Document:

Exhibit 10.1

 

TRANSACTION SUPPORT AGREEMENT

 

This Transaction Support Agreement (together with the exhibits and schedules attached hereto, which include, without limitation, the Term Sheet (as defined below)(1), as each may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof, this “Agreement”), dated as of September 24, 2018, is entered into by and among:  (i) Ascent Capital Group, Inc. (“Ascent”) and Monitronics International, Inc. (“Monitronics”); and (ii)  the beneficial owners (or nominees, investment managers, advisors or subadvisors for the beneficial owners) (each, a “Noteholder”) of the 9.125% Senior Notes due 2020 (the “Notes”) issued pursuant to that certain Indenture dated as of March 23, 2012 (as amended, restated, modified, supplemented, or replaced from time to time in accordance with the terms thereof, the “Notes Indenture”), by and among Monitronics, the guarantors named thereunder, and U.S. Bank National Association, as trustee, that are (and any Noteholder that may become a Consenting Noteholder in accordance with Section 12 hereof) signatories hereto (each, a “Consenting Noteholder” and collectively, the “Consenting Noteholders”).  This Agreement collectively refers to Ascent, Monitronics and the Consenting Noteholders as the “Parties” and each individually as a “Party.”

 

RECITALS

 

WHEREAS, the Parties have engaged in good faith, arm’s-length negotiations and agreed to enter into certain transactions pursuant to the terms and conditions set forth in this Agreement and in the term sheet attached hereto as Exhibit A (the “Term Sheet”) incorporated herein by reference pursuant to Section 2 hereof;

 

WHEREAS, as of the date hereof, the Consenting Noteholders, in the aggregate, hold approximately 66% of the aggregate outstanding principal amount of the Notes;

 

NOW, THEREFORE, in consideration of the promises, mutual covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Parties, intending to be legally bound, hereby agrees as follows:

 

AGREEMENT

 

1.                                      TSA Effective Date.  This Agreement shall become effective, and the obligations contained herein shall become binding upon the Parties, upon the first date (such date, the “TSA Effective Date”) that this Agreement has been executed by all of the following:  (i) Ascent; (ii) Monitronics; and (iii) Consenting Noteholders holding, in aggregate, at least 65% in principal amount outstanding of all Notes.  With respect to any Consenting Noteholder that becomes a party to this Agreement pursuant to Section 12 hereof, this Agreement shall become effective as to such Consenting Noteholder at the time it executes and delivers a Transferee Joinder in accordance with Section 12 hereof.

 

(1)         Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Term Sheet.

 

 

2.                                      Exhibits and Schedules Incorporated by Reference.  Each of the exhibits attached hereto (including the Term Sheet) and any schedules to such exhibits (collectively, the “Exhibits”) is expressly incorporated herein and made a part of this Agreement, and all references to this Agreement shall include the Exhibits.  In the event of any inconsistency between this Agreement (without reference to the Term Sheet) and the Term Sheet, the Term Sheet shall govern.

 

3.                                      Certain Defined Terms.  As used in this Agreement:

 

(a)                                 “Credit Agreement” shall mean that certain Credit Agreement, dated as of March 23, 2012 (as amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof), by and among Monitronics, as borrower, the guarantors party thereto, Bank of America, N.A., as administrative agent, and the lenders from time to time party thereto.

 

(b)                                 “Second Lien Exchange Transaction” shall mean transactions consistent in all material respects with the Second Lien Term Sheet.

 

(c)                                  “Second Lien Term Sheet” shall mean the ‘Second Lien Transactions Overview’ set forth in the Term Sheet.

 

(d)                                 “SUN Exchange Offer” shall mean an offer to exchange the Notes for New Second Lien Notes to be issued by Monitronics as contemplated by the Second Lien Term Sheet (a “Second Lien Exchange”); provided, that if on or prior to the Toggle Trigger Time, Monitronics has not obtained the requisite consents to the Bank Amendments, following the Toggle Trigger Time, a “SUN Exchange Offer” shall mean an offer to exchange the Notes for cash and New Senior Unsecured Notes to be issued by Monitronics as contemplated by the Unsecured Exchange Term Sheet.  For the avoidance of doubt, if on or prior to the Toggle Trigger Time Monitronics obtains the requisite consents to the Bank Amendments, “SUN Exchange Offer” shall at all times mean a Second Lien Exchange.

 

(e)                                  “Toggle Trigger Time” shall mean 11:59 p.m. prevailing Eastern time on the 15th business day following the TSA Effective Date.

 

(f)                                   “Transactions” shall mean a Second Lien Exchange Transaction; provided, that if on or prior to the Toggle Trigger Time Monitronics has not obtained the requisite consents to the Bank Amendments, following the Toggle Trigger Time, “Transactions” shall mean an Unsecured Exchange Transaction.  For the avoidance of doubt, if on or prior to the Toggle Trigger Time Monitronics obtains the requisite consents to the

 

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Bank Amendments, “Transactions” shall at all times mean a Second Lien Exchange Transaction.

 

(g)                                  “Unsecured Exchange Term Sheet” shall mean the ‘Unsecured Exchange Transaction Overview’ set forth in the Term Sheet.

 

(h)                                 “Unsecured Exchange Transaction” shall mean transactions consistent in all material respects with the Unsecured Exchange Term Sheet.

 

4.                                      Definitive Documentation.  The definitive documents and agreements (the “Definitive Documentation”) governing the Transactions shall include, but not be limited to, any offering memoranda prepared in connection with the Transactions, any indenture and security documents with respect to the New Senior Unsecured Notes and the New Second Lien Notes, as applicable, any supplemental indenture in respect of the Notes, any amendments, waivers and/or consents with respect to the Notes or the Credit Agreement, all related transactional or corporate documents, and any other documents or agreements executed, delivered and/or filed in connection with the Transactions.  The Definitive Documentation (including any amendment, supplement or modification thereto) identified in the foregoing sentence remains subject to negotiation and shall, upon completion, contain terms, conditions, representations, warranties, and covenants consistent with the terms of this Agreement and shall otherwise be in form and substance satisfactory to Ascent, Monitronics and the Requisite Consenting Noteholders.

 

5.                                      Requisite Consenting Noteholders.  Unless expressly provided otherwise, and subject to Section 6 of this Agreement, the term “Requisite Consenting Noteholders” shall mean, as of any date of determination on or after the TSA Effective Date, Consenting Noteholders holding at least 66-2/3% of the outstanding Notes held by all Consenting Noteholders as of such date of determination.

 

6.                                      Commitment of Consenting Noteholders.  Each Consenting Noteholder shall (severally and not jointly), solely for so long as it remains a Noteholder, from the TSA Effective Date until the occurrence of the Termination Date (as defined below) and subject to Section 12 hereto:

 

(a)                                 subject to such Consenting Noteholder’s receipt of the offering memorandum prepared in connection with the Transactions, tender or cause to be tendered all Notes (other than Notes in denominations of less than $1,000, if applicable) held by such Consenting Noteholder and provide any consents in respect of the Notes, in each case, in accordance with the terms and conditions of this Agreement prior to the tender time with respect to the SUN Exchange Offer; provided, that such Consenting Noteholder may withdraw its Notes from the SUN Exchange Offer in accordance with the terms and conditions of the SUN Exchange Offer in order to effect a Transfer (as defined below) of such Notes in compliance with Section 12 hereof;

 

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(b)                                 not withdraw or revoke its tender, consent and/or vote with respect to the SUN Exchange Offer, except as otherwise expressly permitted pursuant to this Agreement;

 

(c)                                  take all commercially reasonable actions, and support and cooperate with Ascent and Monitronics to take all commercially reasonable actions, necessary to consummate the Transactions in accordance with the terms and conditions of this Agreement, including without limitation to vote in favor of, or otherwise support, the Transactions with respect to any debt or other securities of Ascent or Monitronics that such Consenting Noteholder may hold; provided that (i) the foregoing shall not limit or restrict, in any respect, any consent or approval rights provided under this Agreement or the Definitive Documentation and (ii) no Consenting Noteholder shall be obligated to waive (to the extent waivable by such Consenting Noteholder) any condition to the consummation of any part of the Transactions set forth in any Definitive Documentation;

 

(d)                                 not directly or indirectly object to, delay, impede, or take any other action to interfere with the Transactions;

 

(e)                                  not take any action (or encourage or instruct any other party including any agent or indenture trustee to take any action) in respect of any potential, actual, or alleged occurrence of any “Default” or “Event of Default” under the Notes Indenture that is triggered or that would be triggered as a result of the execution of this Agreement or the undertaking of Ascent or Monitronics hereunder to implement the Transactions; and

 

(f)                                   not take any other action that is materially inconsistent with its obligations under this Agreement.

 

Notwithstanding the foregoing, nothing in this Agreement shall (u) be construed to prohibit any Consenting Noteholder from contesting whether any matter, fact, or thing is a breach of, or is inconsistent with, this Agreement or the Definitive Documentation, (v) affect the ability of any Consenting Noteholder to consult with other Consenting Noteholders or Ascent or  Monitronics, (w) impair or waive the rights of any Consenting Noteholder to enforce this Agreement against Ascent, Monitronics or any Consenting Noteholder, (x) limit (i) the rights of a Consenting Noteholder in any applicable bankruptcy, insolvency, foreclosure or similar proceeding, including appearing as a party in interest in any matter to be adjudicated in order to be heard concerning any matter arising in any chapter 11 case of any of Ascent or Monitronics or any of their material subsidiaries, (ii) the ability of a Consenting Noteholder to purchase or sell the Notes or any other claims or interests against any of Ascent, Monitronics or any of their respective subsidiaries, subject in all such cases to the terms hereof, (iii) except to the extent any such right or remedy would conflict or be inconsistent with this Agreement, any right or remedy of any Consenting Noteholder under, as applicable, (A)  any of the documents governing the Notes, and (B) any other applicable agreement, instrument or document that gives rise to a Consenting Noteholder’s claims or interests against any of Ascent, Monitronics or any of their respective subsidiaries; (iv) the rights of any Consenting Noteholder to engage in any

 

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discussions, enter into any agreements or take any other action after the Termination Date; or (v) the ability of a Consenting Noteholder to enforce any right, remedy, condition, consent or approval requirement under this Agreement or any Definitive Documentation; (y) constitute a waiver or amendment of any term or provision of (i) any of the Notes Indenture or any other document governing the Notes, or (ii) any other agreement, instrument or document that gives rise to a Consenting Noteholder’s claims or interests against any of Ascent, Monitronics or any of their respective subsidiaries; or (z) be construed to require any Consenting Noteholder to incur, assume, become liable in respect of or suffer to exist any expenses, liabilities or other obligations, or agree to or become bound by any commitments, undertakings, concessions, indemnities or other arrangements that could result in expenses, liabilities or other obligations to such Consenting Noteholder, other than those set forth in this Agreement.

 

7.                                      Commitment of Ascent and Monitronics.  Each of Ascent and Monitronics shall (jointly and severally), from the TSA Effective Date until the occurrence of the Termination Date:

 

(a)                                 timely take all commercially reasonable actions necessary or reasonably requested by the Requisite Consenting Noteholders to complete the Transactions in accordance with the terms and conditions of this Agreement and the Definitive Documentation; provided, however, that Monitronics shall not accept tenders of Notes or consummate the SUN Exchange Offer unless and until all of the conditions to the closing of the Transactions (including the SUN Exchange Offer) set forth in the offering memorandum and the other Definitive Documentation have been satisfied or waived (other than conditions that, by their nature, are to be satisfied or waived at the closing of the Transactions, but subject to their being satisfied or waived contemporaneously with such closing) in accordance with the terms of such offering memorandum or other Definitive Documentation, as applicable;

 

(b)                                 (i) negotiate in good faith, execute and deliver, and perform its obligations under this Agreement and the Definitive Documentation to which it is (or will be) a party; provided, however, that (A) the foregoing shall not limit or restrict, in any respect, any consent or approval rights provided under this Agreement or the Definitive Documentation and (B) neither Ascent nor Monitronics shall be obligated to waive (to the extent waivable by such Party) any closing condition set forth in any Definitive Documentation, and (ii) take any and all necessary and appropriate actions in furtherance of this Agreement and the consummation of the Transactions;

 

(c)                                  prior to the Toggle Trigger Time, use good faith efforts customary for transactions similar to the Bank Amendments to obtain the required consents in connection with the Bank Amendments;

 

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(d)                                 comply with each of the following milestones (the “Milestones”), which Milestones may only be extended pursuant to a further written agreement among Ascent, Monitronics and the Requisite Consenting Noteholders:

 

(i)                                     launch the SUN Exchange Offer pursuant to Definitive Documentation not later than twenty (20) business days after the TSA Effective Date;

 

(ii)                                  commence solicitation with respect to the Bank Amendments pursuant to Definitive Documentation not later than ten (10) business days after the TSA Effective Date; and

 

(iii)                               consummate the Transactions not later than forty-five (45) business days after the TSA Effective Date;

 

(e)                                  not execute, deliver or file, or solicit consents or tenders pursuant to, any Definitive Documentation that, in whole or in part, is not consistent in all material respects with this Agreement or is not otherwise acceptable to the Requisite Consenting Noteholders, Ascent and Monitronics;

 

(f)                                   make commercially reasonable efforts to obtain any and all required regulatory and/or third-party approvals or consents necessary to consummate the Transactions;

 

(g)                                  not directly or indirectly object to, delay, impede, or take any other action to interfere with the Transactions;

 

(h)                                 not seek, solicit, support, encourage, propose, assist, consent to, vote for, enter into, participate in, pursue or consummate (i) any reorganization, merger, consolidation, tender offer, exchange offer, business combination, joint venture, partnership, sale of a material portion of assets, financing (whether debt or equity), recapitalization or restructuring of any of Ascent, Monitronics or any of their respective subsidiaries, other than the Transactions (each, an “Alternative Transaction”) or (ii) any substantive discussions (other than as to respond to any such Person to advise such Person that it does not intend to engage in such discussions), subject to the appropriate exercise of Ascent’s or Monitronics’ fiduciary duties, or any agreement with any individual, partnership, joint venture, limited liability company, corporation, trust, unincorporated organization, group, governmental entity, or legal entity or association (each, a “Person”) regarding an Alternative Transaction; provided, however, that notwithstanding anything to the contrary herein, the Unsecured Exchange Transaction shall constitute an Alternative Transaction prior to the Toggle Trigger Time;

 

(i)                                     if Ascent or Monitronics (or any director, manager, officer, agent or representative thereof, as applicable) receives an unsolicited proposal or

 

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expression of interest with respect to any Alternative Transaction, within one (1) business day after the receipt of such proposal or expression of interest, notify the Consenting Noteholder Advisors (as defined below) of the receipt thereof, with such notice to include the material terms thereof;

 

(j)                                    not undertake any action materially inconsistent with the consummation and implementation of the Transactions or with its obligations under this Agreement;

 

(k)                                 subject in each case to each of Ascent’s and Monitronics’s compliance with and observation of its fiduciary duties (i) conduct, and shall cause their respective subsidiaries to conduct, their businesses and operations only in the ordinary course in a manner that is consistent with past practices and in compliance with applicable law, (ii) maintain their respective books and records in the ordinary course, in a manner that is consistent with past practices, and in compliance with applicable law, (iii) maintain all insurance policies, or suitable replacements therefor, in full force and effect, in the ordinary course, in a manner that is consistent with past practices, and in compliance with applicable law, and (iv) use commercially reasonable efforts to preserve intact their business organizations and relationships with third parties (including creditors, lessors, licensors, suppliers, distributors and customers) and employees in the ordinary course, in a manner that is consistent with past practices, and in compliance with applicable law; and

 

(l)                                     promptly, and in any event within five (5) business days of the TSA Effective Date, execute and deliver the engagement letters of Stroock & Stroock & Lavan LLP (“Stroock”) and Houlihan Lokey Capital, Inc., as advisors to that certain ad hoc group of holders of the Notes (together, the “Consenting Noteholder Advisors”), and pay the fees, costs and expenses of the Consenting Noteholder Advisors in accordance with the terms and conditions of such engagement letters.

 

8.                                      Consenting Noteholder Termination Events.  The Requisite Consenting Noteholders, in their sole discretion, may terminate this Agreement upon or at any time following the occurrence of any of the following events (each, a “Consenting Noteholder Termination Event”), by giving written notice of such termination to each of the other Parties, and such termination shall be effective immediately upon delivery of such written notice to each of the other Parties in accordance with Section 23 hereof, except to the extent that such Consenting Noteholder Termination Event has been waived in writing by the Requisite Consenting Noteholders in their sole discretion:

 

(a)                                 Ascent or Monitronics amends or modifies any of the Definitive Documentation in a manner that is inconsistent with this Agreement, and such amendment or modification has not been revoked or withdrawn within three (3) business days after the receipt by Ascent and Monitronics of written notice from the Requisite Consenting Noteholders (which notice

 

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may be provided by Stroock at the direction of the Requisite Consenting Noteholders);

 

(b)                                 the issuance by any governmental authority, any regulatory authority, or any court of competent jurisdiction, of any ruling or order enjoining the substantial consummation of the Transactions on the terms and conditions set forth in this Agreement, the Term Sheet and the Definitive Documentation; provided, however, that Ascent and Monitronics shall have five (5) business days after issuance of such ruling or order to obtain relief that would allow consummation of the Transactions in a manner that (i) does not prevent or diminish in a material way compliance with the terms of this Agreement, and (ii) is acceptable to the Requisite Consenting Noteholders in their reasonable discretion;

 

(c)                                  the breach in any material respect (without giving effect to any “materiality” qualifiers set forth therein) of Ascent or Monitronics of any representation, warranty, or covenant of such Party set forth in this Agreement (it being understood and agreed that any actions required to be taken by Ascent and Monitronics that are included in the Term Sheet attached to this Agreement but not in this Agreement are to be considered “covenants” of Ascent and Monitronics, and therefore covenants of this Agreement, notwithstanding the failure of any specific provision in the Term Sheet to be re-copied in this Agreement) that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by Ascent and Monitronics of written notice of such breach from the Requisite Consenting Noteholders (which notice may be provided by Stroock at the direction of the Requisite Consenting Noteholders);

 

(d)                                 Ascent or Monitronics terminates its obligations under and in accordance with this Agreement;

 

(e)                                  the failure of any Definitive Documentation to comply with the requirements of Section 4 of this Agreement, which non-compliance remains uncured for a period of three (3) business days after the receipt by Ascent and Monitronics of written notice of such non-compliance from the Requisite Consenting Noteholders (which notice may be provided by Stroock at the direction of the Requisite Consenting Noteholders);

 

(f)                                   the occurrence of any event, change, effect, occurrence, development, circumstance, condition, result, state of fact or change of fact that is not known as of the date hereof (each, an “Event”) that, individually or together with all other Events, has had, or would reasonably be expected to have, a material adverse effect as measured from the date hereof on the business, operations, finances, properties, condition (financial or otherwise), assets or liabilities of Ascent or Monitronics, taken as a whole, or their ability to perform their respective obligations under, or to consummate the Transactions contemplated by, this Agreement, which

 

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material adverse effect remains uncured for a period of three (3) business days after the receipt by Ascent and Monitronics of written notice thereof from the Requisite Consenting Noteholders (which notice may be provided by Stroock at the direction of the Requisite Consenting Noteholders);

 

(g)                                  the occurrence of any “Event of Default” under the Notes Indenture or the Credit Agreement (subject to any applicable right to cure therein upon notice to the Requisite Consenting Noteholders); or

 

(h)                                 the occurrence of any other material breach of this Agreement not otherwise covered in the immediately preceding clauses (a) through and including (g) by Ascent or Monitronics that has not been cured (if susceptible to cure) within five (5) business days after the receipt by Ascent and Monitronics of written notice of such breach from the Requisite Consenting Noteholders (which notice may be provided by Stroock at the direction of the Requisite Consenting Noteholders).

 

9.                                      Company Termination Events.  Each of Ascent and Monitronics, in its sole discretion, may terminate this Agreement upon or at any time following the occurrence of any of the following events (each a “Company Termination Event,” and together with the Consenting Noteholder Termination Events, the “Termination Events”), by giving written notice of such termination to each of the other Parties and such termination shall be effective immediately upon delivery of such written notice to each of the other Parties in accordance with Section 23 hereof, except to the extent that such Company Termination Event has been waived in writing by Ascent and/or Monitronics in its sole discretion:

 

(a)                                 the breach in any material respect (without giving effect to any “materiality” qualifiers set forth therein) by one or more of the Consenting Noteholders of any representation, warranty, or covenant of such Consenting Noteholder(s) set forth in this Agreement such that the non-breaching Consenting Noteholders own or control, in the aggregate, 50% or less of the aggregate principal amount of the Notes that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by such Consenting Noteholder(s) of written notice and description of such breach from Ascent or Monitronics;

 

(b)                                 the issuance by any governmental authority, any regulatory authority, or any court of competent jurisdiction, of any ruling or order enjoining the consummation of the Transactions on the terms and conditions set forth in this Agreement, the Term Sheet and the Definitive Documentation; provided, however, that Ascent and Monitronics have made commercially reasonable, good faith efforts to cure, vacate, or have overruled such ruling or order prior to terminating this Agreement and such ruling or order shall remain uncured, not vacated or not overruled for a period of at least five (5) business days;

 

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(c)                                  the Requisite Consenting Noteholders terminate their obligations under and in accordance with Section 8 of this Agreement; or

 

(d)                                 the failure of any Definitive Documentation to comply with the requirements of Section 4 of this Agreement, which non-compliance remains uncured for a period of three (3) business days after the receipt by the Consenting Noteholders of written notice of such non-compliance from Ascent or Monitronics; provided that Ascent and Monitronics have made good faith efforts to negotiate such Definitive Documentation.

 

10.                               Mutual Termination; Automatic Termination.  This Agreement and the obligations of all Parties hereunder may be terminated by mutual written agreement by and among Ascent, Monitronics and the Requisite Consenting Noteholders.  Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate automatically upon the occurrence of any of the following events:

 

(a)                                 any of Ascent, Monitronics or any of their respective subsidiaries (i) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of such entity or any substantial part of the property of such entity, (ii) seeks any arrangement, adjustment, protection, or relief of its debts other than as contemplated by this Agreement, or (iii) makes a general assignment for the benefit of its creditors;

 

(b)                                 any of Ascent, Monitronics or any of their respective subsidiaries commences a voluntary case filed under title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (as amended, the “Bankruptcy Code”);

 

(c)                                  the commencement of an involuntary case against any of Ascent, Monitronics or any of their respective subsidiaries under the Bankruptcy Code that is not dismissed within thirty (30) days of such filing; or

 

(d)                                 the occurrence of the consummation of the Transactions.

 

11.                               Effect of Termination.  The earliest date on which termination of this Agreement as to a Party is effective in accordance with Sections  8, 9 or 10 of this Agreement shall be referred to as the “Termination Date.”  Upon the occurrence of the Termination Date, (a) except in the case of the Termination Date pursuant to Section 10(d), Monitronics shall promptly withdraw, and shall not consummate, the SUN Exchange Offer and (b)(i) all Parties’ obligations under this Agreement shall be terminated effective immediately, and (ii) the Parties hereto shall be released from all commitments, undertakings, and agreements hereunder; provided, however, that each of the following shall survive any such termination:  (A) any claim for breach of this Agreement that occurs prior to such Termination Date, and all rights and remedies with respect to such claims shall not be prejudiced in any way; and (B) Sections 11, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30 and 31 hereof.  At any time from and after the Termination Date (except in the case of a Termination Date pursuant to Section 10(d)), each Consenting Noteholder in its sole discretion may withdraw or revoke its tender, consent and/or vote with

 

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respect to the SUN Exchange Offer in accordance with the terms and conditions of the SUN Exchange Offer.

 

12.                               Transfers of Claims and Interests. Each Consenting Noteholder shall not sell, loan, assign, transfer, hypothecate (other than hypothecations or re-hypothecations in favor of a registered broker-dealer with whom the Notes are held in a prime brokerage account), tender or otherwise dispose of (including by participation), directly or indirectly, its right, title, or interest in any Notes, in whole or in part (such actions are collectively referred to herein as a “Transfer” and the Consenting Noteholder making such Transfer is referred to herein as the “Transferor”), unless such Transfer is to another Consenting Noteholder or any other entity that first agrees in writing to be bound by the terms of this Agreement by executing and delivering to counsel to Ascent and Monitronics and counsel to the Consenting Noteholders, in accordance with Section 23 hereof, a transferee joinder substantially in the form attached hereto as Exhibit B (a “Transferee Joinder”); provided, however, that a Consenting Noteholder may permit its prime broker to hold the Notes as part of a custodian arrangement whereby such Consenting Noteholder retains all of its voting rights with respect to such Notes from the TSA Effective Date until the occurrence of the Termination Date.  With respect to any and all Notes held by the relevant transferee upon consummation of a Transfer in accordance herewith, such transferee is deemed to make all of the representations, warranties, and covenants of a Consenting Noteholders, as applicable, set forth in this Agreement and (if not already a Consenting Noteholder) is deemed to be, and shall be, a Consenting Noteholder for all purposes of this Agreement.  Upon compliance with the foregoing, the Transferor shall be deemed to relinquish its rights (and be released from its obligations, except for any claim for breach of this Agreement that occurs prior to such Transfer) under this Agreement to the extent of such transferred rights and obligations.

 

Notwithstanding the foregoing, a Qualified Marketmaker (as defined herein), acting solely in its capacity as such, that acquires any Notes subject to this Agreement shall not be required to execute a counterpart signature page to this Agreement or otherwise agree to be bound by the terms and conditions set forth herein if, and only if, such Qualified Marketmaker sells or assigns such Notes within five (5) business days of its acquisition and the purchaser or assignee of such Notes is a Consenting Noteholder or such purchaser or assignee executes and delivers a Transferee Joinder to counsel to Ascent and Monitronics and counsel to the Consenting Noteholders, in accordance with Section 23 hereof; provided that, if a Qualified Marketmaker, acting solely in its capacity as such, acquires Notes from an entity who is not a Consenting Noteholder with respect to such Notes (collectively, “Qualified Unrestricted Claims”), such Qualified Marketmaker may Transfer any right, title or interest in such Qualified Unrestricted Claims without the requirement that the transferee execute and deliver a Transferee Joinder; provided further, that any such Qualified Marketmaker that is a Party to this Agreement shall otherwise be subject to the terms and conditions of this Agreement pending the completion of any such Transfer.  For purposes of this Agreement, a “Qualified Marketmaker” means an entity that holds itself out to the public or applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers Notes of Monitronics, in its capacity as a dealer or market maker in Notes of Monitronics and is not holding such Notes for its own account.

 

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Any Transfer made in violation of this Section 12 shall be deemed null and void ab initio and of no force or effect, regardless of any prior notice provided to Ascent, Monitronics and/or any Consenting Noteholder, and shall not create any obligation or liability of Ascent, Monitronics or any Consenting Noteholder to the purported transferee.

 

13.                               Further Acquisition of Claims or Interests.  Except as set forth in Section 12, nothing in this Agreement shall be construed as precluding any Consenting Noteholder or any of its affiliates from acquiring additional Notes; provided, however, that any additional Notes acquired by any Consenting Noteholder and with respect to which such Consenting Noteholder is the beneficial owner, or the nominee, investment manager, advisor or subadvisor for the beneficial owner with power and/or authority to bind any Notes held by it shall automatically and immediately be subject to the terms and conditions of this Agreement, except to the extent the additional Notes are acquired by the Consenting Noteholder (in its capacity as such a nominee, investment manager, advisor or subadvisor) for the account of a beneficial owner for whom the Consenting Noteholder does not currently hold any Notes that are subject to this Agreement.  Upon any such further acquisition, such Consenting Noteholder shall promptly notify counsel to Ascent and Monitronics and counsel to the Consenting Noteholders, and the Notes so acquired shall become subject to the terms of this Agreement.

 

14.                               Consents and Acknowledgments.  Each Party irrevocably acknowledges and agrees that this Agreement does not constitute an offer to issue or sell securities to any Person, or the solicitation of an offer to acquire or buy securities, in any jurisdiction where such offer or solicitation would be unlawful.

 

15.                               Representations and Warranties.

 

(a)                                 Each Consenting Noteholder hereby represents and warrants on a several and not joint basis for itself and not any other Person that the following statements are true, correct, and complete as of the date hereof:

 

(i)                                     it has the requisite organizational power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;

 

(ii)                                  the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part;

 

(iii)                               the execution, delivery, and performance by it of this Agreement does not violate any provision of its certificate of incorporation, or bylaws, or other organizational documents;

 

(iv)                              it is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), with sufficient knowledge and experience to evaluate the terms and conditions of this Agreement and to consult with its legal and financial advisors with respect to

 

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its investment decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement;

 

(v)                                 it has reviewed, or has had the opportunity to review, with the assistance of professional and legal advisors of its choosing, all information it deems necessary and appropriate for it to evaluate the financial risks inherent in the Transactions; and

 

(vi)                              it (A) is the beneficial owner, or the nominee, investment manager, advisor or subadvisor for the beneficial owner with power and/or authority to bind the Notes identified and in the amounts set forth on its signature page hereto (or, in the case of a Consenting Noteholder that becomes a party hereto after the TSA Effective Date, below its name on its signature page to the Transferee Joinder executed and delivered by such Consenting Noteholder); and (B) does not beneficially own any Notes other than as identified on its signature page hereto (or, in the case of a Consenting Noteholder that becomes a party hereto after the TSA Effective Date, below its name on its signature page to the Transferee Joinder executed and delivered by such Consenting Noteholder).

 

(b)                                 Each of Ascent and Monitronics hereby represents and warrants on a joint and several basis (and not for any other Person other than itself) that the following statements are true, correct, and complete as of the date hereof:

 

(i)                                     it has the requisite corporate or other organizational power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;

 

(ii)                                  the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part;

 

(iii)                               the execution and delivery by it of this Agreement does not (A) violate its certificates of incorporation, or bylaws, or other organizational documents, or those of any of its affiliates, or (B) result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its affiliates is a party;

 

(iv)                              the execution and delivery by it of this Agreement does not require any registration or filing with, the consent or approval of, notice to, or any other action with any federal, state, or other governmental authority or regulatory body, other than, for the avoidance of doubt, the actions with governmental authorities or regulatory

 

13

 

bodies required in connection with implementation of the Transactions;

 

(v)                                 it has sufficient knowledge and experience to evaluate properly the terms and conditions of this Agreement, and has been afforded the opportunity to consult with its legal and financial advisors with respect to its decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement and otherwise investigated this matter to its full satisfaction; and

 

(vi)                              it is not currently engaged in any discussions, negotiations or other arrangements with respect to any Alternative Transaction.

 

16.                               Waiver.  If the Transactions are not consummated, then following the occurrence of the Termination Date, if applicable, nothing herein shall be construed as a waiver by any Party of any or all of such Party’s rights, other than as provided in Section 11 of this Agreement, and the Parties expressly reserve any and all of their respective rights.  The Parties acknowledge that this Agreement and all negotiations relating hereto are part of a proposed settlement of matters that could otherwise be the subject of litigation.  Pursuant to Rule 408 of the Federal Rules of Evidence, any applicable state rules of evidence, and any other applicable law, foreign or domestic, this Agreement, any related documents, and all negotiations relating thereto shall not be admissible into evidence in any proceeding, or used by any party for any reason whatsoever, including in any proceeding, other than a proceeding to enforce its terms.

 

17.                               Relationship Among Parties.  Notwithstanding anything herein to the contrary, the duties and obligations of the Consenting Noteholders under this Agreement shall be several, not joint.  No Party shall have any responsibility by virtue of this Agreement for any trading by any other entity.  No prior history, pattern, or practice of sharing confidences among or between the Parties shall in any way affect or negate this Agreement.

 

18.                               Specific Performance.  It is understood and agreed by the Parties that money damages would be an insufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to seek specific performance and injunctive or other equitable relief as a remedy of any such breach of this Agreement, including, without limitation, an order of a court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder; provided, however, that each Party agrees to waive any requirement for the securing or posting of a bond in connection with such remedy.

 

19.                               GOVERNING LAW & JURISDICTION.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.  BY ITS EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES FOR ITSELF THAT ANY LEGAL ACTION, SUIT OR PROCEEDING AGAINST IT WITH RESPECT TO ANY MATTER UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT

 

14

 

RENDERED IN ANY SUCH ACTION, SUIT OR PROCEEDING, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, COUNTY OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY ACCEPTS AND SUBMITS ITSELF TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, GENERALLY AND UNCONDITIONALLY, WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING, AND WAIVES ANY OBJECTION IT MAY HAVE TO VENUE OR THE CONVENIENCE OF THE FORUM.

 

20.                               WAIVER OF RIGHT TO TRIAL BY JURY.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN ANY OF THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATING TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT.  INSTEAD, ANY DISPUTES RESOLVED IN COURT SHALL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

 

21.                               Successors and Assigns.  Except as otherwise provided in this Agreement, this Agreement is intended to bind and inure to the benefit of each of the Parties and each of their respective permitted successors, assigns, heirs, executors, administrators, and representatives.

 

22.                               No Third-Party Beneficiaries.  Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties and no other Person shall be a third-party beneficiary of this Agreement.

 

23.                               Notices.  All notices (including, without limitation, any notice of termination or breach) and other communications from any Party hereunder shall be in writing and shall be deemed to have been duly given if personally delivered by courier service, messenger, email, or facsimile to the other Parties at the applicable addresses below, or such other addresses as may be furnished hereafter by notice in writing.  Any notice of termination or breach shall be delivered to all other Parties.

 

(a)                                 If to Ascent or Monitronics

 

Ascent Capital Group, Inc.

5251 DTC Parkway, Suite 1000

Greenwood Village, CO 80111

Attn:                    Mr. William Niles

Tel:                           303.628.5600

Email:            wniles@ascentcapitalgroupinc.com

 

With a copy to:

 

Baker Botts L.L.P.

30 Rockefeller Plaza

New York, New York 10112

 

15

 

Attn: Renee L. Wilm, Esq.

Emanuel C. Grillo, Esq.

 

Tel: 212.408.2500

Fax: 212.408.2501

Email:            renee.wilm@bakerbotts.com
                                                 emanuel.grillo@bakerbotts.com

 

and

 

Latham & Watkins LLP

885 Third Avenue,

New York, New York 10022

Attn: Roger Schwartz, Esq.

David Hammerman, Esq.

 

Tel: 212.906.1200

Fax: 212.751.4864

Email: roger.schwartz@lw.com

david.hammerman@lw.com

 

(b)                                 Consenting Noteholders:

 

Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, New York 10038-4982

Attn: Kristopher M. Hansen, Esq.

Sayan Bhattacharyya, Esq.

 

Tel: 212.806.6056

212.806.5723

Fax: 212.806.6006

Email: khansen@stroock.com

sbhattacharyya@stroock.com

 

24.                               Entire Agreement.  This Agreement (including, for the avoidance of doubt, the Term Sheet and any other Exhibits) constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement, and supersedes all prior negotiations, agreements, and understandings, whether written or oral, among the Parties with respect to the subject matter of this Agreement.

 

25.                               Amendments.  Except as otherwise provided herein, this Agreement may not be modified, amended, or supplemented except in a writing executed and delivered by Ascent, Monitronics and the Requisite Consenting Noteholders.

 

16

 

26.                               Counterparts.  This Agreement may be executed in one or more counterparts, each of which, when so executed, shall be deemed to be an original and shall constitute the same instrument, and the counterparts may be delivered by facsimile transmission or by email in portable document format (.pdf) or other electronic imaging means, which shall be deemed to be an original for the purposes of this Section 25; provided, however, that signature pages executed by each of the Consenting Noteholders shall be delivered to (a) each of the other Consenting Noteholder in a redacted form that removes the Consenting Noteholder’s holdings of Notes, and (b) Ascent, Monitronics and counsel to the Consenting Noteholders in an unredacted form.

 

27.                               Public Disclosure and Press Releases.  This Agreement, as well as its terms, its existence, and the details regarding the negotiation of its terms are expressly subject to any existing confidentiality agreements executed by and among any of the Parties as of the date hereof.  Notwithstanding the foregoing, Ascent and Monitronics may make any public disclosure or filing with respect to the subject matter of this Agreement, including, without limitation, the existence of, or the terms of, this Agreement or any other material term of the Transactions, that, based upon the advice of counsel, is required to be made (i) by applicable law or regulation or (ii) pursuant to any rules or regulations of NASDAQ, without the express written consent of the other Parties; provided, that Ascent and Monitronics shall consult with the Consenting Noteholder Advisors before issuing any such press release or making any such filing and shall submit drafts to the Consenting Noteholder Advisors of any such press releases or filing as soon as reasonably practicable prior to making any such disclosure, and shall afford the Consenting Noteholder Advisors an opportunity to comment on such documents and disclosures, and such documents and disclosures shall be in form and substance reasonably acceptable to the Consenting Noteholder Advisors.  Each Party to this Agreement shall have the right, at any time, to know the identities of every other Party to this Agreement, but must keep such information confidential and may not disclose such information to any Person except to the extent such Party believes, upon the advice of counsel, that it is legally required to do so.  Notwithstanding anything to the contrary in this Agreement, Ascent and Monitronics shall not disclose to any Person (and shall redact all such information in any public filing) the identities and holdings information (including the amounts or percentages of Notes held) of any Consenting Noteholders as of the date hereof or at any time hereafter, except to the extent compelled to disclose such information by a court of competent jurisdiction, in which event Ascent and Monitronics shall (a) take all reasonable measures to limit the scope of such disclosure and (b) give the affected Consenting Noteholder(s) and the Consenting Noteholder Advisors (who shall have the right to seek a protective order prior to disclosure) prior written notice of such disclosure and a reasonable opportunity to review and comment in advance of such disclosure or filing; provided, however, that the foregoing shall not prohibit the disclosure of the aggregate percentage or aggregate principal amount of Notes held by all Consenting Noteholders, collectively.

 

28.                               Headings.  The section headings of this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement.

 

29.                               Interpretation.  This Agreement is the product of negotiations among the Parties, and the enforcement or interpretation hereof is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement or any portion hereof, shall not be effective in regard to the interpretation hereof.

 

17

 

30.                               Representation by Counsel.  Each Party hereto acknowledges that it has been represented by, or has been provided a reasonable period of time to obtain access to and advice by, counsel with respect to this Agreement and the Transactions contemplated hereby.  Accordingly, any rule of law or any legal decision that would provide any Party with a defense to the enforcement of the terms of this Agreement against such Party based upon lack of legal counsel shall have no application and is expressly waived.

 

31.                               Severability.  If any provision of this Agreement, or the application of any such provision to any Person or circumstance, shall be held invalid or unenforceable in whole or in part, such invalidity or unenforceability shall attach only to such provision or part thereof and the remaining part of such provision and this Agreement shall continue in full force and effect; provided, however, that nothing in this Section 31 shall be deemed to amend, supplement or otherwise modify, or constitute a waiver of, any Termination Event.  Upon any such determination of invalidity, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible, in a reasonably acceptable manner, such that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

 

[Signatures and exhibits follow.]

 

18

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and delivered by their respective duly authorized officers, solely in their respective capacity as officers of the undersigned and not in any other capacity, as of the date first set forth above.

 

	
 
    	
Ascent   Capital Group, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   William Niles
    
	
 
    	
 
    	
Name:   William Niles
    
	
 
    	
 
    	
Title:   CEO
    
	
 
    	
 
    
	
 
    	
Monitronics   International, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   William Niles
    
	
 
    	
 
    	
Name:   William Niles
    
	
 
    	
 
    	
Title:   EVP/Director
    

 

 

[CONSENTING NOTEHOLDERS]

 

 

Exhibit A to the Transaction Support Agreement

 

Term Sheet

 

 

ASCENT CAPITAL GROUP, INC.

MONITRONICS INTERNATIONAL, INC.

 

TERM SHEET

 

SEPTEMBER 24, 2018

 

This Term Sheet sets forth the principal terms of the Transactions.  Capitalized terms used herein and not otherwise defined shall have the meanings given them in that certain Transaction Support Agreement dated as of September 24, 2018, to which this Term Sheet is an exhibit (the “Agreement”).

 

THIS TERM SHEET DOES NOT CONSTITUTE (NOR SHALL IT BE CONSTRUED AS) AN OFFER TO BUY, SELL OR EXCHANGE ANY OF THE SECURITIES OR INSTRUMENTS DESCRIBED HEREIN, IT BEING UNDERSTOOD THAT SUCH A SOLICITATION, IF ANY, ONLY WILL BE MADE IN COMPLIANCE WITH APPLICABLE PROVISIONS OF ALL APPLICABLE LAWS. THIS TERM SHEET DOES NOT ADDRESS ALL TERMS THAT WOULD BE REQUIRED IN CONNECTION WITH THE TRANSACTIONS AND ENTRY INTO OR THE CREATION OF ANY BINDING AGREEMENT IS SUBJECT TO THE NEGOTIATION AND EXECUTION OF DEFINITIVE DOCUMENTATION, AS CONTEMPLATED BY THE AGREEMENT.

 

	
Second   Lien Transactions Overview
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Second   Lien Exchange:
    	
 
    	
Monitronics shall offer to exchange, and the   Consenting Noteholders shall exchange, the Notes for the New Second Lien   Notes (as defined below) on the following basis:

 

(i) on or prior to the early tender date, the   Notes shall be exchanged on a par value basis such that for each $1,000   principal of Notes tendered, the holder shall receive New Second Lien Notes   with a par value of $1,000 principal of New Second Lien Notes; and

 

(ii) after the early tender date, but on or   before the expiration date of the Second Lien Exchange, the Notes shall be   exchanged such that for each $1,000 principal of Notes tendered, the holder   shall receive New Second Lien Notes with a par value of $950 principal of New   Second Lien Notes.
    
	
New   Second Lien Notes of Monitronics (“New Second Lien Notes”)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Interest Rate:
    	
 
    	
Monitronics shall pay interest on the New Second   Lien Notes, semi-annually, (a) in cash at a rate per annum equal to 6%;   plus (b) to be paid in kind (PIK) at a rate per annum equal to 6%.
    
	
 
    	
 
    	
 
    
	
Guarantees/Collateral/Security:
    	
 
    	
The New Second Lien Notes shall be guaranteed by   each subsidiary of Monitronics that guarantees the obligations under the   Credit Agreement (the “Guarantors”). Monitronics and the Guarantors   shall grant to the collateral trustee for the New Second Lien Notes for the   benefit of the holders of the New Second Lien Notes second priority security   interests in,
    

 

1

 

	
 
    	
 
    	
and liens upon the same collateral presently pledged   as security for the Credit Agreement.
    
	
 
    	
 
    	
 
    
	
Maturity Date:
    	
 
    	
April 30, 2023.
    
	
 
    	
 
    	
 
    
	
Covenants and   Events of Default:
    	
 
    	
Standard and customary covenants and events of   default for a transaction of this kind, nature and size, and the following:

 

·                  Monitronics’ right to issue   additional New Second Lien Notes up to a maximum aggregate principal amount   of $585 million, including those New Second Lien Notes issued as part of the   Second Lien Exchange, for the sole purpose of refinancing all of the existing   Notes, subject to pro forma compliance with a new Total Secured Debt to   EBITDA ratio covenant (taking into account only first and second lien debt)   to be set at 5.25 times (which is to be calculated in the same manner as the   existing Total Debt to EBITDA covenant under the Credit Agreement);

 

·                  Monitronics’ right to issue   additional New Second Lien Notes (in excess of the cap described above) with   the consent of the holders of a majority of the principal amount of the New   Second Lien Notes then outstanding;

 

·                  Monitronics’ right to issue new   third lien notes (with third priority security interests in, and liens upon   the same collateral presently pledged as security for the Credit Agreement   and to be pledged under the New Second Lien Notes) (the “New Third Lien   Notes”), without the prior consent of the holders of the New Second Lien   Notes, in exchange for (i) the existing Ascent 4.00% Convertible Senior   Notes due 2020 (the “Ascent Convertible Notes”), or (ii) Notes   that are not tendered into the Second Lien Exchange; provided   that (a) the maturity date of such New Third Lien Notes would not occur   earlier than one year after the maturity date of the New Second Lien Notes;   and (b) such New Third Lien Notes would not pay cash interest (except to   the extent allowed in the “Permitted Payments” covenant below); and

 

·                  A “Permitted Payments”   basket under the New Second Lien Notes shall be included to permit an   aggregate annual amount of up to $10 million to be distributed to Ascent by   Monitronics to fund public company and other administrative expenses and   interest payments on the Ascent Convertible Notes (provided,   that any portion of the Permitted Payments basket not used for such purposes   may be used to pay interest on New Third Lien Notes).
    
	
 
    	
 
    	
 
    
	
Consent   Solicitation:
    	
 
    	
The tender of any Note into the Second Lien Exchange   shall constitute consent to the proposed amendments to the Notes Indenture   which shall include the elimination or waiver of all or substantially all of   the restrictive covenants and events of default under the Notes Indenture.
    
	
 
    	
 
    	
 
    
	
Cash   Repayment to Consenting
    	
 
    	
In connection with the Second Lien Exchange, Ascent   shall contribute to
    

 

2

 

	
Term   Loan Lenders and Amendment to Credit Agreement
    	
 
    	
Monitronics as capital $100 million in cash to be   used to make a repayment to those lenders under the Term B-2 Loan (as defined   below) (the “Term B-2 Lenders”) under the Credit Agreement who consent   to the proposed amendments of the Credit Agreement, which “Bank Amendments”   shall include, (i) an increase in the interest rate payable in respect   of the term B-2 loan under the Credit Agreement (the “Term B-2 Loan”)   of 50 basis points; (ii) an amendment of the existing covenants in the   Credit Agreement to facilitate and permit the Second Lien Exchange (and to   permit the creation and potential offer of New Third Lien Notes), including   without limitation:

 

·                  Total Debt to EBITDA ratio of 5.50x   (from 5.25x),

·                  Exclusion of the second and third   lien debt from current RMR to Secured Debt calculation,

·                  LTM pro forma adjustment for direct   channel account generation,

·                  Covenant amendments to permit   creation of New Second Lien Notes and New Third Lien Notes (as described   above),

·                  Carve out for Permitted Payments   basket (as described above), and

·                  Elimination of event of default for   going concern qualification to the Monitronics’ audit that results from or is   related to the “springing” maturity of the Credit Agreement obligations   associated with any outstanding Notes (the “Springing Maturity”);

 

(iii) solely as to the consenting lenders under   the Credit Agreement, a waiver of the Springing Maturity where no more than   $50 million principal amount of Notes remain outstanding at the date of the   Springing Maturity; (iv) a reduction in the accordion feature of the   Term B-2 Loan from $150 million borrowing capacity to $25 million; and   (v) a 10% permanent reduction of revolving loan commitments under the   revolving credit facility of the Credit Agreement.
    

 

3

 

	
Potential   Exchange Offer for Ascent Convertible Notes
    	
 
    	
An offer may be made to exchange Ascent Convertible   Notes for New Third Lien Notes to be issued by Monitronics at an exchange   ratio to be determined, but which, under no circumstances, shall exceed   $1,000 principal amount of New Third Lien Notes for $1,000 principal amount   of Ascent Convertible Notes.

 

Interest: The interest rate per   annum payable, in cash or PIK, in respect of such New Third Lien Notes shall   be determined, but any cash interest payments shall not exceed the amount   available under the Permitted Payments basket described above.

 

Collateral Security: Monitronics   shall grant to the collateral trustee for the New Third Lien Notes, for the   benefit of the holders of the New Third Lien Notes, third priority security   interests in, and liens upon the same collateral presently pledged as   security for the Credit Agreement and to be pledged under the New Second Lien   Notes.

 

Maturity Date: Not earlier than   May 1, 2024.

 

Covenants and Events of Default:   Covenants and events of default shall be no more restrictive than that of the   New Second Lien Notes.
    
	
 
    	
 
    	
 
    
	
Conditions   Precedent to Closing:
    	
 
    	
The closing of the Second Lien Exchange shall be   subject to customary conditions which shall include the following:

 

·                  Definitive Documentation that   complies with Section 4 of the Agreement;

 

·                  Participation of the Consenting   Noteholders, subject to the terms of the Agreement;

 

·                  Delivery of customary opinions, as   reasonably determined by the parties; and

 

·                  Receipt of requisite consents to   the Bank Amendments from the lenders under the Credit Agreement (the “Requisite   Consents”), provided that the effectiveness   of such Bank Amendments may be subject to the completion of the Second Lien   Exchange.
    
	
 
    	
 
    	
 
    
	
Unsecured   Exchange Transaction Overview
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Unsecured   Exchange Transaction for New Senior Unsecured Notes and Cash Tender Offer:
    	
 
    	
If Monitronics has not received the Requisite   Consents by the Toggle Trigger Time, then Ascent and Monitronics shall offer   to exchange, up to $100 million in cash and/or up to $585 million of New   Senior Unsecured Notes (as defined below), together with the Additional   Consideration (as defined below) on the following basis:

 

·                  Cash Tender/Modified Dutch   Auction: Tendered Notes shall be accepted for purchase by Ascent (such   Notes, the “Acquired Notes”) pursuant to a modified “Dutch Auction”   tender offer within a price range of $750 per $1,000 principal amount of   Notes to $875 per $1,000 principal amount of Notes. Notes will be
    

 

4

 

	
 
    	
 
    	
accepted from the   lowest price bid to the highest within the range until the tender is filled   and the maximum participation level has been reached. Except as provided   below with respect to Acquired Notes that may be exchanged by Ascent for New   Senior Unsecured Notes, the Acquired Notes shall be exchanged by Ascent for   new unsecured notes of Monitronics, which shall be expressly subordinated in   right of payment to the New Senior Unsecured Notes and to the guarantees of   the New Senior Unsecured Notes, pay cash interest at 9.125% (no PIK feature),   and will mature no earlier than the New Senior Unsecured Notes. Any Notes   tendered into the modified Dutch Auction in excess of the maximum   participation level, but not accepted, will be deemed tendered into the   exchange offer described below.

 

·                  Exchange Offer: On or prior   to the early tender date, the Notes shall be exchanged on a par value basis   such that for each $1,000 principal of Notes tendered, the holder shall   receive New Senior Unsecured Notes with a par value of $1,000 principal of   New Senior Unsecured Notes; and after the early tender date, but on or before   the expiration date of the Unsecured Exchange Transaction, the Notes shall be   exchanged such that for each $1,000 principal of Notes tendered, the holder   shall receive New Senior Unsecured Notes with a par value of $950 principal   of New Senior Unsecured Notes.
    
	
 
    	
 
    	
 
    
	
Additional   Consideration
    	
 
    	
Cashlessly exercisable warrants representing in the   aggregate 10% of the total number of outstanding shares of Ascent’s   Series A and Series B common stock, exercisable for Ascent   Series A common stock, with a strike price of $3.435 per share.
    
	
 
    	
 
    	
 
    
	
New   Senior Unsecured Notes of Monitronics (“New Senior Unsecured Notes”):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Interest Rate:
    	
 
    	
Monitronics shall pay interest on the New Senior   Unsecured Notes, semi-annually, (a) in cash at a rate per annum equal to   10.125%; plus (b) to be paid in kind (PIK) at a rate per annum equal to   2.625% subject to a mechanism by which up to 2.375% of the cash interest can   toggle to an equivalent amount of PIK interest through April 30, 2021   based upon an officer’s certificate and a financial test to ensure compliance   with current covenant package under Credit Agreement.
    
	
 
    	
 
    	
 
    
	
Maturity Date:
    	
 
    	
April 30, 2023
    
	
 
    	
 
    	
 
    
	
Subsidiary   Guarantees, Priority and Related Asset Transfers:
    	
 
    	
Monitronics and all of its restricted subsidiaries   that guarantee the obligations under the Credit Agreement will guarantee the   New Senior Unsecured Notes. Monitronics and certain of its existing   subsidiaries will transfer a majority of their assets (the “Transferred   Assets”) which will include a majority of their primary   revenue-generating contracts to one or more subsidiaries that guarantee or   will guarantee the New Senior Unsecured Notes and the Credit Agreement, but   will be designated as
    

 

5

 

	
 
    	
 
    	
unrestricted under the Notes Indenture and will not   guarantee the Notes.

 

For avoidance of doubt, the Transferred Assets will remain   subject to the security interests granted in connection with the Credit   Agreement.
    
	
 
    	
 
    	
 
    
	
Covenants and   Events of Default:
    	
 
    	
Standard and customary covenants and events of   default for a transaction of this kind, nature and size, and the following:

 

·                  Monitronics’ right to issue   additional New Senior Unsecured Notes up to a maximum aggregate principal   amount of $585 million, including those New Senior Unsecured Notes issued as   part of the Unsecured Exchange Transaction, for the sole purpose of refinancing   all of the existing Notes subject to pro forma compliance with a new Total   Debt to EBITDA ratio covenant to be set at 5.25 times (which is the   calculated in the same manner as the existing Total Debt to EBITDA covenant);

 

·                  Monitronics’ right to issue New   Senior Unsecured Notes in an aggregate principal amount up to $25 million in   exchange for the Acquired Notes (with Ascent then exchanging such New Senior   Unsecured Notes for existing Ascent Convertible Notes) and for other   corporate purposes; and

 

·                  Monitronics’ right to issue   additional New Senior Unsecured Notes (in excess of the cap described above)   with the consent of the holders of a majority of the principal amount of the   New Senior Unsecured Notes outstanding.

 

For the avoidance of doubt, the Permitted Payments   basket described above in the Second Lien Transactions Overview will not   apply to the New Senior Unsecured Notes.
    
	
 
    	
 
    	
 
    
	
Consent   Solicitation:
    	
 
    	
The tender of any Note into the Unsecured Exchange   Transaction shall constitute consent to the proposed amendments to the Notes   Indenture which shall include (i) the elimination or waiver of all or   substantially all of the restrictive covenants and events of default under   the Notes Indenture and (ii) the modification or elimination of other   provisions in the Notes Indenture to remove the subsidiary guarantees granted   to the Notes.
    
	
 
    	
 
    	
 
    
	
Conditions   Precedent to Closing:
    	
 
    	
The closing of the Unsecured Exchange Transaction   shall be subject to customary conditions which shall include the following:

 

·                  Definitive Documentation that   complies with Section 4 of the Agreement;

·                  Participation of the Consenting   Noteholders, subject to the terms of the Agreement; and

·                  Delivery of customary opinions, as   reasonably determined by the parties.
    

 

6

 

Exhibit B to the Transaction Support Agreement

 

Form of Transferee Joinder

 

This joinder (this “Joinder”) to the Transaction Support Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Agreement”), dated as of [DATE], by and among:  (i) Ascent and Monitronics, and (ii) the Consenting Noteholders thereunder, is executed and delivered by [                ] (the “Joining Party”) as of [                ].  Each capitalized term used herein but not otherwise defined shall have the meaning ascribed to it in the Agreement.

 

1.                                      Agreement to be Bound.  The Joining Party hereby acknowledges that it has read and understands the Agreement (including the exhibits and schedules attached thereto, which includes, without limitation, the Term Sheet) and agrees to be bound by all of the terms of the Agreement, a copy of which is attached to this Joinder as Annex 1 (as the same has been or may be hereafter amended, restated, supplemented or otherwise modified from time to time in accordance with the provisions thereof).  The Joining Party shall hereafter be deemed to be a Party for all purposes under the Agreement and one or more of the entities comprising the Consenting Noteholders.

 

2.                                      Representations and Warranties.  The Joining Party hereby represents and warrants to each other Party to the Agreement that, as of the date hereof, such Joining Party (a) is the legal or beneficial holder of, and has all necessary authority (including authority to bind any other legal or beneficial holder) with respect to the Notes identified below its name on the signature page hereto, and (b) makes, as of the date hereof, the representations and warranties set forth in Section 15 of the Agreement to each other Party.

 

3.                                      Governing Law.  This Joinder shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to any conflicts of law provisions which would require the application of the law of any other jurisdiction.

 

4.                                      Notice.  All notices and other communications given or made pursuant to the Agreement shall be sent to:

 

To the Joining Party at:

 

[JOINING PARTY]
 [ADDRESS]
 Attn:
 Facsimile: [FAX]
 EMAIL:

 

 

IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as of the date first written above.

 

 

	
 
    	
Name of   Transferor:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name of   Joinder Party:
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Principal   Amount of Notes:
    
	
 
    	
 
    	
 
    
	
 
    	
$
    	
 
    

 

 

Annex 1 to the Form of Transferee JoinderEX-10.1

 Exhibit 10.1 

FORM OF SECURITIES PURCHASE AGREEMENT 

This Securities Purchase Agreement (this “Agreement”) is dated as of September 24, 2018, between Altimmune, Inc., a
Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”). 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as
more fully described in this Agreement. 
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows: 

ARTICLE I. 
 DEFINITIONS

 1.1     Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this
Agreement, the following terms have the meanings set forth in this Section 1.1: 
 “Acquiring Person”
shall have the meaning ascribed to such term in Section 4.4. 
 “Action” means an action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign). 
 “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act. 

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

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

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

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount 

  
 1 

 
and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading Day following the date hereof. 
 “Commission”
means the United States Securities and Exchange Commission. 
 “Common Stock” means the common stock of the
Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed. 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the
holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles
the holder thereof to receive, Common Stock. 
 “Disclosure Package” means (i) the Prospectus,
(ii) the Prospectus Supplement used most recently prior to the Purchaser’s execution and delivery of this Agreement, (iii) any issuer free writing prospectus, as defined in Rule 433 under the Securities Act (an “Issuer Free
Writing Prospectus), (iv) the final term sheet, if any, prepared and filed in connection with the Offering ,(v) any other free writing prospectus, if any, as defined in Rule 405 under the Securities Act (a “Free Writing Prospectus)
and (vi) with respect to clauses (i) and (ii) each document incorporated therein by reference. 

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith. 

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

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder. 
 “FCPA” means the Foreign Corrupt Practices Act of 1977, as amended. 

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

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

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

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction. 
 “LS” means Lowenstein Sandler LLP, with offices located at 1251 Avenue of the
Americas, New York, New York 10020. 

  
 2 

 “Material Adverse Effect” shall have the meaning assigned
to such term in Section 3.1(b). 
 “Material Permits” shall have the meaning ascribed to such term in
Section 3.1(n). 
 “Offering” means the offering of the Shares pursuant to this Agreement and the
Disclosure Package. 
 “Per Share Purchase Price” equals $17.02, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. 

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

“Placement Agent” means Roth Capital Partners, LLC. 

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

“Prospectus” means the final prospectus filed for the Registration Statement. 

“Prospectus Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities
Act that is filed with the Commission and delivered by the Company to each Purchaser at or prior to the Closing. 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.7. 

“Registration Statement” means the effective registration statement with Commission file No. 333-217034 which registers the sale of the Shares. 
 “Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e). 
 “Rule 144” means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule. 
 “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 

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

  
 3 

 “Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder. 
 “Shares” means the shares of Common Stock
issued or issuable to each Purchaser pursuant to this Agreement. 
 “Short Sales” means all “short
sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing shares of Common Stock).

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares purchased
hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds. 

“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a), and shall, where
applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof. 

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

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

“Transaction Documents” means this Agreement, all exhibits and schedules thereto and hereto and any other
documents or agreements executed in connection with the transactions contemplated hereunder. 
 “Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address of 1 State Street 30th Floor, New York, NY 10004-1561 and a facsimile number of (212) 616-7615, and any successor transfer agent of the Company. 
 ARTICLE II. 

PURCHASE AND SALE 

2.1    Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially
concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $4,878,493 of Shares. Each Purchaser’s
Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available for “Delivery Versus Payment” settlement with the Company or its designee. The Company shall deliver to each Purchaser its
respective Shares, and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of 

  
 4 

 
the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of LS or such other location as the parties shall mutually agree. Unless otherwise directed
by the Placement Agent, settlement of the Shares shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date, the Company shall issue the Shares registered in the Purchasers’ names and
addresses and released by the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly electronically deliver such Shares to the applicable
Purchaser, and payment therefor shall be made by the Placement Agent (or its clearing firm) by wire transfer to the Company). 

2.2    Deliveries. 

(a)    On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser the following: 
 (i)    this Agreement duly executed by the Company; 

(ii)    subject to the last sentence of Section 2.1, the Company shall have provided each Purchaser
with the Company’s wire instructions, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer; 

(iii)    subject to the last sentence of Section 2.1, a copy of the irrevocable instructions to the
Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal to such Purchaser’s Subscription Amount divided by
the Per Share Purchase Price, registered in the name of such Purchaser; and 
 (iv)    the Prospectus and
Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act). 

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

(ii)    such Purchaser’s Subscription Amount, which shall be made available for “Delivery Versus
Payment” settlement with the Company or its designee. 
 2.3    Closing Conditions.  

(a)    The obligations of the Company hereunder in connection with the Closing are subject to the following
conditions being met: 
 (i)    the accuracy in all material respects (or, to the extent representations
or warranties are qualified by materiality or Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be
accurate as of such date); 

  
 5 

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

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

 (b)    The respective obligations of the Purchasers hereunder in connection with the Closing are
subject to the following conditions being met: 
 (i)    the accuracy in all material respects (or, to
the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date
therein in which case they shall be accurate as of such date); 
 (ii)    all obligations, covenants and
agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; 

(iii)    the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; 

(iv)    there shall have been no Material Adverse Effect with respect to the Company since the date hereof;
and 
 (v)    from the date hereof to the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or the Company’s principal Trading Market for a period in excess of two hours, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended
or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State
authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case,
in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing. 

  
 6 

 ARTICLE III. 

REPRESENTATIONS AND WARRANTIES 

3.1    Representations and Warranties of the Company. Except, in each case, as disclosed in the Disclosure Package,
the Company hereby makes the following representations and warranties to each Purchaser: 

(a)    Subsidiaries. The Company owns, directly or indirectly, all of the capital stock or other
equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded. 

(b)    Organization and Qualification. The Company and each of the Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and its subsidiaries (each, a “Subsidiary” and, collectively, the
“Subsidiaries”), taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 

(c)    Authorization; Enforcement. The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of
the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon
delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms,
except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. 

  
 7 

 (d)    No Conflicts. The execution, delivery and
performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby and thereby do not and will not
(i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except as could not have or reasonably be expected to result in a Material Adverse Effect. 

(e)    Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.3 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) application(s) to each applicable
Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby and (iv) such filings as are required to be made under applicable state securities laws (collectively, the “Required
Approvals”). 
 (f)    Issuance of the Shares; Registration. The Shares are duly
authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its
duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became
effective on April 6, 2017 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been
instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus with the Commission pursuant to Rule 424(b). At the time the
Registration Statement and any amendments thereto became effective, at the date of this 

  
 8 

 
Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not
and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto,
at time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company was at the time of the filing of the Registration Statement
eligible to use Form S-3. The Company is eligible to use Form S-3 under the Securities Act and it meets the transaction requirements with respect to the aggregate market
value of securities being sold pursuant to this offering and during the twelve (12) months prior to this offering, as set forth in General Instruction I.B.6 of Form S-3. 

(g)    Capitalization. The capitalization of the Company is as set forth in the Disclosure Package
and the SEC Reports (defined below). The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock
option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently
filed periodic report under the Exchange Act. Except as disclosed in the SEC Reports, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as a result of the purchase and sale of the Shares, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Shares will not obligate the Company or any
Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such
securities. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the
outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization 

  
 9 

 
of any stockholder, the Board of Directors or others is required for the issuance and sale of the Shares. There are no stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. 

(h)    SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the
Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively
referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the
SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has not in the past five (5) years been an issuer subject to Rule
144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments. 
 (i)    Material Changes;
Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as set forth in the SEC Reports and the Disclosure Package (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the
Commission any request for confidential treatment of information. 

  
 10 

 (j)    Litigation. There is no Action which
(i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has
not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. 

(k)    Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent
with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such
employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their
employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does
not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 

(l)    Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it
is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has
been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect. 

  
 11 

 (m)    Environmental Laws. The Company and its
Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or
otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply
could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. 

(n)    Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be
expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. 

(o)    Title to Assets. The Company and the Subsidiaries have good and marketable title in fee
simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens
as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other
taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance. 

(p)    Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with
their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). 

  
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None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is
expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To
the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 

(q)    Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least
equal to the aggregate Subscription Amount. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material Adverse Effect. 

(r)    Transactions With Affiliates and Employees. Except as disclosed in the SEC Reports, none of
the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of
money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is
an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company. 

(s)    Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in
material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as
of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit 

  
 13 

 
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have
established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such
disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the
Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the
Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries. 

(t)    Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the
Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 (u)    Investment Company. The Company is not, and is not an Affiliate of, and immediately
after receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will
not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended. 

(v)    Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect
the registration under the Securities Act of any securities of the Company or any Subsidiary. 

(w)    Listing and Maintenance Requirements. The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company
received any notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or

  
 14 

 
quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in
the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation
and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer. 

(x)    Application of Takeover Protections. The Company and the Board of Directors have taken all
necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling
their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Shares and the Purchasers’ ownership of the Shares. 

(y)    Disclosure. Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might
constitute material, non-public information which is not otherwise disclosed in the Prospectus Supplement or the Disclosure Package.    The Company understands and confirms that the
Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. The disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective
businesses and the transactions contemplated hereby in the Disclosure Package does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. 
 (z)    No Integrated Offering.
Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated. 

(aa)    Tax Status. Except for matters that would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and 

  
 15 

 
other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim. 

(bb)    Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of
the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose
fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA. 

(cc)    Accountants. To the knowledge of the Company, the accounting firm certifying its financial
statements in the Disclosure Package (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report
for the fiscal year ending December 31, 2018. 
 (dd)     Acknowledgment Regarding
Purchasers’ Purchase of Shares. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice
given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Shares. The Company
further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its
representatives. 
 (ee)    Acknowledgment Regarding Purchaser’s Trading Activity. Anything
in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.9 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has
any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Shares for any specified term; (ii) past
(prior to the date on which the Placement Agent first contacted such Investor about the Offering), or future open market or other transactions 

  
 16 

 
by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may
have a “short” position in the Common Stock (established prior to the date on which the Placement Agent first contacted such Investor about the Offering), and (iv) each Purchaser shall not be deemed to have any affiliation with or
control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period
that the Shares are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The
Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents. 

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

(gg)    Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the
Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”). 
 (hh)    U.S. Real Property Holding Corporation. The Company is not
and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request. 

(ii)    Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is
subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its
Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation
by the Federal Reserve. 

  
 17 

 (jj)    Money Laundering. The operations of the
Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened. 

3.2    Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser,
hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date): 

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

(b)    Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for
its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the
Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. 

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

  
 18 

 (d)    Experience of Such Purchaser. Such
Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and
has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment. 

(e)    Access to Information. Such Purchaser acknowledges that it has had the opportunity to review
the Disclosure Package, the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort
or expense that is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser
with any information or advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the
Securities and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the
issuance of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser. 

(f)    Certain Transactions and Confidentiality. Other than consummating the transactions
contemplated hereunder, since the date on which the Placement Agent first contacted such Purchaser about the Offering, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or
indirectly executed any purchases or sales, including Short Sales, of the securities of the Company. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement. Other than to other Persons party to this Agreement or to such
Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions,
with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future. 

  
 19 

 (g)    Future Offerings by the Company. Such Purchaser
acknowledges and agrees that the Company has a Registration Statement on Form S-1 on file with the Commission and, depending upon market and other conditions, may determine to sell some or all of the
securities registered for sale thereby at any time. 
 The Company acknowledges and agrees that the representations contained in this Section 3.2 shall
not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document
or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a
representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future (following public disclosure of the Offering). 

ARTICLE IV. 
 OTHER
AGREEMENTS OF THE PARTIES 
 4.1    Furnishing of Information. Until the earlier of (i) the time that each
Purchaser owns less than twenty percent (20%) of the Shares purchased by such Purchaser hereunder and (ii) the date that is ninety (90) days after the date hereof, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. 

4.2    Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market such that it would require shareholder
approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction. 

4.3    Securities Laws Disclosure; Publicity. The Company shall (a) by 9:00 a.m. (New York City time) on
September 24, 2018 issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) by 9:00 a.m. (New York City time) on the Trading Day immediately following the date hereof, file a Current Report on
Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. The Company represents to the Purchasers that, as of the time of the
issuance of such press release, it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, employees, agents or Affiliates on the one hand, and any of the
Purchasers or any of their Affiliates on the other hand, shall terminate. No Purchaser shall issue any press release nor otherwise make any public statement without the prior consent of the Company, which consent shall not unreasonably be withheld
or delayed, except if such 

  
 20 

 
disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser,
except (a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b). 

4.4    Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the
Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or
arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, solely by virtue of receiving Shares under this Agreement . 

4.5    Non-Public Information. Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.3, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any
Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have
consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in
securities of the Company. To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such
Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their
respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the
extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file
such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenants in this Section 4.5 in
effecting transactions in securities of the Company. 
 4.6    Use of Proceeds. The Company shall use the net
proceeds from the sale of the Shares hereunder for working capital, the conduct of its business as described in the Disclosure Package and other general corporate purposes and shall not use such proceeds: (a) for the satisfaction of any portion
of the Company’s debt (other than payment of trade payables and other liabilities arising in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents,
(c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations. 

  
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 4.7    Indemnification of Purchasers. Subject to the provisions
of this Section 4.7, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees
and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party and not another
Purchaser or an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or
covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser
Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right
to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a
material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The
Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to
the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in
the other Transaction Documents. The indemnification required by this Section 4.7 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The
indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law. 

  
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 Notwithstanding anything in this Agreement to the contrary, the Company shall not be liable to any Purchaser
for any loss incurred as a result of a reduction in the Company’s stock price caused by selling activity by any of the Purchasers with respect to the Company’s securities. 

4.8    Listing of Common Stock. The Company hereby agrees to use commercially reasonable efforts to maintain
the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares on such Trading Market and promptly secure the listing
of all of the Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Shares, and will take such other action
as is necessary to cause all of the Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading
Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to use commercially reasonable efforts to maintain the eligibility of the
Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing
corporation in connection with such electronic transfer. 
 4.9    Certain Transactions and Confidentiality. Each
Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the
Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described
in Section 4.3. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press
release as described in Section 4.3, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Package. Notwithstanding the foregoing, and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities
of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.3, (ii) no Purchaser shall be restricted or prohibited from
effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.3 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described
in Section 4.3. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers
have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Shares covered by this Agreement. 

  
 23 

 4.10    Capital Changes. Until the one year anniversary of the
Closing Date, the Company shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in interest of the Shares. 

4.11    Termination of Certain Obligations. The obligations of the Company pursuant to Sections 4.1, 4.5, 4.6, 4.9
and 4.10 shall terminate, with respect to each Purchaser, on the earlier of (i) the time that each Purchaser beneficially owns less than twenty percent (20%) of the Shares purchased by such Purchaser hereunder, net of Short Sales and any
“derivative” securities acquired by such Purchaser (the “Minimum Ownership Amount”), and (ii) the date that is ninety (90) days after the date hereof. Upon reasonable request of the Company, each Purchaser shall
provide to the Company a representation, which may be by e-mail, as to whether or not such Purchaser continues to own the Minimum Ownership Amount. 

ARTICLE V. 
 MISCELLANEOUS

 5.1    Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before September 28, 2018;
provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties). 

5.2    Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The
Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company), stamp taxes and other taxes and duties
levied in connection with the delivery of any Shares to the Purchasers. 
 5.3    Entire Agreement. The
Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. 

5.4    Notices. Any and all notices or other communications or deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email attachment at the email address as set forth on the signature pages
attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via email attachment at the

  
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email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd)Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form
8-K. 
 5.5    Amendments; Waivers. No provision of this Agreement may be
waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased a majority of the Shares based on the initial Subscription Amounts hereunder or, in the case
of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers) in any material respect,
the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof except to the extent expressly stated in such waiver, nor shall any delay or omission of any party to exercise any right
hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations
of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company. 

5.6    Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall
not be deemed to limit or affect any of the provisions hereof. 
 5.7    Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other
than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect to the
transferred Shares, by the provisions of the Transaction Documents that apply to the “Purchasers.” 

5.8    No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.7 and this Section 5.8. 

5.9    Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the
Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the 

  
 25 

 
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting
in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to
process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall
commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.7, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding. 

5.10    Survival. The representations and warranties contained herein shall survive the Closing and the delivery of
the Shares. 
 5.11    Execution. This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof. 

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

  
 26 

 5.13    Rescission and Withdrawal Right. Notwithstanding anything
to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights. 
 5.14    Replacement of Shares. If any certificate or
instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Shares. 

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

5.16    Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to
any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred. 
 5.17    Independent Nature of Purchasers’
Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or
thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each 

  
 27 

 
Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its
respective counsel have chosen to communicate with the Company through LS. LS does not represent any of the Purchasers. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the
Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a
Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers. Notwithstanding anything to the contrary in the foregoing, each of the Purchasers has been advised, and is being advised by this
Agreement, to consult with an attorney before executing this Agreement, and each Purchaser has consulted (or had an opportunity to consult) with counsel of such Purchaser’s choice concerning the terms and conditions of this Agreement and the
other Transaction Documents for a reasonable period of time prior to the execution hereof and thereof. 

5.18    Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day. 

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

  
 28 

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

							
	ALTIMMUNE, INC. 	 		 	 Address for Notice:
  

910 Clopper Road, Suite 201S
 Gaithersburg, Maryland
20878

							
	By:	 	  
	 		 	E-Mail: enright@altimmune.com

							
	Name:	 		 		 	
	Title:	 		 		 	

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 

SIGNATURE PAGE FOR PURCHASER FOLLOWS] 

  
 29 

 PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT 

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

	
	 Name of Purchaser:
                                         
                                         
                                         
                                         
   

	
	 Signature of Authorized Signatory of Purchaser:
                                         
                                         
                                       

	
	 Name of Authorized Signatory:
                                         
                                         
                                         
                         

	
	 Title of Authorized Signatory:
                                         
                                         
                                         
                           

	
	 Email Address of Authorized Signatory:
                                         
                                         
                                         
           

	
	 Address for Notice to Purchaser:

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

 

	
	 Subscription Amount:
$            

	
	 Shares:
                

	
	 EIN Number:
                    

 ☐  Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the
obligations of the above-signed to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company to sell such securities to the above-signed, shall be unconditional and
all conditions to Closing shall be disregarded, (ii) the Closing shall occur on the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing
contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no
longer be a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the
Closing Date. 
 [SIGNATURE PAGES CONTINUE] 

  
 30

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