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  Exhibit 4.1

 

REGISTRATION RIGHTS AGREEMENT

This
REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of December
11, 2019, is by and among SANUWAVE Health, Inc., a Nevada
corporation (the “Company”), and each of the
undersigned investors (each a “Purchaser,” and collectively, the
“Purchasers”).
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Common Stock
Purchase Agreement by and among the parties hereto, dated as of
December 11, 2019 by and between, inter alia, the parties hereto,
dated as of the date hereof (the “Purchase Agreement”).

 

RECITALS

A.     In
connection with the Purchase Agreement, the Company has agreed,
upon the terms and subject to the conditions of the Purchase
Agreement, to issue the Common Shares to the
Purchasers.

 

B.     To
induce the Purchasers to consummate the transactions contemplated
by the Purchase Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “1933 Act”), under the terms and
subject to the conditions set out in this Agreement.

 

AGREEMENT

NOW, THEREFORE, in consideration of the
premises and the mutual covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and each of the
Purchasers hereby agree as follows:

 

1. Definitions. As
used in this Agreement, the following terms shall have the
following meanings:

 

(a) “Business Day” means any day other
than Saturday, Sunday or any other day on which commercial banks in
New York, New York are authorized or required by law to remain
closed.

 

(b) “Common Shares” means the Common
Shares issued to the Purchasers pursuant to the Purchase
Agreement.

 

(c) “Closing Date” shall have the
meaning set forth in the Purchase Agreement.

 

(d) “Effective Date” means the date
that the applicable Registration Statement has been declared
effective by the SEC.

 

(e) “Effective Purchase Price” means
for each Purchaser, the amount of Common Shares issued to such
Purchaser pursuant to the Purchase Agreement multiplied by the
Per Security Purchase
Price.

 

 

 

 

(f) “Effectiveness Deadline” means (i)
with respect to the initial Registration Statement required to be
filed pursuant to Section 2(a), the earlier of (A) May 30, 2020 and
(B) 2nd Business Day after the date the Company is notified (orally
or in writing, whichever is earlier) by the SEC that such
Registration Statement will not be reviewed or will not be subject
to further review and (ii) with respect to any new Registration
Statements that may be required to be filed by the Company pursuant
to Section 2(c) of this Agreement, the earlier of the (A) 30th
calendar day following the date on which the Company was required
to file such additional Registration Statement and (B) 2nd Business
Day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such additional Registration
Statement will not be reviewed or will not be subject to further
review; provided, however, if (but only if) a Filing Failure did
not occur, then such time periods shall be tolled on a day-for-day
basis for so long as the Company’s audited financial
statements are stale pursuant to Regulation S-X Rule
3-12(b).

 

(g)  “Filing
Deadline” means (i) with respect to the initial
Registration Statement required to be filed pursuant to Section
2(a), the earlier of (x) April 30, 2020; and (ii) with respect to
any additional Registration Statements that may be required to be
filed by the Company pursuant to this Agreement, the date on which
the Company was required to file such additional Registration
Statement pursuant to the terms of this Agreement.

 

(h) “Investor” means a Purchaser or any
transferee or assignee of any Registrable Securities, to whom a
Purchaser assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with
Section 9 and any transferee or assignee thereof to whom a
transferee or assignee of any Registrable Securities, assigns its
rights under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section
9.

 

(i) “Per Security Purchase Price” means
$0.14.

 

(j) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, or any other entity of any kind or nature whatsoever,
a trust, an unincorporated organization or a government or any
department or agency thereof.

 

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

 

(l) “Register,” “Registered,” and
“Registration”
refer to a registration effected by preparing and filing one or
more Registration Statements in compliance with the 1933 Act and
the declaration of effectiveness of such Registration Statement(s)
by the SEC.

 

(m) ”Registrable Securities” means the
Common Shares. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when: (a) a
Registration Statement with respect to the sale of such securities
shall have become effective under the 1933 Act and such securities
shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (b) such securities
shall have been otherwise transferred, new certificates for them
not bearing a legend restricting further transfer shall have been
delivered by the Company, and subsequent public distribution of
them shall not require registration under the Securities Act; or
(c) the Registrable Securities are freely saleable under Rule 144
under the Securities Act without volume limitations.

 

 

2

 

 

(n)  “Registration
Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act
covering Registrable Securities.

 

(o) “Required Registration Amount”
means the aggregate amount of Registrable Securities, as decreased
from time to time as certain Common Shares cease to be Registrable
Securities in accordance with Section 1(m).

 

(p) “Rule 144” means Rule 144
promulgated by the SEC under the 1933 Act, as such rule may be
amended from time to time, or any other similar or successor rule
or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without
registration.

 

(q) “SEC” means the United States
Securities and Exchange Commission or any successor
thereto.

 

(r) “Transaction Documents” means this
Agreement, the Purchase Agreement, and any other agreements,
instruments, or documents entered into pursuant to this
Agreement.

 

2. Registration.

 

(a) Mandatory Registration. The
Company shall prepare and, as soon as practicable, but in no event
later than the Filing Deadline, file with the SEC an initial
Registration Statement on Form S-1 covering the resale of all of
the Registrable Securities, provided that such initial Registration
Statement shall register for resale at least the number of shares
of Common Stock equal to the Required Registration Amount as of the
date such Registration Statement is initially filed with the SEC.
Such initial Registration Statement, and each other Registration
Statement required to be filed pursuant to the terms of this
Agreement. The Investors shall furnish all information reasonably
requested by the Company for inclusion therein. The Company shall
use its commercially reasonable efforts to have such initial
Registration Statement, and each other Registration Statement
required to be filed pursuant to the terms of this Agreement,
declared effective by the SEC as soon as practicable, but in no
event later than the applicable Effectiveness Deadline for such
Registration Statement. Except as contemplated in Section 3(f), and
except with respect to the information furnished in writing to the
Company by the Investors expressly for use in connection with the
preparation of the Registration Statement and any amendments or
supplements thereto or prospectus contained therein (as to which
the Company makes no representation or warranty), the Registration
Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading.

 

(b) Legal Counsel. Subject to
Section 5 hereof, the Purchasers shall have the right to select one
(1) legal counsel to review and oversee, solely on its behalf, any
registration pursuant to this Section 2 (“Legal Counsel”), which shall be
Morrison & Foerster LLP.

 

 

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(c) Sufficient Number of Shares
Registered. In the event the number of shares available
under any Registration Statement is insufficient to cover the
Required Registration Amount or an Investor’s allocated
portion of the Registrable Securities pursuant to Section 2(g), the
Company shall amend such Registration Statement (if permissible),
or file with the SEC a new Registration Statement (on the short
form available therefor, if applicable), or both, so as to cover at
least the Required Registration Amount as of the Trading Day
immediately preceding the date of the filing of such amendment or
new Registration Statement, in each case, as soon as practicable,
but in any event not later than fifteen (15) days after the
necessity therefor arises. The Company shall use reasonable best
efforts to cause such amendment to such Registration Statement
and/or such new Registration Statement (as the case may be) to
become effective as soon as practicable following the filing
thereof with the SEC, but in no event later than the applicable
Effectiveness Deadline for such Registration Statement. For
purposes of the foregoing provision, the number of shares available
under a Registration Statement shall be deemed “insufficient
to cover all of the Registrable Securities” if at any time
the number of shares of Common Stock available for resale under the
applicable Registration Statement is less than the Required
Registration Amount.

 

(d) Reduction of Offering.
Notwithstanding anything to the contrary contained in this
Agreement, but subject to the payment of the Registration Delay
Payments pursuant to Section 2(e), in the event the staff of the
SEC (the “Staff”) or the SEC seeks to
characterize any offering pursuant to a Registration Statement
filed pursuant to this Agreement as constituting an offering
of securities by, or on behalf of, the Company, or in any other
manner, such that the Staff or the SEC do not permit
such Registration Statement to become effective and used for
resales in a manner that does not constitute such an offering and
that permits the continuous resale at the market by the Investors
participating therein (or as otherwise may be acceptable
to each Investor) without being named therein as an
“underwriter,” then the Company shall reduce the number
of shares to be included in such Registration Statement by all
Investors until such time as the Staff and the SEC shall so
permit such Registration Statement to become effective as
aforesaid. In making such reduction, the Company shall reduce
the number of shares to be included by all Investors on a pro rata
basis (based upon the number of Registrable Securities otherwise
required to be included for each Investor).  The Investors
shall have the right to participate or have their counsel
participate in any meetings or discussions with the Staff regarding
the Staff’s position and to comment or have their counsel
comment on any written submission made to the Staff with respect
thereto. No such written submission shall be made to the Staff to
which an Investor’s counsel reasonably objects. In addition,
in the event that the Staff or the SEC requires any Investor
seeking to sell securities under a Registration Statement
filed pursuant to this Agreement to be specifically identified
as an ”underwriter” in order to permit such
Registration Statement to become effective, and such Investor does
not consent to being so named as an underwriter in such
Registration Statement, then, in each such case, the
Company shall reduce the total number of Registrable
Securities to be registered on behalf
of such Investor, until such time as the Staff or
the SEC does not require such identification or until such Investor
accepts such identification and the manner thereof. Any
reduction pursuant to this paragraph will first reduce all
securities that are not Registrable Securities, if any such
securities are permitted by Investors to be included in accordance
with the terms of this Agreement. In the event of
any reduction in Registrable Securities pursuant to this
paragraph, an affected Investor shall have the right to
require, upon delivery of a written request to the Company signed
by such Investor, the Company to file a registration statement
within thirty (30) days of such request (subject to any
restrictions imposed by Rule 415 or required by the Staff
or the SEC) for resale by such Investor in a manner acceptable to
such Investor, and the Company shall, following such
request, cause to be and keep effective such registration
statement in the same manner as otherwise contemplated in this
Agreement for registration statements hereunder, in each case
until such time as: (i) all Registrable Securities held by such
Investor have been registered and sold pursuant to an
effective Registration Statement in a manner acceptable to such
Investor or (ii) all Registrable Securities may be resold by
such Investor without restriction (including, without
limitation, volume limitations) pursuant to Rule 144 (taking
account of any Staff position with respect to
“affiliate” status) and without the need for current
public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) or (iii) such Investor agrees to be named as an
underwriter in any such Registration Statement in a manner
acceptable to such Investor as to all Registrable Securities held
by such Investor and that have not theretofore been included in a
Registration Statement under this Agreement (it being understood
that the special demand right under this sentence may be exercised
by an Investor multiple times and with respect to limited amounts
of Registrable Securities in order to permit the resale thereof by
such Investor as contemplated above).

 

 

4

 

 

(e) Piggyback Registration. Without
limiting any obligation of the Company hereunder or under the
Purchase Agreement, if there is not an effective Registration
Statement covering all of the Registrable Securities or the
prospectus contained therein is not available for use and the
Company shall determine to prepare and file with the SEC a
registration statement relating to an offering for its own account
or the account of others under the 1933 Act of any of its equity
securities (other than on Form S-4 or Form S-8 (each as promulgated
under the 1933 Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition
of any entity or business or equity securities issuable in
connection with the Company’s stock option or other employee
benefit plans), then the Company shall deliver to each Investor a
written notice of such determination and, if within fifteen (15)
days after the date of the delivery of such notice, any such
Investor shall so request in writing, the Company shall include in
such registration statement all or any part of such Registrable
Securities such Investor requests to be registered; provided,
however, the Company shall not be required to register any
Registrable Securities pursuant to this Section 2(g) that are
eligible for resale pursuant to Rule 144 without restriction
(including, without limitation, volume restrictions) and without
the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or that are the subject of a
then-effective Registration Statement.

 

(f) Allocation of Registrable
Securities. The initial number of Registrable Securities
included in any Registration Statement and any increase in the
number of Registrable Securities included therein shall be
allocated pro rata among the Investors based on the number of
Registrable Securities held by each Investor at the time such
Registration Statement covering such initial number of Registrable
Securities or increase thereof is declared effective by the SEC. In
the event that an Investor sells or otherwise transfers any of such
Investor’s Registrable Securities, each transferee or
assignee (as the case may be) that becomes an Investor shall be
allocated a pro rata portion of the then-remaining number of
Registrable Securities included in such Registration Statement for
such transferor or assignee (as the case may be). Any shares of
Common Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable
Securities covered by such Registration Statement shall be
allocated to the remaining Investors, pro rata based on the number
of Registrable Securities then held by such Investors which are
covered by such Registration Statement.

 

(g) No Inclusion of Other
Securities. In no event shall the Company include any
securities other than Registrable Securities on any Registration
Statement without the prior written consent of the Investors. Until
the Applicable Date (as defined in the Purchase Agreement), the
Company shall not enter into any agreement providing any
registration rights to any of its security holders and the Company
shall not file any other registration statement until such
time.

 

3. Related
Obligations. The Company shall use reasonable best efforts to
effect the registration of the Registrable Securities in accordance
with the intended method of disposition thereof, and, pursuant
thereto, the Company shall have the following
obligations:

 

 

5

 

 

(a) The Company shall
promptly prepare and file with the SEC a Registration Statement
with respect to all the Registrable Securities (but in no event
later than the applicable Filing Deadline) and use reasonable best
efforts to cause such Registration Statement to become effective as
soon as practicable after such filing (but in no event later than
the Effectiveness Deadline). Subject to Allowable Grace Periods,
the Company shall keep each Registration Statement effective (and
the prospectus contained therein available for use) at all times
until the earlier of (i) the date as of which all of the Investors
may sell all of the Registrable Securities required to be covered
by such Registration Statement (disregarding any reduction pursuant
to Section 2(e)) without restriction pursuant to Rule 144
(including, without limitation, volume restrictions) and without
the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or (ii) the date on which the
Investors shall have sold all of the Registrable Securities covered
by such Registration Statement (the “Registration Period”).
Notwithstanding anything to the contrary contained in this
Agreement, the Company shall ensure that, when filed and at all
times while effective, each Registration Statement (including,
without limitation, all amendments and supplements thereto) and the
prospectus (including, without limitation, all amendments and
supplements thereto) used in connection with such Registration
Statement (1) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein, or necessary to make the statements therein (in the case
of prospectuses, in the light of the circumstances in which they
were made) not misleading and (2) will disclose (whether directly
or through incorporation by reference to other SEC filings to the
extent permitted) all material information regarding the Company
and its securities. Subject to the provisions of the definition of
“Effectiveness Deadline,” the Company shall submit to
the SEC, within two (2) Business Days after the later of the date
that (i) the Company learns that no review of a particular
Registration Statement will be made by the Staff or that the Staff
has no further comments on a particular Registration Statement (as
the case may be) and (ii) the consent of Legal Counsel is obtained
pursuant to Section 3(c) (which consent shall be immediately
sought), a request for acceleration of effectiveness of such
Registration Statement to a time and date not later than
forty-eight (48) hours after the submission of such
request.

 

(b) Subject to Section
3(p) of this Agreement, the Company shall prepare and file with the
SEC such amendments (including, without limitation, post-effective
amendments) and supplements to each Registration Statement and the
prospectus used in connection with each such Registration
Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep each
such Registration Statement effective at all times during the
Registration Period for such Registration Statement, and, during
such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the
Company required to be covered by such Registration Statement until
such time as all of such Registrable Securities shall have been
disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof as set forth in such Registration
Statement; provided, however, by 8:30 a.m. (New York time) on the
Business Day immediately following each Effective Date, the Company
shall file with the SEC in accordance with Rule 424(b) under the
1933 Act the final prospectus to be used in connection with sales
pursuant to the applicable Registration Statement (whether or not
such a prospectus is technically required by such rule) . In the
case of amendments and supplements to any Registration Statement
which are required to be filed pursuant to this Agreement
(including, without limitation, pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 10-Q or Form 10-K or
any analogous report under the Securities Exchange Act of 1934, as
amended (the “1934
Act”), the Company shall have incorporated such report
by reference into such Registration Statement, if applicable, or
shall file such amendments or supplements with the SEC on the same
day on which the 1934 Act report is filed which created the
requirement for the Company to amend or supplement such
Registration Statement.

 

 

6

 

 

(c) The Company shall
(A) permit Legal Counsel and legal counsel for each other Investor
to review and comment upon (i) each Registration Statement at least
three (3) Business Days prior to its filing with the SEC and (ii)
all amendments and supplements to each Registration Statement
(including, without limitation, the prospectus contained therein)
(except for Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K, and any similar or successor
reports) within a reasonable number of days prior to their filing
with the SEC, and (B) not file any Registration Statement or
amendment or supplement thereto in a form to which Legal Counsel or
any legal counsel for any other Investor reasonably objects. The
Company shall not submit a request for acceleration of the
effectiveness of a Registration Statement or any amendment or
supplement thereto or to any prospectus contained therein without
the prior consent of Legal Counsel, which consent shall not be
unreasonably withheld. The Company shall promptly furnish to Legal
Counsel and, upon each other Investor’s written request,
legal counsel for each such other Investor, without charge, (i)
copies of any correspondence from the SEC or the Staff to the
Company or its representatives relating to each Registration
Statement, provided that such correspondence shall not contain any
material, non-public information regarding the Company or any of
its Subsidiaries (as defined in the Purchase Agreement),
(ii) after the same is prepared and filed with the SEC, one
(1) copy of each Registration Statement and any amendment(s) and
supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, and all exhibits and
(iii) upon the effectiveness of each Registration Statement,
one (1) copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto. The Company
shall reasonably cooperate with Legal Counsel and legal counsel for
each other Investor in performing the Company’s obligations
pursuant to this Section 3.

 

(d) The Company shall
promptly furnish to each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) after
the same is prepared and filed with the SEC, at least one (1) copy
of each Registration Statement and any amendment(s) and
supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, all exhibits and each
preliminary prospectus, (ii) upon the effectiveness of each
Registration Statement, one (1) copy of the prospectus included in
such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may
reasonably request from time to time) and (iii) such other
documents, including, without limitation, copies of any preliminary
or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor, provided that any
such item which is available on the SEC’s EDGAR System (or
successor thereto) need not be furnished in physical
form.

 

 

7

 

 

(e) Upon the reasonable
request of an Investor, the Company shall use reasonable best
efforts to (i) register and qualify, unless an exemption from
registration and qualification applies, the resale by Investors of
the Registrable Securities covered by a Registration Statement
under such other securities or “blue sky” laws of all
applicable jurisdictions in the United States, (ii) prepare and
file in those jurisdictions, such amendments (including, without
limitation, post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain
the effectiveness thereof during the Registration Period, (iii)
take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for
sale in such jurisdictions; provided, however, the Company shall
not be required in connection therewith or as a condition thereto
to (x) qualify to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3(e), (y)
subject itself to general taxation in any such jurisdiction, or (z)
file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify Legal Counsel and
each Investor who holds Registrable Securities of the receipt by
the Company of any notification with respect to the suspension of
the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky”
laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threatening of any proceeding
for such purpose.

 

(f) The Company shall
notify Legal Counsel and each Investor in writing of the happening
of any event, as promptly as practicable after becoming aware of
such event, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue
statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice
contain any material, non-public information regarding the Company
or any of its Subsidiaries), and, subject to Section 3(p), promptly
prepare a supplement or amendment to such Registration Statement
and such prospectus contained therein to correct such untrue
statement or omission and deliver one (1) copy of such supplement
or amendment to Legal Counsel and each Investor (or such other
number of copies as Legal Counsel or such Investor may reasonably
request). The Company shall also promptly notify Legal Counsel and
each Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, when a
Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to
Legal Counsel and each Investor by facsimile or e-mail on the same
day of such effectiveness and by overnight mail), and when the
Company receives written notice from the SEC that a Registration
Statement or any post-effective amendment will be reviewed by the
SEC, (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related
information, (iii) of the Company’s reasonable determination
that a post-effective amendment to a Registration Statement would
be appropriate; and (iv) of the receipt of any request by the SEC
or any other federal or state governmental authority for any
additional information relating to the Registration Statement or
any amendment or supplement thereto or any related prospectus. The
Company shall respond as promptly as practicable to any comments
received from the SEC with respect to each Registration Statement
or any amendment thereto (it being understood and agreed that the
Company’s response to any such comments shall be delivered to
the SEC no later than three (3) Business Days after the receipt
thereof).

 

 

8

 

 

(g) The Company shall
(i) use commercially reasonable efforts to prevent the issuance of
any stop order or other suspension of effectiveness of each
Registration Statement or the use of any prospectus contained
therein, or the suspension of the qualification, or the loss of an
exemption from qualification, of any of the Registrable Securities
for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the
earliest possible moment and (ii) immediately notify Legal Counsel
and each Investor who holds Registrable Securities of the issuance
of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such
purpose.

 

(h) The Company shall
hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal
or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required to be disclosed in
such Registration Statement pursuant to the 1933 Act, (iii) the
release of such information is ordered pursuant to a subpoena or
other final, non-appealable order from a court or governmental body
of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in
violation of this Agreement or any other Transaction Document. The
Company agrees that it shall, upon learning that disclosure of such
information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt written notice to such Investor and allow such
Investor, at such Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.

 

(i) Without limiting
any obligation of the Company under the Purchase Agreement, the
Company shall use commercially reasonable efforts either to (i)
cause all of the Registrable Securities covered by each
Registration Statement to be listed on each securities exchange on
which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, (ii)
secure designation and quotation of all of the Registrable
Securities covered by each Registration Statement on the OTC
Bulletin Board, or (iii) if, despite the Company’s efforts to
satisfy the preceding clauses (i) or (ii), the Company is
unsuccessful in satisfying the preceding clauses (i) or (ii),
without limiting the generality of the foregoing, to use
commercially reasonable efforts to arrange for at least two market
makers to register with the Financial Industry Regulatory Authority
(“FINRA”) as
such with respect to such Registrable Securities. In addition, the
Company shall cooperate with each Investor and any broker or dealer
through which any such Investor proposes to sell its Registrable
Securities in effecting a filing with FINRA pursuant to FINRA Rule
5110 as requested by such Investor. The Company shall pay all fees
and expenses in connection with satisfying its obligations under
this Section 3(i).

 

(j) The Company shall
cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates representing the
Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations
or amounts (as the case may be) as the Investors may reasonably
request from time to time and registered in such names as the
Investors may request.

 

 

9

 

 

(k) If requested by an
Investor, the Company shall as soon as practicable after receipt of
notice from such Investor and subject to Section 3(p) hereof, (i)
incorporate in a prospectus supplement or post-effective amendment
such information as an Investor reasonably requests to be included
therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect
to the number of Registrable Securities being offered or sold, the
purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering;
(ii) make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective
amendment; and (iii) supplement or make amendments to any
Registration Statement or prospectus contained therein if
reasonably requested by an Investor holding any Registrable
Securities.

 

(l) The Company shall
use commercially reasonable efforts to cause the Registrable
Securities covered by a Registration Statement to be registered
with or approved by such other governmental agencies or authorities
as may be necessary to consummate the disposition of such
Registrable Securities.

 

(m) The Company shall
make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of
the period covered thereby, an earnings statement (in form
complying with, and in the manner provided by, the provisions of
Rule 158 under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company’s
fiscal quarter next following the applicable Effective Date of each
Registration Statement.

 

(n) The Company shall
otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.

 

(o) Within one (1)
Business Day after a Registration Statement which covers
Registrable Securities is declared effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared
effective by the SEC.

 

(p) Notwithstanding
anything to the contrary herein (but subject to the last sentence
of this Section 3(p)), at any time after the Effective Date of a
particular Registration Statement, the Company may delay the
disclosure of material, non-public information concerning the
Company or any of its Subsidiaries the disclosure of which at the
time is not, in the good faith opinion of the board of directors of
the Company, in the best interest of the Company and, in the
opinion of counsel to the Company, otherwise required (a
“Grace Period”),
provided that the Company shall promptly notify the Investors in
writing of the (i) existence of material, non-public information
giving rise to a Grace Period (provided that in each such notice
the Company shall not disclose the content of such material,
non-public information to any of the Investors) and the date on
which such Grace Period will begin and (ii) date on which such
Grace Period ends, provided further that (I) no Grace Period shall
exceed ten (10) consecutive days and during any three hundred sixty
five (365) day period all such Grace Periods shall not exceed an
aggregate of thirty (30) days, (II) the first day of any Grace
Period must be at least five (5) Trading Days after the last day of
any prior Grace Period and (III) no Grace Period may exist during
the sixty (60) Trading Day period immediately following the
Effective Date of such Registration Statement (provided that such
sixty (60) Trading Day period shall be extended by the number of
Trading Days during such period and any extension thereof
contemplated by this proviso during which such Registration
Statement is not effective or the prospectus contained therein is
not available for use) (each, an “Allowable Grace Period”). For
purposes of determining the length of a Grace Period above, such
Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) above and shall end on
and include the later of the date the Investors receive the notice
referred to in clause (ii) above and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be
applicable during the period of any Allowable Grace Period. Upon
expiration of each Grace Period, the Company shall again be bound
by the first sentence of Section 3(f) with respect to the
information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to
the contrary contained in this Section 3(p), the Company shall
cause its transfer agent to deliver unlegended shares of Common
Stock to a transferee of an Investor in accordance with the terms
of the Purchase Agreement in connection with any sale of
Registrable Securities with respect to which such Investor has
entered into a contract for sale, and delivered a copy of the
prospectus included as part of the particular Registration
Statement to the extent applicable, prior to such Investor’s
receipt of the notice of a Grace Period and for which the Investor
has not yet settled.

 

 

10

 

 

(q) The Company shall
take all other reasonable actions necessary to expedite and
facilitate disposition by each Investors of its Registrable
Securities pursuant to each Registration Statement.

 

4. Obligations of the
Investors.

 

(a) At least five (5)
Business Days prior to the first anticipated filing date of each
Registration Statement, the Company shall notify each Investor in
writing of the information the Company requires from each such
Investor with respect to such Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete
the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor
shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it, as shall be
reasonably required to effect and maintain the effectiveness of the
registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may
reasonably request.

 

(b) Each Investor, by
such Investor’s acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of each
Registration Statement hereunder, unless such Investor has notified
the Company in writing of such Investor’s election to exclude
all of such Investor’s Registrable Securities from such
Registration Statement.

 

(c) Each Investor
agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g) or the
first sentence of 3(f), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such
Investor’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(g) or the first
sentence of Section 3(f) or receipt of notice that no supplement or
amendment is required. Notwithstanding anything to the contrary in
this Section 4(c), the Company shall cause its transfer agent to
deliver unlegended shares of Common Stock to a transferee of an
Investor in accordance with the terms of the Purchase Agreement in
connection with any sale of Registrable Securities with respect to
which such Investor has entered into a contract for sale prior to
the Investor’s receipt of a notice from the Company of the
happening of any event of the kind described in Section 3(g) or the
first sentence of Section 3(f) and for which such Investor has not
yet settled.

 

(d) Each Investor
covenants and agrees that it will comply with the prospectus
delivery requirements of the 1933 Act as applicable to it in
connection with sales of Registrable Securities pursuant to a
Registration Statement.

 

5. Expenses of
Registration. All reasonable expenses, other than underwriting
discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and
3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, FINRA filing
fees (if any) and fees and disbursements of counsel for the Company
shall be paid by the Company.

 

 

11

 

 

6. Indemnification.

 

(a) To the fullest
extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor and each of its
directors, officers, managers, shareholders, members, partners,
employees, agents, advisors, representatives (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding the lack of such title or any other title) and each
Person, if any, who controls such Investor within the meaning of
the 1933 Act or the 1934 Act and each of the directors, officers,
managers, shareholders, members, partners, employees, agents,
advisors, representatives (and any other Persons with a
functionally equivalent role of a Person holding such titles
notwithstanding the lack of such title or any other title) of such
controlling Persons (each, an “Indemnified Person”), against any
losses, obligations, claims, damages, liabilities, contingencies,
judgments, fines, penalties, charges, costs (including, without
limitation, court costs, reasonable attorneys’ fees and costs
of defense and investigation), amounts paid in settlement or
expenses, joint or several, (collectively, “Claims”) incurred in
investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a
party thereto (“Indemnified
Damages”), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of
a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other
“blue sky” laws of any jurisdiction in which
Registrable Securities are offered (“Blue Sky Filing”), or the omission
or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files
any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including,
without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement (the
matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”). Subject to Section
6(c), the Company shall reimburse the Indemnified Persons, promptly
as such expenses are incurred and are due and payable, for any
legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim by an Indemnified Person arising out of or
based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by
such Indemnified Person for such Indemnified Person expressly for
use in connection with the preparation of such Registration
Statement or any such amendment thereof or supplement thereto, or
any preliminary or final prospectus, and (ii) shall not be
available to a particular Investor to the extent such Claim is
based on a failure of such Investor to deliver or to cause to be
delivered the prospectus made available by the Company (to the
extent applicable), including, without limitation, a corrected
prospectus, if such prospectus or corrected prospectus was timely
made available by the Company pursuant to Section 3(d) and then
only if, and to the extent that, following the receipt of the
corrected prospectus no grounds for such Claim would have existed;
and (iii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably
withheld or delayed. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of any of the
Registrable Securities by any of the Investors pursuant to Section
9.

 

 

12

 

 

(b) In connection with
any Registration Statement in which an Investor is participating,
such Investor agrees to severally and not jointly indemnify, hold
harmless and defend, to the same extent and in the same manner as
is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each
Person, if any, who controls the Company within the meaning of the
1933 Act or the 1934 Act (each, an “Indemnified Party”), against any
Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon
any Violation, in each case, to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement or
any preliminary or final prospectus; and, subject to Section 6(c)
and the below provisos in this Section 6(b), such Investor will
reimburse an Indemnified Party any legal or other expenses
reasonably incurred by such Indemnified Party in connection with
investigating or defending any such Claim; provided, however, the
indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall
not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld or
delayed, provided further that such Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a
result of the applicable sale of Registrable Securities pursuant to
such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of
any of the Registrable Securities by any of the Investors pursuant
to Section 9.

 

(c) Promptly after
receipt by an Indemnified Person or Indemnified Party (as the case
may be) under this Section 6 of notice of the commencement of any
action or proceeding (including, without limitation, any
governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party (as the case may be) shall,
if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified
Party (as the case may be); provided, however, an Indemnified
Person or Indemnified Party (as the case may be) shall have the
right to retain its own counsel with the fees and expenses of such
counsel to be paid by the indemnifying party if: (i) the
indemnifying party has agreed in writing to pay such fees and
expenses; (ii) the indemnifying party shall have failed promptly to
assume the defense of such Claim and to employ counsel reasonably
satisfactory to such Indemnified Person or Indemnified Party (as
the case may be) in any such Claim; or (iii) the named parties to
any such Claim (including, without limitation, any impleaded
parties) include both such Indemnified Person or Indemnified Party
(as the case may be) and the indemnifying party, and such
Indemnified Person or such Indemnified Party (as the case may be)
shall have been advised by counsel that a conflict of interest is
likely to exist if the same counsel were to represent such
Indemnified Person or such Indemnified Party and the indemnifying
party (in which case, if such Indemnified Person or such
Indemnified Party (as the case may be) notifies the indemnifying
party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, then the indemnifying party
shall not have the right to assume the defense thereof and such
counsel shall be at the expense of the indemnifying party, provided
further that in the case of clause (iii) above the indemnifying
party shall not be responsible for the reasonable fees and expenses
of more than one (1) separate legal counsel for such Indemnified
Person or Indemnified Party (as the case may be). The Indemnified
Party or Indemnified Person (as the case may be) shall reasonably
cooperate with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party or
Indemnified Person (as the case may be) which relates to such
action or Claim. The indemnifying party shall keep the Indemnified
Party or Indemnified Person (as the case may be) reasonably
apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party
shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent; provided,
however, the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall,
without the prior written consent of the Indemnified Party or
Indemnified Person (as the case may be), consent to entry of any
judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party or Indemnified
Person (as the case may be) of a release from all liability in
respect to such Claim or litigation, and such settlement shall not
include any admission as to fault on the part of the Indemnified
Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person (as the case may be) with
respect to all third parties, firms or corporations relating to the
matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party (as the case may be) under this Section
6, except to the extent that the indemnifying party is materially
and adversely prejudiced in its ability to defend such action.
Notwithstanding anything to the contrary contained above or
otherwise in this Agreement, a Purchaser shall be entitled, as to
itself and any of its related Indemnified Parties, including
without limitation its agents and representatives, maintain the
control of the defense of any action for which it (or they) may
seek indemnification hereunder, and the Company and its counsel
shall fully cooperate in such defense as such Purchaser and its
counsel may request, all at the cost and expense of the Company
(including without limitation, the attorneys’ fees and other
costs and expenses of the Purchasers and their related Indemnified
Parties’ legal counsel). Any amounts for which the Company is
responsible pursuant to the immediately preceding sentence shall be
paid promptly to, or as directed by, such Purchaser from time to
time, and may be offset by such Purchaser, at its discretion,
against any amounts from time to time owed by such Purchaser to the
Company under the Transaction Documents.

 

 

13

 

 

(d) No Person involved
in the sale of Registrable Securities who is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to
indemnification from any Person involved in such sale of
Registrable Securities who is not guilty of fraudulent
misrepresentation.

 

(e) The indemnification
required by this Section 6 shall be made by periodic payments of
the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are
incurred.

 

(f) The indemnity and
contribution agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party
or Indemnified Person against the indemnifying party or others, and
(ii) any liabilities the indemnifying party may be subject to
pursuant to the law.

 

7. Contribution. To
the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however: (i) no contribution shall be
made under circumstances where the maker would not have been liable
for indemnification under the fault standards set forth in Section
6 of this Agreement, (ii) no Person involved in the sale of
Registrable Securities which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (iii)
contribution by any seller of Registrable Securities shall be
limited in amount to the amount of net proceeds received by such
seller from the applicable sale of such Registrable Securities
pursuant to such Registration Statement. Notwithstanding the
provisions of this Section 7, no Investor shall be required to
contribute, in the aggregate, any amount in excess of the amount by
which the net proceeds actually received by such Investor from the
applicable sale of the Registrable Securities subject to the Claim
exceeds the amount of any damages that such Investor has otherwise
been required to pay, or would otherwise be required to pay under
Section 6(b), by reason of such untrue or alleged untrue statement
or omission or alleged omission.

 

8. Reports Under the
1934 Act. With a view to making available to the Investors the
benefits of Rule 144, the Company agrees to:

 

(a) make and keep
public information available, as those terms are understood and
defined in Rule 144;

 

(b) file with the SEC
in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company
remains subject to such requirements (it being understood and
agreed that nothing herein shall limit any obligations of the
Company under the Purchase Agreement) and the filing of such
reports and other documents is required for the applicable
provisions of Rule 144; and

 

 

14

 

 

(c) take all such
actions necessary to maintain its eligibility to sell such
securities pursuant to Rule 144; except if (i) there is material
non-public information regarding the Company which the
Company’s Board of Directors reasonably determines not to be
in the Company’s best interest to disclose and which the
Company is not otherwise required to disclose or (ii) there is a
significant business opportunity (including, but not limited to,
the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender
offer or other similar transaction) available to the Company which
the Company’s Board of Directors reasonably determines not to
be in the Company’s best interest to disclose and which the
Company would be required to disclose to comply with this Section
9, then the Company’s obligations under this Section 9 shall
be postponed for a period of time reasonably determined by the
Company’s Board of Directors.

 

9. Assignment of
Registration Rights. All or any portion of the rights under this
Agreement shall be automatically assignable by each Investor to any
transferee or assignee (as the case may be) of all or any portion
of such Investor’s Registrable Securities if: (i) such
Investor agrees in writing with such transferee or assignee (as the
case may be) to assign all or any portion of such rights, and a
copy of such agreement is furnished to the Company within a
reasonable time after such transfer or assignment (as the case may
be); (ii) the Company is, within a reasonable time after such
transfer or assignment (as the case may be), furnished with written
notice of (a) the name and address of such transferee or assignee
(as the case may be), and (b) the securities with respect to which
such registration rights are being transferred or assigned (as the
case may be); (iii) immediately following such transfer or
assignment (as the case may be) the further disposition of such
securities by such transferee or assignee (as the case may be) is
restricted under the 1933 Act or applicable state securities laws
if so required; (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this sentence such
transferee or assignee (as the case may be) agrees in writing with
the Company to be bound by all of the provisions contained herein;
(v) such transfer or assignment (as the case may be) shall have
been made in accordance with the applicable requirements of the
Purchase Agreement; and (vi) such transfer or assignment (as the
case may be) shall have been conducted in accordance with all
applicable federal and state securities laws.

 

10. Amendment of
Registration Rights. Provisions of this Agreement may be amended
only with the written consent of the Company and the Investors. Any
amendment effected in accordance with this Section 10 shall be
binding upon each Investor and the Company, provided that no such
amendment shall be effective to the extent that it (1) applies to
less than all of the holders of the holders of Registrable
Securities, (2) imposes any monetary obligation or liability, or
any material obligation or liability, on any Investor without such
Investor’s prior written consent (which may be granted or
withheld in such Investor’s sole discretion) or (3) applies
retroactively. No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party,
provided that the Investors (in a writing signed by all of the
Investors) may waive any provision of this Agreement, and any
waiver of any provision of this Agreement made in conformity with
the provisions of this Section 10 shall be binding on each
Investor, provided that no such waiver shall be effective to the
extent that it (1) applies to less than all the Investors (unless a
party gives a waiver as to itself only) or (2) imposes any monetary
obligation or liability, or any material obligation or liability,
on any Investor without such Investor’s prior written consent
(which may be granted or withheld in such Investor’s sole
discretion). No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any
provision of this Agreement unless the same consideration also is
offered to all of the parties to this Agreement.

 

 

15

 

 

11. Miscellaneous.

 

(a) This Agreement
shall be effective as of the date hereof. This Agreement shall
automatically terminate as to any Registrable Securities, at such
time when the Investors of such Registrable Securities ceases to
hold or be entitled to any such Registrable Securities except that
the obligations of such Investors under Sections 4 and 6 shall
survive such termination. This Agreement shall terminate
automatically, and the Company shall have no further obligations
hereunder, at such time when no Investor holds Registrable
Securities.

 

(b) Solely for purposes
of this Agreement, a Person is deemed to be a holder of Registrable
Securities whenever such Person owns, or is deemed to own, of
record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or
election received from such record owner of such Registrable
Securities.

 

(c) Any notices,
consents, waivers or other communications required or permitted to
be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party);
(iii) by electronic mail (provided confirmation of transmission is
electronically generated and kept on file by the sending party); or
(iv) one (1) Business Day after deposit with a nationally
recognized overnight delivery service with next day delivery
specified, in each case, properly addressed to the party to receive
the same. The addresses, facsimile numbers and e-mail addresses for
such communications shall be:

 

If to
the Company:

 

SANUWAVE Health,
Inc.

3360
Martin Farm Road, Suite 100

Suwanee, GA
30024

Facsimile: 

E-mail
address:

Attention: Chief
Financial Officer

 

If to
the Transfer Agent:

 

Action
Stock Transfer Corp.

7069 S.
Highland Drive, Suite 300

Salt
Lake City, Utah 84121

Facsimile: 

E-mail
address:

Attention: 

 

 

16

 

 

If to
the Legal Counsel:

 

Murray Indick, Esq. 

Morrison & Foerster LLP 

425 Market Street 

San Francisco, California 94105 

Phone:

E-mail
address:

 

If to a
Purchaser, to its address, facsimile number or e-mail address (as
the case may be) set forth on the Schedule of Purchasers attached
to the Purchase Agreement, with copies to such Purchaser’s
representatives as set forth on the Schedule of Purchasers, or to
such other address and/or facsimile number and/or to the attention
of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the
sender’s facsimile machine or e-mail transmission containing
the time, date and recipient facsimile number or e-mail address or
(C) provided by a courier or overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or
receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above,
respectively.

 

(d) Failure of any
party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof. The Company and each
Investor acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party hereto shall be
entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement by any other party
hereto and to enforce specifically the terms and provisions hereof
(without the necessity of showing economic loss and without any
bond or other security being required), this being in addition to
any other remedy to which any party may be entitled by law or
equity.

 

(e) All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of
this Agreement in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY. 

 

 

17

 

 

(f) This Agreement, the
other Transaction Documents, the schedules and exhibits attached
hereto and thereto and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto
and thereto solely with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents, the
schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto solely with
respect to the subject matter hereof and thereof; provided,
however, nothing contained in this Agreement or any other
Transaction Document shall (or shall be deemed to) (i) have any
effect on any agreements any Investor has entered into with, or any
instrument that any Investor received from, the Company or any of
its Subsidiaries prior to the date hereof with respect to any prior
investment made by such Investor in the Company, (ii) waive, alter,
modify or amend in any respect any obligations of the Company or
any of its Subsidiaries or any rights of or benefits to any
Investor or any other Person in any agreement entered into prior to
the date hereof between or among the Company and/or any of its
Subsidiaries and any Investor or any instrument that any Investor
received prior to the date hereof from the Company and/or any of
its Subsidiaries and all such agreements and instruments shall
continue in full force and effect or (iii) limit any obligations of
the Company under any of the other Transaction
Documents.

 

(g) Subject to
compliance with Section 9 (if applicable), this Agreement shall
inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto. This
Agreement is not for the benefit of, nor may any provision hereof
be enforced by, any Person, other than the parties hereto, their
respective permitted successors and assigns and the Persons
referred to in Sections 6 and 7 hereof.

 

(h) The headings in
this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. Unless the context
clearly indicates otherwise, each pronoun herein shall be deemed to
include the masculine, feminine, neuter, singular and plural forms
thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed
broadly as if followed by the words “without
limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like
import refer to this entire Agreement instead of just the provision
in which they are found.

 

(i) This Agreement may
be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to
the other party. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable
document format (.pdf) file of an executed signature page, such
signature page 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 signature page were an
original thereof.

 

(j) Each party shall do
and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents as any other
party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

 

 

18

 

 

(k) The language used
in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent and no rules of strict
construction will be applied against any party. Notwithstanding
anything to the contrary set forth in Section 10, terms used in
this Agreement but defined in the other Transaction Documents shall
have the meanings ascribed to such terms on the Closing Date in
such other Transaction Documents unless otherwise consented to in
writing by each Investor.

 

(l) All consents and
other determinations required to be made by the Investors pursuant
to this Agreement shall be made, unless otherwise specified in this
Agreement, by the Investors.

 

(m) The obligations of
each Investor under this Agreement and the other Transaction
Documents are several and not joint with the obligations of any
other Investor, and no Investor shall be responsible in any way for
the performance of the obligations of any other Investor under this
Agreement or any other Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by
any Investor pursuant hereto or thereto, shall be deemed to
constitute the Investors as, and the Company acknowledges that the
Investors do not so constitute, a partnership, an association, a
joint venture or any other kind of group or entity, or create a
presumption that the Investors are in any way acting in concert or
as a group or entity with respect to such obligations or the
transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Investors are not
acting in concert or as a group, and the Company shall not assert
any such claim, with respect to such obligations or the
transactions contemplated by this Agreement or any of the other the
Transaction Documents. Each Investor shall be entitled to
independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any
other Transaction Documents, and it shall not be necessary for any
other Investor to be joined as an additional party in any
proceeding for such purpose. The use of a single agreement with
respect to the obligations of the Company contained herein was
solely in the control of the Company, not the action or decision of
any Investor, and was done solely for the convenience of the
Company and not because it was required or requested to do so by
any Investor. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction
Document is between the Company and an Investor, solely, and not
between the Company and the Investors collectively and not between
and among Investors.

 

[Signature
pages follow.]

 

 

 

19

 

 

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

 

	

SANUWAVE HEALTH, INC.

 

 

	

Address
for Notice:

 

3360
Martin Farm Road, Suite 100

Suwanee,
GA 30024

Attn:
Chief Financial Officer

 

E-mail

	

By:_/s/
Lisa E. Sundstrom ___________________

     Name:
Lisa E. Sundstrom

     Title:
Chief Financial Officer

 

	

Fax

 

 

 

 

[Signature
Page to Registration Rights Agreement]

20

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Registration Rights Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

Name of Purchaser: 
Opaleye, L.P.

 

Signature of Authorized Signatory of Purchaser: 
/s/James
Silverman

 

Name of Authorized Signatory: 
James Silverman

 

Title of Authorized Signatory: 
General Manager

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

 

 

21

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Registration Rights Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

Name of Purchaser: 
Kerri E. Johnson

 

Signature of Authorized Signatory of Purchaser: 
/s/Kerri
E. Johnson

 

Name of Authorized Signatory: 
Kerri E. Johnson

 

Title of Authorized Signatory: 
Individual

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

 

 

 

 

22

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Registration Rights Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

Name of Purchaser: 
George Johnson

 

Signature of Authorized Signatory of Purchaser: 
/s/George
Johnson

 

Name of Authorized Signatory: 
George Johnson

 

Title of Authorized Signatory: 
Individual

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

Address for Notice to Purchaser:

 

 

 

 

 

23

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Registration Rights Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

Name of Purchaser: 
GCI Partners Opportunity Fund, LP

 

Signature of Authorized Signatory of Purchaser: 
/s/ 
Niraj A. Gupta

 

Name of Authorized Signatory: 
Niraj A. Gupta

 

Title of Authorized Signatory: 
Managing member of GCI Partners, LLC

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

 

 

 

24

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Registration Rights Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

Name of Purchaser: 
Niraj A. Gupta

 

Signature of Authorized Signatory of Purchaser: 
/s/ 
Niraj A. Gupta

 

Name of Authorized Signatory: 
Niraj A. Gupta

 

Title of Authorized Signatory: 
Individual

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

 

 

 

 

 

 

25

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Registration Rights Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

Name of Purchaser: 
Meera Holdings LLC

 

Signature of Authorized Signatory of Purchaser: 
/s/ 
Sanjay Hingorani

 

Name of Authorized Signatory: 
Sanjay Hingorani

 

Title of Authorized Signatory: 
Manager and Authorized Representative

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

 

 

 

 

26

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Registration Rights Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

Name of Purchaser: 
Nainoor Thakore

 

Signature of Authorized Signatory of Purchaser: 
/s/ 
Nainoor Thakore

 

Name of Authorized Signatory: 
Nainoor Thakore

 

Title of Authorized Signatory: 
Individual

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

 

 

 

 

 

 

27Blueprint

  Exhibit
10.1

 

COMMON STOCK PURCHASE AGREEMENT

 

This Common Stock Purchase Agreement (this
“Agreement”)
is dated as of December 11, 2019, between SANUWAVE Health,
Inc., a Nevada corporation
(the “Company”),
and the purchasers identified on the signature page hereto
(including their successors and assigns, the
“Purchasers,” and each individually a
“Purchaser”).

 

WHEREAS, the Company and the Purchasers are executing and
delivering this Agreement in reliance upon the exemption from
securities registration afforded by Section 4(a)(2) of the
Securities Act of 1933, as amended (the “Securities
Act”).

 

WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to sell to the Purchasers, and each
Purchaser desires to purchase from the Company, that aggregate
number of shares of the Company’s common stock, par value
$0.001 per share (the “Common
Stock”), set
forth opposite such Purchaser’s name on the signature page
hereto (which aggregate number for all Purchasers together shall
collectively be referred to herein as the
“Common
Shares”).

 

WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement, substantially in the form attached
hereto as Exhibit
A (the
“Registration Rights
Agreement”),
pursuant to which the Company has agreed to provide certain
registration rights with respect to the Registrable Securities (as
defined in the Registration Rights Agreement) under the Securities
Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.

 

NOW, THEREFORE, the Company and the Purchasers hereby agree as
follows:

 

ARTICLE I

 DEFINITIONS

 

1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement: the
following terms have the meanings set forth in this Section
1.1:

 

“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.

 

“Business Day” means any day except any Saturday, any
Sunday, any day that 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 Common 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
Purchaser’s obligations to pay the Subscription Amount, (ii)
the Company’s obligations to deliver the Common Shares, in
each case, have been satisfied or waived, and (iii) the Company has
received the full Subscription Amount for such Common Shares in
immediately available funds, but in no event later than the third
Trading Day following the date hereof.

 

 

 

 

“Common Stock Equivalents” means any securities of the
Company or the Subsidiaries that 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.

 

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

 

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

 

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

 

“Registration
Rights Agreement” means the Registration Rights Agreement,
dated the date hereof, among the Company and the Purchasers, in the
form of Exhibit A
attached hereto.

 

“Registration
Statement” means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and
covering the resale of the Shares by each Purchaser as provided for
in the Registration Rights Agreement.

 

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

 

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

 

“Subscription Amount” means the aggregate amount to be
paid for the Common Shares purchased hereunder as specified below
the 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 Exhibit 21.1 to the
Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2018, and shall, where applicable, also include
any direct or indirect subsidiary of the Company formed or acquired after the date
hereof.

 

 

2

 

 

“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 MKT, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange or the OTC Bulletin Board (or any successors to
any of the foregoing).

 

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

 

 

 

ARTICLE II

PURCHASE AND SALE OF COMMON SHARES

 

2.1 Purchase
of Common Shares; Closing. On the Closing Date, upon the
terms and subject to satisfaction of the conditions set forth in
Section 2.3, below, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company
agrees to sell, and the Purchaser agrees to purchase, the amount of
Common Shares as set forth on the signature page hereto. Upon
satisfaction of the covenants and conditions set forth in
Sections 2.2
and 2.3, the Closing shall occur at the
offices of the Company or such other location as the parties shall
mutually agree. The parties agree that the Closing may occur
remotely by the electronic delivery of the closing documents set
forth in Section 2.2(a) and (b), with delivery of original,
executed documents to follow promptly
thereafter.

 

2.2 Deliveries.

 

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

 

(i) this
Agreement duly executed by the Company;

 

(ii) a
certificate or certificates for the number of shares of Common
Stock, equal to the number of Common Shares set forth on the
signature page hereto; and

 

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

 

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

 

(i) this
Agreement duly executed by the Purchaser;

 

(ii) the
delivery of the Registration Rights Agreement duly executed by the
Purchaser; and

 

(iii) immediately
available funds equal to the Purchaser’s Subscription Amount
by wire transfer in accordance with the Company’s written
wire instructions to the account as set forth on the signature page
hereto.

 

 

3

 

 

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 on the Closing Date of the
representations and warranties of each Purchaser 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 Purchaser required to
be performed at or prior to the Closing Date shall have been
performed; and

 

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

 

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

 

(i) the
accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained herein
(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 U.S. Securities and Exchange Commission (the
“Commission”)
or the Company’s principal Trading Market, and, from the date
hereof 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, makes
it reasonably impracticable or inadvisable to purchase the Common
Shares at the Closing.

 

 

4

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations
and Warranties of the Company. Except as described in the SEC
Reports (as defined in Section 3.1(h), below) or any information
contained or incorporated therein, which collectively shall be
deemed a part hereof and shall qualify any representation or
otherwise made herein to the extent of the disclosure contained in
the corresponding section of the SEC Reports, the Company hereby
makes the following representations and warranties to the Purchaser
that, as of the date hereof and as of the Closing
Date:

 

(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, except to the extent that any such default would
not have or reasonably be expected to result in: (i) a material
adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results
of operations, assets, business or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or
(iii), a “Material Adverse
Effect”),
provided that none of the following alone shall be deemed, in and
of itself, to constitute a Material Adverse Effect: (i) a change in
the market price or trading volume of the Common Stock or (ii) a
change in general economic conditions or affecting the industry in
which the Company operates generally (as opposed to
Company-specific changes), so long as such changes do not have a
materially disproportionate effect on the Company. Each of the
Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, would not reasonably be expected to result in 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.

 

 

5

 

 

(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 of 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.

 

(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 Common 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 in the
case of each of clauses (ii) and (iii), such as would not
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 4.6 of this Agreement, (ii) application(s)
to each applicable Trading Market for the listing of the Common
Shares for trading thereon in the time and manner required thereby
and (iii) such filings as are required to be made under applicable
state securities laws (collectively, the “Required
Approvals”).

 

 

6

 

 

(f) Issuance
of the Common Shares. The Common 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. Assuming the accuracy
of each of the representations and warranties of each Purchaser set
forth in Section 3.2 of this Agreement, the offer and issuance by
the Company of the Common Shares is exempt from registration under
the Securities Act.

 

(g) Capitalization.
As of the date hereof, the capitalization of the Company is
described in Schedule 3.1(g) attached hereto. The Company has not
issued any capital stock since its most recently filed periodic
report under the Securities Exchange Act of 1934, as amended (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. 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 Common Shares or as
disclosed in the SEC Reports, 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 contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common
Stock Equivalents. The issuance and sale of the Common Shares will
not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchaser) and will not
result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of the
Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws,
and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
securities. Other than the Required Approvals, no further approval
or authorization of any stockholder, the Board of Directors or
others is required for the issuance and sale of the Common Shares.
Except as disclosed in the SEC Reports, 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, are collectively
referred to herein as the “SEC
Reports”) on a
timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of
the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of
the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles
(“GAAP”)
applied on a consistent basis during the periods involved, 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 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 recurring
adjustments.

 

7

 

 

(i) Absence of Material
Changes. Since the
date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC
Report filed prior to the date hereof, (i) there has been no event,
occurrence or development that has had or that would reasonably be
expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made
with the Commission, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock
option plans.

 

(j) No Undisclosed
Events, Liabilities or Developments. Except for the issuance of the Common
Shares contemplated by this Agreement or as disclosed in the SEC
Reports, no event, liability, fact, circumstance, occurrence or
development has occurred or exists or is reasonably expected to
occur or exist with respect to the Company or its Subsidiaries or
their respective businesses, properties, operations, assets or
financial condition that would be required to be disclosed by the
Company under applicable securities laws on a registration
statement on Form S-1 filed with the SEC relating to an issuance
and sale by the Company of its Common Stock and which has not been
publicly announced.

 

(k) Absence of
Litigation. There is
no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”)
that (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Common
Shares or (ii) would reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor, to the
knowledge of the Company, any director or officer thereof, is or
has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim
of breach of fiduciary duty that would be required to be disclosed
in SEC Reports. 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, to the knowledge of the
Company, 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.

 

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

 

 

8

 

 

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

 

(p) Intellectual
Property Rights.
Except as set forth in the SEC Reports, 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 similar intellectual property rights that are used in and
necessary for the conduct of their respective businesses as
currently conducted as described in the SEC Reports and which the
failure to so have would reasonably be expected to result in a
Material Adverse Effect (collectively, the
“Intellectual
Property Rights”). Neither the Company nor any
Subsidiary has received notice (written or otherwise) that the
conduct of its business as currently conducted as described in the
SEC Reports violates or infringes upon the intellectual property
rights of others, except for such conflicts or infringements that,
individually or in the aggregate, are not reasonably likely to
result in a Material Adverse Effect. To the knowledge of the
Company, all of the Intellectual Property Rights of the Company and
its Subsidiaries are enforceable. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy and
confidentiality of all of their Intellectual Property Rights,
except where failure to do so would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect.

 

 

9

 

 

(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. Neither the
Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a
significant increase in cost.

 

(r) Transactions With
Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the
employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money
from or lending of money to or otherwise requiring payments to 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
$150,000, 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
Act. The Company is
in compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002, as amended, 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, except where the
failure to be in compliance would not result in a Material Adverse
Effect.

 

(t) Internal Accounting
and Disclosure Controls. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that: (i) transactions are executed in
accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) for the Company 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 Company’s disclosure controls and
procedures 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 Company’s
internal control over financial reporting (as such term is defined
in the Exchange Act) that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control
over financial reporting.

 

 

10

 

 

(u) 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 Purchaser shall have no obligation with
respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions
contemplated by the Transaction Documents.

 

(v) Investment Company
Status. The Company
is not, and is not an Affiliate of, and immediately after receipt
of payment for the Common Shares, will not be or be an Affiliate
of, and for so long as the Purchasers hold any Common 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 “Investment Company
Act”). 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. To the Company’s knowledge,
the Company is not controlled by an “investment
company.”

 

(w) Registration
Rights. Except as
described in the SEC Reports or pursuant to the Registration Rights
Agreement, no Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the
Company.

 

(x) Listing and
Maintenance Requirements. The Company has not, in the 12 months
preceding the date hereof, received notice from any Trading Market
on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is,
and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and
maintenance requirements.

 

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

 

(z) Disclosure.
Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf
has provided the Purchaser or its agents or counsel with any
information that it believes constitutes material, non-public
information. The Company understands and confirms that the
Purchaser will rely on the foregoing representation in effecting
transactions in securities of the Company. The press releases
disseminated by the Company during the twelve months preceding the
date of this Agreement, each as of the date of its issuance, did
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading. The
Company acknowledges and agrees that the Purchaser does not make
and has not made any representations or warranties with respect to
the transactions contemplated hereby, other than those specifically
set forth in Section 3.2 hereof.

 

 

11

 

 

(aa) No
Integrated Offering.
Assuming the accuracy of the Purchaser’s representations and
warranties set forth in Section 3.2, neither the Company nor any of its
Affiliates, nor any Person acting on its or their behalves, 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 Common 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.

 

(bb) Solvency.
As disclosed in the SEC Reports, the Company does not currently
generate significant recurring revenue. The SEC Reports set forth,
as of the date hereof, all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments. For the purposes of this
Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in
excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements
and other contingent obligations in respect of indebtedness of
others, whether or not the same are or should be reflected in the
Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments
in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in
default with respect to any Indebtedness, except where such default
would not reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect.

 

(cc) Tax
Status. Except for
matters that would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, the
Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and
franchise tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) has paid all taxes and
other governmental assessments and charges that are material in
amount shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim.

 

(dd) Anti-Bribery.
Neither the Company nor any Subsidiary, nor to the knowledge of the
Company or any Subsidiary, any officer, employee, 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) that is in violation of law,
or (iv) violated, in any material respect, any provision of the
U.S. Foreign Corrupt Practices Act of 1977, as amended (the
“FCPA”).

 

 

12

 

 

(ee) Acknowledgment
Regarding Purchaser’s Purchase of Common
Shares. The Company
acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the
Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that the Purchaser is not acting
as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby, and any advice given by the
Purchaser or any of its respective representatives or agents in
connection with the Transaction Documents and the transactions
contemplated thereby, is merely incidental to the Purchaser’s
purchase of the Common Shares. The Company further represents to
the 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.

 

(ff) Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in the Transaction Documents
to the contrary notwithstanding, it is understood and acknowledged
by the Company that: (i) the Purchaser has not been asked by the
Company to agree, nor has the 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 Common Shares for any
specified term; (ii) past or future open market or other
transactions by the 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) the Purchaser,
and counter-parties in “derivative” transactions to
which the Purchaser is a party, directly or indirectly, presently
may have a “short” position in the Common Stock, and
(iv) the 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) the Purchaser may engage in
hedging activities at various times during the period that the
Common 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.

 

(gg) 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 Common Shares, (ii) sold, bid for, or
purchased, or paid any compensation for soliciting purchases of,
any of the Common Shares, or (iii) paid or agreed to pay to any
Person any compensation for soliciting another Person 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 Common
Shares.

 

(hh) No
Conflicts with Sanctions Laws. 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
or enforced by the U.S. government (including, without limitation,
the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”)).

 

 

13

 

 

(ii) U.S.
Real Property Holding Corporation. The Company is not and has never
been, and so long as any of the Common Shares are held by any of
the purchasers, shall become, 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.

 

(jj) 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 (25%) 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.

 

(kk) Compliance
with Anti-Money Laundering Laws. 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, the USA Patriot Act of 2001 and the applicable money
laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering
Laws”), and no
action, suit 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 Purchaser. The Purchaser hereby makes the
following representations and warranties to the
Company:

 

(a) Organization;
Authority. The
Purchaser is 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 this Agreement and otherwise to carry out its
obligations hereunder and thereunder.

 

(b) Validity;
Enforcement. The
execution and delivery of this Agreement and performance by the
Purchaser of the transactions contemplated by this Agreement have
been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the
part of the Purchaser. Each Transaction Document to which it is a
party has been duly executed by the Purchaser, and when delivered
by the Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of the
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.

 

 

14

 

 

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

 

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

 

(e) Accredited Investor
Status. Such
Purchaser is an “accredited investor” as
defined in Regulation D under the Securities
Act.

 

(f) Reliance on
Exemptions. Such
Purchaser understands that the Common Shares are being offered and
sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws
and that the Company is relying in part upon the truth and accuracy
of, and such Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgements and
understandings of such Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Common Shares.

 

(g) Experience of the
Purchaser. The
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 Common Shares, and has
requested, received, reviewed and considered all information it
deemed relevant in making an informed decision to purchase the
Common Shares. The Purchaser is able to bear the economic risk of
an investment in the Common Shares and, at the present time, is
able to afford a complete loss of such
investment.

 

15

 

 

(h) Access to
Information. The
Purchaser acknowledges that it has had the opportunity to review
the Transaction Documents (including all exhibits and schedules
thereto) and the SEC Reports and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of,
and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the 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. The Purchaser acknowledges and agrees
that neither the placement agent, if any, nor any Affiliate of the
placement agent, if any, has provided the Purchaser with any
information or advice with respect to the Common Shares nor is such
information or advice necessary or desired. Neither the placement
agent, if any, nor any Affiliate has made or makes any
representation as to the Company or the quality of the Common
Shares and the placement agent, if any, and any of its Affiliates
may have acquired non-public information with respect to the
Company that the Purchaser agrees need not be provided to it. In
connection with the issuance of the Common Shares to the Purchaser,
neither the placement agent, if any, nor any of its Affiliates has
acted as a financial advisor or fiduciary to the
Purchaser.

 

(i) General Solicitation. Such Purchaser is
not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

(j) Certain Transactions
and Confidentiality.
Such Purchaser has not, nor has any Person acting on behalf of or
pursuant to any understanding with the Purchaser, directly or
indirectly, executed any purchases or sales, including Short Sales,
of the securities of the Company during the period commencing as of
the time that the Purchaser first received a term sheet (written or
oral) from the Company or any other Person representing the Company
setting forth the material terms of the transactions contemplated
hereunder and ending immediately prior to the execution hereof.
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 avoidance of
doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to the
identification of the availability of, or securing of, available
shares to borrow in order to effect Short Sales or similar
transactions in the future.

 

(k) Ownership of Common
Stock. The
Purchaser, together with the Purchaser’s Affiliates and
associates and any Person with which the Purchaser is acting
jointly or in concert, will upon Closing beneficially own less than
10% of the issued and outstanding shares of Common Stock, and,
solely for purposes of calculating such beneficial ownership for
purposes of this Agreement, any such Person will be deemed to
beneficially own any shares of Common Stock that such Person
otherwise has the right to acquire within 60 days (including upon
the occurrence of a contingency or the making of a payment)
pursuant to any convertible security, agreement, arrangement,
pledge or understanding, whether or not in
writing.

 

 

16

 

 

(l) No Governmental
Review. Such
Purchaser understands that no United States federal or state agency
or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Common Shares or the
fairness or suitability of the investment in the Common Shares nor
have such authorities passed upon or endorsed the merits of the
offering of the Common Shares.

 

(m) Brokers or
Finders. Neither
such Purchaser nor any of its affiliates (as defined in Rule 144)
or any of their respective officers or directors has employed any
broker or finder or incurred any liability for any financial
advisory fee, brokerage fees, commissions or finder’s fee,
and no broker or finder has acted directly or indirectly for such
Purchaser or any of its affiliates or any of their respective
officers or directors in connection with this Agreement or the
transactions contemplated hereby.

 

(n) Transfer or Resale. Such Purchaser
understands that the Common Shares may only be disposed of in
compliance with state and federal securities laws. In connection
with any transfer of Common Shares other than pursuant to an
effective registration statement or Rule 144, to the Company or to
an Affiliate of a Purchaser or in connection with a pledge as
contemplated in Section 3.2(o), the Company may require the
transferor thereof to provide the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Common
Shares under the Securities Act. As a condition of transfer, any
such transferee shall agree in writing to be bound by the terms of
this Agreement and the Registration Rights Agreement and shall have
the rights and obligations of a Purchaser under this Agreement and
the Registration Rights Agreement.

 

(o) Legends. Such Purchaser understands that
the book-entry or other instruments representing the Common Shares
shall bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such
Common Shares):

 

THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES
ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. NOTWITHSTANDING THE
FOREGOING, AFTER THE DATE THAT IS 180 DAYS FROM ISSUANCE, THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

 

 

17

 

 

The
Company acknowledges and agrees that a Purchaser may from time to
time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or
all of the Common Shares to a financial institution that is an
“accredited investor” as defined in Regulation D under
the Securities Act and who agrees to be bound by the provisions of
this Agreement and the Registration Rights Agreement and, if
required under the terms of such arrangement, such Purchaser may
transfer pledged or secured Common Shares to the pledgees or
secured parties. Such a pledge or transfer would not be subject to
approval of the Company and no legal opinion of legal counsel of
the pledgee, secured party or pledgor shall be required in
connection therewith. Further, no notice shall be required of such
pledge. At the appropriate Purchaser’s expense, the Company
will execute and deliver such reasonable documentation as a pledgee
or secured party of Common Shares may reasonably request in
connection with a pledge or transfer of the Common Shares,
including, if the Common Shares are subject to registration
pursuant to the Registration Rights Agreement, the preparation and
filing of any required prospectus supplement under Rule 424 under
the Securities Act or other applicable provision of the Securities
Act to appropriately amend the list of Selling Stockholders (as
defined in the Registration Rights Agreement)
thereunder.

 

The Company acknowledges and agrees that the representations
contained in Section 3.2 shall not modify, amend or affect the
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 transaction contemplated hereby.

 

ARTICLE IV

COVENANTS

4.1 Best
Efforts. Each party shall use its reasonable best efforts to
timely satisfy each of the covenants and the conditions to be
satisfied by it as provided in Section 2.3 of this
Agreement.

4.2 Blue Sky.
The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to
qualify the Common Shares for, sale to the Purchasers at the
applicable Closing under applicable securities or “Blue
Sky” laws of the states of the United States, and shall
provide evidence of such actions promptly upon request of any
Purchaser.

 

 

4.3 Acknowledgment of
Dilution. The Company acknowledges that the issuance of the
Common Shares may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain
market conditions. The Company further acknowledges that its
obligations under the Transaction Documents are unconditional and
absolute and not subject to any right of set off, counterclaim,
delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and
regardless of the dilutive effect that such issuance may have on
the ownership of the other stockholders of the
Company.

 

 

18

 

 

4.4 Registration.
Until the earliest of the time that no Purchaser owns Common
Shares, the Company covenants to maintain the registration of the
Common Stock under Section 12(b) or 12(g) of the Exchange Act and
to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to the Exchange
Act even if the Company is not then subject to the reporting
requirements of the Exchange Act.

 

4.5 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 Common 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. 

 

4.6 Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:00 a.m.
(New York City time) on the fourth Trading Day immediately
following the date hereof, issue a press release disclosing the
material terms of the transactions contemplated hereby, and (b)
file a Current Report on Form 8-K with the Commission within the
time required by the Exchange Act. From and after the issuance of
such press release, the Company shall have publicly disclosed all
material, non-public information delivered to the Purchaser 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.

 

4.7 Non-Public
Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction
Documents, 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 the Company
believes constitutes material non-public information, unless prior
thereto such Purchaser shall have entered into a written agreement
with the Company regarding the confidentiality and use of such
information. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.

 

4.8 Use
of Proceeds. The
Company shall use the net proceeds from the sale of the Common
Shares hereunder for general corporate purposes, repayment of
Indebtedness, business development, working capital and general and
administrative expenses and shall not use such proceeds in
violation of FCPA, OFAC regulations and Anti-Money Laundering Laws,
except where such violations would not reasonably be expected to
result, either individually or in the aggregate, in a Material
Adverse Effect.

 

4.9 Listing
of Common Stock.
Concurrently with the Closing, the Company shall apply to list or
quote all of the Shares on the 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 Common Shares, and will take such other
action as is necessary to cause all of the Common Shares to be
listed or quoted on such other Trading Market as promptly as
possible. The Company will comply in all respects with the
Company’s reporting, filing and other obligations under the
bylaws or rules of such Trading Market.

 

 

19

 

 

4.10 Certain
Transactions and Confidentiality. The Purchaser 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 4.6. The Purchaser 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 4.6, the Purchaser will maintain the
confidentiality of the existence and terms of this transaction.
Notwithstanding the foregoing and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly
acknowledges and agrees that (i) the Purchaser does not make 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 4.6, (ii) the Purchaser shall not 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 4.6 and (iii) the Purchaser shall not have
any duty of confidentiality to the Company or its Subsidiaries
after the issuance of the initial press release as described in
Section 4.6.

 

4.11 Indemnification
of Purchaser.
Subject to the provisions of this Section 4.11, the Company will indemnify and hold
the 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 the 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, with respect to any of the
transactions contemplated by the Transaction Documents (unless such
action is based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser 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 that constitutes fraud, gross negligence,
willful misconduct or malfeasance). If any action shall be brought
against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have
the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable written opinion of counsel to the
Purchaser furnished to the Company, 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 4.11
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, but if the Purchaser Party is later determined not to be
entitled to indemnification under this Section 4.11 or otherwise, the Purchaser Party will
promptly return any moneys paid pursuant to this sentence. 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.

 

 

20

 

 

ARTICLE V

TERMINATION

 

5.1 Termination.
In the event that the Closing shall not been consummated with
respect to a Purchaser on or before December 31, 2019; provided,
however, that no such termination will affect the right of either
party to sue for any breach by the other party.

 

ARTICLE VI

MISCELLANEOUS

 

6.1 Fees
and Expenses. Except
as expressly set forth in the Transaction Documents to the
contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
The Company shall pay all transfer agent fees, stamp taxes and
other taxes and duties levied in connection with the delivery of
any Common Shares to the Purchaser.

 

6.2 Entire
Agreement. The
Transaction Documents, together with the exhibits and schedules
thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and 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.

 

6.3 Notices.
Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature page
attached hereto at or prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature page
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, (d) upon actual
receipt by the party to whom such notice is required to be given,
or (e) upon delivery, when sent by electronic mail (provided that
the sending party does not receive an automated rejection notice).
The addresses, facsimile numbers and e-mail addresses for such
notices and communications shall be as set forth on the signature
page attached hereto.

 

6.4 Amendments;
Waivers. No
provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an
amendment, by the Company and the holders of at least a majority of
the aggregate amount of Common Shares issued and issuable
hereunder, or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought. No waiver of
any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such
right.

 

 

21

 

 

6.5 Headings.
The headings of this Agreement are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to
limit or affect the interpretation of any of the provisions of this
Agreement.

 

6.6 Successors
and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The Company may
not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser. Following the
Closing, the Purchaser may assign any or all of its rights under
this Agreement to any Person to whom the Purchaser assigns or
transfers any Common Shares, provided that such transferee agrees
in writing to be bound, with respect to the transferred Common
Shares, by the provisions of the Transaction Documents that apply
to the “Purchaser.”

 

6.7 No
Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and
permitted assigns only, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except that each
Indemnitee shall have the right to enforce the obligations of the
Company with respect to Section 4.11.

 

6.8 Governing
Law. All questions
concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
New York for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any
of the Transaction Documents), and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such
court, or that such court is an improper or inconvenient venue for
such suit, action or proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect
for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any other manner permitted by
law. If either party shall commence an suit, action or proceeding
to enforce any provisions of the Transaction Documents, then, in
addition to the obligations of the Company under Section
4.11, the prevailing party in such suit,
action or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other reasonable costs and
expenses incurred with the investigation, preparation and
prosecution of such suit, action or proceeding.

 

 

22

 

 

6.9 Survival.
Unless this Agreement is terminated under Section 5, the
representations and warranties contained in Sections 3.1(a) and (b)
shall survive the Closing, and the agreements and covenants
contained in Article IV shall survive the Closing until fully
performed. Each Purchaser shall be responsible only for its own
representations, warranties, agreements, and covenants
hereunder.

 

6.10 Counterparts.
This Agreement may be executed in two or more identical
counterparts, both of which when taken together shall be considered
one and the same agreement and this Agreement shall become
effective when each party has delivered its signature to the other
party. 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.

 

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

 

6.12 Further
Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates,
instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions
contemplated hereby.

 

6.13 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 the 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 the 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.

 

6.14 Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the
Purchaser and the Company will be entitled to specific performance
under the Transaction Documents. The parties agree that monetary
damages would not be adequate compensation for any loss incurred by
reason of any breach of obligations contained in the Transaction
Documents and the Company therefore agrees that the Purchasers
shall be entitled to seek temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages
and without posting a bond or other security.

 

 

23

 

 

6.15 Payment
Set Aside. To the
extent that the Company makes a payment or payments to the
Purchaser pursuant to any Transaction Document or the 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, disgorged or
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.

 

6.16 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 Purchaser has been represented by
its own separate legal counsel in its review and negotiation of the
Transaction Documents. 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.

 

6.17 Liquidated
Damages. The
Company’s obligation to pay any amounts owing under the
Transaction Documents is a continuing obligation of the Company and
shall not terminate until all unpaid amounts have been paid,
notwithstanding the fact that the instrument or security pursuant
to which such amounts are due and payable shall have been
canceled.

 

6.18 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.

 

6.19 WAIVER
OF JURY TRIAL. IN
ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY
EITHER PARTY AGAINST THE OTHER PARTY FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, 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)

 

 

24

 

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

 

	

SANUWAVE HEALTH, INC.

 

 

	

Address
for Notice:

 

3360
Martin Farm Road, Suite 100

Suwanee,
GA 30024

Attn:
Chief Financial Officer

 

E-mail

	

By:_/s/
Lisa E. Sundstrom___________

     Name:
Lisa E. Sundstrom

     Title:
Chief Financial Officer

 

	

Fax

	
 

	
 

 

 

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

 

 

Murray Indick, Esq. 

Morrison & Foerster LLP 

425 Market Street 

San Francisco, California 94105 

Phone:

E-mail
address:

 

 

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

 

25

 

 

PURCHASER SIGNATURE PAGE TO SANUWAVE HEALTH, INC. COMMON STOCK
PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned has caused this Common Stock
Purchase Agreement to be duly executed by an authorized signatory
as of the date first indicated above.

 

Name of Purchaser: 
Opaleye, L.P.

 

Signature of Authorized Signatory of Purchaser: 
/s/James
Silverman

 

Name of Authorized Signatory: 
James Silverman

 

Title of Authorized Signatory: 
General Manager

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

 

Address for Delivery of the Common Shares to Purchaser (if not same
as address for notice):

 

 

 

Subscription Amount: $2,000,000

 

Shares:14,285,714

 

EIN Number (if applicable):

 

Broker Name:

 

DTC Participant Number:

 

 

 

 

26

 

 

PURCHASER SIGNATURE PAGE TO SANUWAVE HEALTH, INC. COMMON STOCK
PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned has caused this Common Stock
Purchase Agreement to be duly executed by an authorized signatory
as of the date first indicated above.

 

Name of Purchaser: 
Kerri E. Johnson

 

Signature of Authorized Signatory of Purchaser: 
/s/Kerri
E. Johnson

 

Name of Authorized Signatory: 
Kerri E. Johnson

 

Title of Authorized Signatory: 
Individual

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

 

Address for Delivery of the Common Shares to Purchaser (if not same
as address for notice):

 

 

 

Subscription Amount: $50,000.00

 

Shares:                       

357,142

 

EIN Number (if applicable):

 

Broker Name:

 

DTC Participant Number:

 

 

 

27

 

 

PURCHASER SIGNATURE PAGE TO SANUWAVE HEALTH, INC. COMMON STOCK
PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned has caused this Common Stock
Purchase Agreement to be duly executed by an authorized signatory
as of the date first indicated above.

 

Name of Purchaser: 
George Johnson

 

Signature of Authorized Signatory of Purchaser: 
/s/George
Johnson

 

Name of Authorized Signatory: 
George Johnson

 

Title of Authorized Signatory: 
Individual

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

Address for Delivery of the Common Shares to Purchaser (if not same
as address for notice):

 

 

 

Subscription Amount: $100,000.00

 

Shares:                       

714,285

 

EIN Number (if applicable):

 

Broker Name:

 

DTC Participant Number:

 

 

 

28

 

 

PURCHASER SIGNATURE PAGE TO SANUWAVE HEALTH, INC. COMMON STOCK
PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned has caused this Common Stock
Purchase Agreement to be duly executed by an authorized signatory
as of the date first indicated above.

 

Name of Purchaser: 
GCI Partners Opportunity Fund, LP

 

Signature of Authorized Signatory of Purchaser: 
/s/ 
Niraj A. Gupta

 

Name of Authorized Signatory: 
Niraj A. Gupta

 

Title of Authorized Signatory: 
Managing member of GCI Partners, LLC

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

Address for Delivery of the Common Shares to Purchaser (if not same
as address for notice):

 

 

Subscription Amount: $300,000

 

Shares:                       

2,142,857

 

EIN Number (if applicable):

 

Broker Name:

 

DTC Participant Number:

 

 

 

 

 

29

 

 

PURCHASER SIGNATURE PAGE TO SANUWAVE HEALTH, INC. COMMON STOCK
PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned has caused this Common Stock
Purchase Agreement to be duly executed by an authorized signatory
as of the date first indicated above.

 

Name of Purchaser: 
Niraj A. Gupta

 

Signature of Authorized Signatory of Purchaser: 
/s/ 
Niraj A. Gupta

 

Name of Authorized Signatory: 
Niraj A. Gupta

 

Title of Authorized Signatory: 
Individual

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

Address for Delivery of the Common Shares to Purchaser (if not same
as address for notice):

 

 

 

 

Subscription Amount: $150,000.00

 

Shares:                       

1,071,428

 

EIN Number (if applicable):

 

Broker Name:

 

DTC Participant Number:

 

 

 

 

30

 

 

PURCHASER SIGNATURE PAGE TO SANUWAVE HEALTH, INC. COMMON STOCK
PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned has caused this Common Stock
Purchase Agreement to be duly executed by an authorized signatory
as of the date first indicated above.

 

Name of Purchaser: 
Meera Holdings LLC

 

Signature of Authorized Signatory of Purchaser: 
/s/ 
Sanjay Hingorani

 

Name of Authorized Signatory: 
Sanjay Hingorani

 

Title of Authorized Signatory: 
Manager and Authorized Representative

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

 

 

Address for Delivery of the Common Shares to Purchaser (if not same
as address for notice):

 

 

 

 

 

Subscription Amount: $100,100.00

 

Shares:715,000

 

EIN Number (if applicable):

 

Broker Name:

 

DTC Participant Number:

 

 

31

 

 

PURCHASER SIGNATURE PAGE TO SANUWAVE HEALTH, INC. COMMON STOCK
PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned has caused this Common Stock
Purchase Agreement to be duly executed by an authorized signatory
as of the date first indicated above.

 

Name of Purchaser: 
Nainoor Thakore

 

Signature of Authorized Signatory of Purchaser: 
/s/ 
Nainoor Thakore

 

Name of Authorized Signatory: 
Nainoor Thakore

 

Title of Authorized Signatory: 
Individual

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser:

 

 

Address for Delivery of the Common Shares to Purchaser (if not same
as address for notice):

 

 

 

 

Subscription Amount: $100,000.00

 

Shares:                       

714,285

 

EIN Number (if applicable):

 

Broker Name:

 

DTC Participant Number:

 

 

 

 

32

 

SCHEDULE 3.1(g)

 

COMPANY CAPITALIZATION TABLE

 

COMMON STOCK AND COMMON STOCK EQUIVALENTS

ISSUED, OUTSTANDING AND RESERVED

 

 

33

 

 

Exhibit A

 

FORM OF

 

REGISTRATION
RIGHTS AGREEMENT

 

This
REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of December
11, 2019, is by and among SANUWAVE Health, Inc., a Nevada
corporation (the “Company”), and each of the
undersigned investors (each a “Purchaser,” and collectively, the
“Purchasers”).
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Common Stock
Purchase Agreement by and among the parties hereto, dated as of
December 11, 2019 by and between, inter alia, the parties hereto,
dated as of the date hereof (the “Purchase Agreement”).

 

RECITALS

 

A.     In
connection with the Purchase Agreement, the Company has agreed,
upon the terms and subject to the conditions of the Purchase
Agreement, to issue the Common Shares to the
Purchasers.

 

B.     To
induce the Purchasers to consummate the transactions contemplated
by the Purchase Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “1933 Act”), under the terms and
subject to the conditions set out in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the
premises and the mutual covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and each of the
Purchasers hereby agree as follows:

 

1. Definitions. As
used in this Agreement, the following terms shall have the
following meanings:

 

(a) “Business Day” means any day other
than Saturday, Sunday or any other day on which commercial banks in
New York, New York are authorized or required by law to remain
closed.

 

(b) “Common Shares” means the Common
Shares issued to the Purchasers pursuant to the Purchase
Agreement.

 

(c) “Closing Date” shall have the
meaning set forth in the Purchase Agreement.

 

(d) “Effective Date” means the date
that the applicable Registration Statement has been declared
effective by the SEC.

 

 

34

 

 

(e) “Effective Purchase Price” means
for each Purchaser, the amount of Common Shares issued to such
Purchaser pursuant to the Purchase Agreement multiplied by the
Per Security Purchase
Price.

 

(f) “Effectiveness Deadline” means (i)
with respect to the initial Registration Statement required to be
filed pursuant to Section 2(a), the earlier of (A) May 30, 2020 and
(B) 2nd Business Day after the date the Company is notified (orally
or in writing, whichever is earlier) by the SEC that such
Registration Statement will not be reviewed or will not be subject
to further review and (ii) with respect to any new Registration
Statements that may be required to be filed by the Company pursuant
to Section 2(c) of this Agreement, the earlier of the (A) 30th
calendar day following the date on which the Company was required
to file such additional Registration Statement and (B) 2nd Business
Day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such additional Registration
Statement will not be reviewed or will not be subject to further
review; provided, however, if (but only if) a Filing Failure did
not occur, then such time periods shall be tolled on a day-for-day
basis for so long as the Company’s audited financial
statements are stale pursuant to Regulation S-X Rule
3-12(b).

 

(g)  “Filing
Deadline” means (i) with respect to the initial
Registration Statement required to be filed pursuant to Section
2(a), the earlier of (x) April 30, 2020; and (ii) with respect to
any additional Registration Statements that may be required to be
filed by the Company pursuant to this Agreement, the date on which
the Company was required to file such additional Registration
Statement pursuant to the terms of this Agreement.

 

(h) “Investor” means a Purchaser or any
transferee or assignee of any Registrable Securities, to whom a
Purchaser assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with
Section 9 and any transferee or assignee thereof to whom a
transferee or assignee of any Registrable Securities, assigns its
rights under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section
9.

 

(i) “Per Security Purchase Price” means
$0.14.

 

(j) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, or any other entity of any kind or nature whatsoever,
a trust, an unincorporated organization or a government or any
department or agency thereof.

 

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

 

(l) “Register,” “Registered,” and
“Registration”
refer to a registration effected by preparing and filing one or
more Registration Statements in compliance with the 1933 Act and
the declaration of effectiveness of such Registration Statement(s)
by the SEC.

 

(m) ”Registrable Securities” means the
Common Shares. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when: (a) a
Registration Statement with respect to the sale of such securities
shall have become effective under the 1933 Act and such securities
shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (b) such securities
shall have been otherwise transferred, new certificates for them
not bearing a legend restricting further transfer shall have been
delivered by the Company, and subsequent public distribution of
them shall not require registration under the Securities Act; or
(c) the Registrable Securities are freely saleable under Rule 144
under the Securities Act without volume limitations.

 

35

 

 

(n)  “Registration
Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act
covering Registrable Securities.

 

(o) “Required Registration Amount”
means the aggregate amount of Registrable Securities, as decreased
from time to time as certain Common Shares cease to be Registrable
Securities in accordance with Section 1(m).

 

(p) “Rule 144” means Rule 144
promulgated by the SEC under the 1933 Act, as such rule may be
amended from time to time, or any other similar or successor rule
or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without
registration.

 

(q) “SEC” means the United States
Securities and Exchange Commission or any successor
thereto.

 

(r) “Transaction Documents” means this
Agreement, the Purchase Agreement, and any other agreements,
instruments, or documents entered into pursuant to this
Agreement.

 

2. Registration.

 

(a) Mandatory Registration. The
Company shall prepare and, as soon as practicable, but in no event
later than the Filing Deadline, file with the SEC an initial
Registration Statement on Form S-1 covering the resale of all of
the Registrable Securities, provided that such initial Registration
Statement shall register for resale at least the number of shares
of Common Stock equal to the Required Registration Amount as of the
date such Registration Statement is initially filed with the SEC.
Such initial Registration Statement, and each other Registration
Statement required to be filed pursuant to the terms of this
Agreement. The Investors shall furnish all information reasonably
requested by the Company for inclusion therein. The Company shall
use its commercially reasonable efforts to have such initial
Registration Statement, and each other Registration Statement
required to be filed pursuant to the terms of this Agreement,
declared effective by the SEC as soon as practicable, but in no
event later than the applicable Effectiveness Deadline for such
Registration Statement. Except as contemplated in Section 3(f), and
except with respect to the information furnished in writing to the
Company by the Investors expressly for use in connection with the
preparation of the Registration Statement and any amendments or
supplements thereto or prospectus contained therein (as to which
the Company makes no representation or warranty), the Registration
Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading.

 

(b) Legal Counsel. Subject to
Section 5 hereof, the Purchasers shall have the right to select one
(1) legal counsel to review and oversee, solely on its behalf, any
registration pursuant to this Section 2 (“Legal Counsel”), which shall be
Morrison & Foerster LLP.

 

36

 

 

(c) Sufficient Number of Shares
Registered. In the event the number of shares available
under any Registration Statement is insufficient to cover the
Required Registration Amount or an Investor’s allocated
portion of the Registrable Securities pursuant to Section 2(g), the
Company shall amend such Registration Statement (if permissible),
or file with the SEC a new Registration Statement (on the short
form available therefor, if applicable), or both, so as to cover at
least the Required Registration Amount as of the Trading Day
immediately preceding the date of the filing of such amendment or
new Registration Statement, in each case, as soon as practicable,
but in any event not later than fifteen (15) days after the
necessity therefor arises. The Company shall use reasonable best
efforts to cause such amendment to such Registration Statement
and/or such new Registration Statement (as the case may be) to
become effective as soon as practicable following the filing
thereof with the SEC, but in no event later than the applicable
Effectiveness Deadline for such Registration Statement. For
purposes of the foregoing provision, the number of shares available
under a Registration Statement shall be deemed “insufficient
to cover all of the Registrable Securities” if at any time
the number of shares of Common Stock available for resale under the
applicable Registration Statement is less than the Required
Registration Amount.

 

(d) Reduction of Offering.
Notwithstanding anything to the contrary contained in this
Agreement, but subject to the payment of the Registration Delay
Payments pursuant to Section 2(e), in the event the staff of the
SEC (the “Staff”) or the SEC seeks to
characterize any offering pursuant to a Registration Statement
filed pursuant to this Agreement as constituting an offering
of securities by, or on behalf of, the Company, or in any other
manner, such that the Staff or the SEC do not permit
such Registration Statement to become effective and used for
resales in a manner that does not constitute such an offering and
that permits the continuous resale at the market by the Investors
participating therein (or as otherwise may be acceptable
to each Investor) without being named therein as an
“underwriter,” then the Company shall reduce the number
of shares to be included in such Registration Statement by all
Investors until such time as the Staff and the SEC shall so
permit such Registration Statement to become effective as
aforesaid. In making such reduction, the Company shall reduce
the number of shares to be included by all Investors on a pro rata
basis (based upon the number of Registrable Securities otherwise
required to be included for each Investor).  The Investors
shall have the right to participate or have their counsel
participate in any meetings or discussions with the Staff regarding
the Staff’s position and to comment or have their counsel
comment on any written submission made to the Staff with respect
thereto. No such written submission shall be made to the Staff to
which an Investor’s counsel reasonably objects. In addition,
in the event that the Staff or the SEC requires any Investor
seeking to sell securities under a Registration Statement
filed pursuant to this Agreement to be specifically identified
as an ”underwriter” in order to permit such
Registration Statement to become effective, and such Investor does
not consent to being so named as an underwriter in such
Registration Statement, then, in each such case, the
Company shall reduce the total number of Registrable
Securities to be registered on behalf
of such Investor, until such time as the Staff or
the SEC does not require such identification or until such Investor
accepts such identification and the manner thereof. Any
reduction pursuant to this paragraph will first reduce all
securities that are not Registrable Securities, if any such
securities are permitted by Investors to be included in accordance
with the terms of this Agreement. In the event of
any reduction in Registrable Securities pursuant to this
paragraph, an affected Investor shall have the right to
require, upon delivery of a written request to the Company signed
by such Investor, the Company to file a registration statement
within thirty (30) days of such request (subject to any
restrictions imposed by Rule 415 or required by the Staff
or the SEC) for resale by such Investor in a manner acceptable to
such Investor, and the Company shall, following such
request, cause to be and keep effective such registration
statement in the same manner as otherwise contemplated in this
Agreement for registration statements hereunder, in each case
until such time as: (i) all Registrable Securities held by such
Investor have been registered and sold pursuant to an
effective Registration Statement in a manner acceptable to such
Investor or (ii) all Registrable Securities may be resold by
such Investor without restriction (including, without
limitation, volume limitations) pursuant to Rule 144 (taking
account of any Staff position with respect to
“affiliate” status) and without the need for current
public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) or (iii) such Investor agrees to be named as an
underwriter in any such Registration Statement in a manner
acceptable to such Investor as to all Registrable Securities held
by such Investor and that have not theretofore been included in a
Registration Statement under this Agreement (it being understood
that the special demand right under this sentence may be exercised
by an Investor multiple times and with respect to limited amounts
of Registrable Securities in order to permit the resale thereof by
such Investor as contemplated above).

 

37

 

 

(e) Piggyback Registration. Without
limiting any obligation of the Company hereunder or under the
Purchase Agreement, if there is not an effective Registration
Statement covering all of the Registrable Securities or the
prospectus contained therein is not available for use and the
Company shall determine to prepare and file with the SEC a
registration statement relating to an offering for its own account
or the account of others under the 1933 Act of any of its equity
securities (other than on Form S-4 or Form S-8 (each as promulgated
under the 1933 Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition
of any entity or business or equity securities issuable in
connection with the Company’s stock option or other employee
benefit plans), then the Company shall deliver to each Investor a
written notice of such determination and, if within fifteen (15)
days after the date of the delivery of such notice, any such
Investor shall so request in writing, the Company shall include in
such registration statement all or any part of such Registrable
Securities such Investor requests to be registered; provided,
however, the Company shall not be required to register any
Registrable Securities pursuant to this Section 2(g) that are
eligible for resale pursuant to Rule 144 without restriction
(including, without limitation, volume restrictions) and without
the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or that are the subject of a
then-effective Registration Statement.

 

(f) Allocation of Registrable
Securities. The initial number of Registrable Securities
included in any Registration Statement and any increase in the
number of Registrable Securities included therein shall be
allocated pro rata among the Investors based on the number of
Registrable Securities held by each Investor at the time such
Registration Statement covering such initial number of Registrable
Securities or increase thereof is declared effective by the SEC. In
the event that an Investor sells or otherwise transfers any of such
Investor’s Registrable Securities, each transferee or
assignee (as the case may be) that becomes an Investor shall be
allocated a pro rata portion of the then-remaining number of
Registrable Securities included in such Registration Statement for
such transferor or assignee (as the case may be). Any shares of
Common Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable
Securities covered by such Registration Statement shall be
allocated to the remaining Investors, pro rata based on the number
of Registrable Securities then held by such Investors which are
covered by such Registration Statement.

 

(g) No Inclusion of Other
Securities. In no event shall the Company include any
securities other than Registrable Securities on any Registration
Statement without the prior written consent of the Investors. Until
the Applicable Date (as defined in the Purchase Agreement), the
Company shall not enter into any agreement providing any
registration rights to any of its security holders and the Company
shall not file any other registration statement until such
time.

 

3. Related
Obligations. The Company shall use reasonable best efforts to
effect the registration of the Registrable Securities in accordance
with the intended method of disposition thereof, and, pursuant
thereto, the Company shall have the following
obligations:

 

38

 

 

(a) The Company shall
promptly prepare and file with the SEC a Registration Statement
with respect to all the Registrable Securities (but in no event
later than the applicable Filing Deadline) and use reasonable best
efforts to cause such Registration Statement to become effective as
soon as practicable after such filing (but in no event later than
the Effectiveness Deadline). Subject to Allowable Grace Periods,
the Company shall keep each Registration Statement effective (and
the prospectus contained therein available for use) at all times
until the earlier of (i) the date as of which all of the Investors
may sell all of the Registrable Securities required to be covered
by such Registration Statement (disregarding any reduction pursuant
to Section 2(e)) without restriction pursuant to Rule 144
(including, without limitation, volume restrictions) and without
the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or (ii) the date on which the
Investors shall have sold all of the Registrable Securities covered
by such Registration Statement (the “Registration Period”).
Notwithstanding anything to the contrary contained in this
Agreement, the Company shall ensure that, when filed and at all
times while effective, each Registration Statement (including,
without limitation, all amendments and supplements thereto) and the
prospectus (including, without limitation, all amendments and
supplements thereto) used in connection with such Registration
Statement (1) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein, or necessary to make the statements therein (in the case
of prospectuses, in the light of the circumstances in which they
were made) not misleading and (2) will disclose (whether directly
or through incorporation by reference to other SEC filings to the
extent permitted) all material information regarding the Company
and its securities. Subject to the provisions of the definition of
“Effectiveness Deadline,” the Company shall submit to
the SEC, within two (2) Business Days after the later of the date
that (i) the Company learns that no review of a particular
Registration Statement will be made by the Staff or that the Staff
has no further comments on a particular Registration Statement (as
the case may be) and (ii) the consent of Legal Counsel is obtained
pursuant to Section 3(c) (which consent shall be immediately
sought), a request for acceleration of effectiveness of such
Registration Statement to a time and date not later than
forty-eight (48) hours after the submission of such
request.

 

(b) Subject to Section
3(p) of this Agreement, the Company shall prepare and file with the
SEC such amendments (including, without limitation, post-effective
amendments) and supplements to each Registration Statement and the
prospectus used in connection with each such Registration
Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep each
such Registration Statement effective at all times during the
Registration Period for such Registration Statement, and, during
such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the
Company required to be covered by such Registration Statement until
such time as all of such Registrable Securities shall have been
disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof as set forth in such Registration
Statement; provided, however, by 8:30 a.m. (New York time) on the
Business Day immediately following each Effective Date, the Company
shall file with the SEC in accordance with Rule 424(b) under the
1933 Act the final prospectus to be used in connection with sales
pursuant to the applicable Registration Statement (whether or not
such a prospectus is technically required by such rule) . In the
case of amendments and supplements to any Registration Statement
which are required to be filed pursuant to this Agreement
(including, without limitation, pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 10-Q or Form 10-K or
any analogous report under the Securities Exchange Act of 1934, as
amended (the “1934
Act”), the Company shall have incorporated such report
by reference into such Registration Statement, if applicable, or
shall file such amendments or supplements with the SEC on the same
day on which the 1934 Act report is filed which created the
requirement for the Company to amend or supplement such
Registration Statement.

 

39

 

 

(c) The Company shall
(A) permit Legal Counsel and legal counsel for each other Investor
to review and comment upon (i) each Registration Statement at least
three (3) Business Days prior to its filing with the SEC and (ii)
all amendments and supplements to each Registration Statement
(including, without limitation, the prospectus contained therein)
(except for Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K, and any similar or successor
reports) within a reasonable number of days prior to their filing
with the SEC, and (B) not file any Registration Statement or
amendment or supplement thereto in a form to which Legal Counsel or
any legal counsel for any other Investor reasonably objects. The
Company shall not submit a request for acceleration of the
effectiveness of a Registration Statement or any amendment or
supplement thereto or to any prospectus contained therein without
the prior consent of Legal Counsel, which consent shall not be
unreasonably withheld. The Company shall promptly furnish to Legal
Counsel and, upon each other Investor’s written request,
legal counsel for each such other Investor, without charge, (i)
copies of any correspondence from the SEC or the Staff to the
Company or its representatives relating to each Registration
Statement, provided that such correspondence shall not contain any
material, non-public information regarding the Company or any of
its Subsidiaries (as defined in the Purchase Agreement),
(ii) after the same is prepared and filed with the SEC, one
(1) copy of each Registration Statement and any amendment(s) and
supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, and all exhibits and
(iii) upon the effectiveness of each Registration Statement,
one (1) copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto. The Company
shall reasonably cooperate with Legal Counsel and legal counsel for
each other Investor in performing the Company’s obligations
pursuant to this Section 3.

 

(d) The Company shall
promptly furnish to each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) after
the same is prepared and filed with the SEC, at least one (1) copy
of each Registration Statement and any amendment(s) and
supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, all exhibits and each
preliminary prospectus, (ii) upon the effectiveness of each
Registration Statement, one (1) copy of the prospectus included in
such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may
reasonably request from time to time) and (iii) such other
documents, including, without limitation, copies of any preliminary
or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor, provided that any
such item which is available on the SEC’s EDGAR System (or
successor thereto) need not be furnished in physical
form.

 

40

 

 

(e) Upon the reasonable
request of an Investor, the Company shall use reasonable best
efforts to (i) register and qualify, unless an exemption from
registration and qualification applies, the resale by Investors of
the Registrable Securities covered by a Registration Statement
under such other securities or “blue sky” laws of all
applicable jurisdictions in the United States, (ii) prepare and
file in those jurisdictions, such amendments (including, without
limitation, post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain
the effectiveness thereof during the Registration Period, (iii)
take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for
sale in such jurisdictions; provided, however, the Company shall
not be required in connection therewith or as a condition thereto
to (x) qualify to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3(e), (y)
subject itself to general taxation in any such jurisdiction, or (z)
file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify Legal Counsel and
each Investor who holds Registrable Securities of the receipt by
the Company of any notification with respect to the suspension of
the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky”
laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threatening of any proceeding
for such purpose.

 

(f) The Company shall
notify Legal Counsel and each Investor in writing of the happening
of any event, as promptly as practicable after becoming aware of
such event, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue
statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice
contain any material, non-public information regarding the Company
or any of its Subsidiaries), and, subject to Section 3(p), promptly
prepare a supplement or amendment to such Registration Statement
and such prospectus contained therein to correct such untrue
statement or omission and deliver one (1) copy of such supplement
or amendment to Legal Counsel and each Investor (or such other
number of copies as Legal Counsel or such Investor may reasonably
request). The Company shall also promptly notify Legal Counsel and
each Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, when a
Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to
Legal Counsel and each Investor by facsimile or e-mail on the same
day of such effectiveness and by overnight mail), and when the
Company receives written notice from the SEC that a Registration
Statement or any post-effective amendment will be reviewed by the
SEC, (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related
information, (iii) of the Company’s reasonable determination
that a post-effective amendment to a Registration Statement would
be appropriate; and (iv) of the receipt of any request by the SEC
or any other federal or state governmental authority for any
additional information relating to the Registration Statement or
any amendment or supplement thereto or any related prospectus. The
Company shall respond as promptly as practicable to any comments
received from the SEC with respect to each Registration Statement
or any amendment thereto (it being understood and agreed that the
Company’s response to any such comments shall be delivered to
the SEC no later than three (3) Business Days after the receipt
thereof).

 

41

 

 

(g) The Company shall
(i) use commercially reasonable efforts to prevent the issuance of
any stop order or other suspension of effectiveness of each
Registration Statement or the use of any prospectus contained
therein, or the suspension of the qualification, or the loss of an
exemption from qualification, of any of the Registrable Securities
for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the
earliest possible moment and (ii) immediately notify Legal Counsel
and each Investor who holds Registrable Securities of the issuance
of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such
purpose.

 

(h) The Company shall
hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal
or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required to be disclosed in
such Registration Statement pursuant to the 1933 Act, (iii) the
release of such information is ordered pursuant to a subpoena or
other final, non-appealable order from a court or governmental body
of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in
violation of this Agreement or any other Transaction Document. The
Company agrees that it shall, upon learning that disclosure of such
information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt written notice to such Investor and allow such
Investor, at such Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.

 

(i) Without limiting
any obligation of the Company under the Purchase Agreement, the
Company shall use commercially reasonable efforts either to (i)
cause all of the Registrable Securities covered by each
Registration Statement to be listed on each securities exchange on
which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, (ii)
secure designation and quotation of all of the Registrable
Securities covered by each Registration Statement on the OTC
Bulletin Board, or (iii) if, despite the Company’s efforts to
satisfy the preceding clauses (i) or (ii), the Company is
unsuccessful in satisfying the preceding clauses (i) or (ii),
without limiting the generality of the foregoing, to use
commercially reasonable efforts to arrange for at least two market
makers to register with the Financial Industry Regulatory Authority
(“FINRA”) as
such with respect to such Registrable Securities. In addition, the
Company shall cooperate with each Investor and any broker or dealer
through which any such Investor proposes to sell its Registrable
Securities in effecting a filing with FINRA pursuant to FINRA Rule
5110 as requested by such Investor. The Company shall pay all fees
and expenses in connection with satisfying its obligations under
this Section 3(i).

 

(j) The Company shall
cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates representing the
Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations
or amounts (as the case may be) as the Investors may reasonably
request from time to time and registered in such names as the
Investors may request.

 

42

 

 

(k) If requested by an
Investor, the Company shall as soon as practicable after receipt of
notice from such Investor and subject to Section 3(p) hereof, (i)
incorporate in a prospectus supplement or post-effective amendment
such information as an Investor reasonably requests to be included
therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect
to the number of Registrable Securities being offered or sold, the
purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering;
(ii) make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective
amendment; and (iii) supplement or make amendments to any
Registration Statement or prospectus contained therein if
reasonably requested by an Investor holding any Registrable
Securities.

 

(l) The Company shall
use commercially reasonable efforts to cause the Registrable
Securities covered by a Registration Statement to be registered
with or approved by such other governmental agencies or authorities
as may be necessary to consummate the disposition of such
Registrable Securities.

 

(m) The Company shall
make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of
the period covered thereby, an earnings statement (in form
complying with, and in the manner provided by, the provisions of
Rule 158 under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company’s
fiscal quarter next following the applicable Effective Date of each
Registration Statement.

 

(n) The Company shall
otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.

 

(o) Within one (1)
Business Day after a Registration Statement which covers
Registrable Securities is declared effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared
effective by the SEC.

 

(p) Notwithstanding
anything to the contrary herein (but subject to the last sentence
of this Section 3(p)), at any time after the Effective Date of a
particular Registration Statement, the Company may delay the
disclosure of material, non-public information concerning the
Company or any of its Subsidiaries the disclosure of which at the
time is not, in the good faith opinion of the board of directors of
the Company, in the best interest of the Company and, in the
opinion of counsel to the Company, otherwise required (a
“Grace Period”),
provided that the Company shall promptly notify the Investors in
writing of the (i) existence of material, non-public information
giving rise to a Grace Period (provided that in each such notice
the Company shall not disclose the content of such material,
non-public information to any of the Investors) and the date on
which such Grace Period will begin and (ii) date on which such
Grace Period ends, provided further that (I) no Grace Period shall
exceed ten (10) consecutive days and during any three hundred sixty
five (365) day period all such Grace Periods shall not exceed an
aggregate of thirty (30) days, (II) the first day of any Grace
Period must be at least five (5) Trading Days after the last day of
any prior Grace Period and (III) no Grace Period may exist during
the sixty (60) Trading Day period immediately following the
Effective Date of such Registration Statement (provided that such
sixty (60) Trading Day period shall be extended by the number of
Trading Days during such period and any extension thereof
contemplated by this proviso during which such Registration
Statement is not effective or the prospectus contained therein is
not available for use) (each, an “Allowable Grace Period”). For
purposes of determining the length of a Grace Period above, such
Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) above and shall end on
and include the later of the date the Investors receive the notice
referred to in clause (ii) above and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be
applicable during the period of any Allowable Grace Period. Upon
expiration of each Grace Period, the Company shall again be bound
by the first sentence of Section 3(f) with respect to the
information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to
the contrary contained in this Section 3(p), the Company shall
cause its transfer agent to deliver unlegended shares of Common
Stock to a transferee of an Investor in accordance with the terms
of the Purchase Agreement in connection with any sale of
Registrable Securities with respect to which such Investor has
entered into a contract for sale, and delivered a copy of the
prospectus included as part of the particular Registration
Statement to the extent applicable, prior to such Investor’s
receipt of the notice of a Grace Period and for which the Investor
has not yet settled.

 

43

 

 

(q) The Company shall
take all other reasonable actions necessary to expedite and
facilitate disposition by each Investors of its Registrable
Securities pursuant to each Registration Statement.

 

4. Obligations of the
Investors.

 

(a) At least five (5)
Business Days prior to the first anticipated filing date of each
Registration Statement, the Company shall notify each Investor in
writing of the information the Company requires from each such
Investor with respect to such Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete
the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor
shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it, as shall be
reasonably required to effect and maintain the effectiveness of the
registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may
reasonably request.

 

(b) Each Investor, by
such Investor’s acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of each
Registration Statement hereunder, unless such Investor has notified
the Company in writing of such Investor’s election to exclude
all of such Investor’s Registrable Securities from such
Registration Statement.

 

(c) Each Investor
agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g) or the
first sentence of 3(f), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such
Investor’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(g) or the first
sentence of Section 3(f) or receipt of notice that no supplement or
amendment is required. Notwithstanding anything to the contrary in
this Section 4(c), the Company shall cause its transfer agent to
deliver unlegended shares of Common Stock to a transferee of an
Investor in accordance with the terms of the Purchase Agreement in
connection with any sale of Registrable Securities with respect to
which such Investor has entered into a contract for sale prior to
the Investor’s receipt of a notice from the Company of the
happening of any event of the kind described in Section 3(g) or the
first sentence of Section 3(f) and for which such Investor has not
yet settled.

 

(d) Each Investor
covenants and agrees that it will comply with the prospectus
delivery requirements of the 1933 Act as applicable to it in
connection with sales of Registrable Securities pursuant to a
Registration Statement.

 

5. Expenses of
Registration. All reasonable expenses, other than underwriting
discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and
3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, FINRA filing
fees (if any) and fees and disbursements of counsel for the Company
shall be paid by the Company.

 

44

 

 

6. Indemnification.

 

(a) To the fullest
extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor and each of its
directors, officers, managers, shareholders, members, partners,
employees, agents, advisors, representatives (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding the lack of such title or any other title) and each
Person, if any, who controls such Investor within the meaning of
the 1933 Act or the 1934 Act and each of the directors, officers,
managers, shareholders, members, partners, employees, agents,
advisors, representatives (and any other Persons with a
functionally equivalent role of a Person holding such titles
notwithstanding the lack of such title or any other title) of such
controlling Persons (each, an “Indemnified Person”), against any
losses, obligations, claims, damages, liabilities, contingencies,
judgments, fines, penalties, charges, costs (including, without
limitation, court costs, reasonable attorneys’ fees and costs
of defense and investigation), amounts paid in settlement or
expenses, joint or several, (collectively, “Claims”) incurred in
investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a
party thereto (“Indemnified
Damages”), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of
a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other
“blue sky” laws of any jurisdiction in which
Registrable Securities are offered (“Blue Sky Filing”), or the omission
or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files
any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including,
without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement (the
matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”). Subject to Section
6(c), the Company shall reimburse the Indemnified Persons, promptly
as such expenses are incurred and are due and payable, for any
legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim by an Indemnified Person arising out of or
based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by
such Indemnified Person for such Indemnified Person expressly for
use in connection with the preparation of such Registration
Statement or any such amendment thereof or supplement thereto, or
any preliminary or final prospectus, and (ii) shall not be
available to a particular Investor to the extent such Claim is
based on a failure of such Investor to deliver or to cause to be
delivered the prospectus made available by the Company (to the
extent applicable), including, without limitation, a corrected
prospectus, if such prospectus or corrected prospectus was timely
made available by the Company pursuant to Section 3(d) and then
only if, and to the extent that, following the receipt of the
corrected prospectus no grounds for such Claim would have existed;
and (iii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably
withheld or delayed. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of any of the
Registrable Securities by any of the Investors pursuant to Section
9.

 

45

 

 

(b) In connection with
any Registration Statement in which an Investor is participating,
such Investor agrees to severally and not jointly indemnify, hold
harmless and defend, to the same extent and in the same manner as
is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each
Person, if any, who controls the Company within the meaning of the
1933 Act or the 1934 Act (each, an “Indemnified Party”), against any
Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon
any Violation, in each case, to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement or
any preliminary or final prospectus; and, subject to Section 6(c)
and the below provisos in this Section 6(b), such Investor will
reimburse an Indemnified Party any legal or other expenses
reasonably incurred by such Indemnified Party in connection with
investigating or defending any such Claim; provided, however, the
indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall
not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld or
delayed, provided further that such Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a
result of the applicable sale of Registrable Securities pursuant to
such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of
any of the Registrable Securities by any of the Investors pursuant
to Section 9.

 

(c) Promptly after
receipt by an Indemnified Person or Indemnified Party (as the case
may be) under this Section 6 of notice of the commencement of any
action or proceeding (including, without limitation, any
governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party (as the case may be) shall,
if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified
Party (as the case may be); provided, however, an Indemnified
Person or Indemnified Party (as the case may be) shall have the
right to retain its own counsel with the fees and expenses of such
counsel to be paid by the indemnifying party if: (i) the
indemnifying party has agreed in writing to pay such fees and
expenses; (ii) the indemnifying party shall have failed promptly to
assume the defense of such Claim and to employ counsel reasonably
satisfactory to such Indemnified Person or Indemnified Party (as
the case may be) in any such Claim; or (iii) the named parties to
any such Claim (including, without limitation, any impleaded
parties) include both such Indemnified Person or Indemnified Party
(as the case may be) and the indemnifying party, and such
Indemnified Person or such Indemnified Party (as the case may be)
shall have been advised by counsel that a conflict of interest is
likely to exist if the same counsel were to represent such
Indemnified Person or such Indemnified Party and the indemnifying
party (in which case, if such Indemnified Person or such
Indemnified Party (as the case may be) notifies the indemnifying
party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, then the indemnifying party
shall not have the right to assume the defense thereof and such
counsel shall be at the expense of the indemnifying party, provided
further that in the case of clause (iii) above the indemnifying
party shall not be responsible for the reasonable fees and expenses
of more than one (1) separate legal counsel for such Indemnified
Person or Indemnified Party (as the case may be). The Indemnified
Party or Indemnified Person (as the case may be) shall reasonably
cooperate with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party or
Indemnified Person (as the case may be) which relates to such
action or Claim. The indemnifying party shall keep the Indemnified
Party or Indemnified Person (as the case may be) reasonably
apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party
shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent; provided,
however, the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall,
without the prior written consent of the Indemnified Party or
Indemnified Person (as the case may be), consent to entry of any
judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party or Indemnified
Person (as the case may be) of a release from all liability in
respect to such Claim or litigation, and such settlement shall not
include any admission as to fault on the part of the Indemnified
Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person (as the case may be) with
respect to all third parties, firms or corporations relating to the
matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party (as the case may be) under this Section
6, except to the extent that the indemnifying party is materially
and adversely prejudiced in its ability to defend such action.
Notwithstanding anything to the contrary contained above or
otherwise in this Agreement, a Purchaser shall be entitled, as to
itself and any of its related Indemnified Parties, including
without limitation its agents and representatives, maintain the
control of the defense of any action for which it (or they) may
seek indemnification hereunder, and the Company and its counsel
shall fully cooperate in such defense as such Purchaser and its
counsel may request, all at the cost and expense of the Company
(including without limitation, the attorneys’ fees and other
costs and expenses of the Purchasers and their related Indemnified
Parties’ legal counsel). Any amounts for which the Company is
responsible pursuant to the immediately preceding sentence shall be
paid promptly to, or as directed by, such Purchaser from time to
time, and may be offset by such Purchaser, at its discretion,
against any amounts from time to time owed by such Purchaser to the
Company under the Transaction Documents.

 

46

 

 

(d) No Person involved
in the sale of Registrable Securities who is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to
indemnification from any Person involved in such sale of
Registrable Securities who is not guilty of fraudulent
misrepresentation.

 

(e) The indemnification
required by this Section 6 shall be made by periodic payments of
the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are
incurred.

 

(f) The indemnity and
contribution agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party
or Indemnified Person against the indemnifying party or others, and
(ii) any liabilities the indemnifying party may be subject to
pursuant to the law.

 

7. Contribution. To
the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however: (i) no contribution shall be
made under circumstances where the maker would not have been liable
for indemnification under the fault standards set forth in Section
6 of this Agreement, (ii) no Person involved in the sale of
Registrable Securities which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (iii)
contribution by any seller of Registrable Securities shall be
limited in amount to the amount of net proceeds received by such
seller from the applicable sale of such Registrable Securities
pursuant to such Registration Statement. Notwithstanding the
provisions of this Section 7, no Investor shall be required to
contribute, in the aggregate, any amount in excess of the amount by
which the net proceeds actually received by such Investor from the
applicable sale of the Registrable Securities subject to the Claim
exceeds the amount of any damages that such Investor has otherwise
been required to pay, or would otherwise be required to pay under
Section 6(b), by reason of such untrue or alleged untrue statement
or omission or alleged omission.

 

8. Reports Under the
1934 Act. With a view to making available to the Investors the
benefits of Rule 144, the Company agrees to:

 

(a) make and keep
public information available, as those terms are understood and
defined in Rule 144;

 

(b) file with the SEC
in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company
remains subject to such requirements (it being understood and
agreed that nothing herein shall limit any obligations of the
Company under the Purchase Agreement) and the filing of such
reports and other documents is required for the applicable
provisions of Rule 144; and

 

47

 

 

(c) take all such
actions necessary to maintain its eligibility to sell such
securities pursuant to Rule 144; except if (i) there is material
non-public information regarding the Company which the
Company’s Board of Directors reasonably determines not to be
in the Company’s best interest to disclose and which the
Company is not otherwise required to disclose or (ii) there is a
significant business opportunity (including, but not limited to,
the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender
offer or other similar transaction) available to the Company which
the Company’s Board of Directors reasonably determines not to
be in the Company’s best interest to disclose and which the
Company would be required to disclose to comply with this Section
9, then the Company’s obligations under this Section 9 shall
be postponed for a period of time reasonably determined by the
Company’s Board of Directors.

 

9. Assignment of
Registration Rights. All or any portion of the rights under this
Agreement shall be automatically assignable by each Investor to any
transferee or assignee (as the case may be) of all or any portion
of such Investor’s Registrable Securities if: (i) such
Investor agrees in writing with such transferee or assignee (as the
case may be) to assign all or any portion of such rights, and a
copy of such agreement is furnished to the Company within a
reasonable time after such transfer or assignment (as the case may
be); (ii) the Company is, within a reasonable time after such
transfer or assignment (as the case may be), furnished with written
notice of (a) the name and address of such transferee or assignee
(as the case may be), and (b) the securities with respect to which
such registration rights are being transferred or assigned (as the
case may be); (iii) immediately following such transfer or
assignment (as the case may be) the further disposition of such
securities by such transferee or assignee (as the case may be) is
restricted under the 1933 Act or applicable state securities laws
if so required; (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this sentence such
transferee or assignee (as the case may be) agrees in writing with
the Company to be bound by all of the provisions contained herein;
(v) such transfer or assignment (as the case may be) shall have
been made in accordance with the applicable requirements of the
Purchase Agreement; and (vi) such transfer or assignment (as the
case may be) shall have been conducted in accordance with all
applicable federal and state securities laws.

 

10. Amendment of
Registration Rights. Provisions of this Agreement may be amended
only with the written consent of the Company and the Investors. Any
amendment effected in accordance with this Section 10 shall be
binding upon each Investor and the Company, provided that no such
amendment shall be effective to the extent that it (1) applies to
less than all of the holders of the holders of Registrable
Securities, (2) imposes any monetary obligation or liability, or
any material obligation or liability, on any Investor without such
Investor’s prior written consent (which may be granted or
withheld in such Investor’s sole discretion) or (3) applies
retroactively. No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party,
provided that the Investors (in a writing signed by all of the
Investors) may waive any provision of this Agreement, and any
waiver of any provision of this Agreement made in conformity with
the provisions of this Section 10 shall be binding on each
Investor, provided that no such waiver shall be effective to the
extent that it (1) applies to less than all the Investors (unless a
party gives a waiver as to itself only) or (2) imposes any monetary
obligation or liability, or any material obligation or liability,
on any Investor without such Investor’s prior written consent
(which may be granted or withheld in such Investor’s sole
discretion). No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any
provision of this Agreement unless the same consideration also is
offered to all of the parties to this Agreement.

 

48

 

 

11. Miscellaneous.

 

(a) This Agreement
shall be effective as of the date hereof. This Agreement shall
automatically terminate as to any Registrable Securities, at such
time when the Investors of such Registrable Securities ceases to
hold or be entitled to any such Registrable Securities except that
the obligations of such Investors under Sections 4 and 6 shall
survive such termination. This Agreement shall terminate
automatically, and the Company shall have no further obligations
hereunder, at such time when no Investor holds Registrable
Securities.

 

(b) Solely for purposes
of this Agreement, a Person is deemed to be a holder of Registrable
Securities whenever such Person owns, or is deemed to own, of
record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or
election received from such record owner of such Registrable
Securities.

 

(c) Any notices,
consents, waivers or other communications required or permitted to
be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party);
(iii) by electronic mail (provided confirmation of transmission is
electronically generated and kept on file by the sending party); or
(iv) one (1) Business Day after deposit with a nationally
recognized overnight delivery service with next day delivery
specified, in each case, properly addressed to the party to receive
the same. The addresses, facsimile numbers and e-mail addresses for
such communications shall be:

 

If to
the Company:

 

SANUWAVE Health,
Inc.

3360
Martin Farm Road, Suite 100

Suwanee, GA
30024

Facsimile: 

E-mail
address:

Attention: Chief
Financial Officer

 

If to
the Transfer Agent:

 

Action
Stock Transfer Corp.

7069 S.
Highland Drive, Suite 300

Salt
Lake City, Utah 84121

Facsimile: 

E-mail
address:

Attention: 

 

49

 

 

If to
the Legal Counsel:

 

Murray Indick, Esq. 

Morrison & Foerster LLP 

425 Market Street 

San Francisco, California 94105 

Phone:

E-mail
address:

 

If to a
Purchaser, to its address, facsimile number or e-mail address (as
the case may be) set forth on the Schedule of Purchasers attached
to the Purchase Agreement, with copies to such Purchaser’s
representatives as set forth on the Schedule of Purchasers, or to
such other address and/or facsimile number and/or to the attention
of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the
sender’s facsimile machine or e-mail transmission containing
the time, date and recipient facsimile number or e-mail address or
(C) provided by a courier or overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or
receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above,
respectively.

 

(d) Failure of any
party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof. The Company and each
Investor acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party hereto shall be
entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement by any other party
hereto and to enforce specifically the terms and provisions hereof
(without the necessity of showing economic loss and without any
bond or other security being required), this being in addition to
any other remedy to which any party may be entitled by law or
equity.

 

(e) All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of
this Agreement in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY. 

50

 

 

(f) This Agreement, the
other Transaction Documents, the schedules and exhibits attached
hereto and thereto and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto
and thereto solely with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents, the
schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto solely with
respect to the subject matter hereof and thereof; provided,
however, nothing contained in this Agreement or any other
Transaction Document shall (or shall be deemed to) (i) have any
effect on any agreements any Investor has entered into with, or any
instrument that any Investor received from, the Company or any of
its Subsidiaries prior to the date hereof with respect to any prior
investment made by such Investor in the Company, (ii) waive, alter,
modify or amend in any respect any obligations of the Company or
any of its Subsidiaries or any rights of or benefits to any
Investor or any other Person in any agreement entered into prior to
the date hereof between or among the Company and/or any of its
Subsidiaries and any Investor or any instrument that any Investor
received prior to the date hereof from the Company and/or any of
its Subsidiaries and all such agreements and instruments shall
continue in full force and effect or (iii) limit any obligations of
the Company under any of the other Transaction
Documents.

 

(g) Subject to
compliance with Section 9 (if applicable), this Agreement shall
inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto. This
Agreement is not for the benefit of, nor may any provision hereof
be enforced by, any Person, other than the parties hereto, their
respective permitted successors and assigns and the Persons
referred to in Sections 6 and 7 hereof.

 

(h) The headings in
this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. Unless the context
clearly indicates otherwise, each pronoun herein shall be deemed to
include the masculine, feminine, neuter, singular and plural forms
thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed
broadly as if followed by the words “without
limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like
import refer to this entire Agreement instead of just the provision
in which they are found.

 

(i) This Agreement may
be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to
the other party. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable
document format (.pdf) file of an executed signature page, such
signature page 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 signature page were an
original thereof.

 

(j) Each party shall do
and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents as any other
party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

 

51

 

 

(k) The language used
in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent and no rules of strict
construction will be applied against any party. Notwithstanding
anything to the contrary set forth in Section 10, terms used in
this Agreement but defined in the other Transaction Documents shall
have the meanings ascribed to such terms on the Closing Date in
such other Transaction Documents unless otherwise consented to in
writing by each Investor.

 

(l) All consents and
other determinations required to be made by the Investors pursuant
to this Agreement shall be made, unless otherwise specified in this
Agreement, by the Investors.

 

(m) The obligations of
each Investor under this Agreement and the other Transaction
Documents are several and not joint with the obligations of any
other Investor, and no Investor shall be responsible in any way for
the performance of the obligations of any other Investor under this
Agreement or any other Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by
any Investor pursuant hereto or thereto, shall be deemed to
constitute the Investors as, and the Company acknowledges that the
Investors do not so constitute, a partnership, an association, a
joint venture or any other kind of group or entity, or create a
presumption that the Investors are in any way acting in concert or
as a group or entity with respect to such obligations or the
transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Investors are not
acting in concert or as a group, and the Company shall not assert
any such claim, with respect to such obligations or the
transactions contemplated by this Agreement or any of the other the
Transaction Documents. Each Investor shall be entitled to
independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any
other Transaction Documents, and it shall not be necessary for any
other Investor to be joined as an additional party in any
proceeding for such purpose. The use of a single agreement with
respect to the obligations of the Company contained herein was
solely in the control of the Company, not the action or decision of
any Investor, and was done solely for the convenience of the
Company and not because it was required or requested to do so by
any Investor. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction
Document is between the Company and an Investor, solely, and not
between the Company and the Investors collectively and not between
and among Investors.

 

[Signature
pages follow.]

 

 

 

 

 

 

52

 

 

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

 

 

	

SANUWAVE HEALTH, INC.

 

 

	

Address
for Notice:

 

3360
Martin Farm Road, Suite 100

Suwanee,
GA 30024

Attn:
Chief Financial Officer

 

E-mail

	

By:___________________________________

     Name:
Lisa E. Sundstrom

     Title:
Chief Financial Officer

 

	

Fax

	
 

	
 

 

 

[Signature
Page to Registration Rights Agreement]

53

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Registration Rights Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

Name of Purchaser: 
________________

 

Signature of Authorized Signatory of Purchaser: 
__________________

 

Name of Authorized Signatory: 
_________________

 

Title of Authorized Signatory: 
___________________

 

Email Address of Authorized Signatory: 
___________________

 

Facsimile Number of Authorized Signatory: 
___________________

 

Address for Notice to Purchaser: 
___________________

 

 

 

 

 

 

 

 

54

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