company to
CapitalSource Finance LLC or any of the indebtedness owed by Guardian International, Inc. to third parties or with respect to the outstanding shares of preferred stock of Guardian International, Inc. or as specifically set forth on Schedule
4(d), (A) repayment of any outstanding Indebtedness of the Company or any of its Subsidiaries or (B) redemption or repurchase of any of its or its Subsidiaries' equity securities. 
  

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 (e) Financial Information. Unless filed with the SEC through EDGAR and are available to the
public through the EDGAR system, the Company agrees to send the following to each Investor (as defined in the Registration Rights Agreement) during the Reporting Period (i) within one (1) Business Day after the filing thereof with the SEC,
a copy of its Annual Reports and Quarterly Reports on Form 10-K, 10-KSB, 10-Q or 10-QSB, any interim reports or any consolidated balance sheets, income statements, shareholders' equity statements and/or cash flow statements for any period other than
annual, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) within one (1) Business Day after release thereof, facsimile copies of all press releases
issued by the Company or any of its Subsidiaries, and (iii) copies of any notices and other information made available or given to the shareholders of the Company generally, contemporaneously with the making available or giving thereof to the
shareholders. 
 (f) Listing. The Company shall promptly secure the listing of all of the Registrable Securities (as defined in the
Registration Rights Agreement), including any amendment to previously filed listing application to list additional Registrable Securities resulting from the amendments contemplated hereby, upon each national securities exchange and automated
quotation system, if any, upon which the Common Stock is then listed (subject to official notice of issuance) and shall maintain such listing of all Registrable Securities from time to time issuable under the terms of the Transaction Documents. The
Company shall maintain the Common Stock's authorization for quotation on the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the
Common Stock on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f). 
 (g) Fees. On the Closing Date, the Company shall reimburse Schulte Roth & Zabel LLP, counsel to HBK Main Street Investments L.P. (a Buyer), and within three (3) business days of receiving an
invoice therefor, the Company shall reimburse Katten Muchin Rosenman LLP, counsel to CS Equity II LLC (a Buyer), for any reasonable fees and expenses incurred in connection with the transactions contemplated by the Transaction Documents and due
diligence in connection therewith, which amount shall be non-accountable (the "Counsel Fees"); provided that the fees and expenses reimbursed to Katten shall not exceed $5,000. The Company shall be responsible for the payment of any placement
agent's fees, financial advisory fees, or broker's commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby, including, without limitation, any fees payable to the Agent. The
Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney's fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.

  

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 (h) Pledge of Securities. The Company acknowledges and agrees that the Securities may be pledged
by an Investor (as defined in the Registration Rights Agreement) in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer,
sale or assignment of the Securities hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other
Transaction Document. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by an Investor. 
 (i) Disclosure of Transactions and Other Material Information. On or before 8:30 a.m., New York Time, on the first (1st) Business Day
following the date of this Agreement, the Company shall file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the material Transaction
Documents (including, without limitation, this Agreement (and all schedules to this Agreement), the form of Certificate of Designations and the Registration Rights Agreement) (including all attachments, the "8-K Filing"). From and after the
8-K Filing, the Company shall have disclosed any material nonpublic information delivered to the Buyers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents. The Company shall not, and shall
cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide any Buyer with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the 8-K
Filing with the SEC without the express written consent of such Buyer. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release). Without the prior written consent of any applicable Buyer, neither the Company nor any of its Subsidiaries shall disclose the name of any Buyer in any filing, announcement, release or
otherwise. 
 (j) Additional Registration Statements. Except as otherwise permitted by the terms of the Registration Rights Agreement,
until the Effective Date (as defined in the Registration Rights Agreement), the Company shall not file a registration statement under the 1933 Act relating to securities that are not the Securities. 
  

 - 24 - 

 (k) Additional Preferred Shares; Variable Securities; Dilutive Issuances. So long as any Buyer
beneficially owns any Securities, the Company will not, without the prior written consent of Buyers holding a majority of the Preferred Shares, issue any Preferred Shares (other than to the Buyers as contemplated hereby) and the Company shall not
issue any other securities that would cause a breach or default under the Certificate of Designations or the Warrants. For so long as any Preferred Shares or Warrants remain outstanding, without the prior written consent of Buyers holding a majority
of the Preferred Shares, the Company shall not, in any manner, issue or sell any rights, warrants or options to subscribe for or purchase Common Stock or directly or indirectly convertible into or exchangeable or exercisable for Common Stock at a
conversion, exchange or exercise price which varies or may vary after issuance with the market price of the Common Stock, including by way of one or more reset(s) to any fixed price unless the conversion, exchange or exercise price of any such
security cannot be less than the then applicable Conversion Price (as defined in the Certificate of Designations) with respect to the Common Stock into which any Preferred Shares are convertible or the then applicable Exercise Price (as defined in
the Warrants) with respect to the Common Stock into which any Warrant is exercisable. For purposes of clarification, this does not prohibit the issuance of securities with customary "weighted average" or "full ratchet" anti-dilution adjustments
which adjust a fixed conversion or exercise price of securities sold by the Company in the future. For so long as any Preferred Shares or Warrants remain outstanding, without the prior written consent of Buyers holding a majority of the Preferred
Shares, the Company shall not, in any manner, enter into or affect any dilutive issuance if the effect of such dilutive issuance is to cause the Company to be required to issue upon conversion of any Preferred Shares or exercise of any Warrant any
shares of Common Stock in excess of that number of shares of Common Stock which the Company may issue upon conversion of the Preferred Shares and exercise of the Warrants without breaching the Company's obligations under the rules or regulations of
the Principal Market. 
 (l) Corporate Existence. So long as any Buyer beneficially owns any Securities, the Company shall not be
party to any Fundamental Transaction (as defined in the Certificate of Designations) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Certificate of Designations and the Warrants.

 (m) Reservation of Shares. The Company shall take all action necessary to at all times have authorized, and reserved for the
purpose of issuance, no less than (i) 120% of the maximum number of shares of Common Stock issuable upon conversion of the Preferred Shares (assuming for purposes hereof, that the Preferred Shares are convertible at the Conversion Price and
without taking into account any limitations on the conversion of the Preferred Shares set forth in the Certificate of Designations) and (ii) 120% of the maximum number of shares of Common Stock issuable upon exercise of the Warrants (without
taking into account any limitations on the exercise of the Warrants set forth in the Warrants). 
  

 - 25 - 

 (n) Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted
in violation of any law, ordinance or regulation of any governmental entity, except where such violations would not result, either individually or in the aggregate, in a Material Adverse Effect. 
 (o) Additional Issuances of Securities. 
 (i) For purposes of this Section 4(o), the following definitions shall apply. 
 (1) "Convertible
Securities" means any stock or securities (other than Options) convertible into or exercisable or exchangeable for shares of Common Stock. 
 (2) "Options" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities. 
 (3) "Common Stock Equivalents" means, collectively, Options and Convertible Securities. 
 (ii) [Intentionally Omitted] 
 (iii) Until
the eighteen (18) month anniversary of the Closing Date, the Company will not, directly or indirectly, effect any Subsequent Placement unless (x) such Subsequent Placement is not structured in any manner to avoid the application of this
Section 4(o)(iii) and (y) the Company shall have first complied with this Section 4(o)(iii). 
 (1) The Company shall deliver
to each Buyer a written notice (the "Offer Notice") of any proposed or intended issuance or sale or exchange (the "Offer") of the securities being offered (the "Offered Securities") in a Subsequent Placement, which
Offer Notice shall (x) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (y) identify the persons or entities (if
known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Buyers a pro rata portion of the Offered Securities allocated among such Buyers
(a) based on such Buyer's pro rata portion of the aggregate number of Preferred Shares purchased hereunder (the "Basic Amount"), and (b) with respect to each Buyer that elects to purchase its Basic Amount, any additional portion of
the Offered Securities attributable to the Basic Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the "Undersubscription Amount").

  

 - 26 - 

 (2) To accept an Offer, in whole or in part, such
Buyer must deliver a written notice to the Company prior to the end of the seventh (7th) Business Day after
such Buyer's receipt of the Offer Notice (the "Offer Period"), setting forth the portion of such Buyer's Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount, the Undersubscription
Amount, if any, that such Buyer elects to purchase (in either case, the "Notice of Acceptance"). If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set forth an
Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription
Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the "Available Undersubscription Amount"), each Buyer who has subscribed for any Undersubscription Amount shall be
entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company
to the extent its deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may do so on only two occasions and
shall deliver to the Buyers a new Offer Notice (an "Amended Offer Notice") and the Offer Period shall expire on the seventh (7th) Business Day after such Buyer's receipt of any such Amended Offer Notice. 
 (3) The Company shall have forty-five
(45) Business Days from the expiration of the Offer Period above (i) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Buyers (the "Refused
Securities") pursuant to a definitive agreement(s) (the "Subsequent Placement Agreement"), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation,
unit prices and interest rates) that are not more favorable to the acquiring person or persons or less favorable to the Company than those set forth in the Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent
Placement Agreement, and (b) either (x) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a
Current Report on Form 8-K or other appropriate form under the 1934 Act with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto. 
 (4) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in
Section 

  

 - 27 - 

 
4(o)(iii)(3) above), then each Buyer may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in
its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(o)(iii)(2) above multiplied by a fraction, (i) the numerator of
which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to Section 4(o)(iii)(3) above prior to such reduction) and
(ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue,
sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers in accordance with Section 4(o)(iii)(1) above. 
 (5) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyers shall acquire from the Company, and
the Company shall issue to the Buyers, the number or amount of Offered Securities specified in the Notices of Acceptance, as reduced pursuant to Section 4(o)(iii)(3) above if the Buyers have so elected, upon the terms and conditions specified
in the Offer. The purchase by the Buyers of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Buyers of a purchase agreement relating to such Offered Securities reasonably satisfactory
in form and substance to the Buyers and their respective counsel. 
 (6) Any Offered Securities not acquired by the Buyers or other persons
in accordance with Section 4(o)(iii)(3) above may not be issued, sold or exchanged until they are again offered to the Buyers under the procedures specified in this Agreement. 
 (7) The Company and the Buyers agree that if any Buyer elects to participate in the Offer, (x) neither the Subsequent Placement Agreement nor any
other transaction documents related thereto (collectively, the "Subsequent Placement Documents") shall include any term or provisions whereby any Buyer shall be required to agree to any restrictions in trading as to any securities of the
Company owned by such Buyer prior to such Subsequent Placement, and (y) any registration rights set forth in such Subsequent Placement Documents shall be similar in all material respects to the registration rights contained in the Registration
Rights Agreement. 
 (8) Notwithstanding anything to the contrary in this Section 4(o) and unless otherwise agreed to by the Buyers,
the Company shall either confirm in writing to the Buyers that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention on a Form 8-K or other appropriate report under the 1934 Act to issue
the Offered Securities, in either case in such a manner such that the Buyers will not 

  

 - 28 - 

 
be in possession of material non-public information, by the tenth (10th) Business Day following delivery of the Offer Notice or the last Amended Offer Notice, as the case may be. If by the tenth (10th) Business Day following delivery of the Offer Notice or the last Amended Offer Notice, as the case may be, no public disclosure regarding a transaction
with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by the Buyers, such transaction shall be deemed to have been abandoned and the Buyers shall not be deemed to be in
possession of any material, non-public information with respect to the Company. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide each Buyer with another Offer Notice and each
Buyer will again have the right of participation set forth in this Section 4(o)(iii). The Company shall not be permitted to deliver more than one such Offer Notice (with the aforementioned right to deliver up to two Amended Offer Notices with
respect thereto) to the Buyers in any sixty (60) day period. 
 (9) The restrictions contained in subsections (ii) and
(iii) of this Section 4(o) shall not apply in connection with the issuance of any Excluded Securities (as defined in the Certificate of Designations). 
 (p) Castlerigg Litigation. The Company shall not, without the written consent of HBK Main Street Investments L.P. ("HBK") and CS Equity II LLC ("CS"), settle or compromise any of the claims set forth in or
consent to the entry of judgment in that case (the "Case") styled Castlerigg Master Investments Ltd. ("Castlerigg") and Sandell Asset Management Corp. ("Sandell") v. Devcon International Corp., Case No. 07-CV-3283 filed in the United States
District Court for the Southern District of New York. In addition, the parties hereto agree that to the extent a settlement or compromise of the Case is entered into by the parties thereto notwithstanding the failure of HBK and CS to provide such
consent and such settlement or compromise entails the issuance of new securities (the "New Securities") to Castlerigg or Sandell, the Company shall offer to each of HBK and CS the opportunity to exchange their Preferred Shares and Warrants for such
New Securities on substantially the same terms and conditions as those offered to Castlerigg and Sandell; provided, however, that under no circumstance shall the terms of any New Security received by HBK or CS or the terms of the current Preferred
Shares and Warrants held by such parties be impacted by any Registration Delay Payments or interest earned thereon or legal fees of Castlerigg or Sandell paid or reimbursed to Castlerigg or Sandell as a part of such settlement or compromise nor
shall the Company be obligated to (A) redeem for cash any of the Preferred Shares owned by HBK or CS to the extent such redemption is impracticable taking into account the financial condition of the Company, or (B) pay to HBK or CS any
consequential, punitive, indirect, lost opportunity or special damages of any nature that may be recovered by Castlerigg and Sandell in connection with the Case. 
  

 - 29 - 

 (q) BCD Good Standing Certificate. The Company shall, within two weeks of the date hereof, produce
a certificate evidencing the good standing of Bahamas Construction and Development, Ltd. from the appropriate authority in the Bahamas. 
  

	 	5.	REGISTER; TRANSFER AGENT INSTRUCTIONS. 

 (a)
Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Preferred Shares and the Warrants in which
the Company shall record the name and address of the Person in whose name the Preferred Shares and the Warrants have been issued (including the name and address of each transferee), the number of Preferred Shares held by such Person, the number of
Conversion Shares issuable upon conversion of the Preferred Shares and Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep the register open and available at all times during business hours for
inspection upon reasonable prior notice of any Buyer or its legal representatives. 
 (b) Transfer Agent Instructions. The Company
shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent, to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company ("DTC"), registered in the name of each
Buyer or its respective nominee(s), for the Conversion Shares, and the Warrant Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Preferred Shares or exercise of the Warrants in the form
attached hereto as Exhibit F (the "Irrevocable Transfer Agent Instructions"). The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer
instructions to give effect to Section 2(f) hereof, will be given by the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of the Company, as
applicable, and to the extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(f), the Company shall permit the transfer and shall
promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the
event that such sale, assignment or transfer involves Conversion Shares and Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or pursuant to Rule 144, the transfer agent shall issue such Securities to the
Buyer, assignee or transferee, as the case may be, without any restrictive legend. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in
addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

  

 - 30 - 

	 	6.	CONDITIONS TO THE COMPANY'S OBLIGATION HEREUNDER. 

 (a) Conditions. The obligation of the Company to close is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time
in its sole discretion by providing each Buyer with prior written notice thereof: 
 (i) Such Buyer shall have executed this Agreement and
the Registration Rights Agreement and delivered the same to the Company. 
 (ii) The representations and warranties of such Buyer shall be
true and correct in all material respects as of the Closing Date when made and as of the date hereof (except for representations and warranties that speak as of a specific date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the date hereof. 
 (iii) The Buyer shall have delivered to the Company such other documents relating to the transactions contemplated by this Agreement as the Company or
its counsel may reasonably request. 
 (iv) The Shareholder Approval shall have been obtained and shall be effective under applicable rules
and regulations. 
  

	 	7.	CONDITIONS TO EACH BUYER'S OBLIGATION HEREUNDER. 

 (a) Conditions. The obligation of each Buyer to close is subject to the satisfaction of each of the following conditions, provided that these conditions are for each Buyer's sole benefit and may be waived by such Buyer at any time in
its sole discretion by providing the Company with prior written notice thereof: 
 (i) To the extent that such Buyer has elected to sell the
Warrants of such Buyer, the Company shall have paid the Warrant Price of such Warrants held by such Buyer to such Buyer by wire transfer of immediately available funds in accordance with wire instructions delivered to the Company prior to the
Closing Date. 
  

 - 31 - 

 (ii) The Company shall have duly executed and delivered to such Buyer this Agreement, the Voting
Agreement, the Certificate of Designations, and the Registration Rights Agreement. 
 (iii) Such Buyer shall have received the opinion of
Greenberg Traurig, P.A. the Company's outside counsel, dated as of the Initial Closing Date, in substantially the form of Exhibit G attached hereto. 
 (iv) The Company shall have paid the Counsel Fees to Schulte Roth & Zabel LLP, by wire transfer of immediately available funds in accordance with wire instructions delivered to the Company on or prior to the
Closing Date. 
 (v) The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company
and each of its Material Subsidiaries in each such entity's jurisdiction of formation issued by the Secretary of State (or equivalent) of such jurisdiction of formation as of a date within ten (10) days of the Closing Date. 
 (vi) The Company shall have delivered to such Buyer a certificate evidencing the Company's qualification as a foreign corporation and good standing
issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business and is required to so qualify, as of a date within ten (10) days of the Closing Date. 
 (vii) The Company shall have delivered to such Buyer a certified copy of the Articles of Incorporation as certified by the Secretary of State of the
State of Florida within ten (10) days of the date hereof, which copy shall reflect the filed Certificate of Designations. 
 (viii) The
Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company's board of directors in a
form reasonably acceptable to such Buyer, (ii) the Articles of Incorporation (including the Certificate of Designations) and (iii) the Bylaws, each as in effect at the Closing, in the form attached hereto as Exhibit C. 

(ix) The representations and warranties of the Company shall be true and correct as of the date when made and as of the Closing Date as though made
at that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with 

  

 - 32 - 

 
by the Company. Such Buyer shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Initial Closing Date,
to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form attached hereto as Exhibit H. 
 (x) The Company shall have delivered to such Buyer a letter from the Company's transfer agent certifying the number of shares of Common Stock outstanding as of a date within five (5) days of the Closing Date. 
 (xi) The Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended, as of the
Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall proceedings regarding such suspension by the SEC or the Principal Market have been threatened, as of the Initial Closing Date, either (A) by the SEC
or the Principal Market or (B) by falling below the minimum maintenance requirements of the Principal Market, other than with respect to those issues set forth on the Company's Current Report on Form 8-K, dated as of January 25, 2006.

 (xii) The Company shall have delivered to such Buyer duly executed Voting Agreements, in the form attached hereto as Exhibit D
(the "Voting Agreements"). 
 (xiii) No event or events shall have occurred since the date hereof that, taken individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect. 
 (xiv) The Company shall have obtained all governmental,
regulatory or third party consents and approvals, if any, necessary for the sale of the Securities. 
 (xv) The Certificate of Designations
in the form attached hereto as Exhibit A shall have been filed with the Secretary of State of the State of Florida and shall be in full force and effect, enforceable against the Company in accordance with its terms and shall not have been
amended. 
 (xvi) The Shareholder Approvals shall have been obtained and shall be effective under applicable rules and regulations.

 (xvii) The Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as
such Buyer or its counsel may reasonably request. 
  

 - 33 - 

	 	8.	TERMINATION. 

 In the event that the Closing shall
not have occurred with respect to a Buyer on or before five (5) Business Days from the date hereof due to the Company's or such Buyer's failure to satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching party's failure
to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement with respect to such breaching party at the close of business on such date without liability of any party to any other party; provided,
however, if this Agreement is terminated pursuant to this Section 8, the Company shall remain obligated to reimburse the non-breaching Buyers for the expenses described in Section 4(g) above. 
  

	 	9.	MISCELLANEOUS. 

 (a) Governing Law; Jurisdiction;
Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, 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 brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.  
 (b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which
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; provided that a facsimile signature shall be considered due execution and shall be binding
upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature. 
  

 - 34 - 

 (c) Headings. The headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement. 
 (d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in
any other jurisdiction. 
 (e) Entire Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other
prior oral or written agreements between the Buyers, the Company, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein, including, without limitation, Section 16 of the Confidentiality Agreement which
is terminated hereby, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the holders of at least a majority of the Preferred Shares issued and issuable hereunder, and any amendment to this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all
Buyers and holders of Securities, as applicable. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it applies to
less than all of the holders of the Preferred Shares then outstanding. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same
consideration also is offered to all of the parties to the Transaction Documents, holders of Preferred Shares or holders of the Warrants, as the case may be. The Company has not, directly or indirectly, made any agreements with any Buyers relating
to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has
made any commitment or promise or has any other obligation to provide any financing to the Company or otherwise. 
 (f) Notices. Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically 

  

 - 35 - 

 
generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 
  

									
		 	 If to the Company:
	  	
				
		 		  	Devcon International Corp.	  	
		 		  	 595 South Federal Highway
 Suite
500
 Boca Raton, Florida 33432
	  	
		 		  	Telephone:	  	(561) 955-7300	  	
		 		  	Facsimile:	  	(561) 955-7333	  	
		 		  	Attention:	  	Robert Farenhem	  	
		
		 	With a copy (for informational purposes only) to:
				
		 		  	Greenberg Traurig, P.A.	  	
		 		  	 1221 Brickell Avenue
 Miami, Florida
33131
	  	
		 		  	Telephone:	  	(305) 579-0756	  	
		 		  	Facsimile:	  	(305) 961-5756	  	
		 		  	Attention:	  	Robert L. Grossman, Esq.	  	
			
		 	If to the Transfer Agent:	  	
				
		 		  	Continental Stock Transfer and Trust	  	
		 		  	 17 Battery Place, 8th Floor
 New York, NY
10004
	  	
		 		  	Telephone:	  	(212) 509-4000 x304	  	
		 		  	Facsimile:	  	(212) 616-7616	  	
		 		  	Attention:	  	Mark Zimkind	  	
	
	If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer's representatives as set forth on the Schedule of
Buyers,
		
		 	with a copy (for informational purposes only) to:
				
		 		  	Schulte Roth & Zabel LLP	  	
		 		  	 919 Third Avenue
 New York, New York
10022
	  	
		 		  	Telephone:	  	(212) 756-2000	  	
		 		  	Facsimile:	  	(212) 593-5955	  	
		 		  	Attention:	  	Eleazer N. Klein, Esq.	  	

  

 - 36 - 

 or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively. 
 (g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Preferred Shares or the Warrants. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the holders of at least a majority of the aggregate
number of Registrable Securities issued and issuable hereunder, including by way of a Fundamental Transaction (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Certificate of
Designations and the Warrants). A Buyer may assign some or all of its rights hereunder in connection with transfer of any of its Securities without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with
respect to such assigned rights. 
 (h) No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
 (i) Survival. Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained in Sections 2 and 3 and the agreements and covenants set forth
in Sections 4, 5 and 9 shall survive the Closing Date. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder. 
 (j) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments
and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 
  

 - 37 - 

 (k) Indemnification. In consideration of each Buyer's execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and all of their shareholders,
partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons' agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the "Indemnitees") from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether
any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee as a result of, or arising out
of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction
Documents or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the
execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure made by such Buyer pursuant to Section 4(i), or (iv) the status of such Buyer or holder of the Securities as an investor in the Company pursuant to
the transactions contemplated by the Transaction Documents. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 9(l) shall be the same as those set forth in
Section 6 of the Registration Rights Agreement. 
 (l) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
 (m) Remedies. Each Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company 

  

 - 38 - 

 
recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law
may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a
bond or other security. 
 (n) Payment Set Aside. To the extent that the Company makes a payment or payments to the Buyers hereunder
or pursuant to any of the other Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
 (o) No Effect Upon Lending
Relationships. Nothing contained in this Agreement shall affect, limit or impair the rights and remedies of CapitalSource Finance LLC or its affiliates in their capacities as lenders pursuant to the CapitalSource Credit Agreements, including,
without limitation, in exercising its rights as a lender and making any decision on whether to foreclose on any collateral security, and they shall not have any duty to consider (a) their status as a direct or indirect equityholder of the
Company, (b) the interests of the Company or any of its Subsidiaries (other than with respect to any obligations they may have as a lender) or (c) any duty they may have to any other direct or indirect equityholder of the Company, except
as may be required under the applicable loan documents, by commercial law applicable to creditors generally or pursuant to the Transaction Documents. 
 (p) Independent Nature of Buyers' Obligations and Rights. The obligations of each Buyer under any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be
responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents and the Company acknowledges that the Buyers are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Buyer
confirms that it has independently participated in the negotiation of the transaction 

  

 - 39 - 

 
contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. 
 [Signature Page Follows] 
  

 - 40 - 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 COMPANY:

	
	 DEVCON INTERNATIONAL CORP.

		
	 By:
	 	 /s/ Richard C. Rochon

	 Name:
	 	 Richard C. Rochon

	 Title:
	 	 Acting Chief Executive Officer

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 BUYERS:

	
	 HBK MAIN STREET INVESTMENTS L.P.

		
	By:	 	 HBK Services LLC
 Investment Advisor

		
	By:	 	 /s/ V. Baker Gentry, Jr.

	Name:	 	 V. Baker Gentry, Jr.

	Title:	 	 Authorized Signatory

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 BUYERS:

	
	 CS EQUITY II LLC

		
	By:	 	 /s/ Keith D. Reuben

	Name:	 	 Keith D. Reuben

	Title:	 	 Authorized Signatory

 SCHEDULE OF BUYERS 
  

												
	(1)	  	(2)	  	(4)	  	(5)	  	(6)	  	(7)
	 Buyer
	  	 Address and Facsimile Number
	  	Aggregate
Number of
Preferred
Shares	  	Aggregate
Number of
Warrants	  	Amount of
Dividends Owed
to Buyer as of
the Date Hereof	  	 Legal Representative's Address and
Facsimile
Number

	HBK Main Street
Investments L.P.	  	 c/o HBK Services LLC
 300 Crescent Court, Suite 700
 Dallas, TX 75201
 Attn: Legal (PP)
 Telephone: 214-758-6107
 Facsimile: 214-758-1207
 Residence: Cayman Islands
	  	35,000	  	1,284,067	  	$	1,878,138.89	  	 Schulte Roth & Zabel LLP
 919 Third Avenue

New York, New York 10022
 Attention: Eleazer Klein, Esq.
 Facsimile: (212) 593-5955
 Telephone: (212) 756-2376

						
	Castlerigg Master
Investments Ltd.	  	 c/o Sandell Asset Management
 40 West 57th
St
 26th Floor
 New York, NY 10019
 Attention: Cem Hacioglu / Matthew Pliskin
 Telephone: 212-603-5700

Fax: 212-603-5710
 Residence: British Virgin Islands
	  	7,000	  	256,813	  	$	375,627.78	  	 McDermott Will & Emery LLP
 340 Madison
Avenue
 New York, New York 10017
 Attention: Stephen Older,
Esq.
 Facsimile: (212) 547-5444
 Telephone: (212)
547-5649

						
	CS Equity II LLC	  	 c/o CapitalSource Finance, LLC
 4445 Willard Avenue,
12th Floor
 Chevy Chase, Maryland 20815
 Attention: HSB,
Portfolio Manager
 Telephone: (301) 841-2700
 Fax: (301)
841-2360
 Residence: Delaware
	  	3,000	  	110,063	  	$	160,983..33	  	 Katten Muchin Rosenman LLP
 525 West Monroe
Street
 Chicago, Ill. 60661
 Attention: Jeffrey L.
Elegant,
 Esq. and Mark R. Grossman, Esq.
 Facsimile: (312)
577-4408
 Telephone: (312) 902-5200

 EXHIBITS 
  

			
	Exhibit A	  	Form of Certificate of Designations
	Exhibit B	  	Form of Registration Rights Agreement
	Exhibit C	  	Form of Secretary's Certificate
	Exhibit D	  	Form of Voting Agreement
	Exhibit E	  	Form of Resolutions
	Exhibit F	  	Transfer Agent Instructions
	Exhibit G	  	Form of Outside Company Counsel Opinion
	Exhibit H	  	Form of Officer's Certificate

 Company Disclosure Schedules 
 Dated as of July 13, 2007 
 In connection with the Amended and Restated
Securities Purchase Agreement, dated as of July 13, 2007 (the “Purchase Agreement”), by and among Devcon International Corp. and the Investors listed on the Schedule of Buyers attached thereto, attached hereto are certain sections of
the disclosure schedule (the “Disclosure Schedule”) to the Purchase Agreement prepared by the Company. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Purchase Agreement. 
 The inclusion of any information in the Disclosure Schedule shall not be deemed an admission or acknowledgment, in and of itself, that such information
is required to be listed in the Disclosure Schedule or that any such items are material to the Company. 
 The headings of the sections of
the Disclosure Schedule are inserted for convenience only and shall not be deemed to constitute a part thereof or a part of the Purchase Agreement. 

 Schedule 3(a)(i) 
 List of Subsidiaries 
 See attached. 

 Schedule 3(a)(i) 
  

						
	 	  	Ownership	 	 	Jurisdiction
	 Devcon International Corp
	  			 	
	 Devcon Management Corp
	  	100.00	%	 	Florida
	 Devcon Security Holdings Inc
	  	100.00	%	 	Florida
	 Devcon Security Services Corp.
	  	100.00	%	 	Delaware
	 Mutual Central Alarm Services, Inc.
	  	100.00	%	 	New York
	 Stat-Land Burglar Alarm System & Devices, Inc.
	  	100.00	%	 	New York
	 VI Cement & Building Products, Inc.
	  	100.00	%	 	Delaware
	 VI Excavation Equipment Rental, LLC
	  	100.00	%	 	US Virgin Islands
	 Devcon/Matrix Utility Resources, LLC
	  	80.00	%	 	Florida
	 DevMat Bahamas Ltd
	  	76.80	%	 	Bahamas
	 Devcon Construction & Materials Corp
	  	100.00	%	 	Florida
	 Devcon Carribbean Purchasing Corp
	  	100.00	%	 	Florida
	 Z.S.C. J/V
	  	50.00	%	 	Florida
	 Bahamas Construction & Development Ltd.
	  	99.92	%	 	Bahamas
	 M21 Industries Inc.
	  	100.00	%	 	US Virgin Islands
	 Antigua Heavy Constructors, Ltd.
	  	100.00	%	 	Antigua
	 Newport (Antigua) Ltd.
	  	0.01	%	 	Antigua
	 Corbkinnons Limited
	  	0.34	%	 	Antigua
	 Puerto Rico Crushing Comp, Inc
	  	50.02	%	 	Puerto Rico
	 West Highland Development Company
	  	33.33	%	 	Puerto Rico
	 Societe Des Carrieres de Grand Case, S.A.R.L.
	  	100.00	%	 	Fr. Antilles
	 Proar Construction Materials Company, N.V.
	  	100.00	%	 	Neth. Ant.
	 Bouwbedrijf Boven Winden, N.V.
	  	100.00	%	 	Neth. Ant.
	 Cramer Construction St. Maarten N.V.
	  	100.00	%	 	Neth. Ant.
	 St. Maarten Masonry Product
	  	100.00	%	 	Neth. Ant.
	 South Atlantic Dredging Corp
	  	100.00	%	 	Delaware

 Schedule 3(a)(ii) 
 List of Material Subsidiaries 
 See attached. 

 Schedule 3(a)(ii) 
  

						
	 	  	Ownership	 	 	Jurisdiction
	 Devcon Security Services Corp.
	  	100.00	%	 	Delaware
	 Mutual Central Alarm Services, Inc.
	  	100.00	%	 	New York
	 Stat-Land Burglar Alarm System & Devices, Inc.
	  	100.00	%	 	New York
	 VI Cement & Building Products, Inc.
	  	100.00	%	 	Delaware
	 Bahamas Construction & Development Ltd.
	  	99.92	%	 	Bahamas
	 Devcon Management Corp
	  	100.00	%	 	Florida
	 Devcon Security Holdings Inc
	  	100.00	%	 	Florida
	 Devcon Construction & Materials Corp
	  	100.00	%	 	Florida
	 Devcon Carribbean Purchasing Corp
	  	100.00	%	 	Florida
	 South Atlantic Dredging Corp
	  	100.00	%	 	Delaware

 Schedule 3(d) 
 Conflicts 
 None 

 Schedule 3(e) 
 Consents 
 None. 

 Schedule 3(n) 
 Conduct of Business; Regulatory Permits 
 None. 

 Schedule 3(q) 
 Transactions With Affiliates 
 See attached for Stock Options granted under the Company’s various
option plans. 

 STOCK OPTIONS GRANTED (86/92/99/00 PLANS) 
 Schedule 3(q) 
 Stock Option Grant 
  

							
	 Name
	  	 Original
 Grant
	  	 Net
 Exercisable
	  	 Total
 Unvested

	 Armstrong
	  	9,000	  	9,000	  	—  
	 Benejam
	  	20,000	  	20,000	  	—  
	 Cast
	  	10,000	  	1,000	  	—  
	 Boruff
	  	15,000	  	—  	  	15,000
	 Cohen
	  	20,000	  	—  	  	20,000
	 Cunningham
	  	18,000	  	18,000	  	—  
	 Ferrari
	  	19,000	  	19,000	  	—  
	 Godsey
	  	20,000	  	—  	  	20,000
	 Gutekunst
	  	15,000	  	2,500	  	5,000
	 Hornsby, R.
	  	121,700	  	11,000	  	—  
	 Huber
	  	5,000	  	—  	  	5,000
	 Karnes
	  	18,000	  	18,000	  	—  
	 Klingensmith, A
	  	17,500	  	—  	  	7,500
	 Ladd, W
	  	10,000	  	4,000	  	—  
	 Loof
	  	19,000	  	19,000	  	—  
	 McCarthy
	  	5,000	  	—  	  	5,000
	 McDonald
	  	10,000	  	—  	  	10,000
	 McMillan, J
	  	30,000	  	20,000	  	—  
	 Pitts
	  	16,000	  	12,000	  	—  
	 Rochon
	  	14,000	  	14,000	  	—  
	 Singh
	  	7,500	  	—  	  	7,500
	 Schiller
	  	25,000	  	—  	  	25,000
	 Smith, D Jr.
	  	141,700	  	91,700	  	—  
		  	 	  	 	  	 
		  	586,400	  	259,200	  	120,000
		  	 	  	 	  	 

 Schedule 3(r) 
 Equity Capitalization 
 On July 30, 2004, the Company
issued 2,000,000 units to Coconut Palm Capital Investors I, Ltd. (“Coconut Palm”). Each unit included (i) 1 share of common stock, par value $0.10 of the Company, (ii) a warrant to purchase 1 share of common stock at an exercise
price of $10.00 per share with a term of 3 years, (iii) a warrant to purchase  1/2 share of common stock at
an exercise price of $11.00 per share with a term of 4 years and (iv) a warrant to purchase  1/2 share of
common stock at an exercise price of $15.00 per share with a term of 5 years. At the time of the issuance, Coconut Palm was also entitled, on a fully diluted basis, to acquire up to 57.6% of the common stock of the Company outstanding upon exercise
of the warrants. The warrants contain anti-dilution provisions. 
 The Company’s 1986, 1992, 1999 and 2006 option plans, as amended,
contain anti-dilution provisions in the event of stock splits, mergers, stock dividends, etc. the effect thereof being generally that the options become vested upon a change of control and for a period of time thereafter. 
 Anti-dilution provisions set forth in the securities issued pursuant to the Securities Purchase Agreement. 

 Schedule 3(s) 
 Indebtedness and Other Contracts 
 (i) and (ii) 
 $100 million Revolving Credit Facility made available to Devcon Security Holdings, Inc., Devcon Security Services Corp., Mutual Central Alarm Services, Inc. and Stat-Land Burglar Alarm System & Devices, Inc.
(as Borrowers) by CapitalSource Finance LLC (as Lender), dated November 10, 2005, $88,620,389.00 principal outstanding as of March 28, 2007. 
 General Indemnity Agreement dated June 30, 2003 between Devcon International Corporation and Arch Insurance Company, $22,398,187.65 outstanding as of March 28, 2007. 
 Various corporate guarantees issued by Devcon International Corp. in connection with the provision of the following construction contracts in the normal course of business: Jolly Harbor, WICO-Ultra Voyager Pier
Extension, Reeds Point, Statia and WAPA. 

																							
	Bond #	  	 Obligor
	  	 Obligee
	  	 Description
	  	Type *	  	Bond Amount	  	Premium	  	Effective
Date	  	Expiration
Date	  	Issued
By	  	Note	 
	SU1011587	  	VI Cement & Building Products, Inc.	  	Yacht Haven USVI LLC c/o Island Capital	  	Yacht Haven USVI - Marina Design and Dock Work, Long Bay Road, St. Thomas, USVI 00802	  	PP	  	 	7,493,508.65	  	57,559.00	  	11/2/2004	  	Until job
completed	  	Arch	  		
											
	SU1011842	  	Bahamas Construction & Development, Ltd.	  	Moss & Associates	  	Chub Cay	  	PP	  	 	7,724,265.00	  	59,012.00	  	2/28/2003	  	Until job
completed	  	Arch	  	(1	)
											
	SU1017004	  	VI Cement & Building Products, Inc.	  	Virgin Island Port Authority	  	Anne E Abramson Marine Facility, Frederiksted	  	PP	  	 	2,309,318.00	  	22,941.00	  	12/13/2005	  	Until job
completed	  	Arch	  		
											
	SU1005436	  	VI Cement & Building Products, Inc.	  	IN-USVI, LLC	  	Yacht Haven Restoration	  	PP	  	 	2,837,642.00	  	26,929.00	  	10/9/2003	  	Until job
completed	  	Arch	  		
											
	SU1017007	  	Bahamas Construction & Development, Ltd.	  	West End Resorts, Ltd.	  	Earthwork, rock revetment & subdivision improvements at Old Bahama Bay - West End	  	PP	  	 	2,028,454.00	  	to be advised	  	2/7/2006	  	Until job
completed	  	Arch	  		
											
		  	Antigua Masonry Products Ltd.	  	Pres-T-Con Limited	  	To guarantee workmanship of the Nevis Street and Heritage Breasting Dolphins and the Nevis Pier and Approach Bridge Pile Caps	  	W	  	 	50,000.00	  	n/a	  	4/29/2003	  	4/29/2013	  	RBTT	  	(2	)
											
		  	Antigua Heavy Constructors/Theo’s Tug & Barge Joint Venture	  	Government of Antigua & Barbuda	  	Restoration of the Dockyard Sea Wall. English Harbor job.	  	PP	  	 	184,074.07	  	n/a	  	2/10/2003	  	Until job
completed	  	RBTT	  	(3	)
											
		  		  		  		  		  	$	22,627,261.72	  		  		  		  		  		
		  		  		  		  		  	 	 	  		  		  		  		  		

  

			
	Bond Type	  	
	PP	  	Performance bonds (premium paid once)
	BD	  	Bid bonds (set expiry date)
	W	  	Warranty bond
		
	Note	  	
	(1)	  	Most performance bonds are issued for the full amount of the job at inception of the job; therefore the item being insured is the work to be performed. In the case of Chub Cay, the bond amount
represents the amount of work already performed (e.g., it is a backward looking bond). Therefore, there is technically no performance risk as the work has been performed.
	(2)	  	Collateralized by an EC$ money market account (balance @ Feb 9, 2006 circa $203,940 or EC$550,700).
	(3)	  	This job has been completed for circa 2 years. Will contact the bank and find out what they need in order to release the collateral. Collateralized by an EC$ money market account (balance @ Feb
9, 2006 circa $56,626 or EC$152,890).

 Schedule 3(v) 
 Employee Relations 
 Employees in Antigua may be subject to an Agreement between Antigua Masonry Products Limited and
the Antigua and Barbuda Worker’s Union. This Agreement is effective from November 1, 2003 and shall remain in force until cancelled or amended by a subsequent Agreement. However, it shall remain in force for at least three years from the
date of its commencement. At this time there are 4 employees covered by this Agreement. 
 The Company is not aware of any material grievances at this time.

 The Company has a defined benefit pension plan covering Antigua employees who meet certain minimum requirements and also maintains an accrual for
retirement agreements with Company executives and certain other employees. The accrual is based on the life expectancy of these persons and an assumed weighted average discount rate. Should the actual longevity vary significantly from the United
States insurance norms, or should the discount rate used to establish the present value of the obligation vary, the accrual may have to be significantly increased or diminished at that time. 

 Schedule 3(w) 
 Liens 
 Liens associated with the $100 million Revolving Credit Facility made available to Devcon Security Services
Corp., Mutual Central Alarm Services, Inc. and Stat-Land Burglar Alarm System & Devices, Inc. (as Borrowers) by CapitalSource Finance LLC (as Lender), dated November 10, 2005. 
 Liens associated with the General Indemnity Agreement dated June 30, 2003 between Devcon International Corporation and Arch Insurance Company. 
 Other liens as incurred in the ordinary course of business. 

 Schedule 3(z) 
 Subsidiary Rights 
 Devcon International Corp. has a 50.02% interest in Puerto Rico Crushing Company, Inc.
(“PRCC”), a Puerto Rico corporation. The other shareholders are Hormigonera Mayaguezana, Inc. (“HMI”) and Jose F. Criado, Sr. (“Criado”) (collectively with Devcon International Corp., the “Shareholders”).
Under a Stockholder’s Agreement dated February 2, 1996, the Shareholders agreed: 
  

	 	•	 	 To restrict the transfer of PRCC’s Common Stock except as allowed by the Stockholder’s Agreement. 

  

	 	•	 	 Any sale of PRCC Common Stock must be offered first to the Company and then to the other Shareholders. 

  

	 	•	 	 The articles of incorporation of PRCC will include a preemptive right for the Shareholders to acquire any newly issued stock in order to preserve their respective
ratios of the outstanding stock. 

  

	 	•	 	 Similarly, if PRCC decides to dispose of any acquired shares, the Shareholders will have the right to preserve their respective ratios in the outstanding stock.

  

	 	•	 	 The Board of Directors will consist of 5 directors, 3 designated by Devcon, 1 by Criado and 1 by HMI. 

  

	 	•	 	 Any matter requiring approval by the board must have a majority of the vote. 

  

	 	•	 	 During the term of the Stockholder’s Agreement and for 2 years after the termination of it, Shareholders agree not to compete directly or indirectly with PRCC.
Shareholders can hold investments in competing entities. 

  

	 	•	 	 Shareholders agree not to disclose any Confidential Information. 

  

	 	•	 	 Shareholders agree not to solicit customers, unless given written consent or if the customer has not been a customer for a period in excess of 6 months.

 Irrevocable Proxy by HMI appointing PRCC a proxy to vote its shares in PRCC dated July 30, 1996. 
 Stock Pledge Agreement by and among PROAR Construction Materials Company, N.V., Bouwbedrijf Boven Winden, N.V. and Greenberg Traurig, dated April 18, 1990.

 Amendment No. 1 to Shareholders’ Agreement of Corbkinnon, Limited by and among Antigua and Barbuda, Antigua Heavy Constructors, Ltd.
(“AHC”), Norman Wexelman (“Wexelman”), Corbkinnon, Limited and Devcon, dated December 12, 1987. 
  

	 	•	 	 Assignment of rights of Antigua Masonry Products, Ltd. to AHC and transfer of 41.25 shares by AHC to Wexelman. 

  

	 	•	 	 Right of first refusal: extends first to the company and then to the shareholders. A change of control in the company constitutes a transfer. A change of control is
defined as any person or entity which is not a shareholder or similar holder of such corporation or entity as of the date of the agreement who acquires 50% or more of the beneficial interest of such corporation or entity. Neither Wexelman nor AHC is
restricted from transferring shares to an entity in which either or both are general partners or own all of the shares, provided that such entity agrees to be bound by the terms of the Shareholders’ Agreement as amended.

  

	 	•	 	 Buy-Sell provision among AHC and Wexelman. 

 Amendment No. 1 to Shareholders’ Agreement of NAL by and among Antigua and Barbuda, AHC, N. Wexelman and NAL, dated December 12, 1987. 
  

	 	•	 	 Assignment of rights of AMP to AHC and transfer of 49 shares by AHC to N. Wexelman. 

  

	 	•	 	 Right of first refusal: extends first to the company and then to the shareholders. A change of control in the company constitutes a transfer. A change of control is
defined as any person or 

 
entity which is not a shareholder or similar holder of such corporation or entity as of the date of the agreement who acquires 50% or more of the beneficial
interest of such corporation or entity. Neither Wexelman nor AHC is restricted from transferring shares to an entity in which either or both are general partners, own all of the shares, provided that the such entity agrees to be bound by the terms
of the Shareholders’ Agreement as amended. 
  

	 	•	 	 Lease: Antigua to lease land for 99 years instead of conveying the land to the company. 

  

	 	•	 	 Buy-Sell provision among AHC and Wexelman. 

 In May
2003, the Company issued options to purchase 50,000 shares to Matrix Desalination Inc at an exercise price of $6.38. The vesting of the options issued to Matrix is dependent on the consummation of certain investments for DevMat Utility Resources,
LLC. 

 Schedule 3(aa) 
 Taxes 
 As a matter of course, the Company will request extension of its tax filing requirements in the various
jurisdictions in which it operates. 
 See the Company’s Current Report on Form 8-K filed with the SEC on December 08, 2004 regarding certain tax
agreements entered into with the Government of Antigua and Barbuda. 

 Schedule 4(d) 
 Use of Proceeds 
 Acquisition of all of the capital stock of Guardian International, Inc. (“Guardian”),
including all outstanding common stock and all outstanding preferred stock. 
 Payment of indebtedness owed by the Company to CapitalSource Finance LLC
(“CapitalSource”), including, without limitation, certain bridge financing obtained from CapitalSource. 
 Payment of indebtedness and other
amounts owed by Guardian to third parties. 
 General working capital needs.Amended and Restated Registration Rights Agreement

 Exhibit 10.2 
 Execution Copy 
 AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT 
 AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of July 13, 2007, by and among Devcon
International Corp., a Florida corporation, with headquarters located at 595 South Federal Highway, Suite 500, Boca Raton, Florida 33432 (the “Company”), and the undersigned buyers (each, a “Buyer”, and
collectively, the “Buyers”). 
 WHEREAS: 
 A. The Company’s board of directors authorized a new series of convertible preferred stock of the Company designated as Series A Convertible
Preferred Stock, the terms of which are set forth in the certificate of designation, dated as of October 16, 2006, for such series of preferred stock (the “Original Certificate of Designations”) (together with any convertible
preferred shares issued in replacement thereof in accordance with the terms thereof, the “Preferred Shares”), which Preferred Shares shall be convertible into the Company’s common stock, par value $0.10 per share (the
“Common Stock”), in accordance with the terms of the Certificate of Designations. 
 B. The Company and certain of the
Buyers (the “Original Buyers”) entered into that certain Securities Purchase Agreement, dated as of February 10, 2006 (the “Original Closing Date”) (as amended from time to time in accordance with its terms,
the “Original Securities Purchase Agreement”), whereby the Company, among other things, issued to each Buyer (i) at the Initial Closing (as defined in the Original Securities Purchase Agreement), warrants (the
“Warrants”), to acquire up to that number of additional shares of the Common Stock set forth opposite such Buyer’s name in column (5) of the Schedule of Buyers (as exercised, collectively, the “Warrant
Shares”) and (ii) at the Additional Closing (as defined in the Original Securities Purchase Agreement, that aggregate number of Preferred Shares set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers
(which aggregate number for all Buyers shall be 45,000) (as converted, collectively, the “Conversion Shares”). 
 B. On
March 30, 2007, the Company and certain Buyers entered into those certain Forbearance and Amendment Agreements (collectively, the “Forbearance Agreements”), whereby, among other things, the Company and each of such Buyers
agreed to amend and restate the Original Certificate of Designations as set forth in that certain Amended and Restated Certificate of Designations that is attached as Exhibit A thereto (the “Certificate of Designations”).

 C. The Preferred Shares may be entitled to dividends, which the Company, subject to certain conditions, was permitted to pay and
previously paid in shares of Common Stock (the “Dividend Shares”). 

 D. In connection with the Amended and Restated Securities Purchase Agreement by and among the parties
hereto of even date herewith (the “Securities Purchase Agreement”), the Company has agreed to redeem certain Warrants of the Buyers and permit the capitalization of certain dividends. 
 E. To induce the Buyers to execute and deliver the Forbearance Agreements and the Securities Purchase Agreement, the Company has agreed to execute and
deliver this Agreement which amends, and restates in full the terms and conditions of that certain Registration Rights Agreement, by and among the Company and the Original Buyers, dated as of the Original Closing Date whereby the Company agreed to
provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.

 NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows: 
 1. Definitions. 
 Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth
in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
 a.
“Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
 b. “Cutback Shares” means any of the Required Registration Amount of Registrable Securities not included in all Registration Statements
previously declared effective hereunder as a result of a limitation on the maximum number of shares of Common Stock of the Company permitted to be registered by the staff of the SEC, which cutback shall be applied pro rata to all Registrable
Securities, except to the extent prohibited by the SEC; provided, further, that, in order to determine any applicable Required Registration Amount, first the Warrant Shares shall be excluded on a pro rata basis until all of the Warrant Shares have
been excluded. 
 c. “Demand Registration” shall mean a registration required to be effected by the Company pursuant to
Section 2.1. 
 d. “Demand Registration Statement” shall mean a registration statement of the Company which covers the
Registrable Securities requested to be included therein pursuant to the provisions of Section 2.1 and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the prospectus
contained therein, all exhibits thereto and all material incorporated by reference (or deemed to be incorporated by reference) therein. 
  

 2 

 e. “Effective Date” means the date the applicable Registration Statement is declared
effective by the SEC. 
 f. “Effectiveness Deadline” means the date which is 45 days after the applicable Filing Deadline
for the applicable Registration Statement, or if there is a full review of such Registration Statement by the SEC, 90 days after the applicable Filing Deadline for such Registration Statement. 
 g. “Filing Date” means the date on which the applicable Registration Statement is filed with the SEC. 
 h. “Holder” means any holder of Registrable Securities. 
 i. “Holders’ Counsel” shall mean, in the case of a Demand Registration, Schulte Roth & Zabel LLP or such other one firm of counsel (per registration) selected by the Initiating Holders
holding a majority of the Registrable Securities for which registration was requested in the Request. 
 j. “Initiating
Holders” shall mean, with respect to a particular registration, the Holders who initiated the Request for such registration. 
 k.
“Investor” means a Buyer or any transferee or assignee of the Preferred Shares or Warrants, as applicable, to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee of the Preferred Shares or Warrants, as applicable, assigns its rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9. 
 l. “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and/or a government or any department or agency thereof. 
 m. “register,” “ registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the
1933 Act and the declaration of effectiveness of such Registration Statement(s) by the SEC. 
 n. “Registration Expenses”
shall mean any and all expenses incident to performance of or compliance with this Agreement by the Company and its subsidiaries, including, without limitation (i) all SEC, stock exchange, NASD and other registration, listing and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws and compliance with the rules of any stock exchange (including fees and disbursements of counsel in connection with such compliance and the
preparation of a blue sky memorandum and legal investment survey), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing, distributing, mailing and delivering any Registration Statement, any
prospectus, any underwriting agreements, transmittal letters, 

  

 3 

 
securities sales agreements, securities certificates and other documents relating to the performance of or compliance with this Agreement, (iv) the fees
and disbursements of counsel for the Company, (v) the reasonable fees and disbursements of Holders’ Counsel, (vi) the fees and disbursements of all independent public accountants (including the expenses of any audit and/or “cold
comfort” letters) and the fees and expenses of other Persons, including experts, retained by the Company, (vii) the expenses incurred in connection with making road show presentations and holding meetings with potential investors to
facilitate the distribution and sale of Registrable Securities which are customarily borne by the issuer, (viii) any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, and (ix) premiums and other
costs of policies of insurance against liabilities arising out of the public offering of the Registrable Securities being registered; provided, however, Registration Expenses shall not include discounts and commissions payable to
underwriters, selling brokers, dealer managers or other similar Persons engaged in the distribution of any of the Registrable Securities; and provided further, that in any case where Registration Expenses are not to be borne by the Company,
such expenses shall not include salaries of Company personnel or general overhead expenses of the Company, auditing fees, premiums or other expenses relating to liability insurance required by underwriters of the Company or other expenses for the
preparation of financial statements or other data normally prepared by the Company in the ordinary course of its business or which the Company would have incurred in any event; and provided, further, that in the event the Company
shall, in accordance with Section 2.2 or Section 3(r) hereof, not register any securities with respect to which it had given written notice of its intention to register to Holders, notwithstanding anything to the contrary in the foregoing,
all of the costs incurred by such Holders in connection with such registration shall be deemed to be Registration Expenses. 
 o.
“Registrable Securities” means (i) the Conversion Shares issued or issuable upon conversion of the Preferred Shares, (ii) any Dividend Shares issued or issuable with respect to the Preferred Shares, (iii) any Warrant
Shares issued or issuable with respect to the Warrants, (iv) any share capital of the Company issued or issuable, with respect to the Preferred Shares, the Conversion Shares, the Warrants, the Warrant Shares or the Dividend Shares as a result
of any share split, share dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on conversions of the Preferred Shares or exercise of the Warrants and (v) any Common Stock of the Company issued or
issuable, with respect to the Conversion Shares, the Preferred Shares, the Warrants, the Warrant Shares or the Dividend Shares as a result of any stock split, stock dividend, recapitalization, exchange or similar event, without regard to any
limitations on conversion of the Preferred Shares or exercise of the Warrants, in each case other than Cutback Shares. 
 p.
“Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Registrable Securities. 
 q. “Request” shall have the meaning set forth in Section 2.1(a). 
 r. “Required Holders” means the holders of at least a majority of the Registrable Securities. 
  

 4 

 s. “Required Holders of the Registration” shall mean, with respect to a particular
registration, one or more Holders of Registrable Securities who would hold a majority of the Registrable Securities to be included in such registration. 
 t. “Required Registration Amount “ means 120% of the sum of (i) the number of Conversion Shares issued and issuable pursuant to the Certificate of Designation, as of the trading day immediately
preceding the applicable date of determination, (ii) the number of Dividend Shares issuable pursuant to the terms of the Certificate of Designation, determined as if issued as of the trading day immediately preceding the applicable date of
determination and assuming that all of the Preferred Shares remain outstanding until the Mandatory Date (as defined in the Certificate of Designations), and (iii) the number of Warrant Shares issued and issuable pursuant to the Warrants as of
the trading day immediately preceding the applicable date of determination, all subject to adjustment as provided in Section 2(e), without regard to any limitations on conversion of the Preferred Shares or exercise of the Warrants and in each
case other than Cutback Shares. 
 u. “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for
offering securities on a continuous or delayed basis. 
 v. “SEC” means the United States Securities and Exchange
Commission. 
 w. “Underwriters” shall mean the underwriters, if any, of the offering being registered under the Securities
Act. 
 x. “Underwritten Offering” shall mean a sale of securities of the Company to an Underwriter or Underwriters for
reoffering to the public. 
 y. “Withdrawn Demand Registration” shall have the meaning set forth in Section 2.1(a).

 z. “Withdrawn Request” shall have the meaning set forth in Section 2.1(a). 
 2. Registration. 
 2.1 Demand
Registration. 
 a. Right to Demand Registration. 
 (i) Subject to Section 2.1(c), at any time or from time to time after the date that is nine (9) months after the date hereof, the Required Holders shall have the right to request in writing that the Company
register all or part of such Required Holders’ Registrable Securities (a “Request”) by filing with the SEC a Demand Registration Statement. 
  

 5 

 (1) Each Request shall specify the amount of Registrable Securities intended to be disposed of by such
Holders and the intended method of disposition thereof. 
 (2) As promptly as practicable, but no later than 10 days after receipt of a
Request, the Company shall give written notice of such requested registration to all other Holders of Registrable Securities. 
 (3) Subject
to Section 2.1(b), the Company shall include in a Demand Registration (i) the Registrable Securities intended to be disposed of by the Initiating Holders, and (ii) the Registrable Securities intended to be disposed of by any other
Holder which shall have made a written request (which request shall specify the amount of Registrable Securities to be registered and the intended method of disposition thereof) to the Company for inclusion thereof in such registration within ten
(10) days after the receipt of such written notice from the Company. 
 (4) Right to Demand Registration. The Company, as
expeditiously as possible within sixty (60) days following a Request (the “Filing Deadline”), shall use its best efforts to cause to be filed with the SEC a Demand Registration Statement providing for the registration under the
1933 Act of the Registrable Securities which the Company has been so requested to register by all such Holders, to the extent necessary to permit the disposition of such Registrable Securities so to be registered in accordance with the intended
methods of disposition thereof specified in such Request or further requests. 
 (5) The Company shall use its best efforts to have such
Demand Registration Statement declared effective by the SEC as soon as practicable thereafter but in no event later than the Effectiveness Deadline and to keep such Demand Registration Statement continuously effective until such time as all of such
Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller(s) thereof set forth in such Demand Registration Statement; provided, such period need not extend beyond nine months after the
effective date of the Demand Registration Statement; and provided, further, that with respect to any Demand Registration Statement, such period need not extend beyond the Registration Period, and which period, in any event, shall terminate
when all Registrable Securities covered by such Demand Registration Statement have been sold (but not before the expiration of the 90 day period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable) (the
“Demand Registration Period”). 
 (ii) A Request may be withdrawn prior to the filing of the Demand Registration Statement
by the Required Holders of the Registration (a “Withdrawn Request”) and a Demand Registration Statement may be withdrawn prior to the effectiveness thereof by the Required Holders of the Registration (a “Withdrawn Demand
Registration”) and such withdrawals shall be treated as a Demand Registration which shall have been effected pursuant to this Section 2.1, unless the Required Holders of Registrable Securities to be included in such Registration
Statement reimburse the Company for its reasonable out-of-pocket 

  

 6 

 
Registration Expenses relating to the preparation and filing of such Demand Registration Statement (to the extent actually incurred); provided;
however, that if a Withdrawn Request or Withdrawn Demand Registration is made because of a material adverse change in the business or financial condition of the Company, then such withdrawal shall not be treated as a Demand Registration
effected pursuant to this Section 2.1 (and shall not be counted toward the number of Demand Registrations to which such Holders are entitled), and the Company shall pay all Registration Expenses in connection therewith. Any Holder requesting
inclusion in a Demand Registration may, at any time prior to the effective date of the Demand Registration Statement (and for any reason), revoke such request by delivering written notice to the Company revoking such requested inclusion. 

(iii) The registration rights granted pursuant to the provisions of this Section 2.1 shall be in addition to the registration rights granted
pursuant to the other provisions of Section 2 hereof. 
 b. Priority in Demand Registrations. If a Demand Registration involves
an Underwritten Offering, and the sole or lead managing Underwriter, as the case may be, of such Underwritten Offering shall advise the Company in writing (with a copy to each Holder requesting registration) on or before the date five days prior to
the date then scheduled for such offering that, in its opinion, the amount of Registrable Securities, if any, requested to be included in such Demand Registration exceeds the number which can be sold in such offering within a price range acceptable
to the Required Holders of the Registration (such writing to state the basis of such opinion and the approximate number of Registrable Securities which may be included in such offering), the Company shall include in such Demand Registration, to the
extent of the number which the Company is so advised may be included in such offering without such effect, the Registrable Securities requested to be included in the Demand Registration by the Holders allocated, pro rata among the Investors based on
the number of Registrable Securities held by each Investor (on an as converted, fully-diluted basis and without giving effect to any exercise or conversion limitations contained in any such convertible or exercisable securities held by any such
party). In the event the Company shall not, by virtue of this Section 2.1(b), include in any Demand Registration all of the Registrable Securities of any Holder requesting to be included in such Demand Registration, such Holder, upon written
notice to the Company given within five days of the time such Holder first is notified of such matter, may reduce the amount of Registrable Securities it desires to have included in such Demand Registration, whereupon only the Registrable
Securities, if any, it desires to have included will be so included and the Holders not so reducing shall be entitled to a corresponding increase in the amount of Registrable Securities to be included in such Demand Registration. 
 c. Limitations on Registrations. The rights of Holders of Registrable Securities to request Demand Registrations pursuant to Section 2.1(a)
are subject to the following limitations: 
 (1) in no event shall the Company be required to 

  

 7 

 
effect a Demand Registration unless the reasonably anticipated aggregate offering price to the public of all Registrable Securities for which registration
has been requested by Holders, together with any shares sold by the Company for its own account, will be at least $3,000,000; 
 (2) in no
event shall the Company be required to effect a Demand Registration prior to six months after a prior Demand Registration Statement is declared effective by the SEC; 
 (3) in no event shall the Company be required to register an amount that exceeds the amount of Registrable Securities permitted by the SEC; and 
 (4) in no event shall the Company be required to effect, in the aggregate, more than two Demand Registrations in any consecutive twelve-month period;
provided, however, that such number shall be increased to the extent the Company does not include in what would otherwise be the final registration the number of Registrable Securities requested to be registered by the Holders by
reason of Section 2.1(b). 
 d. Underwriting. 
 (1) Selection of Underwriters. Notwithstanding anything to the contrary contained in Section 2.1(a), if the Initiating Holders holding a
majority of the Registrable Securities for which registration was requested in the Request so elect, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of a firm commitment Underwritten Offering;
and such Initiating Holders may require that all Persons (including other Holders) participating in such registration sell their Registrable Securities to the Underwriters at the same price and on the same terms of underwriting applicable to the
Initiating Holders. If any Demand Registration involves an Underwritten Offering, the sole or managing Underwriters and any additional investment bankers and managers to be used in connection with such registration shall be selected by the
Initiating Holders holding a majority of the Registrable Securities (so long as such Underwriter is not affiliated with any such majority holders) for which registration was requested in the Request, subject to the approval of the Company (such
approval not to be unreasonably withheld or delayed). 
 (2) Underwriting Agreements. If requested by the sole or lead managing
Underwriter for any Underwritten Offering effected pursuant to a Demand Registration the Company shall enter into a customary underwriting agreement with the Underwriters for such offering, such agreement to be reasonably satisfactory in substance
and form to the Required Holders of the Registration. 
 (3) Holders of Registrable Securities to be Parties to Underwriting
Agreement. The Holders of Registrable Securities to be distributed by Underwriters in an Underwritten Offering contemplated by Section 2.1(a) shall be parties to the underwriting agreement between the Company and such Underwriters and may,
at such Holders’ 

  

 8 

 
option, require that any or all of the conditions precedent to the obligations of such Underwriters under such underwriting agreement be conditions precedent
to the obligations of such Holders of Registrable Securities. No Holder shall be required to make any representations or warranties to, or agreements with, the Company or the Underwriters other than representations, warranties or agreements
regarding such Holder, such Holder’s Registrable Securities and such Holder’s intended method of disposition. 
 (4)
Participation in Underwritten Registration. Notwithstanding anything herein to the contrary, no Person may participate in any Underwritten Offering hereunder unless such Person (i) agrees to sell its securities on the same terms and
conditions provided in any underwritten arrangements approved by the Persons entitled hereunder to approve such arrangement and (ii) accurately completes and executes in a timely manner all questionnaires, powers of attorney, indemnities,
custody agreements, underwriting agreements and other documents customary for such an offering and reasonably required under the terms of such underwriting arrangements. 
 (5) In no event shall the Company be required to effect more than two Underwritten Offerings. 
 e.
Registration of Other Securities. Whenever the Company shall effect a Demand Registration, no securities other than the Registrable Securities shall be covered by such registration unless (a) the Required Holders of the Registration
shall have consented in writing to the inclusion of such other securities and (b) no holder of Registrable Securities is unable to include any of its Registrable Securities requested for inclusion in such registration by reason of
Section 2.1(b). 
 f. Effective Registration Statement; Suspension. A Demand Registration Statement shall not be deemed
to have become effective (and the related registration will not be deemed to have been effected) (i) unless it has been declared effective by the SEC and remains effective in compliance with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities covered by such Demand Registration Statement for the Demand Registration Period, (ii) if the offering of any Registrable Securities pursuant to such Demand Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, or (iii) if, in the case of an Underwritten Offering, the conditions to closing specified in an underwriting agreement to which the
Company is a party are not satisfied other than by the sole reason of any breach or failure by the Holders of Registrable Securities or are not otherwise waived. By 9:30 a.m. New York time on the date following any Effective Date, the Company shall
file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement. 
 g. Other Registrations. During the period (i) beginning on the date of a Request and (ii) ending on the date that is 90 days after the date that a Demand Registration Statement filed pursuant to such
Request has been declared effective by the SEC or, 

  

 9 

 
if the Required Holders of the Registration shall withdraw such Request or such Demand Registration Statement, on the date of such Withdrawn Request or such
Withdrawn Registration Statement, the Company shall not, without the consent of the Required Holders of the Registration, file a registration statement pertaining to any other securities of the Company (other than a registration relating solely to
the sale of securities to participants in a Company employee stock or similar plan on Form S-8). 
 h. Registration Statement Form.
Registrations under this Section 2.1 shall be on such appropriate registration form of the SEC (i) as shall be selected by the Initiating Holders holding a majority of the Registrable Securities for which registration was requested in the
Request, and (ii) which shall be available for the sale of Registrable Securities in accordance with the intended method or methods of disposition specified in the requests for registration. The Company agrees to include in any such
Registration Statement all information which any selling Investor Holder, upon advice of counsel, shall reasonably request. 
 2.2 Other
Provisions Concerning Registration. 
 a. Allocation of Registrable Securities. In no event shall the Company include any
securities other than Registrable Securities on any Registration Statement without the prior written consent of the Required Holders. The initial number of Registrable Securities included in any Registration Statement and any increase in the number
of Registrable Securities included therein shall first be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time such Registration Statement is declared effective by the SEC. In the
event that an Investor sells or otherwise transfers any of such Investor’s Registrable Securities, each transferee that becomes an Investor shall be allocated a pro rata portion of the then remaining number of Registrable Securities included in
such Registration Statement for such transferor. Any shares of Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement shall be
allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement. If the SEC requires that the Company register less than the amount of shares
of Common Stock originally included on any Registration Statement at the time it was filed, the Registrable Securities on such registration statement and any other securities allowed to be registered on such Registration Statement (in accordance
with this paragraph) shall be decreased on a pro rata basis; provided, that following any such decrease, at the request of the Required Holders, such Required Holders may elect to withdraw such Registration Statement and thereafter the Request for
such Registration Statement shall not be deemed to constitute a Request for purposes of Section 2.1 hereof. 
 b. Legal Counsel.
Subject to Section 5 hereof, the Required Holders shall have the right to select one legal counsel to review any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Schulte Roth & Zabel LLP
or such other counsel as thereafter designated by the Required Holders. The Company and Legal Counsel shall reasonably cooperate with each other in regards to the performance of the Company’s obligations under this Agreement. 
  

 10 

 c. Ineligibility for Form S-3. In the event that Form S-3 is not available for the registration
of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the
Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the SEC. 
 d. Sufficient Number of Shares Registered. Subject to the
limitations set forth in Section 2.1(c), in the event the number of shares available under a Registration Statement filed pursuant to Section 2.1 is insufficient to cover all of the Registrable Securities required to be covered by such
Registration Statement or an Investor’s allocated portion of the Registrable Securities pursuant to Section 2.2(a), the Company shall amend the applicable Registration Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover at least the Required Registration Amount as of the trading day immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon as
practicable, but in any event not later than fifteen (15) days after the necessity therefor arises. The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable
following the filing thereof. For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient to cover all of the Registrable Securities” if at any time the number of
shares of Common Stock available for resale under the Registration Statement is less than the product determined by multiplying (i) the Required Registration Amount as of such time by (ii) 0.90. The calculation set forth in the foregoing
sentence shall be made without regard to any limitations on the conversion of the Preferred Shares or the exercise of the Warrants and such calculation shall assume that the Preferred Shares are then convertible into shares of Common Stock at the
then prevailing Conversion Rate (as defined in the Certificate of Designations) and that the Warrants are then exercisable for shares of Common Stock at the then prevailing Exercise Price (as defined in the applicable Warrant). 
 e. Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement. If (i) a Registration Statement covering all
of the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the applicable Filing Deadline (a “Filing Failure”) or
(B) filed with the SEC but not declared effective by the SEC on or before the applicable Effectiveness Deadline (an “Effectiveness Failure”) or (ii) on any day after the applicable Effective Date, sales of all of the
Registrable Securities required to be included on such Registration Statement cannot be made (other than during an Allowable Grace Period (as defined in Section 3(r)) pursuant to such Registration Statement (including, without limitation,
because of a failure to keep such Registration Statement effective, to disclose such 

  

 11 

 
information as is necessary for sales to be made pursuant to such Registration Statement, a suspension or delisting of the Common Stock on its principal
trading market or exchange, or to register a sufficient number of shares of Common Stock) (a “Maintenance Failure”) then, as partial relief for the damages to any Investor by reason of any such delay in or reduction of its ability
to sell the underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to each Investor which holds Registrable Securities an amount in cash equal to one percent
(1.0%) of the aggregate Purchase Price (as such term is defined in the Securities Purchase Agreement) of such Investor’s Registrable Securities included in such Registration Statement on each of the following dates: (i) on every
thirtieth day (pro rated for periods totaling less than thirty days) after a Filing Failure until such Filing Failure is cured; (ii) on every thirtieth day (pro rated for periods totaling less than thirty days) after an Effectiveness Failure
until such Effectiveness Failure is cured; and (iii) on every thirtieth day (pro rated for periods totaling less than thirty days) after a Maintenance Failure until such Maintenance Failure is cured. The Company shall also pay the reasonable
fees of Legal Counsel to enforce the provisions hereof. The payments to which an Investor shall be entitled pursuant to this Section 2.2(e) are referred to herein as “Registration Delay Payments.” In the event the Company fails
to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of one and one-half percent (1.5%) per month (prorated for partial months) until paid in full. Registration Delay Payments
shall be paid on the day of the Filing Failure, Effectiveness Failure and the initial day of a Maintenance Failure, as applicable, and thereafter on the earlier of (I) the thirtieth day after the event or failure giving rise to the Registration
Delay Payments has occurred and (II) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured. Notwithstanding anything herein or in the Securities Purchase Agreement to the contrary, in no event
shall the aggregate amount of Registration Delay Payments (other than Registration Delay Payments payable pursuant to events that are within the control of the Company) exceed, in the aggregate, 10% of the Purchase Price of the Registrable
Securities issued on the Closing Date (as defined in the Securities Purchase Agreement) pursuant to the Securities Purchase Agreement. 
 2.3 Piggyback Registration.  
 a. Piggyback Rights. If the Company proposes to file a registration statement with the
Commission with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, for its own account or for the account of any stockholder of the Company (other
than a registration statement on Form S-4 or Form S-8 or their successors or any other form for a limited similar purpose or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another
Person), the Company shall, at least thirty days prior to such filing, give written notice to all Holders of its intention to do so and, upon the written request of any Holder or Holders given within twenty days of the receipt of such notice (which
request shall state the intended method of disposition of such Registrable Securities), the Company shall use its best efforts to cause the Registrable Securities that such Holder or Holders request the Company to register to be included in such
registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters (if any) of a proposed 

  

 12 

 
Underwritten Offering to permit such Registrable Securities to be included in such registration on the same terms and conditions as any similar securities of
the Company, in each case to the extent necessary to permit their sale or other disposition in accordance with the intended methods of distribution specified in the request of the Holder or Holders; provided that the Company shall have the right to
postpone or withdraw any registration effected pursuant to this Section 2.3 without obligation to the Holders (any such registration statement which includes Registrable Securities, a “Piggy-Back Registration Statement”).

 b. Underwritten Offerings. In connection with any Underwritten Offering under this Section 2.3 (but not including
Underwritten Offerings under Section 2.1), the notice to the Holders shall state whether such offering is an Underwritten Offering and the Company shall not be required to include any Registrable Securities in such Underwriting Offering unless
the Holders requesting inclusion of such Registrable Securities accept the terms of the underwriting as reasonably agreed upon between the Company and the managing Underwriter or Underwriters, selected by the Company. Each Holder that has requested
that Registrable Securities held by it be included in such Registration Statement shall (together with the Company and the other Holders distributing the securities through such underwriting) enter into such underwriting agreement as reasonably
agreed upon between the Company and the managing Underwriter or Underwriters. In connection with any Underwritten Offering under this Section 2.3 (but not including Underwritten Offerings under Section 2.1), if in the reasonable and good
faith opinion of the managing Underwriter or Underwriters, the registration of all, or part of, the Registrable Securities requested to be included in such registration and any other securities to be included in such registration jeopardize the
success of the offering by the Company or the holders of securities initiating such registration (the “Demanding Holders”), then: (i) in the case of an Underwritten Offering by the Company, (A) the Company shall not be
cutback and (B) the Registrable Securities and any other securities requested for inclusion pursuant to similar piggyback rights shall be reduced first pro rata (on an as-converted, fully-diluted basis and without giving effect to any exercise
or conversion limitations contained in any such convertible or exercisable securities held by any such party) in accordance with the number of securities that each such Person has requested be included in the registration, regardless of the number
of securities held by each such Person; and (ii) in the case of an Underwritten Offering by a Demanding Holder, (A) the Demanding Holder (and other parties that are subject to the same registration rights agreement with such Demanding
Holder) shall not be cutback and (B) the Registrable Securities and any other securities requested for inclusion pursuant to similar piggyback rights shall be reduced first pro rata (on an as-converted, fully-diluted basis and without giving
effect to any exercise or conversion limitations contained in any such convertible or exercisable securities held by any such party) in accordance with the number of securities that each such Person has requested be included in the registration,
regardless of the number of securities held by each such Person. If any Holder disapproves of the terms of any such underwriting, it may elect to withdraw therefrom by written notice to the Company and the managing Underwriter. 
 Section 2.4 Underwriter Status. Neither the Company nor any Subsidiary (as defined in the Securities Purchase Agreement) or affiliate
thereof shall identify any Buyer as an 

  

 13 

 
underwriter in any public disclosure or filing with the SEC or any Principal Market (as defined in the Securities Purchase Agreement) or Eligible Market (as
defined in the Certificate of Designations) and any Buyer being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Securities Purchase
Agreement). 
 3. Related Obligations. 
 At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2.1 or 2.3, the Company will use its best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations: 
 a. The Company shall promptly prepare and file with the SEC a Registration Statement with respect to the applicable Registrable Securities and use its best efforts to cause such Registration Statement relating to the Registrable Securities
to become effective as soon as practicable after such filing (but in no event later than the applicable Effectiveness Deadline). Subject to Allowable Grace Periods (as defined below), the Company shall keep each Registration Statement effective
pursuant to Rule 415 at all times until the earlier of (i) the date as of which all of the Investors (other than any Investors who are “affiliates” of the Company as such term is used in Rule 144(k) promulgated under the Securities
Act) may sell all of the Registrable Securities covered by such Registration Statement without restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under the 1933 Act and (ii) the date on which the Investors shall have
sold all of the Registrable Securities covered by such Registration Statement (the “Registration Period”). The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances
in which they were made) not misleading. The Company shall submit to the SEC, within two (2) Business Days after the later of the date that (i) the Company learns that no review of a particular Registration Statement will be made by the
staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the case may be, and (ii) the approval of Legal Counsel pursuant to Section 3(c) (which approval is immediately sought), a request for
acceleration of effectiveness of such Registration Statement to a time and date not later than 48 hours after the submission of such request. 
 b. Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with
such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such 

  

 14 

 
Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this
Section 3(b)) by reason of the Company filing a report on Form 10-Q, Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company shall have incorporated such report by
reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such
Registration Statement. 
 c. The Company shall (A) permit Legal Counsel to review and comment upon (i) a Registration Statement at
least five (5) Business Days prior to its filing with the SEC (and for at least two (2) Business Days after any final, material changes are made to any draft thereof) (provided that the Filing Deadline shall be extended by the time taken
by Legal Counsel beyond such specified periods in exercising its right to review the Registration Statement pursuant to this Section 3) and (ii) all amendments and supplements to all Registration Statements (except for Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment or
supplement thereto in a form to which Legal Counsel reasonably objects. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval of
Legal Counsel, which consent shall not be unreasonably withheld. The Company shall furnish to Legal Counsel, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to
any Registration Statement (except for reports previously filed pursuant to the Securities Exchange Act of 1934, as amended), (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the
prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with Legal Counsel in performing the Company’s obligations pursuant to this Section 3. 
 d. The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly
after the same is prepared and filed with the SEC, at least one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an
Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, one (1) copy of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such
other number of copies as such Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time and/or in order to facilitate the
disposition of the Registrable Securities owned by such Investor. 
  

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 e. The Company shall use its reasonable best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of all applicable jurisdictions in the United
States, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the
Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall
promptly notify Legal Counsel and each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale
under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose. 
 f. The Company shall notify Legal Counsel and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of
such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(r), promptly prepare a
supplement or amendment to such Registration Statement to correct such untrue statement or omission and deliver one (1) copy of such supplement or amendment to Legal Counsel and each Investor (or such other number of copies as Legal Counsel or
such Investor may reasonably request). The Company shall also promptly notify Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration
Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and each Investor by facsimile or e-mail on the same day of such effectiveness and by overnight mail),
(ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate. 
 g. The Company shall use its best efforts to prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement, or the suspension of the 

  

 16 

 
qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of
such order or suspension at the earliest possible moment and to notify Legal Counsel and each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose. 
 h. If any Investor may be required under applicable securities law to be
described in the Registration Statement as an underwriter, at the reasonable request of any Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such
dates as an Investor may reasonably request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the Investors. 
 i. If any Investor may be required under applicable
securities law to be described in the Registration Statement as an underwriter, the Company shall make available for inspection by (i) any Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents retained by the
Investors (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed
necessary by each Inspector, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector shall agree in writing to hold in strict
confidence and not to make any disclosure (except to an Investor) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the
disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement of which
the Inspector has knowledge. Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and
allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any
Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations. 
 j. The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such 

  

 17 

 
information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is
sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information. 
 k. The Company shall use its best efforts either to (i) cause all of the
Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure designation and quotation of all of the Registrable Securities covered by a Registration Statement on the Nasdaq National Market, or (iii) if, despite the Company’s best
efforts to satisfy the preceding clause (i) or (ii) the Company is unsuccessful in satisfying the preceding clause (i) or (ii), to secure the inclusion for quotation on The Nasdaq Capital Market for such Registrable Securities and,
without limiting the generality of the foregoing, to use its best efforts to arrange for at least two market makers to register with the National Association of Securities Dealers, Inc. (“NASD”) as such with respect to such
Registrable Securities. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(k). 
 l. The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing
the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Investors may reasonably request and registered in such names as the
Investors may request. 
 m. If requested by an Investor, the Company shall as soon as practicable after receipt of notice from such Investor
and subject to Section 3(r) hereof, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in
such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement
or make amendments to any Registration Statement if reasonably requested by an Investor holding any Registrable Securities. 
  

 18 

 n. The Company shall use its best efforts to cause the Registrable Securities covered by a Registration
Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities. 
 o. The Company shall make generally available to its security holders as soon as practical, but not later than one hundred five (105) days after the
close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the
Company’s fiscal quarter next following the effective date of the Registration Statement. 
 p. The Company shall otherwise use its best
efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder. 
 q. Within two
(2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as
Exhibit A. 
 r. Notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared
effective by the SEC, the Company may delay the disclosure of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company, in the best
interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Investors in writing of the existence of material,
non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information to the Investors) and the date on which the Grace Period will begin, and
(ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed twenty (20) consecutive days and during any three hundred sixty five (365) day period such Grace
Periods shall not exceed an aggregate of sixty (60) days and the first day of any Grace Period must be at least five (5) trading days after the last day of any prior Grace Period (each, an “Allowable Grace Period”). For
purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall end on and include the later of the date the Investors receive
the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary, the Company shall
cause its transfer 

  

 19 

 
agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale, and delivered a copy of the prospectus included as part of the applicable Registration Statement (unless an exemption from
such prospectus delivery requirement exists), prior to the Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled. 
 4. Obligations of the Investors. 
 a. At least five (5) Business Days prior to the first
anticipated filing date of a Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of such Investor’s Registrable Securities
included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such
Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect and maintain
the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. 
 b. Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement. 
 c. Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 3(g) or the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such
Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of 3(f) or receipt of notice that no supplement or amendment is required or the event contemplated by
Section 3(g) is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any
event of the kind described in Section 3(g) or the first sentence of 3(f) and for which the Investor has not yet settled. 
 d. Each
Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement. 
  

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 5. Expenses of Registration. 
 The Company shall pay all Registration Expenses in connection with any Registration Statement hereunder, whether or not such registration shall become
effective or is withdrawn and whether or not any or all Registrable Securities originally requested to be included in such registration are with drawn or otherwise ultimately not included in such registration. In addition to the foregoing, the
Company shall also reimburse the Investors for the fees and disbursements of Legal Counsel in connection with the registration, filing or qualification pursuant to Sections 2 and 3 of this Agreement which amount shall be limited to $35,000 per
Registration Statement. 
 6. Indemnification. 
 In the event any Registrable Securities are included in a Registration Statement under this Agreement: 
 a.
To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls
any Investor within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts
paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before
any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an Indemnified Person is or may be a party thereto (“Indemnified Damages”), to which any of them
may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered
(“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any
violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities
pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c), the 

  

 21 

 
Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply
to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person expressly for
use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto; and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the
transfer of the Registrable Securities by the Investors pursuant to Section 9. 
 b. In connection with any Registration Statement in
which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation
occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c), such Investor will reimburse any legal
or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed;
provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9. 
 c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of
notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party 

  

 22 

 
similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the
Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for all such Indemnified Person or
Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would
be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding; provided further, that the indemnifying party shall not be
responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for all such Indemnified Person or Indemnified Party. In the case of an Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Investors holding at least a majority in interest of the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified Person shall cooperate
reasonably with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto.
No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent.
No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action. 
 d. No Person involved in the sale of Registrable Securities who is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to indemnification from any Person involved in such sale of Registrable Securities who is not
guilty of fraudulent misrepresentation. 
 e. The indemnification required by this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred. 
  

 23 

 f. The indemnity agreements contained herein shall be in addition to (i) any cause of action or
similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law. 
 7. Contribution. 
 To the extent any
indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however, that: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6 of this Agreement,
(ii) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from
any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities pursuant to such Registration Statement. 
 8. Reports Under the 1934 Act.

 With a view to making available to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to: 
 a. make and keep public information available, as those terms are understood and defined in Rule 144; 
 b. file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the
Company remains subject to such requirements (it being understood that nothing herein shall limit the Company’s obligations under Section 4(c) of the Securities Purchase Agreement) and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and 
 c. furnish to each Investor so long as such Investor owns Registrable Securities,
promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant
to Rule 144 without registration. 
  

 24 

 9. Assignment of Registration Rights. 
 The rights under this Agreement shall be automatically assignable by the Investors to any transferee of all or any portion of such Investor’s
Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company
is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer
shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement; and (vi) such transfer shall have been conducted in accordance with all applicable federal and state securities laws. 
 10. Amendment of Registration Rights. 
 Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required
Holders; provided, however, that any such amendment or waiver that would have an adverse and disproportionate effect on any Investor must be approved by such Investor. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the parties to this Agreement. 
 11. Miscellaneous. 
 a. A Person is
deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities. 
 b. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with a
nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 
  

 25 

									
		 	 If to the Company:
	 	
				
		 		 	Devcon International Corp.	 	
		 		 	595 South Federal Highway	 	
		 		 	Suite 500	 	
		 		 	Boca Raton, Florida 33432	 	
		 		 	Telephone:	  	(561) 955-7300	 	
		 		 	Facsimile:	  	(561) 955-7333	 	
		 		 	Attention:	  	Robert Farenhem	 	
			
		 	With a copy (for informational purposes only) to:	 	
				
		 		 	Greenberg Traurig, P.A.	 	
		 		 	1221 Brickell Avenue	 	
		 		 	Miami, Florida 33131	 	
		 		 	Telephone:	  	(305) 579-0756	 	
		 		 	Facsimile:	  	(305) 961-5756	 	
		 		 	Attention:	  	Robert L. Grossman, Esq.	 	
			
		 	If to the Transfer Agent:	 	
				
		 		 	Continental Stock Transfer and Trust	 	
		 		 	17 Battery Place, 8th Floor	 	
		 		 	New York, NY 10004	 	
		 		 	Telephone:	  	(212) 509-4000 x304	 	
		 		 	Facsimile:	  	(212) 616-7616	 	
		 		 	Attention:	  	Mark Zimkind	 	
			
		 	 If to Legal Counsel:
	 	
				
		 		 	 Schulte Roth & Zabel LLP
	 	
		 		 	 919 Third Avenue
	 	
		 		 	 New York, New York 10022
	 	
		 		 	Telephone:	  	 (212) 756-2000
	 	
		 		 	Facsimile:	  	 (212) 593-5955
	 	
		 		 	Attention:	  	 Eleazer N. Klein, Esq.
	 	

 If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached hereto (as updated
from time to time), with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically

  

 26 

 
or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of
such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively. 
 c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. 
 d. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New
York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, 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 brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY. 
 e. This Agreement, the other Transaction Documents (as defined in the Securities Purchase
Agreement) and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof. 
  

 27 

 f. Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be
binding upon the permitted successors and assigns of each of the parties hereto. 
 g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. 
 h. This Agreement may be executed in identical counterparts,
each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement. 
 i. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby. 
 j. All consents and other determinations required to be made by
the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders. 
 k. The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party. 
 l. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person. 
 m. The obligations of each Investor hereunder are several and not joint
with the obligations of any other Investor, and no provision of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained herein, and no action taken by any Investor pursuant hereto,
shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated herein. 
 * * * * * * 
  

 28 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Registration Rights Agreement to be duly executed as of the date first written above. 
  

			
	COMPANY:
	
	DEVCON INTERNATIONAL CORP.
		
	 By:
	 	 /s/ Richard C. Rochon

	 Name:
	 	 Richard C. Rochon

	 Title:
	 	 Acting Chief Executive Officer

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Registration Rights Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	HBK MAIN STREET INVESTMENTS L.P.
		
	 By:
	 	HBK Services LLC
		 	Investment Advisor
		
	 By:
	 	 /s/ V. Baker Gentry, Jr.

	 Name:
	 	 V. Baker Gentry, Jr.

	 Title:
	 	Authorized Signatory

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Registration Rights Agreement to be duly executed as of the date first written above. 
  

			
	CS EQUITY II LLC
		
	 By:
	 	 /s/ Keith D. Reuben

	 Name:
	 	 Keith D. Reuben

	 Title:
	 	 Authorized Signatory

 SCHEDULE OF BUYERS 
  

									
	 Buyer
	  	 	  	 Buyer Address
 and Facsimile Number
	  	 	  	 Buyer’s Representative’s Address
 and Facsimile Number

	HBK Main Street Investments L.P.	  		  	 c/o HBK Services LLC
 300 Crescent Court, Suite
700
 Dallas, TX 75201
 Attn: Legal (PP)
 Telephone: 214-758-6107
 Facsimile: 214-758-1207
	  		  	 Schulte Roth & Zabel LLP
 919 Third Avenue

New York, NY 10022
 Attn: Eleazer Klein, Esq.
 Facsimile: (212) 593-5955
 Telephone: (212) 756-2000

					
	Castlerigg Master Investments Ltd.	  		  	 c/o Sandell Asset Management
 40 West 57th St

26th Floor
 New York, NY 10019
 Attention: Cem Hacioglu / Matthew Pliskin

 Fax: 212-603-5710
 Telephone: 212-603-5700
 Residence: British Virgin Islands
	  		  	McDermott Will & Emery LLP
340 Madison Avenue
New York, New York 10017
Attention: Stephen Older, Esq.
Facsimile: (212) 547-5444
Telephone: (212) 547-5649
					
	CS Equity II LLC	  		  	 c/o CapitalSource Finance, LLC
 4445 Willard Avenue, 12th
Floor
 Chevy Chase, Maryland 20815
 Attention: HSB, Portfolio
Manager
 Telephone: (301) 841-2700
 Fax: (301)
841-2360
	  		  	 Katten Muchin Rosenman LLP
 525 West Monroe
Street
 Chicago, Ill. 60661
 Attention: Jeffrey L. Elegant, Esq.
and
Mark R. Grossman, Esq.
Facsimile: (312) 577-4408
Telephone: (312) 902-5200

 EXHIBIT A 
 FORM OF NOTICE OF EFFECTIVENESS 
 OF REGISTRATION STATEMENT 
  

					
	Continental Stock Transfer and Trust
	 17 Battery Place, 8th Floor

	New York, NY 10004
	 Telephone:
	 	(212) 509-4000 x304
	 Facsimile:
	 	(212) 616-7616
	 Attention:
	 	Mark Zimkind
			
		 	Re:	 	Devcon International Corp.

 Ladies and Gentlemen: 
 [We are][I am] counsel to Devcon International Corp., a Florida corporation (the “Company”), and have represented the Company in connection with that certain Amended and Restated Securities Purchase
Agreement (the “Securities Purchase Agreement”) entered into by and among the Company and the buyers named therein (collectively, the “Holders”) pursuant to which the Company issued to the Holders preferred shares
(the “Preferred Shares”) convertible into the Company’s common stock, $0.10 par value (the “Common Stock”), warrants exercisable for shares of Common Stock (the “Warrants”). Pursuant to
the Securities Purchase Agreement, the Company also has entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the
Registrable Securities (as defined in the Registration Rights Agreement), including the shares of Common Stock issuable upon conversion of the Preferred Shares and the shares of Common Stock issuable upon exercise of the Warrants, under the
Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration Rights Agreement, on
                         , 200    , the Company filed a Registration Statement on Form
S-3 (File No. 333-                    ) (the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names each of the Holders as a selling shareholder thereunder. 
 In
connection with the foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement. 
  

 1 

 Unless we inform you otherwise, this letter shall serve as our standing opinion to you that the shares of
Common Stock are freely transferable by the Holders pursuant to the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance of shares of Common Stock to the Holders as contemplated
by the Company’s Irrevocable Transfer Agent Instructions dated February     , 2006. 
  

			
	 Very truly yours,

	
	 [ISSUER’S COUNSEL]

		
	 By:
	 	  

  

	CC:	[LIST NAMES OF HOLDERS] 

  

 2 

 EXHIBIT B 
 SELLING SHAREHOLDERS 
 The shares of Common Stock being offered by the selling shareholders are
issuable upon conversion of the convertible preferred shares, upon exercise of the warrants and in payment of certain dividend requirements as set forth in the Certificate of Designation. For additional information regarding the issuance of those
convertible preferred shares and warrants, see “Private Placement of Convertible Preferred Shares and Warrants” above. We are registering the shares of Common Stock in order to permit the selling shareholders to offer the shares for resale
from time to time. Except for the ownership of the preferred shares and warrants issued pursuant to the Securities Purchase Agreement, the selling shareholders have not had any material relationship with us within the past three years. 

The table below lists the selling shareholders and other information regarding the beneficial ownership of the shares of Common Stock by each of the
selling shareholders. The second column lists the number of shares of Common Stock beneficially owned by each selling shareholder, based on its ownership of the convertible preferred shares and warrants, as of
                    , 200    , assuming conversion of all convertible preferred shares and exercise of the warrants
held by the selling shareholders on that date, without regard to any limitations on conversions or exercise. 
 The third column lists the
shares of Common Stock being offered by this prospectus by the selling shareholders. 
 In accordance with the terms of a registration rights
agreement with the selling shareholders, this prospectus generally covers the resale of at least 120%, of the sum of (i) the number of shares of Common Stock issuable upon conversion of the convertible preferred shares (and the dividends
accrued and payable thereunder) as of the trading day immediately preceding the date the registration statement is initially filed with the SEC, (ii) the number of shares of Common Stock issuable upon payment of the dividend shares as of the
trading day immediately preceding the date the registration statement is initially filed with the SEC assuming that all of the Preferred Shares remain outstanding through the Mandatory Date (as defined in the Certificate of Designations) and
(iii) the number of shares of Common Stock issuable upon exercise of the related warrants as of the trading day immediately preceding the date the registration statement is initially filed with the SEC. Because the conversion price of
the convertible preferred shares and the exercise price of the warrants may be adjusted, the number of shares that will actually be issued may be more or less than the number of shares being offered by this prospectus. The fourth column assumes the
sale of all of the shares offered by the selling shareholders pursuant to this prospectus. 
 Under the terms of the certificate of
designations and the warrants, a selling shareholder may not convert the preferred shares or exercise the warrants to the extent such conversion or 

  

 3 

 
exercise would cause such selling shareholder, together with its affiliates, to beneficially own a number of shares of Common Stock which would exceed 9.99%
or 4.99% as applicable of our then outstanding shares of Common Stock following such conversion or exercise, excluding for purposes of such determination shares of Common Stock issuable upon conversion of the convertible preferred shares which have
not been converted and upon exercise of the warrants which have not been exercised. The number of shares in the second column does not reflect this limitation. The selling shareholders may sell all, some or none of their shares in this offering. See
“Plan of Distribution.” 
  

 4 

							
	 Name of Selling Shareholder
	  	Number of Shares of
Common Stock Owned
Prior to Offering	  	Maximum Number of Shares
of Common Stock to be Sold
Pursuant to this Prospectus	  	Number of Shares of
Common Stock Owned
After Offering
	 HBK Main Street Investments L.P. (1)
	  		  		  	0
				
	 Castlerigg Master Investments Ltd. (2)
	  		  		  	0
				
	 CS Equity II LLC (3)
	  		  		  	

	(1)	HBK Investments L.P., a Delaware limited partnership, has shared voting and dispositive power over the Registrable Securities pursuant to an Investment Management Agreement between
HBK Investments L.P. and HBK Main Street Investments L.P. HBK Investments L.P. has delegated discretion to vote and dispose of the Registrable Securities to HBK Services LLC. The following individuals may be deemed to have control over HBK
Investments L.P.: Jamiel A. Akhtar, Richard L. Booth, David C. Haley, Laurence H. Lebowitz, and William E. Rose. 

	(2)	Sandell Asset Management Corp. is the investment manager of Castlerigg Master Investment Ltd. (“Castlerigg”) and has shared voting and dispositive power over the
securities owned by Castlerigg. Sandell Asset Management Corp. and Thomas E. Sandell, its sole shareholder, disclaim beneficial ownership of the securities owned by Castlerigg. 

	(3)	CapitalSource Finance LLC may be deemed to have sole voting and sole dispositive power over the securities pursuant to its relationship with CS Equity II LLC. Additionally Keith
Reuben may be deemed to have control over CapitalSource. Keith Reuben disclaims beneficial ownership of the securities owned by CapitalSource. 

  

 1 

 PLAN OF DISTRIBUTION 
 We are registering the shares of Common Stock issuable upon conversion of the convertible preferred shares, upon exercise of the warrants and in payment of certain dividend requirements to permit the resale of these
shares of Common Stock by the holders of the convertible preferred shares and warrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the shares of Common
Stock. We will bear all fees and expenses incident to our obligation to register the shares of Common Stock. 
 The selling shareholders may
sell all or a portion of the shares of Common Stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of Common Stock are sold through underwriters
or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of Common Stock may be sold in one or more transactions at fixed prices, at prevailing market prices at
the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, 
  

	 	•	 	 on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; 

  

	 	•	 	 in the over-the-counter market; 

  

	 	•	 	 in transactions otherwise than on these exchanges or systems or in the over-the-counter market; 

  

	 	•	 	 through the writing of options, whether such options are listed on an options exchange or otherwise; 

  

	 	•	 	 ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	 	•	 	 block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the
transaction; 

  

	 	•	 	 purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	 	 an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	 	 privately negotiated transactions; 

  

	 	•	 	 short sales; 

	 	•	 	 sales pursuant to Rule 144; 

  

	 	•	 	 broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share; 

 

	 	•	 	 a combination of any such methods of sale; and 

  

	 	•	 	 any other method permitted pursuant to applicable law. 

 If the selling shareholders effect such transactions by selling shares of Common Stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the
form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the shares of Common Stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of Common Stock or otherwise, the selling shareholders may enter
into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of Common Stock in the course of hedging in positions they assume. The selling shareholders may also sell shares of Common Stock short and deliver
shares of Common Stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge shares of Common Stock to broker-dealers that in turn
may sell such shares. 
 The selling shareholders may pledge or grant a security interest in some or all of the convertible preferred shares
or warrants or shares of Common Stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of Common Stock from time to time pursuant to this prospectus or
any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in
interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate the shares of Common Stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be
the selling beneficial owners for purposes of this prospectus. 
 The selling shareholders and any broker-dealer participating in the
distribution of the shares of Common Stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of Common Stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of
Common Stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions
or concessions allowed or reallowed or paid to broker-dealers. 
  

 2 

 Under the securities laws of some states, the shares of Common Stock may be sold in such states only
through registered or licensed brokers or dealers. In addition, in some states the shares of Common Stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification
is available and is complied with. 
 There can be no assurance that any selling shareholder will sell any or all of the shares of Common
Stock registered pursuant to the shelf registration statement, of which this prospectus forms a part. 
 The selling shareholders and any
other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act,
which may limit the timing of purchases and sales of any of the shares of Common Stock by the selling shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares
of Common Stock to engage in market-making activities with respect to the shares of Common Stock. All of the foregoing may affect the marketability of the shares of Common Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Common Stock. 
 We will pay all expenses of the registration of the shares of Common Stock pursuant
to the registration rights agreement, estimated to be $[                    ] in total, including, without limitation, Securities and Exchange
Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that a selling shareholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling
shareholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling shareholders will be entitled to contribution. We may be indemnified by the selling
shareholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling shareholder specifically for use in this prospectus, in accordance with the related
registration rights agreements, or we may be entitled to contribution. 
 Once sold under the shelf registration statement, of which this
prospectus forms a part, the shares of Common Stock will be freely tradable in the hands of persons other than our affiliates. 
  

 3

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