Document:

Form of Senior Convertible Note.

 Exhibit 10.2 
  
 FORM OF SENIOR CONVERTIBLE NOTE 
  
 NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE 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 REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 17(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE. 
  
 SENIOR CONVERTIBLE NOTE 
  

			
	 Issuance Date1:                          , 2004
	 	Principal: U.S. $                    

  
 FOR VALUE RECEIVED,
INTERNET CAPITAL GROUP, INC., a Delaware corporation (the “Company”), hereby promises to pay to the order of                  or its registered
assigns (the “Holder”) the amount set out above as the Principal (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether upon the Maturity Date
(as defined herein), acceleration, redemption or otherwise (in each case, in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal at the rate of 5.00% per annum (the “Interest
Rate”), from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon an Interest Date (as defined herein) or the Maturity Date, acceleration, conversion,
redemption or otherwise (in each case in accordance with the terms hereof). For avoidance of doubt, any Principal that comprises a portion of the Conversion Amount (as defined herein) pursuant to Section 3(b) in connection with any conversion of
this Note pursuant to Section 3(a) shall reduce the outstanding Principal of this Note. This Senior Convertible Note (including all 

	1	Insert Subscription Date. 

  

 Senior Convertible Notes issued in exchange, transfer or replacement hereof, this “Note”) is one of an
issue of Senior Convertible Notes issued pursuant to the Securities Purchase Agreement (as defined herein) on the Subscription Date (collectively, the “Notes” and such other Notes, the “Other Notes”). Certain
capitalized terms used herein are defined in Section 27. 
  
 1. Payments of
Principal. On the Maturity Date, the Company shall pay to the Holder by wire transfer of immediately available funds (provided that the Holder has provided the Company with written wire transfer instructions not later than the second Business
Day immediately preceding the Maturity Date), an amount in cash equal to the then outstanding Principal. Notwithstanding anything to the contrary in this Section 1, but subject to Section 3(d), until the outstanding Principal is paid in full, the
outstanding Principal (and any accrued and unpaid Interest thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. The “Maturity Date” shall be
                    , 2009,2 as extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined herein) shall have occurred and be continuing or any event shall have occurred and be continuing which with
the passage of time and the failure to cure would result in an Event of Default; provided that no such extension shall be extended further than
                    , 2009,3 and (ii) through the date that is ten days after the earlier of (A) the consummation of a Change of Control (as defined herein) in the event that a Change of Control is publicly announced or a Change of Control Notice (as
defined herein) is delivered prior to the Maturity Date or (B) the Company has provided the Holder with written notice that such Change of Control has been abandoned or terminated. 
  
 2. Interest; Interest Rate. Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of
a 365-day year and actual days elapsed and shall be payable during the period beginning on the Issuance Date and ending on, and including, the Maturity Date, on the six (6) month anniversary of the Issuance Date, on the twelve (12) month anniversary
of the Issuance Date, on the eighteen (18) month anniversary of the Issuance Date, on the twenty-four (24) month anniversary of the Issuance Date, on the thirty (30) month anniversary of the Issuance Date, on the thirty six (36) month anniversary of
the Issuance Date, on the forty two (42) month anniversary of the Issuance Date, on the forty eight (48) month anniversary of the Issuance Date, on the fifty-four (54) month anniversary of the Issuance Date, on the sixty (60) month anniversary of
the Issuance Date and on the Maturity Date (if the Maturity Date is not the sixty month anniversary of the Issuance Date) (each, an “Interest Date”). Interest shall be payable on each Interest Date, to the record holder of this Note
on the applicable Interest Date, in cash (“Cash Interest”) or, at the option of the Company, in shares of Common Stock (“Interest Shares”) provided that the Interest which accrued during any period shall be payable
in Interest Shares if, and only if, the Company delivers written notice of such election (each, an “Interest Election Notice”) to each holder of the Notes at least ten (10) Trading Days (and not more than twenty-five (25) Trading
Days) prior to the Trading Day immediately prior to the Interest Date (each, an “Interest Election Date”). Interest to be paid on an Interest Date in Interest Shares shall be paid in a number of fully paid and nonassessable shares
(rounded up to the nearest whole share in accordance with Section 3(a)) of Common Stock equal to the quotient of (a) the amount of Interest payable on such Interest Date and (b) the 

	2	Insert date that is five (5) years from the Issuance Date. 

  

	3	Insert date that is 90 days after the Maturity Date. 

  

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 Interest Conversion Price in effect on the applicable Interest Date. If any Interest Shares are to be paid on an Interest
Date, then the Company shall (X) provided that the Company’s transfer agent (the “Transfer Agent”) is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program and such
action is not prohibited by applicable law or regulation or any applicable policy of DTC, credit such aggregate number of Interest Shares to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC
through its Deposit Withdrawal Agent Commission system, or (Y) if the foregoing shall not apply, issue and deliver on the applicable Interest Date, to the address set forth in the register maintained by the Company for such purpose pursuant to the
Securities Purchase Agreement or to such address as specified by the Holder in writing to the Company at least two Business Days prior to the applicable Interest Date, a certificate, registered in the name of the Holder or its designee, for the
number of Interest Shares to which the Holder shall be entitled. Notwithstanding the foregoing, the Company shall not be entitled to pay Interest in Interest Shares and shall be required to pay such Interest in cash as Cash Interest on the
applicable Interest Date if, unless consented to in writing by the Holder, on the applicable Interest Election Date and on the applicable Interest Date the Equity Conditions have not been satisfied. From and after the occurrence of an Event of
Default, a Listing Default or an Initial Listing Default, the Interest Rate shall be increased to 10% (the “Default Interest”). In the event that such Event of Default, Listing Default or Initial Listing Default is subsequently
cured, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure; provided that the Interest as calculated at such increased rate during the continuance of such Event of Default shall
continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of cure of such Event of Default. The Company shall be required to pay all Default Interest in cash and may not elect
to issue shares of Common Stock as payment of Default Interest. The Company shall pay any and all taxes that may be payable with respect to the issuance and delivery of Interest Shares; provided that the Company shall not be required to pay
any tax that may be payable in respect of any issuance of Interest Shares to any Person other than the Holder or with respect to any income tax due by the Holder with respect to such Interest Shares. 
  
 3. Conversion of Notes. This Note shall be convertible into shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), on the terms and conditions set forth in this Section 3. 
  
 (a) Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder shall be entitled
to convert all or any portion of the outstanding and unpaid Conversion Amount into fully paid and nonassessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined herein) then in effect. The Company shall not
issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share.
The Company shall pay any and all taxes that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount; provided that the Company shall not be required to pay any tax that may be payable
in respect of any transfer involved in the issue and delivery of Common Stock to any Person other than the Holder or with respect to any income tax due by the Holder with respect to such Common Stock issued upon conversion. 
  

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 (b) Conversion Rate. The number of shares of Common Stock issuable upon conversion of any
Conversion Amount pursuant to Section 3(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (as defined herein) (the “Conversion Rate”). 
  
 (c) Mechanics of Conversion. 
  
 (i) Optional Conversion. To convert any Conversion
Amount into shares of Common Stock on any date (a “Conversion Date”), the Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York City Time, on such date, a copy of an executed
notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company, (B) if required by Section 3(c)(iii), surrender this Note to a common carrier for delivery to the Company as soon as
practicable on or following such date (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Note in the case of its loss, theft or destruction) and (C) pay any transfer taxes or other applicable taxes or
duties, if any, required in connection with the issuance of shares of Common Stock to a Person other than the Holder. On or before the first Business Day following the date of receipt by the Company of a Conversion Notice, the Company shall transmit
by facsimile a confirmation of receipt of such Conversion Notice to the Holder and the Transfer Agent. On or before the third Business Day following the date of receipt by the Company of a Conversion Notice (the “Share Delivery
Date”), the Company shall (X) provided that the Transfer Agent is participating in DTC Fast Automated Securities Transfer Program and such action is not prohibited by applicable law or regulation or any applicable policy of DTC, credit such
aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the foregoing shall not apply,
issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled. If this Note is physically
surrendered for conversion as required by Section 3(c)(iii) and the outstanding Principal of this Note prior to such conversion is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as
practicable and in no event later than three Business Days after receipt of this Note (the “Note Delivery Date”) and at its own expense, issue and deliver to the holder a new Note (in accordance with Section 18(d)) representing the
outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the
Conversion Date. 
  
 (ii) Company’s
Failure to Timely Convert. If the Company shall fail to issue a certificate to the Holder or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon conversion of any
Conversion Amount on or prior to the date which is three Trading Days after the Conversion Date, and if after such third Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a sale by the Holder of the shares of Common Stock that the Holder anticipated receiving from the Company pursuant hereto (a “Buy-In”), then the Company shall, within three Trading Days after the Holder’s request and in the
Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so 

  

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purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver the certificate for the shares of Common Stock so
purchased (and to issue such number of shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Common Stock and pay cash to the Holder in an amount equal
to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Sale Price on the date of the event giving rise to the Company’s obligation to deliver such certificate. The failure
of the Company to issue a certificate to the Holder or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon conversion of any Conversion Amount on or prior to the date which
is three Business Days after the Conversion Date (other than as the result of the limitations set forth in Section 3(d)) shall be deemed a “Conversion Failure”. The Holder shall provide the Company written notice of any Conversion
Failure (a “Conversion Failure Notice”). If the Conversion Failure has not been corrected within one Business Day of the Company’s receipt of the Conversion Failure Notice then (A) the Company shall pay damages to the Holder
for each date of such Conversion Failure in an amount equal to 0.5% of the product of (I) the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, and (II) the Closing
Sale Price of the Common Stock on the third Business Day following the date of receipt by the Company of a Conversion Notice and (B) the Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain or have
returned, as the case may be, any portion of this Note that has not been converted pursuant to such Conversion Notice; provided that the voiding of a Conversion Notice shall not affect the Company’s obligations to make any payments which
have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. 
  
 (iii) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in
accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the Holder has provided the Company with
prior written notice (which notice may be included in a Conversion Notice) requesting physical surrender and reissue of this Note. The Company shall maintain records showing the Principal, Interest and Late Charges converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the Holder, so as not to require physical surrender of this Note upon conversion. 
  
 (iv) Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes
for the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion, the Company, subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on
such date a pro rata amount of such holder’s portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion on such date by such holder relative to the aggregate principal amount of all Notes
submitted for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common
Stock not in dispute and resolve such dispute in accordance with Section 22. 
  

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 (v) Application of Conversion Amounts. Any Conversion Amount which the Holder
elects to convert in accordance with this Section 3 shall be deducted from the outstanding Principal. 
  
 (vi) Holder Status. Except as specifically provided in this Note, the Holder shall not be entitled to any rights relating to the
Common Stock issuable upon conversion of the Notes until the Holder has converted this Note into Common Stock. 
  
 (d) Limitations on Conversions. 
  
 (i) Beneficial Ownership. 
  
 (1) The Company shall not effect any conversion of this Note and shall not be entitled to pay Interest to the Holder in Interest Shares
pursuant to Section 2, and the Holder of this Note shall not have the right to convert any portion of this Note, whether pursuant to this Section 3 or otherwise, to the extent that, after giving effect to such conversion or payment, the Holder
(together with the Holder’s Affiliates) would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or payment. For
purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which the
determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of its affiliates and (B)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any Other Notes) subject to a limitation on conversion analogous to the limitation contained herein beneficially
owned by the Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 3(d)(i)(1), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934,
as amended. For purposes of this Section 3(d)(i)(1), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in the most recent of the following items (x)
the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a public announcement by the Company or (z) any other notice delivered to the Holder by the Company or the Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written request of the Holder, the Company shall within two Business Days confirm orally and in writing to the Holder, the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was
reported. In connection with the delivery of an Interest Election Notice or a Conversion Notice, the Holder shall notify the Company in 

  

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writing prior to any such payment or conversion that after giving effect to receipt of the applicable shares of Common Stock, such Holder, together with its
Affiliates, will have beneficial ownership of a number of shares of Common Stock which exceeds the Maximum Percentage. 
  
 (2) If on any Interest Date the Company has properly delivered an Interest Election Notice to the Holder and the Company is prohibited
from paying all or a portion of the Interest Shares pursuant to Section 3(d)(i)(1), (A) the Company shall pay to the Holder any portion of the Interest Shares the payment of which would not result in a violation of Section 3(d)(i)(1), (B) the
Company shall not pay to the Holder any portion of the Interest Shares the payment of which would result in a violation of Section 3(d)(i)(1) and (C) the portion of the Interest due on such Interest Date and not paid pursuant to Section
3(d)(i)(2)(B) shall be payable in accordance with Section 3(d)(i)(3) or Section 3(d)(i)(4) (such Interest, the “Accumulated Interest”). The Accumulated Interest shall not accrue any interest. 
  
 (3) On or before the third Business Day following a Delayed
Interest Shares Payment Date, the Company shall (X) provided that the Transfer Agent is participating in DTC Fast Automated Securities Transfer Program and such action is not prohibited by applicable law or regulation or any applicable policy of
DTC, credit the aggregate number of shares of Common Stock equal to the applicable Delayed Interest Share Payment Amount to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or
(Y) if the foregoing shall not apply, issue and deliver to the address as specified in the Delayed Interest Share Payment Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock equal to
the applicable Delayed Interest Share Payment Amount. 
  
 (4) On the Delayed Cash Interest Payment Date, the Company shall pay to the Holders, in cash, all of the Accumulated Interest that has not been paid to the Holder pursuant to Section 3(d)(i)(3). 
  
 (ii) Principal Market Regulation. The Company shall
not be obligated to issue any shares of Common Stock as Interest Shares pursuant to Section 2 or upon conversion of this Note, whether pursuant this Section 3 or otherwise, if the issuance of such shares of Common Stock would exceed the Issuance
Cap, except that such limitation shall not apply in the event that the Company obtains the approval of its stockholders as required by the applicable rules of the applicable Eligible Market for issuances of Common Stock in excess of such amount.
Until such approval is obtained, no purchaser of the Notes pursuant to the Securities Purchase Agreement (the “Purchasers”) shall be issued, upon conversion of Notes held by such Purchaser, shares of Common Stock in an amount
greater than Issuance Cap multiplied by a fraction, the numerator of which is the principal amount of Notes issued by the Company on the Subscription Date (as defined herein) and delivered to such Purchaser on the Closing Date (as
defined herein) in each case pursuant to the Securities Purchase Agreement and the denominator of which is the aggregate principal amount of all Notes issued by the Company on the Subscription Date and 

  

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delivered to the Purchasers on the Closing Date (with respect to each Purchaser, the “Principal Market Cap Allocation”). In the event that
any Purchaser shall sell or otherwise transfer any of such Purchaser’s Notes, the transferee shall be allocated a pro rata portion of such Purchaser’s Principal Market Cap Allocation, and the restrictions of the prior sentence shall apply
to such transferee with respect to the portion of the Principal Market Cap Allocation allocated to such transferee. In the event that any holder of Notes shall convert all of such holder’s Notes into a number of shares of Common Stock which, in
the aggregate, is less than such holder’s Principal Market Cap Allocation, then the difference between such holder’s Principal Market Cap Allocation and the number of shares of Common Stock actually issued to such holder shall be allocated
to the respective Principal Market Cap Allocations of the remaining holders of Notes on a pro rata basis in proportion to the aggregate principal amount of the Notes then held by each such holder. 
  
 4. Rights Upon Event of Default. 
  
 (a) Event of Default. Each of the following events shall constitute an
“Event of Default” (whatever the reason for such Event of Default and whether or not it shall be occasioned by the provisions of this Note, be voluntary or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any administrative or governmental body): 
  
 (i) the suspension from trading or failure of the Common Stock to be listed on an Eligible Market for a period of 30 consecutive calendar
days (other than during a Listing Default or an Initial Listing Default); provided, that such 30 day period shall be extended to 75 consecutive calendar days if the deficiency causing such suspension or failure can be cured through an action
that requires the approval of the Company’s stockholders and during such initial 30 day period the Company agrees to seek such approval within the 75 day period; provided, further, that suspension from trading or failure of the
Common Stock to be listed on an Eligible Market shall not be an Event of Default if, at any time after the Effectiveness Date, the Closing Sale Price for the Company’s Common Stock shall equal or exceed of 150% of the Market Price (as defined
herein) for any 20 Trading Days of any 30 consecutive Trading Days; 
  
 (ii) the Company’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other amounts when and as due under this Note (including, without limitation, the Company’s failure to pay
any redemption payments or amounts hereunder), or any other Transaction Document or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby to which the Holder is a
party, which such failure continues for a period of at least 30 days; 
  
 (iii) the Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within 10 calendar days after the applicable Conversion Date or (B) written notice to any
holder of the Notes by the Company or through any of its authorized agents, at any time, of its intention not to comply with a permitted request for conversion of any Notes into shares of Common Stock that are tendered for conversion in accordance
with the provisions of the Notes (other than notice delivered by the Company in good faith in connection with a dispute that is being resolved in accordance with Section 22 as to the appropriate number of shares of Common Stock to be delivered upon
conversion of the Notes); 
  

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 (iv) default in the performance, or breach, of any covenant of the Company in the
Transaction Documents or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby to which the Holder is a party and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified mail, to the Company by the Holders of at least 25% in principal amount of the then outstanding Notes a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “notice of default” hereunder; 
  
 (v) a default under any bonds, debentures, notes or other evidences of indebtedness for money borrowed of the Company or under any
mortgages, indentures or instruments under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company, whether such indebtedness now exists or shall hereafter be created, which
indebtedness, individually or in the aggregate, has a principal amount outstanding in excess of $6,000,000, which default shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of 30 days after there shall have been given, by registered or certified mail, to the
Company by the Holders of at least 25% in principal amount of the then outstanding Notes, a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or
annulled and stating that such notice is a “notice of default” hereunder (unless such default has been cured or waived); 
  
 (vi) a final judgment or judgments for the payment of money aggregating in excess of $6,000,000 are rendered against the Company or any of
its Subsidiaries and which judgments are not, within 60 days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; provided, however, that any
judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $6,000,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or
indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company will receive the proceeds of such insurance or indemnity within 60
days of the issuance of such judgment; 
  
 (vii)
the determination by the Securities and Exchange Commission (including, without limitation, a determination by an administrative law judge) that the Company is an “investment company” within the meaning of the Investment Company Act of
1940, as amended (the “1940 Act”) unless the Company has timely appealed such determination (other than a non-administrative appeal) and, after consultation with outside counsel, the Company has a good faith belief that such an
appeal is meritorious; provided that it shall be an Event of Default if the Company is unsuccessful in such appeal and there are either (1) no further administrative appeals available or (2) after consultation with outside counsel, the
Company does not have a good faith belief that any additional administrative appeals would be meritorious; 
  
 (viii) the judgement, determination or finding by a Federal District Court that the Company is an “investment company” within
the meaning of the 1940 Act unless the Company has timely appealed such determination and, after consultation with outside counsel, 

  

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the Company has a good faith belief that such an appeal is meritorious; provided that it shall be an Event of Default if the Company is unsuccessful
in such appeal regardless of the availability of additional appeals; 
  
 (ix) the Company or any Subsidiary (as defined in the Securities Purchase Agreement) pursuant to or within the meaning of any Bankruptcy Law: 
  
 (1) commences a voluntary case, 
  
 (2) consents to the entry of an order for relief against it in an involuntary case, 
  
 (3) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or 
  
 (4) makes a general assignment for the benefit of its creditors; or 
  
 (x) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 
  
 (1) is for relief against the Company or any Subsidiary in
an involuntary case, 
  
 (2) appoints a Custodian
of the Company or any Subsidiary or for all or substantially all of the property of any of them, or 
  
 (3) orders the winding up or liquidation of the Company or any Subsidiary, and the order or decree remains unstayed and in effect for 60
days. 
  
 As used in this Section 4(a), the term “Bankruptcy Law”
means title 11, U.S. Code or any similar Federal or State law for the relief of debtors and the term “Custodian” means any receiver, trustee, assignee, liquidator or other similar official under any Bankruptcy Law. 
  
 (b) Redemption Right. Promptly after the Company has knowledge of the
occurrence of an Event of Default with respect to this Note or any Other Note, the Company shall deliver written notice thereof via facsimile and overnight courier (an “Event of Default Notice”) to the Holder. At any time after the
earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof to the Company
(the “Event of Default Redemption Notice”). An Event of Default Redemption Notice shall indicate the portion of this Note that the Holder or each exercising Holder is electing to require the Company to redeem. So long as the Event
of Default is continuing at the time of the delivery of the Event of Default Redemption Notice, the portion of this Note subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price (the
“Redemption Price”) equal to the sum of (A) the amount of Principal to be redeemed and (B) the amount of all accrued and unpaid Interest on the Note and (C) the amount of all unpaid Late Charges. Notwithstanding the foregoing, in
the case of an Event of Default under Section 4(a)(i), Section 4(a)(iii), Section 4(a)(iv), Section 4(a)(v) or Section 4(a)(vi), the 

  

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Company shall not be required to redeem the portion of this Note subject to redemption by the Company pursuant to this Section 4(b) unless the holders of at
least 25% in principal amount of the then outstanding Notes (including the Holder hereof) have provided written notice to the Company to redeem all or any portion of the Notes. The Holder shall be entitled to seek any available remedy for the
enforcement of this Note, including for the payment of any Redemption Price. Nothing shall preclude the Holder from pursuing or obtaining specific performance or other equitable relief with respect to this Note. Redemptions required by this Section
4(b) shall be made in accordance with the provisions of Section 11. In the event of a partial redemption of this Note pursuant hereto, the principal amount redeemed shall be deducted from the outstanding Principal. 
  
 5. Rights Upon Change of Control. 
  
 (a) Change of Control. Each of the following events shall constitute a
“Change of Control”: 
  
 (i) the
consolidation, merger or other business combination (including, without limitation, a reorganization or recapitalization) of the Company with or into another Person (other than (A) a consolidation, merger or other business combination (including,
without limitation, reorganization or recapitalization) in which holders of the Company’s voting power immediately prior to the transaction continue after the transaction to hold, directly or indirectly, the voting power of the surviving entity
or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (B) pursuant to a migratory merger effected solely for the purpose of changing the
jurisdiction of incorporation of the Company); 
  
 (ii) the sale or transfer of all or substantially all of the Company’s assets; or 
  
 (iii) a purchase, tender or exchange offer made to and accepted by the holders of more than the 50% of the outstanding shares of Common
Stock. 
  
 No sooner than 15 days nor later than
10 days prior to the consummation of a Change of Control the Company shall deliver written notice thereof via facsimile and overnight courier to the Holder (a “Change of Control Notice”). Notwithstanding anything herein to the
contrary, (x) no Change of Control Notice shall be made prior to the public announcement of a Change of Control and (y) no Change of Control Notice shall be made prior to the consummation of the Change of Control described in (a)(iii) above.
Notwithstanding anything herein to the contrary, the Change of Control Notice shall be delivered no later than one Business Day following the events described in (x) and (y) of the preceding sentence. 
  
 (b) Assumption. Prior to the consummation of any Change of Control,
the Company will secure from any Person purchasing the Company’s assets or Common `Stock or any successor resulting from such Change of Control (in each case, an “Acquiring Entity”) a written agreement (in form and substance
satisfactory to the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding) to deliver to each holder of Notes in exchange for such Notes, a security of the Acquiring Entity evidenced by a
written instrument substantially similar in form and substance to the Notes, including, without 

  

 11 

 
limitation, having a principal amount and interest rate equal to the principal amounts and the interest rates of the Notes held by such holder, and
satisfactory to the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding. In the event that an Acquiring Entity is directly or indirectly controlled by a company or entity whose common
stock or similar equity interest is listed, designated or quoted on a securities exchange or trading market, the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding may elect to treat
such Person as the Acquiring Entity for purposes of this Section 5(b). 
  
 (c) Holder Redemption Right. At any time during the period beginning after the Holder’s receipt of a Change of Control Notice and ending on the date of the consummation of such Change of Control (or, in the event a Change of
Control Notice is not delivered at least 10 days prior to a Change of Control, at any time on or after the date which is 10 days prior to a Change of Control and ending 10 days after the delivery of the Change of Control Notice), the Holder may
require the Company to redeem all or any portion of this Note by delivering written notice thereof (“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate the portion of this
Note that the Holder is electing to require the Company to redeem. The portion of this Note subject to redemption pursuant to this Section 5(c) shall be redeemed by the Company at a price equal to the Redemption Price. Redemptions required by this
Section 5(c) shall be made in accordance with the provisions of Section 11 and, to the extent permitted by applicable law, shall have priority to payments by the Company or the Acquiring Entity, as applicable, to the stockholders of the Company in
connection with a Change of Control. Notwithstanding anything to the contrary in this Section 5, but subject to Section 3(d), until the Redemption Price (together with any interest thereon) is paid in full, the portion of this Note submitted for
redemption under this Section 5(c) (together with any interest thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event of a partial redemption of this Note pursuant hereto, the principal
amount redeemed shall be deducted from the outstanding Principal. 
  
 6. Rights
Upon Issuance of Purchase Rights and Other Corporate Events. 
  
 (a) Purchase Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common
Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of
shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. 
  
 (b) Other Corporate Events. Prior to the consummation of any
recapitalization, reorganization, consolidation, merger, spin-off or other business combination (other than a Change of Control) pursuant to which holders of Common Stock are entitled to receive securities or other assets with respect to or in
exchange for Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter 

  

 12 

 
have the right to receive upon a conversion of this Note, (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or
other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such Corporate Event or (ii) in lieu of the shares of Common Stock
otherwise receivable upon such conversion, such securities or other assets received by the holders of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had this
Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding
sentence shall be in a form and substance satisfactory to the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding. 
  
 7. Rights Upon Issuance of Other Securities. 
  

(a) Adjustment of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Execution Date, the Company, directly or
indirectly, issues or sells, or in accordance with this Section 7 is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but
excluding Excluded Securities) for a consideration per share (the “New Securities Issuance Price”) less than the Closing Sale Price per share of Common Stock determined as of the Trading Day immediately prior to such issuance or
sale (the Closing Sale Price per share of Common Stock, the “Applicable Price” and the issuance or sale of the Common Stock, a “Dilutive Issuance”), then immediately after such issue or sale, the Conversion Price
then in effect shall be reduced to equal the amount determined by multiplying the Conversion Price in effect immediately prior to such issuance or sale by a fraction, the numerator of which will be the sum of (1) the number of shares of Common Stock
Deemed Outstanding immediately prior to such issuance or sale multiplied by the Closing Sale Price per share of Common Stock determined as of the Trading Day immediately prior to such issuance or sale, plus (2) the consideration, if any,
received by the Company upon such issuance or sale, and the denominator of which will be the product derived by multiplying such Closing Sale Price by the number of shares of Common Stock Deemed Outstanding immediately after such issuance or sale.
For the purposes of this Section 2, the calculation of the number of shares of Common Stock Deemed Outstanding shall exclude the Conversion Shares and the Interest Shares. For purposes of determining the adjusted Conversion Price under this Section
7(a) (other than for Excluded Securities), the following shall be applicable: 
  
 (i) Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon
conversion or exchange or exercise of any Convertible Securities issuable upon exercise of such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 7(a)(i), the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon
conversion or exchange or exercise of any Convertible Securities issuable upon exercise of such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company 

  

 13 

 
with respect to any one share of Common Stock upon granting or sale of the Option, upon exercise of the Option and upon conversion or exchange or exercise of
any Convertible Security issuable upon exercise of such Option. No further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Stock or of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such Common Stock upon conversion or exchange or exercise of such Convertible Securities. 
  
 (ii) Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest
price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and
sold by the Company at the time of the issuance of sale of such Convertible Securities for such price per share. For the purposes of this Section 7(a)(ii), the “price per share for which one share of Common Stock is issuable upon such
conversion or exchange or exercise” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the issuance or sale of the Convertible
Security and upon the conversion or exchange or exercise of such Convertible Security. No further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange or exercise of such
Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price had been or are to be made pursuant to other provisions of this Section 7(a), no
further adjustment of the Conversion Price shall be made by reason of such issue or sale. 
  
 (iii) Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exchange or exercise of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exchangeable or exercisable for Common Stock changes at any time,
the Conversion Price in effect at the time of such change shall be adjusted to the Conversion Price which would have been in effect at such time had such Options or Convertible Securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 7(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the Execution Date are
changed in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of
such change. No adjustment shall be made if such adjustment would result in an increase of the Conversion Price then in effect. 
  
 (iv) Calculation of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities
of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the Options will be deemed to have been issued for a consideration of $.01. If any Common Stock,
Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the gross amount received by the Company therefor; provided that such consideration
shall not be reduced by any reasonable and customary amounts paid by the Company to underwriters, placement 

  

 14 

 
agents, brokers, financial advisors or similar agents in connection with such issuance or sale (or deemed issuance or sale). If any Common Stock, Options or
Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company will be the fair value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Company will be the Closing Sale Price of such securities on the date of receipt. The fair value of any consideration other than cash or securities will be determined in good
faith by the Board of Directors of the Company. 
  
 (v) Record Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. 
  
 (b) Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. If
the Company at any time combines (by combination, reverse stock split or otherwise and including, without limitation, the Reverse Stock Split) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination will be proportionately increased. 
  
 (c) Other Events. If any event occurs of the type contemplated by the provisions of this Section 7 but not expressly provided for by such
provisions (including, without limitation, the granting of Equity Equivalents), then the Company’s Board of Directors will make an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder under this Note;
provided, that no such adjustment will increase the Conversion Price as otherwise determined pursuant to this Section 7. 
  
 8. Company’s Right of Optional Redemption. 
  
 (a) At any time from and after the later of (A) the sixth month anniversary of the Issuance Date and (B) Effectiveness Date, if both the Condition to
Optional Redemption and the Redemption Equity Conditions are satisfied, the Company may redeem all (and not less than all) of this Note and the Other Notes, by delivering written notice thereof (each, a “Optional Redemption Notice”
and the date all of the holders of Notes receive such notice is referred to as the “Optional Redemption Notice Date”) to the Holder and each other holder of Notes, which Optional Redemption Notice shall indicate the redemption of
this Note in accordance with this Section 8 but subject to the satisfaction of the Condition to Optional Redemption (the “Optional Redemption”). 
  

 15 

 (b) The Optional Redemption Notice shall be delivered by the Company to the Holder on the date which is
at least 30 calendar days prior to the date that the Optional Redemption will be effected (the “Optional Redemption Date”); provided that if a Grace Period (as defined in the Registration Rights Agreement) occurs during the
Optional Redemption Period, the Optional Redemption Date shall be extended by a number of days equal to the number of days in such Grace Period; provided, further, that the Optional Redemption Date cannot occur during a Grace Period.
The Optional Redemption Notice shall be delivered by facsimile and overnight courier to all, but not less than all, of the holders of Notes. The Optional Redemption Notice shall be irrevocable. The Optional Redemption Notice shall (i) state the
Optional Redemption Date, (ii) state the aggregate Principal amount of the Other Notes which are then outstanding and (ii) certify that the Condition to Optional Redemption is satisfied as of the Optional Redemption Notice Date. 
  
 (c) The Optional Redemption will only be effected on the Optional Redemption
Date if (i) the Condition to Optional Redemption is satisfied on or has been satisfied prior to the Optional Redemption Date and (ii) the Redemption Equity Conditions were satisfied on the Optional Redemption Notice Date and during the entire
Optional Redemption Notice Period and are satisfied on the Optional Redemption Date. This Note shall be redeemed by the Company in cash at a price equal to the Redemption Price. 
  
 (d) Notwithstanding anything to the contrary in this Section 8, but subject to Section 3(d), until the Redemption Price is
paid in full, all or a portion of this Note may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3, and any such conversion shall reduce the outstanding Principal on this Note. 
  
 (e) If the Company elects to cause the Optional Redemption pursuant to
Section 8(b), then it must simultaneously take the similar action with respect to the Other Notes. 
  
 9. Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, other than as contemplated by the terms of the Transaction Documents, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all
times in good faith carry out all of the provisions of this Note. 
  
 10.
Reservation of Authorized Shares. 
  
 (a)
Reservation. The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares of Common Stock for each of the Notes equal to 150% of the maximum number of shares of Common Stock issuable upon conversion
of the Notes (assuming for purposes hereof, that the Notes are convertible at the Conversion Price and without taking into account any limitations on the conversion of the Notes). Thereafter, the Company shall, so long as any of the Notes are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Notes, 150% of the number of shares of Common Stock as shall from time to
time be necessary to effect the conversion of all of the Notes then outstanding (assuming for purposes hereof, that the Notes are convertible at the then applicable Conversion 

  

 16 

 
Price and without taking into account any limitations on the conversion of the Notes); provided, that at no time shall the number of shares of Common
Stock so reserved be less than the number of shares required to be reserved by the previous sentence (without regard to any limitations on conversions) (the “Required Reserve Amount”). The initial number of shares of Common Stock
reserved for conversions of the Notes and each increase in the number of shares so reserved shall be allocated pro rata among the holders of the Notes based on the principal amount of the Notes held by each holder on the Issuance Date or increase in
the number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Notes, each transferee shall be allocated a pro rata
portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Notes shall be allocated to the remaining holders of Notes, pro rata based on the principal amount of
the Notes then held by such holders. 
  
 (b) Insufficient
Authorized Shares. If at any time while any of the Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of
the Notes at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized
shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the
occurrence of an Authorized Share Failure, but in no event later than 75 days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized
shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable best efforts to solicit its stockholders’ approval of such increase in authorized shares of
Common Stock. 
  
 11. Redemptions. 
  
 (a) Mechanics. In the event that the Holder has sent a Redemption
Notice to the Company pursuant to Section 4(b) or Section 5(c) or the Company has sent a Redemption Notice to the Holder pursuant to Section 8, the Holder shall promptly submit this Note to the Company in accordance with this Section 11. If the
Holder has submitted a Event of Default Redemption Notice, the Company shall deliver the Redemption Price to the Holder within five Business Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice and thereafter
the Holder shall promptly deliver this Note to the Company. If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 5(c), the Company shall deliver to the Holder the Redemption Price concurrently with the
consummation of such Change of Control if such Change of Control Redemption Notice is received by the Company prior to the consummation of such Change of Control and within five Business Days after the Company’s receipt of such Change of
Control Redemption Notice otherwise. The Company shall deliver the Redemption Price to the Holder on the applicable Optional Redemption Date. In the event of a redemption of less than all of the Conversion Amount of this Note, the Company shall
promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 17(d)) representing the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable Redemption Price to
the 

  

 17 

 
Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption Price in full, the Holder shall have the
option to, in lieu of redemption, provide the Company with written notice (the “Redemption Termination Notice”) requiring the Company to promptly return to the Holder all or any portion of this Note representing the Principal amount
that was submitted for redemption and for which the applicable Redemption Price (together with any Late Charges thereon) has not been paid. No later than three Business Days after the Company’s receipt of the Redemption Termination Notice, if
the Company has not cured such failure, (x) the Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 18(d)) to the Holder
representing such Principal amount and (z) the Conversion Price of this Note or such new Notes shall be adjusted to the lesser of (A) the Conversion Price as in effect on the date on which the Redemption Notice is voided and (B) the lowest Closing
Bid Price of the Common Stock during the period beginning on and including the date on which the Redemption Notice is delivered to the Company and ending on and including the date on which the Redemption Notice is voided. The Holder’s delivery
of the Redemption Termination Notice and exercise of its rights following such notice shall not affect the Company’s obligations to make any payments of Late Charges which have accrued prior to the date of such notice with respect to the
Conversion Amount subject to such notice. 
  
 (b) Redemption by
Other Holders. Upon the Company’s receipt of notice from any of the holders of Other Notes for redemption or repayment as a result of an event or occurrence described in Section 4(b) or Section 5(c) (each, an “Other Redemption
Notice”), the Company shall immediately forward to the Holder by facsimile a copy of such notice. If the Company receives a Redemption Notice and one or more Other Redemption Notices during the seven Business Day period beginning on and
including the date which is three Business Days prior to the Company’s receipt of the Holder’s Redemption Notice and ending on and including the date which is three Business Days after the Company’s receipt of the Holder’s
Redemption Notice and the Company is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption Notices received during such seven Business Day period, then the Company shall redeem a
pro rata amount from each holder of the Notes (including the Holder) based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices received or delivered by the Company during
such seven Business Day period. 
  
 12. Restriction on Redemption and
Dividends. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms, except for the redemption of the Existing Notes (as defined in the Securities Purchase Agreement) contemplated by Section
4(d)(ii) of the Securities Purchase Agreement, the Company shall not, directly or indirectly, (A) repurchase (other than the repurchase of shares of Common Stock from employees in connection with loans made to such employees prior to the date
hereof), redeem, or declare or pay any cash dividend or distribution on, the Common Stock or (B) distribute any material property or assets of any kind to holders of the Common Stock in respect of the Common Stock. 
  
 13. Voting Rights. The Holder shall have no voting rights as the holder of this Note,
except as required by law, including, but not limited to, the General Corporation Law of the State of Delaware, and as expressly provided in this Note. 
  

 18 

 14. Rank; Additional Indebtedness; Liens. 
  
 (a) Rank. Obligations under this Note, including payments of Principal and Interest and other payments due under this
Note, (a) shall rank pari passu with all Other Notes, (b) shall be senior to the Existing Notes and (c) shall be senior to all other Indebtedness (as defined in the Securities Purchase Agreement) of the Company and its Subsidiaries, other
than Permitted Senior Indebtedness (as defined herein). 
  
 (b)
Incurrence of Indebtedness. So long as this Note is outstanding, the Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness, other
than (i) the Indebtedness evidenced by this Note and the Other Notes, (ii) Permitted Senior Indebtedness and (iii) Permitted Subordinated Indebtedness. 
  
 (c) Existence of Liens. So long as this Note is outstanding, the Company shall not, and the Company shall not permit any of its Subsidiaries to,
directly or indirectly, allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Company or any of its Subsidiaries
other than Permitted Liens. 
  
 15. Vote to Issue, or Change the Terms of,
Notes. The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the holders of Notes representing not less than a majority of the aggregate principal amount of the then outstanding Notes shall be
required for any change or amendment to this Note or the Other Notes; provided that the Holder of this Note may waive any term or provision of this Note without such vote or written consent. 
  
 16. Transfer. This Note and any shares of Common Stock issued upon conversion of this
Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company, subject only to the provisions of Sections 2(f) and 2(g) of the Securities Purchase Agreement. 
  
 17. Reissuance Of This Note. 
  
 (a) Transfer. If this Note is to be transferred, the Holder shall
surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 17(d)), registered as the Holder may request, representing the outstanding Principal being
transferred by the Holder and, if less then the entire outstanding Principal is being transferred, a new Note (in accordance with Section 17(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee,
by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii), following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the
Principal stated on the face of this Note. 
  
 (b) Lost, Stolen
or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnity bond in the principal
amount of the 

  

 19 

 
Note and an indemnification undertaking by the Holder to the Company, which undertaking shall be reasonably satisfactory to the Company, and, in the case of
mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 17(d)) representing the outstanding Principal. 
  
 (c) Note Exchangeable for Different Denominations. This Note is
exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 17(d) and in principal amounts of at least $10,000) representing in the aggregate the outstanding
Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender. 
  
 (d) Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note,
such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 17(a) or Section 17(c), the
Principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance
of new Notes), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent the proportionate
amount of accrued Interest and Late Charges on the Principal and Interest of this Note that correspond to the Principal of the new Notes, from the Issuance Date. 
  
 18. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit
the Holder’s right to pursue actual damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be
the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. 
  
 19. Payment of Collection, Enforcement and Other Costs. If (a) this Note is placed in the hands of an attorney for collection or
enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization,
receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the reasonable costs incurred by the Holder for such collection, enforcement or action or in
connection with such 

  

 20 

 
bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, reasonable attorneys’ fees and disbursements. 

 
 20. Construction; Headings. This Note shall be deemed to be jointly drafted by the
Company and all the Purchasers and shall not be construed against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note. 
  
 21. Failure or Indulgence not Waiver. No failure or delay on the part of the Holder in
the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or
privilege. 
  
 22. Dispute Resolution. In the case of a dispute as to the
determination of the Closing Bid Price, the Closing Sale Price, the Weighted Average Price, the Redemption Price or the arithmetic calculation of the Conversion Rate, the Company shall submit the disputed determinations or arithmetic calculations
via facsimile within two Business Days of receipt of the Conversion Notice or the deemed receipt of the Conversion Notice or the Redemption Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are
unable to agree upon such determination or calculation of the Redemption Price or the Conversion Rate, as applicable, within one Business Day of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company
shall, within one Business Day submit via facsimile (a) the disputed determination of the Closing Bid Price, the Closing Sale Price or the Weighted Average Price to an independent, reputable investment bank selected by the Company and approved by
the Holder or (b) the disputed arithmetic calculation of the Conversion Rate or the Redemption Price to the Company’s independent, outside accountant. The Company, at the Company’s expense, shall use its reasonable best efforts to cause
the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than five Business Days from the time it receives the disputed determinations or
calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. The Company shall not be required to pay any penalty payments hereunder
solely relating to the matter in dispute during the pendency of any bona fide, good faith dispute hereunder as to such matter. 
  
 23. Notices; Payments; List of Holders. 
  
 (a) Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore.
Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) promptly upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and
(ii) at least ten days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any pro rata subscription offer to holders of Common Stock
or (C) for determining 

  

 21 

 
rights to vote with respect to any Change of Control, dissolution or liquidation, provided in each case, if such information is material, non-public
information, such information shall not be provided to the Holder until such information has been made known to the public. 
  
 (b) Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, such payment shall be made in lawful
money of the United States of America by a check drawn on the account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address, in the case of each of the
Purchasers, shall initially be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement); provided, that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by
providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same
shall instead be due on the next succeeding day which is a Business Day and, in the case of any Interest Date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for
purposes of determining the amount of Interest due on such date. Any amount of Interest, Principal or other amount due under the Transaction Documents (as defined in the Securities Purchase Agreement) which is not paid when due shall result in a
late charge being incurred and payable by the Company at a rate per annum equal to the interest rate provided by Section 5004 of the New York Civil Practice Law and Rules, calculated from the date such amount was due until the same is paid in full
(“Late Charge”). 
  
 (c) List of Holders.
As soon as reasonably practicable following a written request by the Holder (and in any event no later than five Business Days following such request), the Company shall, or shall cause the Transfer Agent to, provide the Holder with a list of the
then current registered holders of the Notes. 
  
 24. Cancellation. After
all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued. 
  
 25. Waiver of Notice. To the extent permitted by law, the Company hereby waives
demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase Agreement. 
  
 26. Governing Law. This Note shall be construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and performance of this Note 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. 
  
 27. Certain Definitions. For purposes of this Note, the following terms shall have the following meanings: 
  
 (a) “Allowable Interest Amount” means the amount of
Accumulated Interest that can be paid to the Holder without violating Section 3(d)(i)(1). 
  

 22 

 (b) “Bloomberg” means Bloomberg Financial Markets. 
  
 (c) “Board of Directors” means the board of directors of the
Company or any authorized committee of the board of directors. 
  
 (d) “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
  
 (e) “Closing Bid Price” and “Closing Sale
Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York City Time, as reported by
Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board
for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 22. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
that proportionately decreases or increases the Common Stock during the applicable calculation period. 
  
 (f) “Closing Date” shall have the meaning set forth in the Securities Purchase Agreement. 
  
 (g) “Common Stock Deemed Outstanding” means, at any given
time, the number of shares of all classes of the Company’s common stock actually outstanding at such time, plus the number of shares of the Company’s common stock deemed to be outstanding pursuant to Section 7. 
  
 (h) “Condition to Optional Redemption” means that the
Closing Sale Price for the Company’s Common Stock shall equal or exceed 175% of the then effective Conversion Price for any 20 Trading Days in any 30 consecutive Trading Day period. 
  

 23 

 (i) “Conversion Amount” means, subject to the Issuance Cap, the sum of (A) the portion
of the outstanding Principal to be converted, redeemed or otherwise with respect to which this determination is being made (provided that such portion of the Principal shall be equal to $10,000 or an integral multiple of $10,000 in excess thereof),
(B) all accrued and unpaid Interest with respect to such Principal and (C) all accrued and unpaid Late Charges with respect to such Principal and Interest. 
  
 (j) “Conversion Price” means $0.4554, subject to adjustment as provided herein. 
  
 (k) “Convertible Securities” means any stock or securities
(other than Options) directly or indirectly convertible into or exercisable or exchangeable for the Common Stock. 
  
 (l) “Delayed Cash Interest Payment Date” means the earlier of (a) the Maturity Date and (b) the redemption of this Note in accordance
with Section 4(b), Section 5(c) or Section 8. 
  
 (m)
“Delayed Interest Share Payment Amount” means the number of fully paid and nonassessable shares (rounded up to the nearest whole share) of Common Stock equal to the quotient of (a) the Allowable Interest Amount and (b) the Interest
Conversion Price in effect on the Interest Date upon which such Interest Shares would have been paid other than as a result of the restrictions set forth in Section 3(d)(i). 
  
 (n) “Delayed Interest Share Payment Date” means the date upon which the Holder notifies the Company in
writing (such notice, the “Delayed Interest Share Payment Notice”) that the payment of the Allowable Interest Amount will not result in a violation of Section 3(d)(i)(1). 
  
 (o) “Eligible Market” means any of The New York Stock Exchange Inc., the Nasdaq National Market, The Nasdaq
SmallCap Market or the American Stock Exchange. 
  
 (p)
“Effectiveness Date” means the date the Registration Statement covering the resale of all of the Registrable Securities relating to this Note is declared effective by the SEC. 
  
 (q) “Equity Conditions” means that each of the following
conditions is satisfied: (i) prior to the applicable date of determination, the Company shall have delivered shares of Common Stock upon any conversion of amount previously converted (if any) on a timely basis as set forth in Section 3(c)(i) of this
Note (and analogous provisions under the Other Notes); (ii) on the Interest Payment Date the Common Stock shall be listed on an Eligible Market and delisting or suspension by such market or exchange shall not have been threatened either (A) in
writing by such market or exchange or (B) by falling below for at least the requisite period the applicable minimum listing maintenance requirements of such market or exchange (other than, in the case of clauses (A) and (B) as disclosed in
Schedule 3(r) of the Securities Purchase Agreement); (iii) during the period beginning on the Execution Date and ending on and including the applicable date of determination, there shall not have occurred either (A) the public announcement by
the Company of a pending, proposed or intended Change of Control which has 

  

 24 

 
not been abandoned, terminated or consummated or (B) an Event of Default other than an Event of Default that is capable of being cured that has been so
cured; (iv) on any day during an Interest Measuring Period there shall not have occurred an event that with the passage of time or giving of notice would constitute an Event of Default; (v) on the applicable date of determination either (A) the
Registration Statement or Registration Statements required pursuant to the Registration Rights Agreement shall be effective and available for the sale for all of the Registrable Securities in accordance with the terms of the Registration Rights
Agreement or (B) all shares of Common Stock issuable upon conversion of the Notes shall be eligible for sale without restriction pursuant to Rule 144(k) and any applicable state securities laws; (vi) the Company shall have no knowledge of any fact
that would cause (A) the Registration Statements required pursuant to the Registration Rights Agreement not to be effective and available for the sale of at least all of the Registrable Securities in accordance with the terms of the Registration
Rights Agreement or (B) any shares of Common Stock issuable upon conversion or redemption of the Notes not to be eligible for sale without restriction pursuant to Rule 144(k) and any applicable state securities laws; (vii) any applicable shares of
Common Stock to be issued in connection with the event requiring determination may be issued in full without violating Section 3(d) hereof or the rules or regulations of the applicable Eligible Market; (viii) such issuance, taken together with all
prior issuances pursuant to the Notes, shall not exceed the Issuance Cap; and (ix) the Company otherwise shall have been in material compliance with and shall not have materially breached any provision, covenant, representation or warranty of any
Transaction Document. 
  
 (r) “Execution Date”
means March 31, 2004. 
  
 (s) “Equity
Equivalents” means stock appreciation rights, phantom stock rights or other rights or obligations of the Company with equity features related to the Company. 
  
 (t) “Excluded Securities” means shares of (A) Common Stock, (B) Options, (C) Convertible Securities and (D)
Equity Equivalents issued, sold, or deemed to have been issued or sold, by the Company (i) to any employee, officer, director or consultant for services provided to the Company which has been approved prior to its issuance by the Board of Directors
of the Company or its compensation committee, (ii) upon conversion of the Notes, (iii) in connection with the payment of any Interest Shares on the Notes, (iv) in connection with any acquisition by the Company or a Partner Company (as such term is
used by the Company in the Company’s SEC Report on Form 10-K for the year ended December 31, 2003 filed with the SEC on March 15, 2004), whether through an acquisition for securities or a merger, of any business, assets or technologies
(including, without limitation, investments in new or existing partner companies) the primary purpose of which is not to raise equity capital for the Company or a Partner Company, (v) pursuant to a bona fide firm commitment underwritten public
offering with a nationally recognized underwriter which generates net proceeds to the Company in excess of $60,000,000 (other than (x) an “at-the-market offering” as defined in Rule 415(a)(4) under the 1933 Act, (y) a rights or similar
offering to the Company’s stockholders and (z) “equity lines”) and (vi) upon conversion of any Options, Convertible Securities or Equity Equivalents which are outstanding on the day immediately preceding the Execution Date;
provided that the exercise price of such Option, Convertible Securities or Equity Equivalents are not amended, modified or changed on or after the Execution Date (other than in the case of proportionate adjustments in the 

  

 25 

 
event of any stock dividend, stock split, stock combination or other similar transaction that proportionately decreases or increases the Common Stock).

  
 (u) “Initial Listing Default” shall mean the
failure of the Common Stock either (i) to be in compliance with the applicable minimum bid requirements of the Principal Market as of the Closing Date or (ii) be listed on another Eligible Market on or prior to the Closing Date and not be suspended
from trading on the Closing Date. An Initial Listing Default shall commence on the Closing Date and continue until such time as the Company is either (A) in compliance with the applicable minimum bid requirements of the Principal Market or (B)
listed on another Eligible Market and not suspended from trading on such market. 
  
 (v) “Interest Conversion Price” means, with respect to any Interest Date, that price which shall be computed as 85% of the arithmetic average of the Weighted Average Price of the Common Stock on each
of the ten (10) consecutive Trading Days immediately preceding the Trading Day immediately prior to the applicable Interest Date (each, an “Interest Measuring Period”). All such determinations to be appropriately adjusted for any
stock split, stock dividend, stock combination or other similar transaction during such period. 
  
 (w) “Issuance Cap” means (x) the number of shares of Common Stock which the Company may issue in connection with the Notes without
breaching the Company’s obligations under the rules or regulations of the applicable Eligible Market, including, without limitation, NASD Rule 4350(i)(1)(D) and NASD Rule 4350(i)(B), if applicable, minus (y) the sum of (i) the number of
shares of Common Stock previously issued in connection with any Notes that should be included under the rules or regulations of the Principal Market in the calculation of the Issuance Cap, (ii) the number of shares of Common Stock issuable upon
conversion of any Notes then outstanding at the respective Conversion Price set forth in such Notes that should be included under the rules or regulations of the Principal Market in the calculation of the Issuance Cap and (iii) the number of
Interest Shares previously issued in connection with any of the Notes. 
  
 (x) “Listing Default” shall mean the occurrence of the following event: the failure of the Common Stock to be listed on an Eligible Market for a period of 30 consecutive calendar days as a result of a Subsequent Listing
Event; provided, that such 30 day period shall be extended to 75 consecutive calendar days if the deficiency causing such suspension or failure can be cured through an action that requires the approval of the Company’s stockholders and
during such initial 30 day period the Company agrees to seek such approval within the 75 day period; provided, further, that the failure of the Common Stock to be listed on an Eligible Market shall not be an Event of Default if, at any
time after the Effectiveness Date, the Closing Sale Price for the Company’s Common Stock shall equal or exceed 150% of the Market Price for any 20 Trading Days of any 30 consecutive Trading Days. 
  
 (y) “Market Price” means $0.37956, subject to appropriate
adjustments for any stock split, reverse stock split, stock dividend, stock combination or other similar transaction. 
  
 (z) “Optional Redemption Notice Period” means the period between the Optional Redemption Notice Date and the Optional Redemption Date.

  

 26 

 (aa) “Options” means any rights, warrants or options to subscribe for or purchase Common
Stock or Convertible Securities, including, without limitation, any contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock or Convertible Securities. 

 
 (bb) “Permitted Liens” means (i) any lien for taxes not
yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with generally acceptable accounting principles in the United States applied on a consistent basis,
(ii) any statutory lien arising in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any lien created by operation of law, such as materialmen’s liens, mechanics’ liens
and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent, (iv) deposits, pledges or liens (other than liens arising under ERISA) securing (A) obligations incurred in respect of
workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits, (B) the performance of bids, tenders, leases, contracts (other than for the payment of money) and statutory obligations or (C) obligations on
surety or appeal bonds, but only to the extent such deposits, pledges or liens are incurred or otherwise arise in the ordinary course of business and secure obligations not past due or delinquent, (v) restrictions on the use of real property and
minor irregularities in the title thereto which do not (A) secure obligations for the payment of money or (B) materially impair the value of such property or its use in the ordinary course of business, (vi) any minor imperfection of title or similar
lien which individually or in the aggregate with other such liens would not reasonably be expected to have a Material Adverse Effect and (vii) any lien created in connection with the incurrence of Permitted Senior Indebtedness. 
  
 (cc) “Permitted Senior Indebtedness” means the Indebtedness
of the Company and the Subsidiaries in an amount not to exceed at any one time $10,000,000 in the aggregate, which Permitted Indebtedness is (i) set forth on Schedule 3(k) to the Securities Purchase Agreement, (ii) incurred in connection with
Purchase Money Indebtedness, (iii) a bona fide capitalized lease obligation, (iv) a guarantee of any Indebtedness set forth in the items referred to in the foregoing clauses (i)-(iii) or (v) a letter of credit facility that replaces the facility
provided by the Letter of Credit Agreement, dated as of September 30, 2002, by and between Comerica Bank-California, the Company, ICG Holdings, Inc. and Internet Capital Group Operations, Inc., as amended (the “Existing LC
Facility”) regardless of whether such facility is entered into at the time the Existing LC Facility is terminated or subsequent to such termination; provided that such replacement facility shall be on terms and conditions
substantially similar to those of the Existing LC Facility; provided, further, that the replacement facility will provide that the Company’s maximum indebtedness under the letter of credit line will not exceed $10,000,000.

  
 (dd) “Permitted Subordinated Indebtedness”
means the Existing Notes and the other Indebtedness of the Company, and not any Subsidiary, that (i) is made expressly subordinate in right of payment to the Indebtedness evidenced by this Note and the Other Notes on terms and pursuant to an
agreement reasonably satisfactory to the holders of Notes representing not less than a majority of the aggregate principal amount of the then outstanding Notes and, in the event that interest is payable, directly or indirectly, prior to 91 days
after the Maturity Date, provides for interest that is no greater than market rate interest, and (ii) does not provide at any time for the payment, prepayment, repayment, repurchase or defeasance, directly 

  

 27 

 
or indirectly, of any principal or premium, if any, thereon until at least 91 days after the Maturity Date. 
  
 (ee) “Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof. 
  
 (ff) “Principal Market” means the Nasdaq SmallCap Market. 
  
 (gg) “Purchase Money Indebtedness” means Indebtedness of the
Company or any Subsidiary incurred solely for the purpose of financing all or any part of the purchase price, or the cost of construction or improvement of any property; provided, however, that the aggregate principal amount of any
such Indebtedness does not exceed the lesser of the fair market value of such property, as determined in the good faith judgment of the Board of Directors, or such purchase price or cost, including any refinancing of such Indebtedness that does not
increase the aggregate principal amount (or accreted amount, if less) thereof as of the date of refinancing. 
  
 (hh) “Redemption Equity Conditions” means that each of the following conditions is satisfied: (i) on the Optional Redemption Notice Date,
the Optional Redemption Date and for the entire Optional Redemption Period, the Common Stock shall be listed on an Eligible Market and delisting or suspension by such market or exchange shall not have been threatened either (A) in writing by such
market or exchange or (B) by falling below for at least the requisite period the applicable minimum listing maintenance requirements of such market or exchange (other than, in the case of clauses (A) and (B) as disclosed in Schedule 3(r) of
the Securities Purchase Agreement); (ii) on the Optional Redemption Notice Date, the Optional Redemption Date and for the entire Optional Redemption Period either (A) the Registration Statement or Registration Statements required pursuant to the
Registration Rights Agreement shall be effective and available for the sale for all of the Registrable Securities in accordance with the terms of the Registration Rights Agreement other than during any Grace Periods that occur during the Optional
Redemption Period or (B) all shares of Common Stock issuable upon conversion of the Notes shall be eligible for sale without restriction pursuant to Rule 144(k) and any applicable state securities laws; and (iii) no Conversion Failures have occurred
during the Optional Redemption Period or on the Optional Redemption Date. 
  
 (ii) “Redemption Notice” means any of an Event of Default Redemption Notice, Change of Control Redemption Notice or Optional Redemption Notice. 
  
 (jj) “Registration Rights Agreement” means that certain
registration rights agreement, dated as of the Subscription Date, by and among the Company and the initial holders of the Notes relating, among other things, to the registration of the resale of the shares of Common Stock issuable upon conversion of
the Notes. 
  
 (kk) “SEC” means the United States
Securities and Exchange Commission. 
  
 (ll) “Securities
Purchase Agreement” means that certain securities purchase agreement, dated as of the Execution Date, by and among the Company and the initial holders of the Notes pursuant to which the Company issued the Notes. 
  

 28 

 (mm) “Subscription Date” shall have the meaning set forth in the Securities Purchase
Agreement. 
  
 (nn) “Subsequent Listing Event”
means either (i) a modification of the listing requirements of the Principal Market after the Execution Date in a manner that affects the Company’s eligibility for quotation on the Principal Market or (ii) the Principal Market ceasing to exist
in its form as of the Execution Date. 
  
 (oo) “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which
the Common Stock is then traded; provided, that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended
from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., New York City
time). 
  
 (pp) “Weighted Average Price” means,
for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York City time (or such other time as the Principal Market publicly announces is the
official open of trading), and ending at 4:00:00 p.m., New York City time (or such other time as the Principal Market publicly announces is the official close of trading) as reported by Bloomberg through its “Volume at Price” functions,
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York City time (or such
other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York City time (or such other time as the Principal Market publicly announces is the official close of trading) as reported by
Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as
reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average
Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be
resolved pursuant to Section 22. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period. 
  
 [Signature Page Follows] 
  

 29 

 IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date
set out above. 
  

			
	INTERNET CAPITAL GROUP, INC.
		
	By:	 	 
	 	 	

	 	 	 Name:
 Title

  

 30 

 EXHIBIT I 
  

INTERNET CAPITAL GROUP, INC. 
  
 CONVERSION NOTICE 
 TO BE EXECUTED BY
THE REGISTERED HOLDER TO CONVERT THIS NOTE 
 INTO COMMON STOCK 
  
 Reference is made to the Senior Convertible Note (the “Note”) issued to the undersigned by Internet Capital
Group, Inc. (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, par value
$0.001 per share (the “Common Stock”), of the Company as of the date specified below. 
  
 Date of Conversion: _____________________________________________________________________________________ 
  
 Aggregate Conversion Amount to be converted: _______________________________________________________________ 
  
 Please confirm the following information: ____________________________________________________________________ 
  
 Conversion Price:
_______________________________________________________________________________________ 
  
 Number of shares of Common Stock currently held by the undersigned and its affiliates: _______________________________ 
  
 Number of shares of Common Stock to be issued: ______________________________________________________________ 
  
 Please issue the Common Stock into which the Note is being converted in the
following name and to the following address: 
  
 Issue to:
_______________________________________________________________________________________________ 
  
 ______________________________________________________________________________________________________ 
  
 ______________________________________________________________________________________________________ 
  
 Facsimile Number: ______________________________________________________________________________________ 
  
 Authorization:
__________________________________________________________________________________________ 
  
 By: __________________________________________________________________________________________________ 
  
 Title: ________________________________________________________________________________________________ 
  
 Dated: ________________________________________________________________________________________________ 
  
 Account Number:
_______________________________________________________________________________________ 
     (if
electronic book entry transfer) 
  

 I-1 

 Transaction Code Number: _______________________________________________________________________________ 
                 (if electronic book entry transfer)

  

									
					
	DATED:	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 Name:
 Title:

  
 ACKNOWLEDGMENT

  
 The Company hereby acknowledges this Conversion Notice and
hereby directs Mellon Investor Services LLC to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated
[                    ], 2004, from the Company and acknowledged and agreed to by Mellon Investor Services LLC. 
  

			
	INTERNET CAPITAL GROUP, INC.
		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

 I-2Form of Registration RIghts Agreement.

 Exhibit 10.3 
  
 FORM OF REGISTRATION RIGHTS AGREEMENT 
  
 REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of
[            ], 2004, by and among Internet Capital Group, a Delaware corporation, with headquarters located at 690 Lee Road, Suite 310, Wayne, Pennsylvania 19087 (the
“Company”), and the investors listed on the Schedule of Buyers attached as Schedule I hereto (individually, a “Buyer” and collectively, the “Buyers”). 
  
 WHEREAS: 
  
 A. In connection with the Securities Purchase Agreement, dated as of March 31, 2004 (the “Securities Purchase Agreement”),
by and among the parties hereto, the Company has agreed, upon the terms and subject to the conditions set forth in the Securities Purchase Agreement, to issue and sell to each Buyer senior convertible notes of the Company (the
“Notes”) which will, among other things, be convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) (as converted, the “Conversion Shares”) in
accordance with the terms of the Notes. 
  
 B. To induce the Buyers to execute and
deliver the Securities Purchase Agreement, the Company has 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. 
  
 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) “Continuing Effectiveness Damages” shall equal the product of (i) 0.00033
multiplied by (ii) the number of days after the Registration Statement has been declared effective by the SEC that such Registration Statement is not available (other than during an Allowable Grace Period) for the sale of all of the
Registrable Securities required to be included on such Registration Statement. 
  
 (c) “Effectiveness Deadline Damages” shall equal the product of (i) 0.00033 multiplied by (ii) the number
of days after the Effectiveness Deadline that the Registration Statement is not declared effective by the SEC. 
  

 (d) “Filing Deadline” means the later of (i) 45 days after the
Subscription Date (as defined in the Securities Purchase Agreement) and (ii) two Business Days after the Closing Date (as defined in the Securities Purchase Agreement). 
  
 (e) “Filing Deadline Damages” shall equal the product of (i) the 0.00033 multiplied
by (ii) the number of days after the Filing Deadline that the Registration Statement is not filed with the SEC. 
  
 (f) “Investor” means a Buyer or any transferee or assignee thereof 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 assigns its rights under this Agreement and who agrees to become bound
by the provisions of this Agreement in accordance with Section 9. 
  
 (g) “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. 
  
 (h) “register”,
“registered”, and “registration” refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415 and the
declaration or ordering of effectiveness of such Registration Statement(s) by the SEC. 
  
 (i) “Registrable Securities” means (i) the Notes, (ii) the Conversion Shares issued or issuable upon conversion or
redemption of the Notes, (iii) the Interest Shares issued or issuable under the Notes and (iv) any share capital of the Company issued or issuable with respect to the Conversion Shares, the Notes or the Interest Shares as a result of any stock
split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on conversions of the Notes. 
  
 (j) “Registration Statement” means a registration statement or registration statements of the Company filed under the
1933 Act covering the Registrable Securities. 
  
 (k) “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis. 
  
 (l) “SEC” means the United States Securities and Exchange Commission. 
  
 Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Securities Purchase Agreement. 
  
 2. Registration. 
  
 (a) Mandatory Registration. The Company shall prepare, and, as soon as practicable, but in no event later than the Filing Deadline file with the SEC the Registration Statement on Form S-3 covering the resale of
all of the Registrable Securities. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration, subject to the provisions of Section 2(e). The Registration 

  

 2 

 
Statement prepared pursuant hereto shall register for resale at least the number of shares of Common Stock equal to the sum of the product of (x) 1.5 and (y)
the maximum number of shares of Common Stock issuable upon conversion of the Notes (assuming for purposes hereof, that the Notes are convertible at the Conversion Price (as defined in the Securities Purchase Agreement) and without taking into
account any limitations on the conversion of the Notes set forth in the Notes). The Registration Statement shall contain (except if otherwise directed by the holders of at least a majority of the Registrable Securities) the “Selling
Stockholders” section in substantially the form attached hereto as Exhibit B and the “Plan of Distribution” in substantially the form attached hereto as Exhibit B. The Company shall use its reasonable best
efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the date which is 45 days after the applicable Filing Deadline (the “Effectiveness Deadline”);
provided that the Effectiveness Deadline shall be extended to 75 days after the applicable Filing Deadline if the SEC elects to review the Registration Statement. In connection the registration discussed above, the Company shall obtain CUSIP
numbers for each of the Registrable Securities no later than the applicable Filing Deadline. 
  
 (b) Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and
each increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof 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 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. In
no event shall the Company include any securities other than Registrable Securities on any Registration Statement without the prior written consent of Buyers holding at least a majority of the Registrable Securities. 
  
 (c) Legal Counsel. Subject to Section 5 hereof, the
Buyers holding at least a majority of the Registrable Securities shall have the right to select one legal counsel to review and oversee any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Morgan, Lewis
& Bockius LLP or such other counsel as thereafter designated by the holders of at least a majority of the Registrable Securities. The Company and Legal Counsel shall reasonably cooperate with each other in performing the Company’s
obligations under this Agreement. 
  
 (d)
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 holders of at least a majority of the Registrable Securities 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 

  

 3 

 
Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC. 
  
 (e) Sufficient Number of Shares Registered. In the
event the number of shares available under a Registration Statement filed pursuant to Section 2(a) 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(b), 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 100% of the Notes and 150% of the maximum number of shares of Common Stock issuable upon conversion of the Notes (assuming for purposes hereof, that the Notes are convertible at the then applicable Conversion Price, and without taking into
account any limitations on the conversion of the Notes set forth in the Notes) as soon as practicable, but in any event not later than fifteen (15) days after the necessity therefor arises. The Company shall use its reasonable best efforts to cause
such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof, but in no event later than 60 days after such filing. 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 Registrable Securities issued or issuable upon conversion of the Notes and covered by such Registration
Statement is greater than 150% of the maximum number of shares of Common Stock issuable upon conversion of the Notes (assuming for purposes hereof, that the Notes are convertible at the then applicable Conversion Price and without taking into
account any limitations on the conversion of the Notes set forth in the Notes) available for resale under such Registration Statement. The calculation set forth in the foregoing sentence shall be made without regard to any limitations on the
conversion of the Notes and such calculation shall assume that the Notes are then convertible into shares of Common Stock (assuming for purposes hereof, that the Notes are convertible at the then applicable Conversion Price and without taking into
account any limitations on the conversion of the Notes set forth in the Notes) and the maximum number of Interest Shares under the Notes, assuming the applicable portions of the initial outstanding principal amount of the Notes remains outstanding
through the applicable scheduled installment payment or maturity dates and assuming no conversions or redemptions of the Notes prior to the scheduled installment or maturity date, are issuable at the then prevailing Interest Conversion Price (as
defined in the Notes) or Conversion Rate (as defined in the Notes). 
  
 (f) 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 Filing Deadline or (B) not declared effective by the SEC on or before the Effectiveness Deadline (an “Effectiveness
Failure”) or (ii) on any day after such Registration Statement has been declared effective by the SEC 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(o)) pursuant to such Registration Statement (a “Continuing Effectiveness Failure”) (including, without limitation, because of a failure to keep such Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant to such Registration Statement or to register a sufficient number of shares of Common Stock), then the Company shall pay, as liquidated damages and not as a penalty, to each
holder of Notes relating to such Registration Statement an 

  

 4 

 
amount in cash equal to (1) the product of (i) the aggregate Principal (as such term is defined in the Notes) of such Investor’s Notes multiplied
by (ii) the sum of (A) if such Registration Statement is not filed by the Filing Deadline, the Filing Deadline Damages plus (B) if such Registration Statement is not declared effective by the Effectiveness Deadline, the Effectiveness
Deadline Damages plus (C) if there exists a Continuing Effectiveness Failure, the Continuing Effectiveness Damages. The payments to which a holder shall be entitled pursuant to this Section 2(g) are referred to herein as “Registration
Delay Payments.” Registration Delay Payments shall be paid on the earlier of (I) the last day of the calendar month during which such Registration Delay Payments are incurred and (II) the third Business Day after the event or failure giving
rise to the Registration Delay Payments is cured. 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 1.0% per month (prorated for partial months)
until paid in full. Each Investor shall be entitled to seek any available remedy for the enforcement of this Agreement, including for the payment of any Registration Delay Payments. Nothing shall preclude an Investor from pursuing or obtaining
specific performance or other equitable relief with respect to this Agreement. 
  
 3. Related Obligations. 
  
 At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will use its reasonable 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 submit to the SEC, within two (2) Business Days after the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that the staff of the SEC has no further comments on a particular Registration Statement, as the case may be, 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. 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 the Investors 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 or (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. 
  
 (b) 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 Registration Statement until such time as 

  

 5 

 
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-K, Form 10-Q or Form 8-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 (ii) all amendments and supplements to all Registration Statements (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
and 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 (except for Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports and any exhibits incorporated by reference therein) in a form to which Legal Counsel reasonably objects in writing; provided that
the Registration Delay Payments shall not accrue as a result of such objection. 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, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including, to the extent not available on the EDGAR system, 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 such 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, ten (10) copies 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 in
order to facilitate the disposition of the Registrable Securities owned by such Investor. 
  
 (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 

  

 6 

 
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(o), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies 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 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 reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the 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) 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 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, 

  

 7 

 
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 of which the Company has knowledge. 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. 
  
 (i)
The Company shall use its reasonable best efforts to secure the inclusion for quotation on The Nasdaq SmallCap Market of the shares of Common Stock included in the Registrable Securities. In the event the Company’s Common Stock cease to be
listed on The Nasdaq SmallCap Market, the Company shall use its reasonable best efforts to secure the inclusion for quotation on the Eligible Market (as defined in the Notes) on which the Company’s Common Stock is listed or included for
quotation. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(i). 
  
 (j) 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. 
  
 (k) If requested by an Investor, the Company shall (i) as soon as practicable 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) as soon as practicable 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) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably
requested by an Investor holding any Registrable Securities. 
  
 (l) The Company shall use its reasonable best efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other United States federal, state and local
governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities. 
  
 (m) The Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC in
connection with any registration hereunder. 
  
 (n) Within two (2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver to the transfer agent for such Registrable Securities (with copies to the
Investors whose Registrable Securities 

  

 8 

 
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. 
  
 (o) 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 written opinion of an executive officer of the Company and its counsel, 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-five (25) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of seventy-five (75) days and the first day of any Grace Period must be at least two (2) 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 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, 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 seven (7) 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 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 

  

 9 

 
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. 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 agrees that it shall, in connection with
any sales or other transfers of Registrable Securities pursuant to the Registration Statements, comply with any applicable prospectus delivery requirements pursuant to the 1933 Act. 
  
 5. Expenses of Registration. 
  
 All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be
paid by the Company. The Company shall also reimburse the Investors for the reasonable fees and disbursements of Legal Counsel in connection with registration, filing or qualification pursuant to Sections 2 and 3 of this Agreement, which amount
shall be limited to $20,000 for each 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 party is or may be a party thereto (“Indemnified Damages”), to 

  

 10 

 
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 the 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 material violation of this Agreement by the Company, its agents or
representatives (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are
due and payable, for any 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; (ii) with respect to any preliminary prospectus, shall not inure to the benefit of any
such Person from whom the Person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any Person controlling such Person) if the untrue statement or omission of material fact contained in
the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus and such Indemnified Person, notwithstanding such advice,
failed to deliver the correct prospectus as required by the 1933 Act and such correct prospectus was timely made available pursuant to Section 3(d); (iii) shall not be available to the extent such Claim is based on a failure of the Investor to
properly deliver or to cause to be delivered the prospectus made available by the Company, including a corrected prospectus, if such prospectus or corrected prospectus was timely made available by the Company pursuant to Section 3(d); and (iv) 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 

  

 11 

 
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, (i) 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 (ii) based on a failure of the Investor
to properly deliver or to cause to be delivered the prospectus made available by the Company, including a corrected prospectus, if such prospectus or corrected prospectus was timely made available by the Company pursuant to Section 3(d); 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. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or
supplemented. 
  
 (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 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 such Indemnified
Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of the Indemnified Person or the Indemnified Party, as the case may be, 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. 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 fully with the indemnifying party in connection with any 

  

 12 

 
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) 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. 
  
 (e) 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 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 (ii) 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 

  

 13 

 
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 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,
and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration. 
  
 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 (but, in no event, greater than five Business Days following 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; and (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement. 
  
 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 Investors who then hold at least a majority of the Registrable Securities. 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. 
  

 14 

 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 the 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:

  
 If to the Company: 
  

			
	Internet Capital Group, Inc.
	690 Lee Road	  	 
	Suite 310	  	 
	Wayne, Pennsylvania 19087
	Telephone:	  	(610) 727-6900
	Facsimile:	  	(610) 727-6901
	Attention:	  	 General Counsel and
 Vice President, Treasury and
Tax

	
	with a copy to:
	
	Dechert LLP
	1717 Arch Street
	Philadelphia, Pennsylvania 19103
	Telephone:	  	(215) 994-4000
	Facsimile:	  	(215) 994-2222
	Attention:	  	 Henry N. Nassau, Esq.
 and Christopher G. Karras,
Esq.

  
 If to the Transfer
Agent: 
  

			
	Mellon Investor Services LLC
	PO Box 3315	  	 
	South Hackensack, New Jersey 07606
	Telephone:	  	(201) 329-8863
	Facsimile:	  	(201) 329-8967
	Attention:	  	Scott Bellinger

  

 15 

 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:
	 
	Morgan, Lewis & Bockius LLP
	1701 Market Street
	Philadelphia, Pennsylvania 19103
	Telephone:	  	(215) 963-5000
	Facsimile:	  	(215) 963-5001
	Attention:	  	 Richard A. Silfen, Esq.
 and Robert G. Robison,
Esq.

  
 If to a Buyer, to its
address and facsimile number set forth on the Schedule of Buyers attached hereto, 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 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 non-exclusive jurisdiction of the state and federal courts sitting 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 

  

 16 

 
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. 
  
 (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 Investors holding at least a majority of the Registrable Securities, determined as if all of the Notes
held by Investors then outstanding have been converted into Registrable Securities without regard to any limitations on conversion of the Notes. 
  
 (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.

  

 17 

 (m) This Agreement shall terminate in the event that the Securities Purchase Agreement
terminates in accordance with its terms prior to the Closing Date. 
  
 [Signature Pages Follow] 
  

 18 

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

			
	COMPANY:
	 
	 INTERNET CAPITAL GROUP, INC.

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

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

			
	BUYER:
	 
	 BEAR STEARNS SECURITIES CORP.
 CUSTODIAN FOR JEFFREY THORP IRA
 ROLLOVER

		
	By:	 	 
	 	 	

	 	 	 Name: Jeffrey Thorp

  

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

			
	BUYER:
	 
	 COHANZICK ABSOLUTE RETURN
 MASTER FUND, LTD.

		
	By:	 	 
	 	 	

	 	 	 Name: David K. Sherman
 Title: Authorized Agent

  

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

			
	BUYER:
	 
	 COHANZICK CREDIT OPPORTUNITIES
 FUND, LTD.

		
	By:	 	 
	 	 	

	 	 	 Name: David K. Sherman
 Title: Authorized Agent

  

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

			
	BUYER:
	 
	 COHANZICK HIGH YIELD PARTNERS, L.P.

		
	By:	 	 
	 	 	

	 	 	 Name: David K. Sherman
 Title: Authorized Agent

  

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

			
	BUYER:
	 
	 GABRIEL CAPITAL, L.P.

		
	By:	 	 
	 	 	

	 	 	 Name: David K. Sherman
 Title: Authorized Agent

  

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

			
	BUYER:
	 
	 JMB CAPITAL PARTNERS, LP

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

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

			
	BUYER:
	 
	 JMG CAPITAL PARTNERS, LP

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

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

			
	BUYER:
	 
	 JMG TRITON OFFSHORE FUND, LTD

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

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

			
	BUYER:
	 
	 LANGLEY PARTNERS, L.P.

	 
	 by: Langley Capital, LLC, its General Partner

		
	By:	 	 
	 	 	

	 	 	 Name: Jeffrey Thorp
 Title: Managing Member

  

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

			
	BUYER:
	 
	 MANCHESTER SECURITIES CORPORATION

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

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

			
	BUYER:
	 
	 MASON CAPITAL, LP
 MASON CAPITAL, LTD
 GUGGENHEIM PORTFOLIO COMPANY X, LLC

	 
	 By:
	 	 Mason Capital Management LLC,
 Investment Manager

	 	 	 
		
	By:	 	 
	 	 	

	 	 	 Name: John C. Grizzetti
 Title: Chief Financial Officer

  

 30 

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

			
	BUYER:
	 
	 NORTHWOOD CAPITAL PARTNERS LP

	 
	 By: NwCapital Management LP, its General
 Partner

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

 31 

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

			
	BUYER:
	 
	 PORTSIDE GROWTH AND OPPORTUNITY
 FUND

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

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

			
	BUYER:
	 
	 SCOGGIN CAPITAL MANAGEMENT, LP II

	 
	 By: S&E Partners, LP, its general partner

	 
	 By: Scoggin, Inc., its general partner

		
	By:	 	 
	 	 	

	 	 	 Name: Craig Effron
 Title: President

  

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

			
	BUYER:
	 
	 SCOGGIN INTERNATIONAL FUND, LTD.

	 
	 By: Scoggin, LLC, its trading advisor

		
	By:	 	 
	 	 	

	 	 	 Name: Craig Effron
 Title: Managing Member

  

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

			
	BUYER:
	 
	 TOPAZ PARTNERS LP

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

 Schedule I 
  

Schedule of Buyers 
  

					
	 Buyer

	  	 Address and
 Facsimile Number

	  	 Representative

			
	 Bear Stearns Securities Corp.
 Custodian for Jeffrey
Thorp
 IRA Rollover
	  	 535 Madison Avenue
 7th Floor
 New York, NY 10022
 Fax: 212-850-7589
 Attn: Jeffrey Thorp
	  	 Morgan, Lewis & Bockius LLP
 1701 Market
Street
 Philadelphia, PA 19103
 Fax: 215-963-5001
 Attn: Richard A. Silfen, Esq. and
 Robert G. Robison,
Esq.

			
	 Cohanzick Credit
 Opportunities Fund,
Ltd.
	  	 427 Bedford Road
 Suite 260
 Pleasantville, NY 10570
 Fax: 914-992-9817
 Attn: David K. Sherman
	  	 Nixon Peabody LLP
 100 Summer Street
 Boston, MA 02110
 Fax: 866-382-6139
 Attn: Richard Stein

			
	 Cohanzick High Yield
 Partners, L.P.
	  	 427 Bedford Road
 Suite 260
 Pleasantville, NY 10570
 Fax: 914-992-9817
 Attn: David K. Sherman
	  	 Nixon Peabody LLP
 100 Summer Street
 Boston, MA 02110
 Fax: 866-382-6139
 Attn: Richard Stein

			
	 Cohanzick Absolute Return
 Master Fund,
Ltd.
	  	 427 Bedford Road
 Suite 260
 Pleasantville, NY 10570
 Fax: 914-992-9817
 Attn: David K. Sherman
	  	 Nixon Peabody LLP
 100 Summer Street
 Boston, MA 02110
 Fax: 866-382-6139
 Attn: Richard Stein

			
	Gabriel Capital, L.P.	  	 450 Park Avenue
 32nd Floor
 New York, NY 10022
 Fax: 914-992-9817
 Attn: David K. Sherman
  
 with copy to:
 450 Park Avenue
 Suite 3201
 New
York, NY 10022
 Fax: 212-759-0368
 Attn: Mark
Weiner
	  	 Nixon Peabody LLP
 100 Summer Street
 Boston, MA 02110
 Fax: 866-382-6139
 Attn: Richard Stein

			
	 Guggenheim Portfolio
 Company X, LLC
	  	 110 East 59th
Street
 30th
Floor
 New York, NY 10022
 Fax: 212-644-4264
 Attn: John C. Grizzetti
	  	 Thelen Reid & Priest
 875 Third Avenue
 New York, NY 10022
 212-603-6783
 Fax: 212-603-2001
 Attn: Richard Swanson

  

					
			
	JMB Capital Partners, LP	  	 1999 Avenue of the Stars
 Suite 2040
 Los Angeles, CA 90067
 Fax: 310-286-6662
 Attn: Ron D. Silverton
	  	 Latham & Watkins LLP
 633 West Fifth
Street
 Suite 4000
 Los Angeles, CA 90071
 Fax: 213-891-8763
 Attn: Michael A. Treska

			
	JMG Capital Partners, LP	  	 1999 Avenue of the Stars
 Suite 2530
 Los Angeles, CA 90067
 Fax: 310-201-2759
 Attn: Noelle Newton
	  	None.
			
	JMG Triton Offshore Fund, Ltd	  	 1999 Avenue of the Stars
 Suite 2530
 Los Angeles, CA 90067
 Fax: 310-201-2759
 Attn: Noelle Newton
	  	None.
			
	Langley Partners, LP	  	 535 Madison Avenue
 7th Floor
 New York, NY 10022
 Fax: 212-850-7589
 Attn: Jeffrey Thorp
	  	 Morgan, Lewis & Bockius LLP
 1701 Market
Street
 Philadelphia, PA 19103
 Fax: 215-963-5001
 Attn: Richard A. Silfen, Esq. and
 Robert G. Robison,
Esq.

			
	 Manchester Securities
 Corporation
	  	 c/o Elliott Management Corporation
 712 5th
Ave
 35th floor
 New York, NY 10019
 Fax: 212-974-2092
 attn: Elliot Greenberg (back office), Brett Cohen and Nadav
Manham
	  	 Kleinberg, Kaplan, Wolff, & Cohen, P.C.
 551 Fifth
Avenue
 New York, NY 10176
 Fax: 212-986-8866
 Attn: Larry Hui

			
	Mason Capital, LP	  	 110 East 59th
Street
 30th
Floor
 New York, NY 10022
 Fax: 212-644-4264
 Attn: John C. Grizzetti
	  	 Thelen Reid & Priest
 875 Third Avenue
 New York, NY 10022
 212-603-6783
 Fax: 212-603-2001
 Attn: Richard Swanson

			
	Mason Capital, Ltd	  	 110 East 59th
Street
 30th
Floor
 New York, NY 10022
 Fax: 212-644-4264
 Attn: John C. Grizzetti
	  	 Thelen Reid & Priest
 875 Third Avenue
 New York, NY 10022
 212-603-6783
 Fax: 212-603-2001
 Attn: Richard Swanson

			
	 Northwood Capital Partners
 LP
	  	 1150 First Avenue
 Suite 600
 King of Prussia, PA 19406
 Fax: 610-783-4788
 Attn: Bob Berlacher
	  	None.

  

					
			
	 Portside Growth and
 Opportunity Fund
	  	 c/o Ramius Capital Group, LLC
 666 Third
Avenue,
 26th Floor
 New York, NY 10017
 Fax: 212-845-7999
 Attn: Jeff Smith and
 Roger Anscher
	  	None.
			
	 Scoggin Capital
 Management, LP II
	  	 660 Madison Avenue
 20th Floor
 NY, NY 10021
 Fax: 212-355-7480
 Attn: Craig Efron
	  	None.
			
	 Scoggin International Fund,
 Ltd.
	  	 660 Madison Avenue
 20th Floor
 NY, NY 10021
 Fax: 212-355-7480
 Attn: Craig Efron
	  	None.
			
	Topaz Partners LP	  	 c/o Jemmco Capital Corp
 900 Third Avenue
 11th Floor
 New York, N.Y. 10022
 Fax: 212-644-1175
 Attn: Kevin Schweitzer
	  	 Akin Gump
 900 Third Avenue
 11th Floor
 NY, NY 10022
 Fax: 212-872-1002
 Attn: Lorne Smith

  

 EXHIBIT A 
  

FORM OF NOTICE OF EFFECTIVENESS 
  
 OF REGISTRATION STATEMENT 
  
 [Transfer Agent] 
  
 Attn: 
  

	Re:	Internet Capital Group, Inc. 

  
 Ladies and Gentlemen: 
  
 Reference is made to that certain Securities Purchase Agreement, dated as of March 31, 2004 (the “Purchase Agreement”), entered into by
and among Internet Capital Group, Inc., a Delaware corporation (the “Company”) and the buyers named therein (collectively, the “Holders”) pursuant to which the Company issued to the Holders its convertible notes
(the “Notes”), convertible into shares of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”). Pursuant to the 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 resale of the Registrable Securities (as defined in the Registration Rights Agreement),
including the Notes, the shares of Common Stock issuable upon conversion of the Notes and the shares of Common Stock issuable as interest on the Notes, 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 stockholder thereunder. 
  
 In connection with the foregoing, we advise you that a member of the SEC’s staff has advised us 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 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. 
  
 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
[                    ], 2004. This letter shall serve as our standing instructions to you with regard to this matter. 
  

 A-1 

			
	 Very truly yours,

	
	 INTERNET CAPITAL GROUP, INC.

		
	By:	 	 
	 	 	

	 Name:
	 	 
	 Title:
	 	 

  
 CC: [LIST NAMES OF ALL
HOLDERS] 
  

 A-2 

 EXHIBIT B 
  

SELLING STOCKHOLDERS 
  
 The shares of common stock being offered by the selling stockholders are issuable upon conversion of the convertible note and as interest on the
convertible notes. For additional information regarding the convertible notes, see “Private Placement of Convertible Notes” above. We are registering the convertible notes and shares of common stock in order to permit the selling
stockholders to offer the convertible notes and/or the shares for resale from time to time. Except for the ownership of the convertible notes and the purchase of securities from the Company on
[                ], the selling stockholders have not had any material relationship with us within the past three years. 
  
 The table below lists the selling stockholders and other information
regarding the beneficial ownership of the convertible notes and the shares of common stock by each of the selling stockholders. The second column lists the aggregate principal amount of convertible notes held by each selling stockholder. The third
column lists the aggregate principal amount of convertible notes being offered by this prospectus by the selling stockholders. 
  
 The fourth column lists the number of shares of common stock beneficially owned by each selling stockholder, based on its ownership of the convertible
notes, as of                     , 200  , assuming conversion of all convertible notes held by the selling stockholders on
that date, without regard to any limitations on conversions or exercise. The fifth column lists the shares of common stock being offered by this prospectus by the selling stockholders. 
  
 In accordance with the terms of registration rights agreements with the holders of the convertible notes, this prospectus
generally covers the resale of all of the convertible notes and shares of common stock issuable upon conversion of the convertible notes (assuming that the convertible notes are convertible at the Conversion Price and without taking into account any
limitations on the conversion of the convertible notes set forth in the convertible notes) and as interest on the convertible notes and the maximum number of interest shares were issued assuming no conversions or redemptions prior to the maturity
date of the convertible notes, in each case as of the trading day immediately preceding the date this registration statement was initially filed with the SEC. Because the conversion price of the convertible notes and the interest payable on the
convertible notes 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
stockholders pursuant to this prospectus. 
  
 The selling
stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.” 
  

 B-1 

											
	 Name of Selling Stockholder

	  	Aggregate Principal
Amount of Convertible
Notes Owned Prior to
Offering

	  	Maximum Principal
Amount of Convertible
Notes to be Sold
pursuant to this
Prospectus

	  	 Number of Shares
Owned
 Prior to Offering

	  	 Maximum Number of
Shares
 to be Sold Pursuant
to this Prospectus

	  	 Number of Shares
Owned
 After Offering

	Bear Stearns Securities Corp. Custodian for Jeffrey Thorp IRA Rollover (1)	  	 	  	 	  	 	  	 	  	 
	Cohanzick Absolute Return Master Fund, Ltd. (2)	  	 	  	 	  	 	  	 	  	 
	Cohanzick Credit Opportunities Fund, Ltd. (3)	  	 	  	 	  	 	  	 	  	 
	Cohanzick High Yield Partners, L.P. (4)	  	 	  	 	  	 	  	 	  	 
	Gabriel Capital, L.P. (5)	  	 	  	 	  	 	  	 	  	 
	Guggenheim Portfolio Company X, LLC (6)	  	 	  	 	  	 	  	 	  	 
	JMB Capital Partners, LP (7)	  	 	  	 	  	 	  	 	  	 
	JMG Capital Partners, LP (8)	  	 	  	 	  	 	  	 	  	 
	JMG Triton Offshore Fund, Ltd (9)	  	 	  	 	  	 	  	 	  	 
	Langley Partner, LP (10)	  	 	  	 	  	 	  	 	  	 
	Manchester Securities Corporation (11)	  	 	  	 	  	 	  	 	  	 
	Mason Capital, LP (12)	  	 	  	 	  	 	  	 	  	 
	Mason Capital, Ltd (13)	  	 	  	 	  	 	  	 	  	 
	Northwood Capital Partners LP (14)	  	 	  	 	  	 	  	 	  	 
	Portside Growth and Opportunity Fund (15)	  	 	  	 	  	 	  	 	  	 
	Scoggin Capital Management, LP II (16)	  	 	  	 	  	 	  	 	  	 
	Scoggin International Fund, Ltd. (17)	  	 	  	 	  	 	  	 	  	 
	Topaz Partners LP (18)	  	 	  	 	  	 	  	 	  	 

  

	(1)	

  

	(2)	

  

	(3)	

  

	(4)	

  

	(5)	

  

	(6)	

  

	(7)	

  

	(8)	

  

	(9)	

  

	(10)	

  

	(11)	

  

	(12)	

  

	(13)	

  

	(14)	

	(15)	

  

	(16)	

	(17)	

  

	(18)	

  

 B-2 

 PLAN OF DISTRIBUTION 
  
 We are registering the convertible notes and the shares of common stock issuable upon conversion of the convertible notes
and an interest on the convertible notes to permit the resale of these convertible notes and these shares of common stock by the holders of the convertible notes from time to time after the date of this prospectus. We will not receive any of the
proceeds from the sale by the selling stockholders of the convertible notes or the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of the convertible notes and the common stock.

  
 The selling stockholders may sell all or a portion of the
convertible notes and 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 convertible notes or the shares of common stock are sold
through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The convertible notes and 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 convertible notes and 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; pursuant to Rule 144 under the Securities Act; broker-dealers may agree with the selling securityholders to sell a
specified amount of convertible notes or 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 stockholders effect such transactions by selling convertible
notes or 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 stockholders or
commissions from purchasers of the convertible notes or 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 convertible notes or the shares of common stock or otherwise, the selling stockholders may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the convertible notes and the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also sell convertible notes or shares of common stock
short and deliver convertible notes or shares of common stock covered by this prospectus to close out short positions. The selling stockholders may also loan or pledge 

  

 B-3 

 
the convertible notes or shares of common stock to broker-dealers that in turn may sell such convertible notes or shares. 
  
 The selling stockholders may pledge or grant a security interest in some or
all of the convertible notes 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 convertible notes or 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 stockholders to include the
pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the convertible notes or 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 stockholders and any broker-dealer participating in the distribution of the convertible notes or 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 convertible notes or the shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of convertible notes or 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 stockholders and any discounts, commissions or concessions
allowed or reallowed or paid to broker-dealers. 
  
 Under the
securities laws of some states, the convertible notes or 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 convertible notes or the shares of common stock
may not be sold unless such convertible notes or 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 stockholder will sell any or all
of the convertible notes or shares of common stock registered pursuant to the shelf registration statement, of which this prospectus forms a part. 
  
 The selling stockholders 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 convertible notes or any of the shares of common stock by the
selling stockholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the convertible notes or the shares of common stock to engage in market-making activities with respect
to the convertible notes or shares of common stock. All of the foregoing may affect the marketability of the convertible notes or shares of common stock and the ability of any person or entity to engage in market-making activities with respect to
the convertible notes or shares of common stock. 
  

 B-4 

 We will pay all expenses of the registration of the convertible notes and 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 stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some
liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including
liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholder 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 convertible notes or the shares of common stock will be freely tradable in the hands of persons other than our affiliates 
  

 B-5

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