Document:

Registration Rights Agreement

 Exhibit 4.1 
 REGISTRATION RIGHTS AGREEMENT 
 This Registration Rights Agreement (this
“Agreement”) is made and entered into as of December 1, 2006, among Panda Ethanol, Inc., a Delaware corporation (the “Company”), and the several purchasers signatory hereto (each such purchaser is a
“Purchaser” and collectively, the “Purchasers”). 
 This Agreement is made pursuant to the Securities
Purchase Agreement, dated as of the date hereof among the Company and each Purchaser (the “Purchase Agreement”). 
 The
Company and each Purchaser hereby agree as follows: 
 1. Definitions. Capitalized terms used and not otherwise defined herein that
are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
 “Advice” shall have the meaning set forth in Section 6(d). 
 “Effectiveness Date” means the date on which the Commission declares the initial Registration Statement filed hereunder
to be effective. 
 “Effectiveness Period” shall have the meaning set forth in Section 2(a). 
 “Event” shall have the meaning set forth in Section 2(b). 
 “Event Date” shall have the meaning set forth in Section 2(b). 
 “Filing Date” means, with respect to the initial Registration Statement required hereunder, the 75th calendar day following the effective time of the Merger and, with respect to any additional Registration Statement(s) that may
be required pursuant to Section 3(c), the 30th day following the date on which the Company first becomes aware
that such additional Registration Statement(s) is or are required hereunder. 
 “Holder” or “Holders” means
the holder or holders, as the case may be, from time to time of Registrable Securities. 
 “Indemnified Party” shall have
the meaning set forth in Section 5(c). 
 “Indemnifying Party” shall have the meaning set forth in Section 5(c).

 “Losses” shall have the meaning set forth in Section 5(a). 
 “Participating Holders” means the Holders offering Registrable Securities for sale pursuant to an Underwritten Offering. 
  

 “PEII” means Panda Energy International, Inc., a Texas corporation.

 “PIPE I Registrable Securities” means the “Registrable Securities” (as defined in the PIPE I
Registration Rights Agreement). 
 “PIPE I Registration Rights Agreement” means that certain Registration
Rights Agreement dated June 7, 2006 among the Company and the several purchasers signatory thereto. 
 “Plan of
Distribution” shall have the meaning set forth in Section 2(a). 
 “Prospectus” means the
prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
 “Registrable Securities” means all of (i) the Shares issued to the Purchasers and (ii) any shares of Common
Stock, par value $0.001 per share, of the Company issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the Shares. 
 “Registration Statement” means the registration statements required to be filed hereunder and any additional
registration statements contemplated by Section 3(c), including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in such registration statement. 
 “Rule
415” means Rule 415 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 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. 
 “Selling Stockholder Questionnaire” shall have the meaning set forth in Section 3(a). 
 “Shares” means the shares of Common Stock, par value $0.001 per share, issued by the Company pursuant to the Purchase
Agreement. 
  

 - 2 - 

 “Total Registrable Securities” means all of (i) the Registrable
Securities and (ii) the PIPE I Registrable Securities. 
 “Underwritten Offering” means an offering in
which securities of the Company are offered and sold on a firm commitment basis through one or more underwriters, all pursuant to an underwriting agreement between the Company and one or more Holders and such underwriter(s); provided,
however, that it is contemplated that the aggregate gross proceeds from such Underwritten Offering will exceed $50 million. 
  

	 	2.	Shelf Registration. 

 (a) On or prior to the Filing
Date, the Company shall use its reasonable best efforts to prepare and file as promptly as possible with the Commission a universal “Shelf” Registration Statement or Statements covering, among such other securities as may be offered from
time to time by the Company, the resale of the Registrable Securities on or prior to such Filing Date for an offering to be made on a continuous basis pursuant to Rule 415. Each such Registration Statement shall be on Form S-1 (except if the Company
is then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration may be on Form S-3 in accordance herewith) and shall contain (unless otherwise directed by the holders of 66-2/3% of the PIPE I
Registrable Securities included in such Registration Statement or in response to a written comment from the Commission) the “Plan of Distribution” section substantially in the form attached hereto as Annex A, with such
changes as are reasonably required to comply with then applicable securities laws. If, for any reason, the Commission refuses to permit all of the PIPE I Registrable Securities and the Registrable Securities to be registered on a single registration
statement or at the same time on multiple registration statements, then all of the PIPE I Registrable Securities (other than the PIPE I Registrable Securities held by PEII) and the Registrable Securities shall be registered together with as many
PIPE I Registrable Securities held by PEII as the Commission will permit to be registered in such initial registration statement or statements, and the balance of PEII’s PIPE I Registrable Securities shall be registered on another registration
statement or statements filed only after the effective date of the registration statement(s) registering the PIPE I Registrable Securities and the Registrable Securities; provided, however, if, for any reason, the Commission also
refuses to permit any portion of the PIPE I Registrable Securities not held by PEII or any of the Registrable Securities to be registered, then the non-PEII holders of the PIPE I Registrable Securities and the Purchasers shall reduce the number of
their PIPE I Registrable Securities and Registrable Securities, as applicable, to be registered on a pro rata basis as among the non-PEII holders of the PIPE I Registrable Securities and the Purchasers, considered collectively. Subject to the terms
of this Agreement, the Company shall use its reasonable best efforts to cause each such Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, and shall use its reasonable best
efforts to keep each such Registration Statement continuously effective under the Securities Act until the earlier of (A) the date on which there ceases to be outstanding any Registrable Securities, and (B) the date on which all
Registrable Securities have been sold, or may be sold without volume restrictions pursuant to Rule 144(k), as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the
Company’s transfer agent and the affected Holders (the “Effectiveness Period”). The Company shall telephonically request effectiveness of each such Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The
Company shall 

  

 - 3 - 

 
promptly notify the Holders (via electronic message or facsimile) of the effectiveness of each such Registration Statement no later than the next Trading Day
following the date such Registration Statement is declared effective by the Commission. The Company shall, by 5:00 p.m. Central Time on the Trading Day after the Effective Date (as defined in the Purchase Agreement), file a final Prospectus with the
Commission as required by Rule 424. Notwithstanding anything in this Agreement to the contrary, in the event that any Holder is required by applicable law to be named as an underwriter in a Registration Statement, or in any Prospectus contained
therein, in order to have any Registrable Securities then held by such Holder included in such Registration Statement, such Holder may elect by written notice to the Company not to have such Registrable Securities so included, and upon receipt of
such notice, the Company shall remove such specified Registrable Securities from inclusion in the Registration Statement. 
 (b) If:
(i) any Registration Statement is not filed on or prior to its Filing Date, or (ii) the Company fails to file with the Commission a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five
Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that any Registration Statement will not be “reviewed,” or not subject to further review, or (iii) after the
Effectiveness Date, a Registration Statement or Statements, as the case may be, ceases or cease for any reason to remain continuously effective as to all Registrable Securities for which it or they is or are required to be effective, or the Holders
are otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities for more than 10 consecutive calendar days or more than an aggregate of 30 calendar days during any 12-month period (which need not be consecutive
calendar days) (any such failure or breach being referred to as an “Event”, and for purposes of clause (i) the date on which such Event occurs, or for purposes of clause (ii) the date on which such five Trading Day period
is exceeded, or for purposes of clause (iii) the date on which such 10 or 30 calendar day period, as applicable, is exceeded, in any case, being referred to as “Event Date”), then in addition to any other rights the Holders may
have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to
each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.00% of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for any Registrable Securities then held by such Holder;
provided, that in no event shall such partial liquidated damages accrue for a period in excess of 24 months. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 10.0% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such
amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event. 
 (c) At any time after the Effectiveness Date and prior to the expiration of the Effectiveness Period, if and only if a holder or group of holders holding
in the aggregate at least 22.5% of the PIPE I Registrable Securities has requested in writing that the Company commence an Underwritten Offering under the Registration Statement or any separate registration statement to the extent required by any
then applicable rules and regulations or at the direction of the 

  

 - 4 - 

 
Commission, then a Holder or group of Holders holding in the aggregate at least 22.5% of the Registrable Securities may request in writing that any such
Underwritten Offering shall include the proposed sale or resale, as the case may be, of Registrable Securities, in addition to PIPE I Registrable Securities and securities of the Company, in the respective and relative amounts to be determined by a
managing underwriter(s) which shall be selected by the Company and the requesting Holder or Holders and shall be reasonably acceptable to each (it being understood that the underwriters specified on Annex A hereto or their respective
successors shall be deemed acceptable to the Company and the Holders). The managing underwriter(s) shall determine in good faith based on marketing factors the number of PIPE I Registrable Securities, Company securities, and Registrable Securities
to be included in such Underwritten Offering (it being understood that to the extent marketable the PIPE I Registrable Securities and the Registrable Securities shall take preference over Company securities), and any shares included in the
Underwritten Offering shall be allocated to the Participating Holders on a pro rata basis based on the total number of Registrable Securities requested to be included. In connection with an Underwritten Offering, the Company and the Participating
Holders shall negotiate and enter into an underwriting agreement in customary form with the managing underwriter(s), which shall include, among other provisions, customary representations and warranties and customary indemnities by and of the
Company and any Participating Holders; it being understood that neither the Company nor the Participating Holders shall be required to enter into representations, warranties or agreements that are not customary or reasonably requested by the
underwriters. In connection with any such Underwritten Offering, each Participating Holder shall, as a condition to inclusion, provide all such information and materials and take all such action as may be reasonably requested by the Company. The
Company and any Participating Holders shall take all reasonable actions as requested by the managing underwriter(s) in order to expedite and facilitate the registration and disposition of the Company securities and Registrable Securities included in
such Underwritten Offering; provided, however, that the Company shall not be required to cause the appropriate officers of the Company or its Affiliates to participate in a “road show” or similar marketing effort being
conducted by such underwriter with respect to such Underwritten Offering more than once in any six month calendar period. Additionally, notwithstanding any other provisions of this Agreement, the Company shall not be obligated to proceed with any
such Underwritten Offering if (i) managing underwriter(s) cannot be selected; (ii) any such Underwritten Offering would materially adversely affect (including through the premature disclosure thereof) any other financing arrangement or any
proposed acquisition, reorganization, merger, consolidation, disposition, capital expenditure or other similar transaction then being implemented by the Company or reasonably likely to be implemented by the Company during or immediately following
the pendancy of such Underwritten Offering; (iii) commencing an Underwritten Offering would, in the good faith judgment of the Board of Directors of the Company, be seriously detrimental to the Company by having a material adverse impact on the
Company’s ability to implement its business plan or to perform in any material respect its obligations under any material agreement; or (iv) prior to such request, the Company has offered the Holder or Holders of the Registrable Securities
a right to include the Registrable Securities or any portion thereof in an underwritten offering separately commenced by the Company outside the Registration Statement pursuant to the provisions of Section 6(e) hereof or otherwise and all
Registrable Securities were included in any such prior registration. In the event that the Company is not obligated to proceed with the Underwritten Offering pursuant to any of (i) through (iv) above, it shall provide written notice to the
Holders of its determination and the 

  

 - 5 - 

 
reasons therefor and the Holders shall then be entitled to make an additional request for an Underwritten Offering prior to the expiration of the
Effectiveness Period, so long as no request is made within a sixty (60) day period after the initial request. If the Company has previously delivered a notice of its determination not to proceed with an Underwritten Offering, upon receipt of a
subsequent request of the requisite percentage of Holders to proceed with an Underwritten Offering, it will be obligated to proceed with respect to an Underwritten Offering subject only to a right of the Company to delay the Underwritten Offering
for a period of up to one-hundred twenty (120) days because of any of the factors specified in (i) through (iv) above. In the event of an Underwritten Offering pursuant to this Section 2(c), the parties agree that the Company
shall amend, to the extent required by applicable rules and regulations, the Plan of Distribution attached as Annex A to reflect all necessary adjustments for such Underwritten Offering. In connection with any Underwritten Offering of its
Common Stock, the Company also hereby covenants and agrees to use its reasonable best efforts to seek a listing of its Common Stock on either any NASDAQ Stock Market, the American Stock Exchange, Inc. or the New York Stock Exchange, Inc. In no event
shall the Company’s failure to obtain such listing entitle the Holders to any monetary damages; it being understood that the Holders’ sole remedy for failure to obtain any such listing shall be their right to pursue an action for specific
performance. 
 3. Registration Procedures. 
 In connection with the Company’s registration obligations hereunder, the Company shall (and, for purposes of Section 3(m), each Holder shall): 
 (a) Not less than four Trading Days prior to the filing of each Registration Statement and not less than one Trading Day prior to the
filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), (i) furnish to each Holder copies of the “Principal and Selling
Stockholders” and “Plan of Distribution” sections of such Registration Statement or other documents proposed to be filed, if such sections have been revised since the previous filing of such Registration Statement or any amendment or
supplement thereto, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration
Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the PIPE I Registrable Securities, or the holders of a majority of the Total Registrable Securities, included in such Registration
Statement shall reasonably object in good faith, provided that the Company is notified of such objection in writing no later than two Trading Days after the Holders have been so furnished copies of such documents. Each Holder agrees to furnish to
the Company a completed Selling Stockholder Questionnaire in the form attached to this Agreement as Annex B not less than ten days after written request therefore has been made by the Company. The Company shall not be required to include the
Registrable Securities of a Holder in a Registration Statement and shall not be required to pay any liquidated or other damages 

  

 - 6 - 

 
under Section 2(b) to any Holder who fails to furnish to the Company a fully completed Selling Holder Questionnaire at least three Trading Days
prior to the date the Registration Statement is filed with the Commission (subject to the other requirements in this Section 3(a)). 
 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration
Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all
of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and, upon written request by any Holder, as promptly as reasonably possible provide
such Holder with true and complete copies of all material written correspondence from and to the Commission relating to a Registration Statement (provided that the Company may excise any information contained therein which would constitute material
non-public information as to any Holder which has not executed a confidentiality agreement with the Company); and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such
Registration Statement as so amended or in such Prospectus as so supplemented. 
 (c) If during the Effectiveness Period, the
number of Registrable Securities at any time exceeds 100% of the number of shares of common stock then included in a Registration Statement, then the Company shall use its reasonable best efforts to file as soon as reasonably practicable, but in any
case prior to the applicable Filing Date, an additional Registration Statement or post effective amendment to the existing Registration Statement covering the resale by the Holders of not less than 100% of the number of such Registrable Securities.

 (d) Use its reasonable best efforts to notify the Holders (which notice shall, pursuant to clauses (iii) through
(vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible and confirm such notice in writing (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement has been filed; (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement; and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other federal or state governmental
authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission or any other Federal or state governmental authority 

  

 - 7 - 

 
of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made
in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so
that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading; and (vi) the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided that any and all of such information shall be kept confidential by each Holder until
such information otherwise becomes public, unless disclosure by a Holder is required by law; provided, further, notwithstanding each Holder’s agreement to keep such information confidential, the Holders make no acknowledgement
that any such information is material, non-public information. 
 (e) Use its reasonable best efforts to avoid the issuance
of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable moment. 
 (f) Furnish to each Holder, without charge, to the extent
requested in writing by such Holder, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by
reference, and all exhibits to such Registration Statement (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. 
 (g) Promptly deliver to each Holder, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus)
and each amendment or supplement thereto as such Holder may reasonably request in writing in connection with resales by such Holder. Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment
or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to
Section 3(d). 
 (h) If NASDR Rule 2710 requires any broker-dealer to make a filing prior to executing a sale by a
Holder, the Company shall (i) make an Issuer Filing with the NASDR, Inc. Corporate Financing Department pursuant to proposed NASDR Rule 

  

 - 8 - 

 
2710(b)(10)(A)(i), (ii) respond within five Trading Days to any comments received from NASDR in connection therewith, and (iii) pay the filing fee
required in connection therewith. 
 (i) Prior to any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by the Holder
under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to
do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be required to qualify generally to
do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction. 

(j) If requested by the Holders, cooperate with the Holders to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such Holders may request. 
 (k) Upon the
occurrence of any event contemplated by this Section 3, as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of
the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein
by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an 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. If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to
suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be
resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(k) to suspend the availability of a Registration Statement and Prospectus subject to the payment of partial liquidated damages
pursuant to Section 2(b) for a period not to exceed 60 calendar days (which need not be consecutive days) in any 12 month period. 
 (l) Comply with all applicable rules and regulations of the Commission. 
  

 - 9 - 

 (m) If reasonably requested by the Company prior to any filing by the Company with the
Commission in connection with any applicable Registration Statement or Prospectus requirement of the Commission, each selling Holder agrees to furnish to the Company a certified statement as to the number of Shares beneficially owned by such Holder
and, if required by the Commission, the natural persons thereof that have voting and dispositive control over such shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event
that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company. 
 (n) Notwithstanding any provision of this Agreement to the contrary, subject to payment of any accrued liquidated damages otherwise provided for herein, it shall not be a breach or violation of any obligation of the
Company hereunder if the Company fails to take any action otherwise required hereunder because, in its reasonable determination, such action would require the Company to disclose material, non-public information that the Company has a bona fide
business or legal reason for not disclosing regardless of whether the Company caused such material, non-public information to exist. 
 (o) In the case of an Underwritten Offering, use its reasonable best efforts to furnish or caused to be furnished to each Holder of Registrable Securities covered by such Registration Statement and the underwriters a
signed counterpart, addressed to each such Holder and the underwriters, of: (i) an opinion of counsel for the Company, dated the date of each closing under the underwriting agreement, reasonably satisfactory to the underwriters; and (ii) a
“comfort” letter, dated the effective date of such Registration Statement and the date of each closing under the underwriting agreement, signed by the independent public accountants who have certified the Company’s financial
statements included in such Registration Statement, covering substantially the same matters with respect to such Registration Statement (and the Prospectus included therein) and with respect to events subsequent to the date of such financial
statements, as are customarily covered in accountants’ letters delivered to underwriters in underwritten public offerings of securities, and such other financial matters as the underwriters may reasonably request and customarily obtained by
underwriters in underwritten offerings, provided that, to be an addressee of the comfort letter, each Holder may be required to confirm that it is in the category of persons to whom a comfort letter may be delivered in accordance with applicable
accounting literature. 
 (p) In the case of an Underwritten Offering, use its reasonable best efforts to make available for
inspection by the representatives of the Holders and the representative of any underwriters participating in any disposition pursuant to a Registration Statement, and any special counsel or accountants retained by such Holders or underwriters,
during normal business hours and subject to receipt of executed confidentiality agreement or reasonably satisfactory form, such financial and other records, corporate documents and properties of the Company as are necessary in order to conduct a
“due diligence investigation.” 
  

 - 10 - 

 (q) In the case of an Underwritten Offering, make generally available to its
stockholders, as soon as reasonably practicable, earnings statements covering at least 12 months that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder in the case of an Underwritten Offering. 
 4. Registration Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by
the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market on which the Shares are then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws
reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested in writing by the Holders), and (C) if not previously paid by the Company in connection with an Issuer Filing, with respect to any filing
that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with NASD Regulation, Inc. pursuant to the NASD Rule 2710, so long as the broker is receiving no more than a customary brokerage
commission in connection with such sale), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested
by the Holders of a majority of the Registrable Securities included in a Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall
be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal
or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any Trading Market as required hereunder. In no event shall the Company be responsible for any
broker or similar commissions of any Holder (including any underwriting discounts and selling commissions in connection with an Underwritten Offering) or, except to the extent provided for in the Transaction Documents, any legal fees, stock transfer
taxes or other costs of the Holders. 
 5. Indemnification 
 (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, members, partners, agents, investment advisers and 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 each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, stockholders, members, partners, agents and employees
(and any other Persons with a functionally equivalent role 

  

 - 11 - 

 
of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating
to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under
which they were made) not misleading, or (2) any violation or alleged violation by the Company of the Securities Act, Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its
obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly
for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved or was not objected to in writing by such Holder
expressly for use in a Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that each Holder has expressly approved Annex A hereto for this purpose) or (ii) in the
case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware. 
 (b) Indemnification by Holders. Each Holder shall,
severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and 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), each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents 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, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising
out of or based solely upon: (x) such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act, or (y) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi),
the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d)
or (z) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of
or relating to any omission or alleged omission of a material fact required to be stated 

  

 - 12 - 

 
therein or necessary to make the statements therein not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in such Registration Statement or such Prospectus or (ii) to the extent that such information relates to such Holder’s proposed
method of distribution of Registrable Securities and was reviewed and expressly approved or was not objected to in writing by such Holder expressly for use in a Registration Statement (it being understood that each Holder has expressly approved
Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. 
 (c)
Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from
whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have prejudiced the Indemnifying Party.

 An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded
parties) include both such Indemnified Party and the Indemnifying Party, and counsel to such Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified
Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right
to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected
without its written consent, which consent shall not be unreasonably withheld, conditioned or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in
respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  

 - 13 - 

 Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days following written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such
actions for which such Indemnified Party is judicially determined to be not entitled to indemnification hereunder. 
 (d)
Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid
or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as
any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any
reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this
Section was available to such party in accordance with its terms. 
 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, except in the case of fraud by such
Holder. 
 The indemnity and contribution agreements contained in this Section are in addition to any liability that the
Indemnifying Parties may have to the Indemnified Parties. 
 6. Miscellaneous 
 (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their respective obligations under this Agreement,
each Holder or the Company, as 

  

 - 14 - 

 
the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate. 
 (b) No Piggyback on Initial Registration Statement. Except as set forth on Schedule 6(b) to this Agreement, no security holders
(other than the Holders in such capacity pursuant hereto) may include securities of the Company in the initial Registration Statement other than the Registrable Securities. 
 (c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities
Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement. 
 (d)
Discontinued Disposition. Each Holder agrees by its acquisition of Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d), such Holder will forthwith
discontinue disposition of such Registrable Securities under a Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the
“Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in
such Prospectus or Registration Statement. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed as promptly as it practicable. The Company agrees and acknowledges that any periods during which the
Holder is required to discontinue the disposition of Registrable Securities hereunder shall be subject to the provisions of Section 2(b). 
 (e) Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to
prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities 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 stock option or other employee
benefit plans, then the Company shall send to each Holder a written notice of such determination and, if within fifteen days after the date of such notice, any such Holder shall so request in writing, the Company shall include in such registration
statement all or any part of such Registrable Securities such Holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration rights if such registration statement relates to an underwritten
public offering; provided, however, that, the Company shall not be required to register any Registrable Securities pursuant to this 

  

 - 15 - 

 
Section 6(e) that are eligible for resale pursuant to Rule 144(k) promulgated under the Securities Act or that are the subject of a then effective
Registration Statement. 
 (f) Amendments and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of at least sixty-six and
two-thirds percent (66-2/3%) of the then outstanding Registrable Securities; provided, however, that any modification or amendment of this Agreement that is materially adverse to a Holder relative to any other Holder shall not be
effective without the consent of such adversely affected Holder. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. 
 (g)
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 electronic message or via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:00 p.m. (Dallas, Texas time) on a Trading Day, and such communication is electronically
confirmed as received, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via electronic message or via facsimile at the facsimile number set forth on the signature pages attached hereto on a
day that is not a Trading Day or later than 5:00 p.m. (Dallas, Texas time) on any Trading Day, and such communication is electronically confirmed as received, (c) the 2nd Trading Day following the date of mailing, if such communication is sent
by U.S. nationally recognized overnight courier service and is confirmed as received by such courier service, or (d) upon actual receipt by the party to whom such notice or communication is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto. 
 (h) Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior
written consent of all of the Holders of the then-outstanding Registrable Securities except in the case of a merger (or similar transaction) in which case the surviving entity shall succeed to the rights and obligations of the Company. Each Holder
may assign their respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement; provided, however, that at least 10,000 shares (subject to adjustment for splits, stock dividends, and
recapitalizations) of the Registrable Securities, are assigned to an assignee who seeks to assert registration rights under this Agreement. 
  

 - 16 - 

 (i) No Inconsistent Agreements. Except as set forth on Schedule 6(i),
neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have
the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as set forth on Schedule 6(i), neither the Company nor any of its subsidiaries has previously entered into
any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full. Except as set forth on Schedule 6(i), the Company hereby agrees that it will not grant registration
rights more favorable than the rights specified herein to any subsequent holder of its securities without either offering the same rights to all Holders or obtaining the written consent from Holders beneficially owning in the aggregate at least
50.1% of the Registrable Securities. 
 (j) Execution and Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof. 
 (k) 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 Texas, 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, stockholders, employees or
agents) shall be commenced exclusively in the state and federal courts sitting in the City of Dallas, Texas. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Dallas, Texas for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the 

  

 - 17 - 

 
Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 
 (l)
Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law. 
 (m) 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. 
 (n) Headings. The headings in this Agreement are for convenience only, do not constitute a part of this Agreement, and shall not be deemed to limit or affect any of the provisions hereof. 
 (o) Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint
with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way
acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it
shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. 
 (p)
Holder Cooperation. The Holders shall cooperate with the Company, as reasonably requested by the Company, in connection with the preparation and filing of any Registration Statement hereunder. The Company may require a Holder to promptly
furnish in writing to the Company such information as may be required in connection with such registration including, without limitation, all such information as may be requested by the Commission or the NASD or any state securities commission and
all such information regarding the Holder, the Registrable Securities held by the Holder and the intended method of disposition of the Registrable Securities. Each Holder agrees to provide such information requested in connection with such
registration within a reasonable time after receiving such written request. The Company may exclude from such registration the Registrable Securities of any such Holder who fails to furnish such information within a reasonable time prior to the
filing of each Registration Statement, 
  

 - 18 - 

 
supplemented Prospectus and/or amended Registration Statement. Each Holder shall be responsible for the delivery of the Prospectus to the Persons to whom the
Holder sells the Registrable Securities to the extent required by applicable law. When selling Registrable Securities pursuant to any Registration Statement, each Holder agrees to dispose of Registrable Securities in compliance with the plan of
distribution described in such Registration Statement and otherwise in compliance with applicable federal and state securities laws. 
 (q) PEII Lockup. The Company represents and warrants to the Purchasers that, pursuant to Section 6(q) of the PIPE I Registration Rights Agreement, PEII agreed as follows (it being understood that the
capitalized terms used in the following quoted language shall have the meanings given such terms in the PIPE I Registration Rights Agreement): “Prior to the Effectiveness Date, PEII will not, without the prior written consent of a majority in
interest of the other Holders, which shall not be unreasonably withheld, pledge, sell, contract to sell or sell any option or contract to purchase or otherwise transfer or dispose of, directly or indirectly, any of its Registrable Securities,
including covered or uncovered puts, short sales (including those against the box) or similar arrangements. Further, for a period of six (6) months following the Effectiveness Date, PEII will not, without the prior written consent of a majority
in interest of the other Holders pledge, sell, contract to sell or sell any option or contract to purchase or otherwise transfer or dispose of, directly or indirectly, all or any part of seventy-five percent (75%) of its Registrable Securities
that are registered for resale pursuant to the initial Registration Statement, including covered or uncovered parts, short sales (including those against the box) or similar arrangements. Notwithstanding the foregoing, PEII shall at all times be
permitted to pledge up to 50% of its Registrable Securities pursuant to a bona fide commercial lending arrangement based on the credit of PEII as a whole; provided that any pledgee in such arrangement agrees that the restrictions set forth in
this Section 6(q) shall continue to apply to such pledged shares at all times, including any period following a foreclosure of such pledged shares by the applicable lender(s).” 
 (r) Trading Restrictions. Each Holder hereby agrees that it shall not, to the extent requested by the managing underwriter(s) of
securities of the Company in connection with any Underwritten Offering effected pursuant to this Agreement, directly or indirectly sell, offer to sell (including without limitation any short sale), grant any option or otherwise transfer or dispose
of any Registrable Securities or other shares of Common Stock of the Company or any securities convertible into or exchangeable or exercisable for shares of Common Stock of the Company then owned by such Holder for a period of 60 days following such
Underwritten Offering; provided, however, that the restrictions above shall not apply to Registrable Securities being sold pursuant to such Underwritten Offering or to any underwritten offering in which Registrable Securities or any
portion thereof are not included, except to the extent expressly required in writing by the managing underwriter because of marketing considerations. In order to enforce the foregoing covenant, the Company shall have the right to place
restrictive legends on the stock certificates representing the securities subject to this Section and to impose stop transfer instructions with respect to applicable securities until the end of such period. 
  

 - 19 - 

 [Remainder of Page Intentionally Left Blank. 
 Signature Pages to Follow] 
  

 - 20 - 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  
  

									
		 	PANDA ETHANOL, INC. 
			
		 	By:	 	 /s/ MICHAEL TRENTEL
  

		 		 		 	Name:	 	Michael Trentel
		 		 		 	Title:	 	Chief Financial Officer

  
 [SIGNATURE PAGE OF HOLDERS
FOLLOWS] 
  

 [SIGNATURE PAGE OF HOLDERS TO PANDA RRA] 
 Name of Holder: _Panda Energy International, Inc.             
 Signature of Authorized Signatory of Holder: _/s/ ROBERT W. CARTER             
 Name of Authorized Signatory: _ Robert W. Carter             
 Title of Authorized Signatory: __Chairman & Chief Executive Officer             

[SIGNATURE PAGES CONTINUE] 
  

 - 22 - 

 [SIGNATURE PAGE OF HOLDERS TO PANDA RRA] 
 Name of Holder: _D.B. Zwirn Special Opportunities Fund, Ltd.             
 Signature of Authorized Signatory of Holder: /s/ LAWRENCE D. CUTLER             
 Name of Authorized Signatory: _Lawrence D. Cutler              
 Title of Authorized Signatory: _Chief Administrative and Compliance Officer __ 
 [SIGNATURE PAGES CONTINUE] 
  

 - 23 - 

 [SIGNATURE PAGE OF HOLDERS TO PANDA RRA] 
 Name of Holder: _D.B. Zwirn Special Opportunities Fund, L.P.             
 Signature of Authorized Signatory of Holder: /s/ LAWRENCE D. CUTLER             
 Name of Authorized Signatory: _Lawrence D. Cutler              
 Title of Authorized Signatory: _Chief Administrative and Compliance Officer __ 
 [SIGNATURE PAGES CONTINUE] 
  

 - 24 -Amended and Restated Securities Purchase Agreement

 Exhibit 10.8 
 AMENDED AND RESTATED 
 SECURITIES PURCHASE AGREEMENT 
 THIS AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of December 1, 2006 by and between Vertical
Communications, Inc., a Delaware corporation (the “Company”), and the investors set forth on Exhibit A attached hereto (individually, an “Investor” and collectively, the “Investors”).

 WITNESSETH: 
 WHEREAS, the Company and certain Investors previously entered into that certain Securities Purchase Agreement, dated as of October 18, 2006 (the “Original Purchase Agreement”) pursuant to which the Company
agreed to sell to certain Investors and such Investors agreed to purchase from the Company (the “Offering”), (i) 22,000 shares (the “Shares”) of the Company’s Series E Convertible Preferred Stock, par
value $1.00 per share (the “Series E Preferred Stock”) at a price per share of $1,000.00, (ii) warrants to purchase an aggregate of 20,754,717 shares of common stock, par value $0.01 per share (the “Common
Stock”) with an initial exercise price of $0.58 per share (the “Tranche I Warrants”), and (iii) additional warrants to purchase an aggregate of 20,754,717 shares of Common Stock with an initial exercise price of $0.58
per share (the “Tranche II Warrants,” and together with the Tranche I Warrants, the “Warrants”), for a total purchase price of $22,000,000 (the “Purchase Price”) pursuant to the terms of this
Agreement; 
 WHEREAS, the Company has agreed to sell and certain additional investors listed on Exhibit A have agreed
to purchase an aggregate of 5,400 additional shares of Series E Preferred Stock (the “Additional Shares”) and warrants to purchase an aggregate of 5,094,341 shares of Common Stock (the “Additional Warrants”) on
identical terms and conditions as set forth herein; 
 WHEREAS, the sale of the Additional Shares constitutes a Future Financing
Transaction (as such term is defined in the Original Purchase Agreement) and the parties hereto desire to amend and restate the Original Purchase Agreement in its entirety in order to reflect the satisfaction of the Future Financing Transaction
provisions of the Original Purchase Agreement; 
 WHEREAS, the parties desire, by the execution and delivery of this Agreement, to
amend and restate the Original Purchase Agreement in its entirety (i) to incorporate the Additional Shares in the definition of “Shares” as used herein; (ii) to reflect that, as a result of the Future Financing Transaction having
occurred, the Tranche II Warrants are void ab initio, and to amend all references in the Original Purchase Agreement to “Warrants” to refer only to the Tranche I Warrants and the Additional Warrants; and (iii) to amend the definition
of “Purchase Price” to refer to an aggregate purchase price of $27,400,000; 
 WHEREAS, concurrently with the execution of
the Original Purchase Agreement, the Company, Vertical Acquisition Sub, Inc., a wholly owned subsidiary of the Company (“Acquisition Sub”) and Vodavi Technology, Inc. (“Vodavi”) executed an Agreement and Plan of
Merger (the “Merger Agreement”) pursuant to which, as a condition to the transactions contemplated by the Original Purchase Agreement and this Agreement, Vodavi shall merge with Acquisition Sub (with Vodavi being the surviving
corporation thereof) and Vodavi will become a wholly owned subsidiary of the Company (the “Merger”); and 
 WHEREAS,
the parties hereto desire to enter into this Agreement for the purpose of setting forth certain representations, warranties and covenants made by each to the other as an inducement to the execution and delivery of this Agreement and the conditions
precedent to the consummation of the transactions set forth in this Agreement. 

 NOW, THEREFORE, in consideration of the premises and of the mutual provisions, agreements and
covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 
 PURCHASE AND SALE OF THE SHARES 
 1.1 Authorization and Sale of the Shares and Warrants. Subject to the terms and conditions set forth in this Agreement, the Company has authorized
the sale of (a) up to 33,000 shares of Series E Preferred Stock, and (b) warrants to purchase an aggregate of 25,849,059 shares of the Company’s Common Stock pursuant to the Warrants (of which the Investors set forth on Exhibit
A have committed to purchase the amounts set forth thereon). The shares of Common Stock issuable upon conversion of the Shares are referred to herein as the “Conversion Shares”. The shares of Common Stock issuable upon the
exercise of the Warrants are referred to herein as the “Warrant Shares”. 
 1.2 Agreement to Sell and Purchase the Shares
and the Warrants. Subject to the terms and conditions of this Agreement, each Investor, severally and not jointly, agrees to purchase at the Closing (as such term is defined in Section 1.3 hereof), and the Company agrees to issue and
sell to each such Investor at the Closing, for the purchase price set forth opposite each such Investor’s name on Exhibit A attached hereto, that number of Shares and Warrants set forth opposite each such Investor’s name on
Exhibit A attached hereto. 
 1.3 Delivery of the Shares and Warrants at Closing. 
 (a) The completion of the purchase and sale of the Shares and the Warrants (the “Closing”) shall occur immediately following consummation
of the Merger (the “Closing Date”) at the offices of Goodwin Procter LLP, 53 State Street, Boston, MA 02109 or at such other place as may be mutually agreed by the Company and the Investors. At the Closing, the Company shall
(i) deliver to the Investors one or more stock certificates representing the number of Shares set forth on Exhibit A, each such certificate to be registered in the name of each Investor or, if so indicated on the signature page of this
Agreement, in the name of a nominee designated by such Investor (at the address of each Investor set forth on the signature pages hereto); and (ii) deliver to each Investor a Warrant substantially in the form attached hereto as Exhibit B
to purchase the number of shares of Common Stock set forth opposite each such Investor’s name on Exhibit A or, if so indicated on the signature page of this Agreement, in the name of a nominee designated by such Investor. 
 (b) The Company’s obligation to issue the Shares and the Warrants to the Investors shall be subject to the following conditions, any one or more of
which may be waived by the Company: 
 (i) receipt by the Company of a wire transfer of funds to an account designated by the Company in
the full amount of the Purchase Price for all of the Shares and Warrants being purchased hereunder as set forth on Exhibit A; 
 (ii)
consummation of the Merger; and 
 (iii) the accuracy of the representations and warranties made by the Investors and the satisfaction of
the undertakings of the Investors to be fulfilled prior to the Closing. 
  

 (c) The Investors’ obligations to purchase the Shares and the Warrants shall be subject to the
following conditions, any one or more of which may be waived by any Investor hereunder as to itself only: 
 (i) consummation of the Merger
on terms and conditions satisfactory to the Investors; 
 (ii) consummation of the transaction, contemplated by the Credit Agreement and
related Security Agreement, dated as of October 16, 2006 (the “Credit Agreement”), by and among the Company, Vertical Communications Acquisition Corp., Acquisition Sub, on one hand, and Columbia Partners, L.L.C. Investment
Management and NEIPF, L.P. (collectively, “Lender”), on terms and conditions satisfactory to the Investors; 
 (iii) the
Company shall have caused the Certificate of Powers, Designations, Preferences and Rights of the Series E Preferred Stock in substantially the form attached hereto as Exhibit C (the “Certificate of Designations”) to be duly
adopted and approved by the Company’s Board of Directors (the “Board of Directors”) and to be duly filed with the Secretary of State of Delaware (and the Investors shall have received written confirmation of the same certified
by the Secretary of State of Delaware); 
 (iv) the Company having authorized, unissued and unreserved shares sufficient to permit issuance
of all of the Shares proposed to be sold hereunder; 
 (v) the representations and warranties of the Company set forth herein shall be true,
correct and complete as of the Closing Date in all respects (except for representations and warranties that speak as of a specific date, which representations and warranties shall be true, correct and complete as of such date); 
 (vi) performance and compliance by the Company with all covenants, agreements obligations and conditions required to be performed on or before the date
hereof; 
 (vii) the execution of a Consent and Waiver Agreement (as defined in the Original Purchase Agreement); and 
 (viii) the Investors shall have received such documents as the Investors shall reasonably have requested, including, a standard opinion of Company
counsel as to the matters set forth in the form attached as Exhibit D hereto and as to exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), of the sale of the Shares.
The Warrants, the Merger Agreement, the Credit Agreement, the Certificate of Designations and the Consent and Waiver Agreement shall collectively be referred to herein as the “Ancillary Agreements.” 

 ARTICLE II 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
 2. Except as disclosed by the Company in a written
Disclosure Schedule provided by the Company to the Investors (the “Disclosure Schedule”), the Company hereby represents, warrants and covenants to the Investors, as follows: 
 2.1 Organization. The Company is duly organized and validly existing in good standing under the laws of the jurisdiction of its organization. Each
of the Company and its Subsidiaries (as such term is defined in Rule 405 under the Securities Act) has all requisite corporate power and authority to own, operate and occupy its properties and to conduct its business as presently conducted and
as described in the documents filed by the Company under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), since June 30, 2004 through the date hereof,
including, without limitation, its most recent report on Form 10-K (the “Exchange Act Documents”) and is registered or qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted
by it or the location of the properties owned or leased by it requires such qualification and where the failure to be so qualified would have a material adverse effect upon the condition (financial or otherwise), results of operations, business or
business prospects, properties or operations of the Company and its Subsidiaries, considered as one enterprise (a “Material Adverse Effect”), and no proceeding to which the Company or any Subsidiary is a party has been instituted in
any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification. 
 2.2 Due Authorization and Valid Issuance. The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and the Ancillary Agreements, and this Agreement and the
Ancillary Agreements have been duly authorized and validly executed and delivered by the Company and constitutes the legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as rights to
indemnity and contribution may be limited by state or federal securities laws or the public policy underlying such laws, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The
Shares and the Warrants being purchased by the Investors hereunder will, and the Conversion Shares and the Warrant Shares, upon issuance and payment therefor pursuant to the terms hereof or thereof, as applicable, be duly authorized, validly issued,
fully-paid and nonassessable. 
 2.3 Non-Contravention. The execution and delivery of this Agreement and the Ancillary Agreements, the
issuance and sale of the Shares under this Agreement, the issuance of the Conversion Shares upon conversion of the Shares, the issuance of the Warrants and the issuance of the Warrant Shares upon exercise of the Warrants, the fulfillment of the
terms of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby do not and will not (a) conflict with or constitute a violation of, or default (with the passage of time or otherwise)
under, (i) any bond, debenture, note or other evidence of indebtedness, lease, contract, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or any Subsidiary is a party or by
which it or any of its Subsidiaries or their respective properties are bound, (ii) the charter, by-laws or other organizational documents of the Company or any Subsidiary, or (iii) any law, administrative regulation, ordinance or order of
any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary or their respective properties, except in the case of clauses (i) and (iii) for any such conflicts, violations or defaults which
are not reasonably likely to have a Material Adverse Effect or (b) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the material properties or assets of the Company or
any Subsidiary or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or any indenture, mortgage, deed of trust or any other agreement or
instrument to which the Company or any Subsidiary is a party or by which any of them is bound or to which any of the material property or assets of the Company or any Subsidiary is subject. No consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body, administrative agency, or other governmental body or any other 

 person is required for the execution and delivery of this Agreement or the Ancillary Agreements by the Company, the valid
issuance and sale of the Shares to be sold pursuant to this Agreement, the issuance of the Conversion Shares upon conversion of the Shares, the issuance of the Warrants and the issuance of the Warrant Shares upon exercise of the Warrants, and the
performance by the Company of its other obligations hereunder and thereunder, other than such as have been made or obtained, and except for any post-closing securities filings or notifications required to be made under federal or state securities
laws. 
 2.4 Capitalization. The capitalization of the Company as of October 15, 2006 is as set forth on Schedule 2.4,
increased as set forth in the next sentence. The Company has not issued any capital stock since that date other than pursuant to (a) employee benefit plans disclosed in the Exchange Act Documents, or (b) outstanding warrants, options or
other securities disclosed in the Exchange Act Documents. The Company has authorized, unissued, unreserved and undesignated shares of preferred stock sufficient to sell all Shares proposed to be issued under this Agreement. The designations, powers,
preferences, rights qualifications, limitations and restrictions in respect of the Series E Preferred Stock are as set forth in the Certificate of Designations, and all such designations, powers, preferences, rights, qualifications, limitations and
restrictions are valid, binding and enforceable and in accordance with all applicable laws. The Shares to be sold pursuant to this Agreement, the Conversion Shares to be issued upon conversion of the Shares, the Warrants and the Warrant Shares to be
issued upon exercise of the Warrants have all been duly authorized, and when issued and paid for in accordance with the terms of this Agreement, upon conversion of the Shares or upon exercise of the Warrants, as applicable, will be duly and validly
issued, fully paid and nonassessable. The Shares and the Warrants shall represent approximately 49.1% of the outstanding capital stock of the Company immediately following the Closing (calculated on a fully diluted basis). The outstanding shares of
capital stock of the Company have been duly and validly issued and are fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and were not issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. Except as set forth in or contemplated by the Exchange Act Documents, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any unissued shares of capital stock or other equity interest in the Company or any Subsidiary, or any contract, commitment, agreement, understanding or arrangement of any kind to which the Company is a party or
of which the Company has knowledge and relating to the issuance or sale of any capital stock of the Company or any Subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options. Without limiting the foregoing
and except as provided herein, no preemptive right, co-sale right, right of first refusal, registration right, or other similar right exists with respect to the Shares and the Warrants or the issuance and sale thereof, the issuance of the Conversion
Shares upon conversion of the Shares or the Warrant Shares upon exercise of the Warrants. No further approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Shares
and the Warrants. The Company owns the entire equity interest in each of its Subsidiaries, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest, other than as described in the Exchange Act Documents. Except
as disclosed in the Exchange Act Documents, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Common Stock to which the Company is a party or, to the knowledge of the Company, between or among
any of the Company’s stockholders. 
 2.5 Legal Proceedings; Disagreements with Advisors. There is no material legal or
governmental proceeding pending or, to the knowledge of the Company, threatened to which the Company or any Subsidiary is or may be a party or of which the business or property of the Company or any Subsidiary is subject that is not disclosed in the
Exchange Act Documents. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the accountants and lawyers formerly or presently employed by the Company and the Company is current with
respect to any fees owed to its accountants and lawyers. 

 2.6 No Violations. Neither the Company nor any Subsidiary is in violation of (a) its charter,
bylaws, or other organizational document; (b) in violation of any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary, which
violation, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect; or (c) is in default (and there exists no condition which, with the passage of time or otherwise, would constitute a default) in the
performance of any bond, debenture, note or any other evidence of indebtedness in any indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary
is bound or by which the properties of the Company or any Subsidiary are bound, which would be reasonably likely to have a Material Adverse Effect. 
 2.7 Governmental Permits, Etc. With the exception of the matters which are dealt with separately in Sections 2.1, 2.12, 2.13, and 2.14, each of the Company and its Subsidiaries has all necessary
franchises, licenses, certificates and other authorizations from any foreign, federal, state or local government or governmental agency, department, or body that are currently necessary for the operation of the business of the Company and its
Subsidiaries as currently conducted and as described in the Exchange Act Documents except where the failure to currently possess could not reasonably be expected to have a Material Adverse Effect. 
 2.8 Intellectual Property. Except as specifically disclosed in the Exchange Act Documents (a) each of the Company and its Subsidiaries owns
or possesses sufficient rights to use all patents, patent rights, trademarks, copyrights, licenses, inventions, trade secrets, trade names and know-how (collectively, “Intellectual Property”) described or referred to in the Exchange
Act Documents as owned or possessed by it or that are necessary for the conduct of its business as now conducted or as proposed to be conducted as described in the Exchange Act Documents, except where the failure to currently own or possess would
not have a Material Adverse Effect, (b) neither the Company nor any of its Subsidiaries is infringing, or has received any notice of, or has any knowledge of, any asserted infringement by the Company or any of its Subsidiaries of, any rights of
a third party with respect to any Intellectual Property that, individually or in the aggregate, would have a Material Adverse Effect and (c) neither the Company nor any of its Subsidiaries has received any notice of, or has any knowledge of,
infringement by a third party with respect to any Intellectual Property rights of the Company or of any Subsidiary that, individually or in the aggregate, would have a Material Adverse Effect. Except as specifically disclosed in the Exchange Act
Documents, all software applications and portions of applications, including, without limitation, interfaces, functions, and class definitions included in whole or in part in any Company Software (as hereinafter defined) are either: (a) owned
by the Company, (b) currently in the public domain or otherwise available for use, modification and distribution by the Company without a license from or the approval or consent of any third party, or (c) licensed or otherwise used by the
Company pursuant to the terms of valid, binding written agreements (a “Software Contract”). Except as specifically disclosed in the Exchange Act Documents, no Software Contract creates, or purports to create, obligations or
immunities with respect to any intellectual property rights of the Company enforceable in any jurisdiction of the world, including but not limited to, obligations requiring the disclosure or distribution of all or a portion of the source code for
any Company Software. For purposes of this Agreement, “Company Software” means any and all computer programs or portions thereof owned, licensed, distributed, copied, modified, displayed, sublicensed or otherwise used by the Company
in connection with the operation of its business as now conducted or as now proposed to be conducted as described in the Exchange Act Documents. 

 2.9 Financial Statements; Solvency; Obligations to Related Parties. 
 (a) The financial statements of the Company and the related notes contained in the Exchange Act Documents present fairly, in accordance with U.S.
generally accepted accounting principles (“GAAP”), the financial position of the Company and its Subsidiaries as of the dates indicated, and the results of its operations and cash flows for the periods therein specified consistent
with the books and records of the Company and its Subsidiaries except that the unaudited interim financial statements were or are subject to normal and recurring year-end adjustments which are not expected to be material in amount except as
otherwise described in the Exchange Act Documents. Such financial statements (including the related notes) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods therein specified, except as may be disclosed
in the notes to such financial statements, or in the case of unaudited statements, as may be permitted by the Securities and Exchange Commission (the “SEC”) on Form 10-Q under the Exchange Act and except as disclosed in the
Exchange Act Documents. The other financial information contained in the Exchange Act Documents has been prepared on a basis consistent with the financial statements of the Company. 
 (b) The (i) fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the
Company’s existing liabilities and other obligations as such matures or is otherwise payable; (ii) Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and
as proposed to be conducted taking into account the current and projected capital requirements of the business conducted by the Company and projected capital availability; and (iii) current cash flow of the Company, together with the proceeds
the Company would receive upon liquidation of its assets, after taking into account all anticipated uses of such amounts, would be sufficient to pay all such liabilities and obligations when such is required to be paid. The Company does not intend
to incur liabilities and other obligations beyond its ability to pay such as they mature or are required to be paid. The Company has no knowledge of any facts or circumstances which lead it to believe that it will be required to file for
reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction, and has no present intention to so file. 
 (c) Except as set forth in any Exchange Act Documents, there are no obligations of the Company to officers, directors, stockholders or employees of the Company other than: 
 (i) for payment of salary for services rendered and for bonus payments; 
 (ii) reimbursements for reasonable expenses incurred on behalf of the Company; 
 (iii) for other standard
employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors); 
 (iv) obligations listed in the Company’s financial statements; and 
 (v) under applicable laws. 
 (d) Except as described above or in any Exchange Act Filings, (i) none of
the officers, directors or, to the best of the Company’s knowledge, key employees or stockholders of the Company or any members of their immediate families, are indebted to the Company, individually or in the aggregate, in excess of $60,000;
and (ii) none of the officers, directors or, to the best of the Company’s knowledge, key employees have any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has
a business relationship, or any firm or corporation which competes with the Company, other than passive investments in publicly traded companies (representing less than one percent (1%) of such company) 

 which may compete with the Company. Except as described above, no officer, director, or any member of their immediate
families, is, directly or indirectly, interested in any material contract with the Company and no agreements, understandings or proposed transactions are contemplated between the Company and any such person. Except as set forth in any Exchange Act
Documents, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation. 
 2.10 No Material
Adverse Change. Except as disclosed in the Exchange Act Documents, since March 31, 2006, there has not been (a) any material adverse change in the financial condition or results of operations of the Company and its Subsidiaries
considered as one enterprise, (b) any material adverse event affecting the Company or its Subsidiaries, (c) any obligation, direct or contingent, that is material to the Company and its Subsidiaries considered as one enterprise, incurred
by the Company, except obligations incurred in the ordinary course of business or with respect to the transactions contemplated by this Agreement or the Merger Agreement or Credit Agreement, (d) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of its Subsidiaries, or (e) any loss or damage (whether or not insured) to the physical property of the Company or any of its Subsidiaries which has been sustained which has a
Material Adverse Effect. 
 2.11 Disclosure. The representations and warranties of the Company contained in this ARTICLE II
as of the date hereof and as of the Closing Date, do 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. The Company understands and confirms that the Investors will rely on the foregoing representations in effecting transactions in the securities of the Company. 
 2.12 Exchange Act and OTCBB Compliance. The Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange Act and is
quoted on The Nasdaq Stock Market, Inc.’s OTC Bulletin Board quotation service (the “OTCBB”), and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or removal from quotation of the Common Stock from the OTCBB, nor has the Company received any notification that the SEC, the OTCBB or the National Association of Securities Dealers, Inc. (“NASD”) is
contemplating terminating such registration or quotation, except as disclosed in the Exchange Act Documents. 
 2.13 Reporting Status.
The Company has filed in a timely manner all documents that the Company was required to file under the Exchange Act during the twelve (12) months preceding the date of this Agreement. The following documents complied as to form in all material
respects with the SEC’s requirements as of their respective filing dates, and the information contained therein as of the date thereof did not contain an 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: 
 (a) all Forms
10-K, 10-Q, 8-K (including any and all amendments thereto) and all Definitive Proxy Statements on Schedule 14A and additional Definitive Proxy Materials filed with the SEC since June 30, 2006; and 
 (b) all other documents, if any, filed by the Company with the SEC since June 30, 2006. 
 2.14 Issuance and Quotation. The Company shall comply with all requirements of the NASD and the SEC with respect to the issuance of the Shares,
the Conversion Shares, the Warrants and the Warrant Shares and the OTCBB with respect to the quotation of the Conversion Shares and the Warrant Shares on the OTCBB. 

 2.15 No Manipulation of Stock. The Company has not taken and will not, in violation of applicable
law, take, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares, the Warrant Shares and the Conversion Shares.

 2.16 Company Not an “Investment Company”. The Company has been advised of the rules and requirements under the Investment
Company Act of 1940, as amended (the “Investment Company Act”). The Company is not, and immediately after receipt of payment for the Shares and the Warrants will not be, an “investment company” within the meaning of the
Investment Company Act and shall conduct its business in a manner so that it will not become subject to the Investment Company Act. 
 2.17
Foreign Corrupt Practices; Embargoed Person. 
 (a) Neither the Company, nor to the knowledge of the Company, any agent or other
person acting on behalf of the Company, has (i) directly or indirectly, corruptly 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 to the extent required by law any contribution made by the
Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. 
 (b) None of the funds or other assets of the Company constitute or shall constitute property of, or shall be beneficially owned, directly or indirectly,
by any person with whom U.S. persons are restricted from engaging in financial or other transactions under United States law, including, but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. § 1701
et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any executive orders or regulations promulgated under any such United States laws (each, an “Embargoed Person”), with the
result that the investments evidenced by the Shares are or would be in violation of law and (i) no Embargoed Person has or shall have any interest of any nature whatsoever in the Company with the result that the investments evidenced by the
Shares are or would be in violation of law; and (ii) none of the funds of the Company are or shall be derived from any unlawful activity with the result that the investments evidenced by the Shares are or would be in violation of law; provided,
that with respect to the covenants contained in this Section 2.17(b), the Company may assume that the Investors are not Embargoed Persons. The Company certifies that, to the Company’s knowledge, the Company has not been designated,
and is not owned or controlled, by an Embargoed Person. 
 2.18 Accountants. To the Company’s knowledge, KPMG LLP and Vitale
Caturano & Company, Ltd, each of whom the Company expects will express their respective opinion with respect to the financial statements to be incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended
June 30, 2004, 2005 and/or 2006, as applicable, into the Registration Statement (as defined below) and the prospectus which forms a part thereof, are independent accountants as required by the Securities Act and the rules and regulations
promulgated thereunder and are registered with the Public Company Accounting Oversight Board. 
 2.19 Contracts. The contracts filed
as exhibits to the Exchange Act Documents are in full force and effect on the date hereof, and neither the Company nor, to the Company’s knowledge, any other 

 party to such contracts is in breach of or default under any of such contracts which would have a Material Adverse
Effect. The Company has filed with the SEC all contracts and agreements required to be filed by the Exchange Act. 
 2.20 Taxes. The
Company has filed all necessary federal, state and foreign income and franchise tax returns due to be filed as of the date hereof and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has
been or might be asserted or threatened against it which would have a Material Adverse Effect. 
 2.21 Transfer Taxes. On the Closing
Date, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Shares to be sold to the Investor hereunder will be, or will have been, fully paid or provided for by the
Company and all laws imposing such taxes will be or will have been fully complied with. 
 2.22 Private Offering. Assuming the
correctness of the representations and warranties of the Investors set forth in ARTICLE V hereof, the offer and sale of Shares and Warrants hereunder is exempt from registration under the Securities Act. The Company has not in the past nor
will it hereafter take any action to sell, offer for sale or solicit offers to buy any securities of the Company which would bring the offer, issuance or sale of the Shares and the Warrants as contemplated by this Agreement, within the provisions of
Section 5 of the Securities Act, unless such offer, issuance or sale was or shall be within the exemptions of Section 4 of the Securities Act. Neither the Company nor any person acting on behalf of the Company has offered or sold any of
the Shares and/or the Warrants by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act). The Company has offered the Shares and Warrants for sale only to the Investors and certain
other “accredited investors” within the meaning of Rule 501 of Regulation D under the Securities Act. 
 2.23 Controls and
Procedures. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company has established and maintains an effective system of internal control over
financial reporting (as such term is defined in the Exchange Act ) regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with GAAP and includes policies and procedures that
(i) pertain to maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the issuer’s assets that could have a Material Adverse Effect on the financial statements. Except as set forth in the Exchange Act Documents,
the Company has established and maintains disclosure controls and procedures (as defined in Exchange Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in the applicable Exchange Act
Documents their conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the periods covered by such Exchange Act Documents based on such evaluation. Since the last such evaluation date, there has been no
change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, 

 the Company’s internal control over financial reporting, and no significant deficiencies or material weaknesses in
internal controls over financial reporting, or other factors that could significantly affect the Company’s internal control over financial reporting, have been identified. 
 2.24 Merger Agreement and Credit Agreement. Each of the representations and warranties of each party to (i) the Merger Agreement (including,
without limitation, those of Vodavi), as qualified by the disclosure schedule provided by Vodavi, were true and correct in all respects when made and will be true and correct in all material respects at the time of the consummation of the Merger,
and (ii) the Credit Agreement (including, without limitation, those of the Company), as qualified by the disclosure schedule provided by the Company, were true and correct in all respects when made and will be true and correct in all material
respects at the time of the consummation of the transactions contemplated by the Credit Agreement. The execution, delivery and performance by the Company of each of the Merger Agreement and the Credit Agreement and the consummation by the Company of
the transactions contemplated thereby, were within the powers of the Company and were duly authorized by all necessary action of the Company. The Merger Agreement and the Credit Agreement each constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with their respective terms, except to the extent that the validity or binding nature of either agreement may be subject or affected by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or conveyance or other laws relating to or affecting the rights of creditors generally, or the availability of any equitable or other specific remedy upon breach of such agreements, or public policy. Upon consummation of the
Merger, the Company will be, subject to the terms and conditions of the Merger Agreement, the sole stockholder of Vodavi. 
 ARTICLE III

 AFFIRMATIVE COVENANTS OF THE COMPANY 
 3. The Company hereby covenants (i) with respect to Section 3.3, with all of the Investors for so long as such Investors beneficially own any Shares and/or Conversion Shares and/or Warrant Shares,
(ii) with respect to Section 3.1, with those Investors who, after the issuance and sale of the Shares and the Warrants pursuant to this Agreement, will beneficially own at least 30% of the Common Stock (calculated on a fully diluted
basis) (the “30% Investors”) for so long as such Investors beneficially own at least 30% of the Common Stock (calculated on a fully diluted basis); (iii) in addition to and not in lieu of the foregoing with respect to
Sections 3.1-3.2 and Sections 3.4-3.7, M/C Venture Partners for so long as M/C Venture Partners owns at least 50% of the Shares initially purchased by it hereunder, as follows: 
 3.1 Right of First Refusal. 
 (a)
Right of First Refusal. The Company shall not issue, sell or exchange, agree or obligate itself to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange, in a transaction not involving a public offering, any
(i) shares of Common Stock, (ii) any other equity security of the Company, including without limitation, preferred shares, (iii) any debt security of the Company (other than debt with no equity feature) including without limitation,
any debt security which by its terms is convertible into or exchangeable for any equity security of the Company, (iv) any security of the Company that is a combination of debt and equity, or (v) any option, warrant or other right to
subscribe for, purchase or otherwise acquire any such equity security or any such debt security of the Company, unless in each case the Company shall have first offered to sell such securities (the “Offered Securities”) to the 30%
Investors and each other person or entity, if any, that has such a right (each an “Offeree” and collectively, the “Offerees”) as follows: Each Offeree shall have the right to purchase (x) that portion of the
Offered Securities as the number of shares of Common Stock then held (including shares then issuable upon the exercise or conversion of outstanding securities) by such Offeree bears to the total number of 

 shares of issued and outstanding Common Stock of the Company calculated on a fully diluted basis to include (i) the
total number of shares of Common Stock subject to outstanding awards granted under stock plans of the Company and (ii) the total number of shares that could be issued upon the exercise or conversion of outstanding securities (the “Basic
Amount”), and (y) such additional portion of the Offered Securities as such Offeree shall indicate it will purchase should the other Offerees subscribe for less than their Basic Amounts (the “Undersubscription
Amount”), at a price and on such other terms as shall have been specified by the Company in writing delivered to such Offeree (the “Offer”), which Offer by its terms shall remain open and irrevocable for a period of twenty
(20) days from receipt of the offer. 
 (b) Notice of Acceptance. Notice of each Offeree’s intention to accept, in whole or
in part, any Offer made shall be evidenced by a writing signed by such Offeree and delivered to the Company prior to the end of the 20-day period of such offer, setting forth such of the Offeree’s Basic Amount as such Offeree elects to purchase
and, if such Offeree shall elect to purchase all of its Basic Amount, such Undersubscription Amount as such Offeree shall elect to purchase (the “Notice of Acceptance”). If the Basic Amounts subscribed for by all Offerees are less
than the total Offered Securities, then each Offeree who has set forth Undersubscription Amounts in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, all Undersubscription Amounts it has
subscribed for; provided, however, that should the Undersubscription Amounts subscribed for exceed the difference between the Offered Securities and the Basic Amounts subscribed for (the “Available Undersubscription
Amount”), each Offeree who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Undersubscription Amount subscribed for by such Offeree bears to the
total Undersubscription Amounts subscribed for by all Offerees, subject to rounding by the Board of Directors to the extent it reasonably deems necessary. 
 (c) Conditions to Acceptances and Purchase. 
 (i) Permitted Sales of Refused Securities. In
the event that Notices of Acceptance are not given by the Offerees in respect of all the Offered Securities, the Company shall have ninety (90) days from the expiration of the period set forth above to close the sale of all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the Offerees (the “Refused Securities”) to the Person or Persons specified in the Offer, but only for cash and otherwise in all respects upon terms and
conditions, including, without limitation, unit price and interest rates, which are no more favorable, in the aggregate, to such other person or persons or less favorable to the Company than those set forth in the Offer. 
 (ii) Reduction in Amount of Offered Securities. In the event the Company shall propose to sell less than all the Refused Securities (any such
sale to be in the manner and on the terms specified above), then each Offeree may, at its sole option and in its sole discretion, reduce the number of, or other units of the Offered Securities specified in its respective Notices of Acceptance to an
amount which shall be not less than the amount of the Offered Securities which the Offeree elected to purchase pursuant to (b) above multiplied by a fraction, (i) the numerator of which shall be the amount of Offered Securities which the
Company actually proposes to sell, and (ii) the denominator of which shall be the amount of all Offered Securities the Company proposed to sell in its writing delivered pursuant to Section 3.1(a) above. In the event that any Offeree
so elects to reduce the number or amount of Offered Securities specified in its respective Notices of Acceptance, the Company may not sell or otherwise dispose of more than the reduced amount of the Offered Securities until such securities have
again been offered to the Offerees in accordance with Section 3.1(a). 
 (iii) Closing. Upon the closing, which shall
include full payment to the Company, of the sale to such other person or persons of all or less than all the Refused Securities, the 

 Offerees shall purchase from the Company, and the Company shall sell to the Offerees, the number of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to Section 3.1(b) above if the Offerees have so elected, upon the terms and conditions specified in the Offer. The purchase by the Offerees of any Offered Securities is subject
in all cases to the preparation, execution and delivery by the Company and the Offerees of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Company and the Offerees and their respective
counsel. 
 (d) Further Sale. In each case, any Offered Securities not purchased by the Offerees or other person or persons in
accordance with Section 3.1(c)(iii) above may not be sold or otherwise disposed of until they are again offered to the Offerees under the procedures specified in Section 3.1(c)(i)-(iii) above. 
 (e) Exceptions. The rights of the Investors under this Section 3.1 shall not apply to: 
 (i) Common Stock issued as a stock dividend to holders of Common Stock or upon any subdivision or combination of shares of Common Stock; 
 (ii) any capital stock or derivative thereof granted to an employee, director or consultant under a stock plan approved by the Board of Directors and
the Company’s stockholders; 
 (iii) any securities issued as consideration for the acquisition of another entity by the Company by
merger or share exchange (whereby the Company owns no less than 51% of the voting power of the surviving entity) or purchase of substantially all of such entity’s stock or assets, if such acquisition is approved by the Board of Directors;

 (iv) any securities issued in connection with a strategic partnership, joint venture or other similar agreement, provided that the
purpose of such arrangement is not primarily the raising of capital and that such arrangement is approved unanimously by the Board of Directors; 
 (v) any securities issued to a financial institution in connection with a bank loan or lease with such financial institution provided that such is approved unanimously by the Board of Directors; 
 (vi) securities issuable upon the exercise or conversion of securities outstanding on the Closing Date; and 
 (vii) the Shares, the Warrants, the Conversion Shares issued upon conversion of the Shares and the Warrant Shares issued upon the exercise of the
Warrants. 
 3.2 Further Assurances. The Company hereby agrees to take all further actions, execute all further documents and perform
all further things necessary to give effect to the provisions of this Agreement and consult with and keep informed, and shall cause the appropriate officers, directors and legal counsel to consult with and keep informed, legal counsel to the
Investors (including, without limitation, legal counsel to M/C Venture Partners) including, but not limited to the status of the proposed Merger and Credit Agreement. 

 3.3. Registration of the Shares; Compliance with the Securities Act. 
 (a) Registration Procedures and Other Matters. The Company shall: 
 (i) subject to receipt of necessary information from the Investors (for purposes of this Section 3.3 only, “Investors” shall include the holder of warrants issued in connection with the Credit
Agreement) after prompt request from the Company to the Investors to provide such information, prepare and file with the SEC within 210 days after the consummation of the Merger (the date such registration statement is filed, the “Filing
Date”), a registration statement on Form S-3 or Form S-1 (the “Registration Statement”) to enable the resale of the Conversion Shares and the Warrant Shares (for purposes of this Section 3.3 only, the term
“Warrant Shares” shall include shares of Common Stock issuable upon exercise of the Warrants and any warrants to purchase Common Stock issued in connection with the Credit Agreement), as applicable, by the Investors from time to time
through any quotation system on which the Common Stock is quoted or listed, if applicable, or in privately-negotiated transactions (as used in this Section 3.3 and in Section 3.7 only, the term “Conversion
Shares” shall include any securities into which the Conversion Shares are reclassified after the date hereof); 
 (ii) use its best
efforts, subject to receipt of necessary information from the Investors after prompt request from the Company to the Investors, to provide such information (provided that failure on the part of one Investor shall not relieve the Company from its
obligation to use best efforts with respect to complying Investors), to cause the Registration Statement to become effective as soon as reasonably practicable after (A) being informed by the staff of the SEC (the “Staff”) that
the Staff has decided not to review the Registration Statement, or (B) being informed by the Staff that the Staff have no further comments on such Registration Statement (the date the Registration Statement is initially declared effective by
the SEC, the “Effective Date”), such efforts to include, without limiting the generality of the foregoing, preparing and filing with the SEC in such period any financial statements that are required to be filed prior to the
effectiveness of such Registration Statement; and, in the event that the filing referred to in Section 3.3(a)(i) above is on a form other than Form S-3, the Company shall use its best efforts, subject to receipt of necessary
information from the Investors after prompt request from the Company to the Investors to provide such information (provided that failure on the part of one Investor shall not relieve the Company from its obligation to use best efforts with respect
to complying Investors), to prepare and file with the SEC, as soon as reasonably practicable after the Company first becomes eligible to file a registration statement on Form S-3, a registration statement on Form S-3 (the “S-3 Registration
Statement”) to enable the resale of the Conversion Shares and the Warrant Shares by the Investors from time to time through any quotation system on which the Common Stock is quoted or listed or in privately-negotiated transactions; and to
use its best efforts to cause the S-3 Registration Statement to become effective as soon as reasonably practicable thereafter, such efforts to include, without limiting the generality of the foregoing, preparing and filing with the SEC as promptly
as reasonably practicable any financial statements that are required to be filed prior to the effectiveness of such S-3 Registration Statement (the term “Registration Statement” shall mean the Form S-1 Registration Statement until
the S-3 Registration Statement is declared effective by the SEC, after which time it shall mean the S-3 Registration Statement). 
 (iii)
use its best efforts to prepare and file with the SEC such amendments and supplements to the Registration Statement and the Prospectus (as used herein, the term “Prospectus” shall mean (1) the prospectus included in any
Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Conversion Shares covered by such Registration Statement and by all other amendments and supplements to
the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (2) any “free writing prospectus” as defined in Rule 163 under the Securities Act) used in connection therewith as
may be necessary to keep the Registration Statement current, effective and free from any material misstatement or omission to state a material fact for a period not exceeding, with respect to each Investor’s Conversion Shares or Warrant Shares
purchased hereunder, the earlier of (x) the date on which such Investor may sell all Conversion Shares or Warrant Shares then held by the Investor without restriction by the volume limitations of Rule 144(e) of the Securities Act and
(y) such time as all Conversion Shares or Warrant Shares held by such Investor have been sold pursuant to a registration statement; 

 (iv) comply with Rule 172 of the Securities Act and (x) advise the Investors promptly of any
failure by the Company to satisfy the conditions of such Rule 172 and (y) promptly furnish to the Investors with respect to the Conversion Shares or Warrant Shares registered under the Registration Statement such number of copies of the
Registration Statement, Prospectuses and Preliminary Prospectuses in conformity with the requirements of the Securities Act and such other documents as the Investors may reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Conversion Shares or Warrant Shares by the Investors; 
 (v) file documents required of the Company for blue sky
clearance in states specified in writing by any Investor and use its best efforts to maintain such blue sky qualifications during the period the Company is required to maintain the effectiveness of the Registration Statement pursuant to
Section 3.3(a)(iii); provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented; 

(vi) bear all expenses in connection with the procedures in paragraph (i) through (v), (viii) and the last paragraph of this
Section 3.3(a) and the registration of the Conversion Shares and Warrant Shares pursuant to the Registration Statement; 
 (vii)
advise the Investors, promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying or suspending the effectiveness of the Registration Statement or of the initiation or threat of any proceeding for
that purpose; and it will promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued; and 
 (viii) provide a “Plan of Distribution” section of the Registration Statement substantially in the form attached hereto as Exhibit E
hereto (subject to the comments of the SEC). 
 Notwithstanding anything to the contrary herein, (i) the Registration Statement shall
cover only the Conversion Shares, the Warrant Shares and any other securities with respect to which the Company has registration obligations as of the date hereof. In no event at any time before the Registration Statement becomes effective shall the
Company publicly announce or file any other registration statement, other than registrations on Form S-8, without the prior written consent of each individual holder (together with any Affiliates of such holder) of 30% of the Series E Preferred
Stock to be purchased pursuant to this Agreement (the “30% Investors’ Consent”). 
 The Company understands that the
Investors disclaim being underwriters, but any Investor being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has hereunder; provided, however that if the Company receives notification from the SEC that a
Investor is deemed an underwriter, then the period by which the Company is obligated to submit an acceleration request to the SEC shall be extended to the earlier of (a) the 90th day after such SEC notification, or (b) 120 days after the
initial filing of the Registration Statement with the SEC. 
 Within three (3) business days of the Effective Date, the Company shall
advise its transfer agent that the shares are subject to an effective registration statement and can be reissued free of restrictive legend upon notice of a sale by a Investor and confirmation by such Investor that it has complied with the
prospectus delivery requirements, provided that the Company has not advised the transfer agent orally or in writing that the registration statement has been suspended; provided, however, in the event the 

 Company’s transfer agent requires an opinion of counsel to the Company for an such reissuance, within three business
days of any such request for an opinion by the transfer agent, the Company shall cause its counsel to issue a blanket opinion to the transfer agent stating the foregoing. 
 (b) Transfer of Conversion and Warrant Shares After Registration; Suspension. 
 (i) Each Investor,
severally and not jointly, agrees that it will not effect any disposition of the Conversion Shares or the Warrant Shares or its right to purchase the Conversion Shares or the Warrant Shares that would constitute a sale within the meaning of the
Securities Act except as contemplated in the Registration Statement referred to in Section 3.3(a) and as described below or as otherwise permitted by law, and that it will promptly notify the Company of any material changes in the
information set forth in the Registration Statement regarding the Investor or its plan of distribution. 
 (ii) Except in the event that
paragraph (iii) below applies, the Company shall (A) if deemed necessary by the Company, prepare and file from time to time with the SEC a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or
a supplement or amendment to any document incorporated therein by reference or file any other required document so that such Registration Statement will not contain an 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 not misleading, and so that such Prospectus will not contain an 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) provide the Investors copies of any documents filed pursuant to Section 3.3(b)(ii)(A); and (C) inform each Investor that the
Company has complied with its obligations in Section 3.3(b)(ii)(A) (or that, if the Company has filed a post-effective amendment to the Registration Statement which has not yet been declared effective, the Company will notify the
Investor to that effect, will use its best efforts to secure the effectiveness of such post-effective amendment as promptly as possible and will promptly notify the Investor pursuant to Section 3.3(b)(ii)(A) hereof when the
amendment has become effective). 
 (iii) Subject to paragraph (iv) below, in the event (A) of any request by the SEC or any other
federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to a Registration Statement or related Prospectus or for additional information; (B) of the issuance by the
SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose; (C) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from qualification of any of the Conversion Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; or (D) of any event or
circumstance which, upon the advice of its counsel, necessitates the making of any changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or any 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; then the Company shall deliver a notice in writing to each Investor (the “Suspension Notice”) to the effect of the foregoing and, upon receipt of such Suspension Notice, the Investor will refrain from selling any
Conversion Shares pursuant to the Registration Statement (a “Suspension”) until the Investor’s is advised in writing by the Company that the Suspension is no longer effective. In the event of any Suspension, the Company will
use its best efforts to cause the Suspension to be terminated as soon as reasonably practicable within twenty (20) business days after the delivery of a Suspension Notice to the Investors. In addition to and without limiting any other remedies
(including, without limitation, at law or at equity) available to the Investors, each Investor shall be entitled to specific performance in the event that the Company fails to comply with the provisions of this Section 3.3(b)(iii).

 (iv) Notwithstanding the foregoing paragraphs of this Section 3.3(b), the Investors shall
not be prohibited from selling Conversion Shares or the Warrant Shares under the Registration Statement as a result of Suspensions on more than two occasions of not more than thirty (30) days each in any twelve (12) month period, unless,
in the good faith judgment of the Company’s Board of Directors, upon the advice of counsel, the sale of Conversion Shares or Warrant Shares under the Registration Statement in reliance on this Section 3.3(b)(iv) would be reasonably
likely to cause a violation of the Securities Act or the Exchange Act and result in liability to the Company. 
 (v) Provided that a
Suspension is not then in effect, any Investor may sell Conversion Shares or Warrant Shares under the Registration Statement upon compliance with its obligations under this Section 3.3. 
 (vi) In the event of a sale of Conversion Shares or Warrant Shares by a Investor pursuant to the Registration Statement, the Investor must also deliver
to the Company’s transfer agent, with a copy to the Company, a Certificate of Subsequent Sale substantially in the form attached hereto as Exhibit F, so that the Conversion Shares or Warrant Shares, as applicable, may be properly
transferred. 
 (c) Indemnification. 
 (i) For the purposes of this Section 3.3(c): 
 (A) the term “Selling
Stockholder” shall include each Investor and any Affiliate of such Investor; 
 (B) the term “Registration
Statement” shall include the Prospectus in the form first filed with the SEC pursuant to Rule 424(b) of the Securities Act or filed as part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing is
required, exhibit, supplement or amendment included in or relating to the Registration Statement referred to in Section 3.3(a); and 
 (C) the term “untrue statement” shall include any untrue statement or alleged untrue statement, or any omission or alleged omission to state in the Registration Statement 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. 
 (ii) The Company
agrees to indemnify and hold harmless each Selling Stockholder from and against any losses, claims, damages or liabilities to which such Selling Stockholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (A) any breach of the representations or warranties of the Company contained in this Section 3.3 or failure to comply with the
covenants and agreements of the Company contained in this Section 3.3, (B) any untrue statement of a material fact contained in the Registration Statement as amended at the time of effectiveness or any omission of a material fact
required to be stated therein or necessary to make the statements therein not misleading, or (C) any failure by the Company to fulfill any undertaking included in the Registration Statement as amended at the time of effectiveness, and the
Company will reimburse such Selling Stockholder for any reasonable legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim, or preparing to defend any such action,

 proceeding or claim, provided, however, that the Company shall not be liable in any such case to the extent that
such loss, claim, damage or liability arises out of, or is based upon, an untrue statement made in such Registration Statement or any omission of a material fact required to be stated therein or necessary to make the statements therein not
misleading in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Selling Stockholder specifically for use in preparation of the Registration Statement or the failure of such Selling Stockholder
to comply with its covenants and agreements contained in Section 3.3(b) hereof respecting sale of the Conversion Shares or, in the event the Company has advised the Investors in writing that the Company does not meet the conditions for
using Rule 172 of the Securities Act and has provided the Investors with a copy of a current Prospectus, any statement or omission in any earlier Prospectus that is corrected in the Prospectus so delivered to the Investors and delivered to the
Selling Stockholder prior to the pertinent sale or sales by the Selling Stockholder. The Company shall reimburse each Selling Stockholder for the amounts provided for herein on demand as such expenses are incurred. 
 (iii) Each Investor, severally but not jointly, agrees to indemnify and hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each officer of the Company who signs the Registration Statement and each director of the Company) from and against any losses, claims, damages or liabilities to which the Company (or any
such officer, director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon,
(A) any failure to comply with the covenants and agreements contained in Section 3.3(b) hereof respecting sale of the Conversion Shares or Warrant Shares, or (B) any untrue statement of a material fact contained in the
Registration Statement or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading if such untrue statement or omission was made in reliance upon and in conformity with written
information furnished by or on behalf of such Investor specifically for use in preparation of the Registration Statement, and such Investor will reimburse the Company (or such officer, director or controlling person), as the case may be, for any
legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, however that such Investor’s obligation to indemnify the Company shall be limited to
the net amount received by such Investor from the sale of the Conversion Shares or Warrant Shares giving rise to such obligation. 
 (iv)
Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 3.3(c), such indemnified person
shall notify the indemnifying person in writing of such claim or of the commencement of such action, but the omission to so notify the indemnifying person will not relieve it from any liability which it may have to any indemnified person under this
Section 3.3(c) (except to the extent that such omission materially and adversely affects the indemnifying person’s ability to defend such action) or from any liability otherwise than under this Section 3.3(c). Subject to
the provisions hereinafter stated, in case any such action shall be brought against an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall elect by written notice delivered to the
indemnified person promptly after receiving the aforesaid notice from such indemnified person, shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After notice from the indemnifying
person to such indemnified person of its election to assume the defense thereof, such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the
defense thereof, provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified
person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the reasonable expense of such indemnifying person; provided, however, that no indemnifying
person shall 

 be responsible for the fees and expenses of more than one separate counsel (together with appropriate local counsel) for
all indemnified parties. In no event shall any indemnifying person be liable in respect of any amounts paid in settlement of any action unless the indemnifying person shall have approved the terms of such settlement; provided that such
consent shall not be unreasonably withheld. No indemnifying person shall, without the prior written consent of the indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified person is or
could have been a party and indemnification could have been sought hereunder by such indemnified person, unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject matter of
such proceeding. 
 (v) If the indemnification provided for in this Section 3.3(c) is unavailable to or insufficient to hold
harmless an indemnified person under subsection (ii) or (iii) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying person shall contribute
to the amount paid or payable by such indemnified person as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and
the applicable Investor, as well as any other Selling Shareholders under such registration statement on the other in connection with the statements or omissions or other matters which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, in the case of an untrue statement, whether the untrue statement relates to information
supplied by the Company on the one hand or an Investor, or other Selling Stockholder on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement. The Company and
each Investor, severally but not jointly, agree that it would not be just and equitable if contribution pursuant to this subsection (v) were determined by pro rata allocation (even if the Investor and other Selling Stockholders were treated as
one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (v). The amount paid or payable by an indemnified person as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (v) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this subsection (v), each Investor shall not be required to contribute any amount in excess of the amount by which the net amount received by such Investor from the sale of the
Conversion Shares or the Warrant Shares to which such loss relates exceeds the amount of any damages which such Investor has otherwise been required to pay by reason of such untrue statement. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Each Investor’s obligations in this subsection to contribute shall be in
proportion to its sale of Conversion Shares or Warrant Shares to which such loss relates and shall not be joint with any other Selling Stockholders. 
 (vi) The parties to this Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during the negotiations regarding the provisions hereof including, without limitation,
the provisions of this Section 3.3(c), and are fully informed regarding said provisions. They further acknowledge that the provisions of this Section 3.3(c) fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate disclosure is made in the Registration Statement as required by the Securities Act and the Exchange Act. The parties are advised that federal or state public policy as
interpreted by the courts in certain jurisdictions may be contrary to certain of the provisions of this Section 3.3(c), and the parties hereto hereby expressly waive and relinquish any right or ability to assert such public policy as a
defense to a claim under this Section 3.3(c) and further agree not to attempt to assert any such defense. 

 (d) Termination of Conditions and Obligations. The conditions precedent imposed by
Section 5.5 or this Section 3.3 upon the transferability of the Conversion Shares or Warrant Shares shall cease and terminate as to any particular number of the Conversion Shares or Warrant Shares when such Conversion Shares
or Warrant Shares shall have been effectively registered under the Securities Act and sold or otherwise disposed of in accordance with the intended method of disposition set forth in the Registration Statement covering such Conversion Shares or
Warrant Shares, at the time such Shares are eligible for sale pursuant to Rule 144(k) (and the Investor provides the Company with such reasonable and appropriate customary representations as may be reasonably requested by the Company) or at such
time as an opinion of counsel reasonably satisfactory to the Company shall have been rendered to the effect that such conditions are not necessary in order to comply with the Securities Act. 
 (e) Information Available. So long as the Registration Statement is effective covering the resale of Conversion Shares or Warrant Shares owned by
any Investor, the Company will furnish to such Investors, upon the reasonable request of a Investor, an adequate number of copies of the Prospectuses to supply to any other party requiring such Prospectuses; and upon the reasonable request of such
Investor, the President or the Chief Financial Officer of the Company (or an appropriate designee thereof) will meet with such Investor or a representative thereof at the Company’s headquarters to discuss all information relevant for disclosure
in the Registration Statement covering the Conversion Shares or Warrant Shares and will otherwise cooperate with any Investor conducting an investigation for the purpose of reducing or eliminating such Investor’s exposure to liability under the
Securities Act, including the reasonable production of information at the Company’s headquarters; provided, that the Company shall not be required to disclose any confidential information to or meet at its headquarters with any Investor
until and unless the Investor shall have entered into a confidentiality agreement in form and substance reasonably satisfactory to the Company with the Company with respect thereto. 
 3.4 Delivery of Shares; Liquidated Damages. The Company and each Investor agree that such Investor will suffer damages if the Company fails to
fulfill its obligations pursuant to Section 1.3 hereof and that it would not be possible to ascertain the extent of such damages with precision. Accordingly, the Company hereby agrees to pay liquidated damages to each Investor if the
Company fails to deliver to the Investors the stock certificates evidencing the Shares and the Warrants being purchased by the Investors hereunder within three (3) business days after the date hereof (such an event, a “Covenant
Default”). The Company shall pay an amount in cash equal to 1% of the aggregate purchase price paid by the Investors pursuant to this Agreement (the “Liquidated Damages”) in connection with a Covenant Default, on the
business day following the Covenant Default, and each 30th day thereafter until the certificates evidencing the
Shares and the Warrants purchased by the Investors hereunder have been delivered to the Investors. Notwithstanding the foregoing, all periods shall be tolled during delays directly caused by the action or inaction of the Investor, and the Company
shall have no liability to any Investor in respect of any such delay. The Liquidated Damages payable herein shall apply on a pro rata basis for any portion of a 30-day period of a Covenant Default. 
 3.5 Reservation of Shares of Common Stock. From and after the Closing Date, the Company will at all times reserve and keep available, solely for
issuance and delivery upon the conversion of the Shares and exercise of the Warrants, all Common Stock issuable from time to time upon such conversion and exercise. If at any time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of the Shares and/or exercise of the Warrants without limitation of any remedies available to any Investor, the Company will forthwith take such corporate action (and shall use its best efforts to cause the
Company’s stockholders to take such action) as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. The Company shall obtain any authorization,
consent, approval or other action by, or make any filing with, any court or administrative body that may be required under applicable state securities laws in connection with the issuance of shares of Common Stock upon conversion of the Shares and
exercise of the Warrants. 

 3.6 Extinguishment of Prior Debt. Prior to the Closing Date, the Company shall have completely
satisfied and extinguished all of its payment obligations and amounts due to (i) Silicon Valley Bank (“SVB”) pursuant to that certain Loan and Security Agreement, dated as of September 28, 2005 (“SVB Loan
Agreement”), including, without limitation the promissory notes made to SVB in connection therewith, and (ii) Comdial Corporation (“Comdial”), pursuant to that certain Promissory Note, dated as of September 28,
2005 (the “Comdial Note”), made by the Company to Comdial, and the Company shall have no further obligations under the SVB Loan Agreement or the Comdial Note (and 30% Investors shall have received evidence in writing of such
satisfaction and extinguishment from the Company). 
 3.7 Removal of Legends. Upon the earlier of (i) registration of the
Conversion Shares and the Warrant Shares for sale pursuant to Section 3.3 or (ii) Rule 144(k) becoming available with respect to an Investor’s Conversion Shares and/or Warrant Shares, the Company shall, (A) deliver to the
transfer agent for the Common Stock (the “Transfer Agent”) irrevocable instructions that the Transfer Agent shall reissue a certificate representing shares of Common Stock without legends upon receipt by such Transfer Agent of the
legended certificates for such shares, together with either (1) a customary representation by such Investor that Rule 144(k) of the Securities Act applies to the shares of Common Stock represented thereby or (2) the Certificate of
Subsequent Sale in substantially the form of Exhibit F hereto, and (B) cause its counsel to deliver to the Transfer Agent one or more blanket opinions to the effect that the removal of such legends in such circumstances may be effected
under the Securities Act. From and after the earlier of such dates, upon an Investor’s written request, the Company shall promptly cause certificates evidencing such Investor’s securities to be replaced with certificates which do not bear
such restrictive legends, and Conversion Shares subsequently issued upon conversion of the Shares or the due exercise of the Warrants shall not bear such restrictive legends. When the Company is required to cause unlegended certificates to replace
previously issued legended certificates, if unlegended certificates are not delivered to an Investor within three (3) business days of submission by that Investor of legended certificate(s) to the Transfer Agent as provided above (or to the
Company, in the case of the Warrants), the Company shall be liable to such Investor for a penalty equal to 1% of the aggregate purchase price of the Conversion Shares evidenced by such certificate(s) for each thirty (30) day period (or portion
thereof) beyond such three (3) business day period that the unlegended certificates have not been so delivered; provided that in no event shall the aggregate amount of cash to be paid to such Investor pursuant to this
Section 3.7 exceed 9% of such aggregate purchase price. 
 3.8 Board and Committee Configuration. 
 (a) Size. The Board of Directors following the consummation of the Merger shall consist of, and be fixed at, eight (8) members. If the Merger
is not consummated, the Board of Directors shall consist of, and be fixed at, seven (7) members. 
 (b) Membership –
Post-Merger. Immediately following the Closing, the members of the Board of Directors shall consist of (and the Company agrees to nominate for election) (i) the chief executive officer of the Company who shall serve as a Class II director,
currently William Y. Tauscher, (ii) one member who shall serve as a Class II director designated by the written consent of the majority-in-interest of the shares of Common Stock held by the investors (including the affiliated assignees of such
investors, the “Series B Investors”) named on the signature pages to the Company’s Series B purchase agreement dated as of August 8, 2001 that were acquired upon the conversion of the shares of Series B Preferred
Stock held by them pursuant to the terms of the Consent, Waiver and Amendment Agreement dated September 25, 2004 (the “2004 Consent”), acting as a single class, currently Robert J. Majteles, (iii) one member who shall
serve as a Class II director designated by the written consent of the majority-in-interest 

 of the shares of Common Stock held by the investors (including the affiliated assignees of such investors, the
“Series C Investors”) named on the signature pages to the Company’s Series C purchase agreement dated as of June 27, 2003, as amended that were acquired upon the conversion of the shares of Series C Preferred
Stock held by them pursuant to the terms of the 2004 Consent, acting as a single class, currently R. Randy Stolworthy, (iv) two members who shall serve as Class III directors designated in writing by M/C Venture Partners, currently John W.
Watkins and Matthew J. Rubins, (v) two non-executive members who shall serve as Class I directors designated by the mutual agreement of M/C Venture Partners and the Board of Directors (reflected by approval of the Board of Directors (or its
Nominating or Corporate Governance committee) of a written designation by M/C Venture Partners), provided that each such non-executive member has relevant industry experience (each, an “Industry Director”), which such Industry
Directors are currently Michael P. Downey and Francis E. Girard, and (vi) subject to the consummation of the Merger, one member who shall serve as a Class I director designated in writing, by LG-Nortel Co., Ltd. (“LG”).

 (c) Membership - Post-Annual Meeting. Following the date which is six months from the Closing Date, the members of the Board of
Directors shall consist of (and the Company agrees to nominate for election) (i) the chief executive officer of the Company who shall serve as a Class II director, (ii) one member who shall serve as a Class II director designated by the
written consent of (A) Special Situations Fund III, L.P. and its Affiliates (collectively, “SSF”) so long as SSF and its Affiliates continue to beneficially own at least 50% of the shares of Common Stock acquired by SSF and its
Affiliates upon the conversion of the shares of Series B Preferred Stock held by them pursuant to the terms of the 2004 Consent or (B) in the event that SSF is not entitled to appoint a director pursuant to clause (A), the majority-in-interest
of the shares of Common Stock held by the Series B and C Investors that were acquired by them upon the conversion, pursuant to the terms of the 2004 Consent, of the shares of Series B Preferred Stock and Series C Preferred Stock held by them, acting
as a single class, (iii) two members who shall serve as Class III directors designated in writing by M/C Venture Partners (at least one of whom shall be an Industry Director), (iv) three Industry Directors who shall serve as Class I
directors designated by the mutual agreement of M/C Venture Partners and the Board of Directors (reflected by approval of the Board of Directors (or its Nomination or Corporate Governance committee) of a written designation by M/C Venture Partners)
and (v) subject to the Merger having been consummated, one member who shall serve as a Class I director designated in writing, by LG. 
 (d) Term. The directors to be elected shall serve for terms in accordance with the Company’s bylaws. 
 (e)
Vacancy. A vacancy in any directorship provided for pursuant to Sections 3.8(b) and (c) hereof shall be filled or in accordance with such Sections 3.8(b) and (c) by a director designated by the
persons or entities that hold the right to designate such person under Sections 3.8(b) and (c). 
 (f) Committees.
The Company shall maintain Compensation, Audit and Nominating or Corporate Governance committees, and the Investors’ designees shall be entitled to membership on the Compensation and Nominating or Corporate Governance committees. 
 3.9 Prior Round Liquidated Damages. The Company shall property account for and record as a liability on the Company’s balance sheet all
accrued and unpaid liquidated damages payable with respect to prior financings (which the Company hereby acknowledges remain outstanding). 

 ARTICLE IV 
 NEGATIVE COVENANTS OF THE COMPANY 
 For so long as any shares of Series E Preferred Stock are issued
and outstanding, the Company hereby covenants with (i) M/C Venture Partners that so long as M/C Venture Partners owns at least 50% of the Shares initially purchased by it hereunder and (ii) with respect to Sections 4.6 and
4.11, with all of the 30% Investors for so long as such Investors beneficially own at least 30% of the Common Stock (calculated on a fully diluted basis), in addition to any other vote required by law or the Company’s certificate of
incorporation without the prior written consent of M/C Venture Partners, the Company will not: 
 4.1 Change in Control; Sale of Assets;
Merger. Enter into any transaction, or series of related transactions, constituting a Change of Control (or agree to enter into any such transaction or series of related transactions, or permit any Subsidiary to do so). For purposes of this
Section 4.1, “Change of Control” shall mean the existence or occurrence of any of the following: (a) the sale, conveyance or disposition of all or substantially all of the assets of the Company; (b) the effectuation
of a transaction or series or related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of (other than as a direct result of normal, uncoordinated trading activities in the Common Stock
generally); (c) the consolidation, merger or other business combination of the Company with or into any other entity, immediately following which the prior stockholders of the Company fail to own, directly or indirectly, at least fifty percent
(50%) of the voting equity of the surviving entity; and (d) a transaction or series of related transactions in which any person or group, other than the Investors and their affiliates, acquires more than fifty percent (50%) of the
voting equity of the Company, provided, that the Company shall not be deemed to have violated this Section 4.1(d) in the event the Investors sell, convey or transfer more than 50% of the outstanding equity securities of the
Company to an unaffiliated third party. 
 4.2 Creation of Senior or Pari Passu Equity; Issuance of Equity Securities. Create or
authorize the creation of any additional class or series of shares of stock (or any debt security which by its terms is convertible into or exchangeable for any equity security of the Company and any security which is a combination of debt and
equity) unless the same ranks junior to the Common Stock as to dividends and the distribution of assets on the liquidation, dissolution or winding up of the Company; or issue, or agree to issue, any equity security (or any security convertible,
exercisable or exchangeable for or into any equity security) of the Company other than securities set forth in Section 3.1(e). Notwithstanding any other provision of this Agreement, the Company shall not issue any shares of the Series E
Preferred Stock except for the Shares. 
 4.3 Repurchases, Redemptions, Dividends. Purchase or redeem, or set aside any sums for the
purchase or redemption of, or pay any dividend or make any distribution on, any shares of capital stock of the Company or permit any Subsidiary to do any of the foregoing, except for (1) dividends or other distributions payable on the Common
Stock solely in the form of additional shares of Common Stock; (2) redemption of the Shares as contemplated by the Certificate of Designations and/or the Company’s certificate of incorporation; (3) the dividends and/or distributions
with respect to the Shares contemplated by the Certificate of Designations and/or the Company’s certificate of incorporation, as amended; and (4) the repurchase of shares of Common Stock from employees or consultants at the original
purchase price thereof pursuant to awards granted prior to the date hereof under a stock plan approved by the Board of Directors. 
 4.4
Transfers of Intellectual Property. Transfer any ownership or interest in, or material rights relating to, or the granting of any liens or encumbrances on, any of the Intellectual Property to any person or entity which is not a member of the
consolidated group of the Company and its Subsidiaries; provided, however, that this restriction shall not apply to transfers of Intellectual Property accomplished in the ordinary course of business (such as pursuant to software license
agreements in the ordinary course of business). 

 4.5 Liquidation or Dissolution. Consent to or effect any liquidation, dissolution or winding up of
the Company or any recapitalization or reorganization of the Company, or permit any Subsidiary to do any of the foregoing. 
 4.6 Change
in Size of Board. Increase or decrease the number of directors constituting the size of the Board of Directors from eight (8) members. 
 4.7 Change to Charter/By-laws. Amend, alter or repeal any provision of the certificate of incorporation or by-laws of the Company. 
 4.8 Change in Nature of Business. Make, or permit any Subsidiary to make, any change in the nature of its business in the Exchange Act Documents existing on the Closing Date. 
 4.9 Restrictions on Indebtedness. Create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist,
any liability with respect to indebtedness for money borrowed which exceeds, in the aggregate, $3,000,000, provided that indebtedness for borrowed money assumed, guaranteed, endorsed or upon which the Company or any Subsidiary has
otherwise become directly or contingently liable on, shall count as indebtedness for money borrowed for the purpose of this restriction. 
 4.10 Change in Authorized Capital Stock. Increase or decrease in the authorized amount of any shares of capital stock of the Company, whether any such change shall be by means of amendment to the Company’s certificate of
incorporation or by merger, consolidation or otherwise. 
 4.11 No Disparate Voting Rights. Take any action, including, without
limitation, amendments to the Certificate of Incorporation, that would enable any holder of a share of capital stock of the Company to vote such shares on any matter at a rate exceeding the number of votes that such share would be entitled to had it
been purchased at a purchase price equal to one share of Common Stock of the Company on the date of its purchase (and the Company shall not use indebtedness to evade this covenant). 
 4.12 Issuance of Compensatory Equity Awards. Grant any options or other rights to purchase capital stock except to employees, directors and
consultants as authorized by vote of the Board of Directors or its Compensation Committee, if such committee has been formed. 
 4.13
Adjustments to Warrants. Take any action which would cause any adjustment under Section 8 of the Warrants. 
 4.14 Credit
Agreement. Amend the Credit Agreement or the warrants issued in connection therewith, or take any action that would cause any increase in the number of shares of Common Stock for which such warrants may be exercised. 

 ARTICLE V 
 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTORS 
 5. Each Investor, severally and not
jointly, represents and warrants to, and covenants with, the Company that: 
 5.1 Authorization. The Investor has all requisite power
and authority to execute, deliver and perform its obligations under this Agreement. The execution of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such
Investor and this Agreement has been duly executed and delivered and constitutes the valid and binding obligation of the Investor enforceable in accordance with its terms, except as rights to indemnity and contribution may be limited by state or
federal securities laws or the public policy underlying such laws, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’
rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
 5.2 Purchase Entirely for Own Account. The Shares and Warrants to be purchased by the Investor will be acquired for investment for the
Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act, and such Investor has no present intention of selling, granting any participation in,
or otherwise distributing the same. Such Investor does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participation to any person with respect to any of the Shares or the Warrants. Nothing
contained herein shall be deemed a representation or warranty by such Investor to hold the Shares, Warrants or any Conversion Shares for any period of time. 
 5.3 Disclosure of Information. The Investor acknowledges that it has received all the information that it has requested relating to the Company and the purchase of the Shares and the Warrants. The Investor
further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Shares and the Warrants. The foregoing, however, does not limit or modify the
representations and warranties of the Company in this Agreement or the right of the Investor to rely thereon. 
 5.4 Accredited
Investor. The Investor is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act, as presently in effect and the Investor is also knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to the transactions contemplated hereby. 
 5.5 Restricted Securities. Investor understands
that the Shares and Warrants that it is purchasing is characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering, and
that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. 
 5.6 Legends. It is
understood that the certificates evidencing the Conversion Shares and Warrant Shares shall bear a legend, reading substantially as follows: 
 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AS
SET FORTH IN THIS CERTIFICATE. THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS 

 EXCEPT PURSUANT TO RULE 144(K) OR PURSUANT TO AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL
FOR THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.” 
 5.7 Investor Questionnaire. The Investor covenants to execute and deliver to the Company at or promptly following the Closing an investor
questionnaire supplied by the Company to facilitate the registration of the Conversion Shares and the Warrant Shares pursuant to the registration rights set forth herein and the information contained therein shall be true and correct. 
 5.8 Prohibited Transactions. During the last thirty (30) days prior to the date hereof, neither such Investor nor any Affiliate of such
Investor which (a) had knowledge of the transactions contemplated hereby, (b) has or shares discretion relating to such Investor’s investments or trading or information concerning such Investor’s investments, including in respect
of the Securities, or (c) is subject to such Investor’s review or input concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has, directly or indirectly, effected or agreed to effect
any short sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to the Conversion Shares or Warrant Shares, granted any other right (including,
without limitation, any put or call option) with respect to the Conversion Shares or Warrant Shares or with respect to any security that includes, relates to or derived any significant part of its value from the Conversion Shares or Warrant Shares
or otherwise sought to hedge its position in the Conversion Shares or Warrant Shares (each, a “Prohibited Transaction”). Prior to the earliest to occur of the termination of this Agreement or the Effective Date, such Investor shall
not, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in a Prohibited Transaction. Such Investor acknowledges that the representations, warranties and covenants contained in this Section 5.8 are being made
for the benefit of the Investors as well as the Company and that each of the other Investors shall have an independent right to assert any claims against such Investor arising out of any breach or violation of the provisions of this
Section 5.8. 
 5.9 Restrictions on Certain Payments. The Investor acknowledges and agrees that, pursuant to the
provisions of the Credit Agreement, the Company will be prohibited from (a) paying or declaring any dividends on or with respect to the Shares (except for dividends payable solely in stock of the Company) or (b) redeeming, retiring,
purchasing or otherwise acquiring any of the Shares until such time as all indebtedness under the Credit Agreement, and any extensions, renewals or refinancings thereof, has been repaid in full, without, in any case, obtaining the prior written
consent of Lender. 
 ARTICLE VI 
 SURVIVAL; INDEMNITY 
 6.1 Survival of Representations, Warranties and Agreements. Notwithstanding any investigation
made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company herein shall survive the execution of this Agreement, the delivery to the Investors of the Shares and Warrants being purchased and the
payment therefor; provided, that the representations and warranties of the parties hereunder shall only survive for a period of one year following the Closing Date. 
 6.2 Indemnity. Company agrees to indemnify and hold each Investor, and its respective directors, managers, officers, shareholders, members, partners, affiliates, employees, attorneys and agents (each, an
“Indemnified Person”), harmless from and against any and all suits, actions, proceedings, 

 claims, damages, losses, liabilities and expenses of any kind or nature whatsoever (including attorneys’ fees and
disbursements and other costs of investigation or defense, including those incurred upon any appeal) which may be instituted or asserted against or incurred by any such Indemnified Person as the result of their investment in the Shares and Warrants
under this Agreement or with respect to any breach (or alleged breach) of any representation, warranty or covenant of the Company contained in this Agreement or with respect to the execution, delivery, enforcement, performance and administration of,
or in any other way arising out of or relating to, this Agreement or transactions contemplated by or referred to herein and any actions or failures to act with respect to any of the foregoing, except to the extent that any such indemnified liability
is finally determined by a court of competent jurisdiction to have resulted from such Indemnified Person’s gross negligence or willful misconduct. The Company shall reimburse each Investor for amounts provided for herein on demand as such
expenses are incurred. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO THE COMPANY OR TO ANY OTHER PARTY OR TO ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR
INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THEIR INVESTMENT IN THE SHARES AND WARRANTS UNDER THIS AGREEMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER. THE COMPANY SHALL NOT BE
RESPONSIBLE OR LIABLE TO ANY INDEMNIFIED PERSON OR TO ANY OTHER PARTY OR TO ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY, CONSEQUENTIAL OR
SPECIAL DAMAGES WHETHER OR NOT SUCH DAMAGES WERE REASONABLY FORESEEABLE. 
 ARTICLE VII 
 MISCELLANEOUS 
 7.1 Notices. All
notices, requests, consents and other communications hereunder shall be in writing, shall be mailed (a) if within the United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage
prepaid, or by facsimile, or (b) if delivered from outside the United States, by International Federal Express or facsimile, and shall be deemed given and received (i) if delivered by first-class registered or certified mail, three
business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed, (iv) if delivered
by facsimile, upon electronic confirmation of receipt and shall be delivered as addressed as follows: 
 (a) if to the Company, to:

 Vertical Communications, Inc. 
 One Memorial Drive 
 Cambridge, MA 02142 
 Attn: William Y. Tauscher, Chief Executive Officer 
 (b) with a copy to: 
 Andrews Kurth LLP 
 1717 Main Street, Suite
3700 
 Dallas, TX 75201 
 Attn:
Victor B. Zanetti, Esq. 

 (c) if to the Investors, at their respective addresses on the signature page hereto, or at such other
address or addresses as may have been furnished to the Company in writing, with a copy to counsel to M/C Venture Partners: 
 Goodwin |
Procter LLP 
 Exchange Place 
 53 State Street 
 Boston, MA 02109 
 Attn: Jocelyn M. Arel, Esq. 
 7.2 Changes. This Agreement may not be modified, waived or amended
except pursuant to an instrument in writing signed by the Company and with Investors constituting the 30% Investors’ Consent (provided, that, if such modification, waiver or amendment does not equally affect all Investors to whom such
modification, waiver or amendment is applicable (taking into account the relative ownership interests of such Investors), such modification, waiver or amendment must be signed by all Investors). 
 7.3 Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed
to be part of this Agreement. 
 7.4 Severability. In case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 
 7.5 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF
THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER. 
 7.6 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. 
 7.7 Press Release. The Company shall on the Closing Date issue a press release disclosing the material terms of the transactions contemplated
hereby (including at least the number of Shares sold and proceeds therefrom). 

 7.8 Prior Agreements. This Agreement constitutes the entire agreement between the parties and
supersedes any prior understandings or agreements (including without limitation oral agreements) concerning the purchase and sale of the Shares and the Warrants. 
 7.9 Costs, Expenses and Taxes. The Company agrees to pay the reasonable out-of-pocket costs and expenses of M/C Venture Partners incurred in connection with the transactions contemplated by this Agreement,
including the reasonable fees and expenses of Goodwin Procter LLP, special counsel for M/C Venture Partners, as well as the reasonable fees and out-of-pocket expenses of legal counsel, independent public accountants, technical professionals and
other outside experts retained by M/C Venture Partners in connection with the transactions contemplated by this Agreement and the amendment or enforcement of this Agreement. 
 7.10 Transfer of Rights. All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties hereto (including without limitation transferees of any Shares, Warrants, Conversion Shares and/or Warrant Shares), whether so expressed or not. 
 7.11 Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under this Agreement 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. Nothing contained herein or in any other document, and no action taken by
any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by this Agreement. 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 the
other related documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. Each Investor has been represented by its own separate legal counsel in their review and
negotiation of this Agreement. The Company has elected to provide all Investors with the same terms and documents for the convenience of the Company and not because it was required or requested to do so by the Investors. 
 [Signature Page Follows] 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written. 
  

			
	VERTICAL COMMUNICATIONS, INC.
		
	By:	 	 /s/ KEN CLINEBELL

	Name:	 	Ken Clinebell
	Title:	 	Chief Financial Officer

			
	INVESTOR:
		
	By:	 	 /s/ WILLIAM Y. TAUSCHER

	Print Name:	 	William Y. Tauscher
		
	Address:	 	c/o Vertical Communications, Inc.
		 	One Memorial Drive
		 	Cambridge, MA 02142
		
	Tax ID No.:	 	  

		
	Contact name:	 	  

		
	Telephone:	 	(617) 354-0600
	
	 Name in which shares should be registered (if different):
  

			
	INVESTOR: LG-Nortel Co. Ltd.
		
	By:	 	 /s/ LEITH TESSY

	Print Name:	 	Leith Tessy
	Title:	 	CFO/LG-Nortel
		
	Address:	 	GS Tower 8th Floor
		 	679 Yoksam-dong
		 	Kangnam-gu, Seoul
		 	135-985, Korea
		
	Tax ID No.:	 	220-87-17654
		
	Contact name:	 	Jum Bae Choi
		
	Telephone:	 	82-2-2005-2299
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: Special Situations Fund III, L.P.
		
	By:	 	 /s/ DAVID GREENHOUSE

	Print Name:	 	David Greenhouse
	Title:	 	General Partner
		
	Address:	 	527 Madison Avenue, Suite 2600
		 	New York, NY 10022
		
	Tax ID No.:	 	55-0898321
		
	Contact name:	 	Marianne Kelly
		
	Telephone:	 	(212) 319-6625
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: Special Situations Cayman Fund, L.P.
		
	By:	 	 /s/ DAVID GREENHOUSE

	Print Name:	 	David Greenhouse
	Title:	 	General Partner
		
	Address:	 	527 Madison Avenue, Suite 2600
		 	New York, NY 10022
		
	Tax ID No.:	 	98-0132442
		
	Contact name:	 	Marianne Kelly
		
	Telephone:	 	(212) 319-6625
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: Special Situations Private Equity Fund, L.P.
		
	By:	 	 /s/ DAVID GREENHOUSE

	Print Name:	 	David Greenhouse
	Title:	 	General Partner
		
	Address:	 	527 Madison Avenue, Suite 2600
		 	New York, NY 10022
		
	Tax ID No.:	 	13-3916551
		
	Contact name:	 	Marianne Kelly
		
	Telephone:	 	(212) 319-6625
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: Special Situations Technology Fund, L.P.
		
	By:	 	 /s/ DAVID GREENHOUSE

	Print Name:	 	David Greenhouse
	Title:	 	General Partner
		
	Address:	 	527 Madison Avenue, Suite 2600
		 	New York, NY 10022
		
	Tax ID No.:	 	20-0051532
		
	Contact name:	 	Marianne Kelly
		
	Telephone:	 	(212) 319-6625
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: Special Situations Technology Fund II, L.P.
		
	By:	 	 /s/ DAVID GREENHOUSE

	Print Name:	 	David Greenhouse
	Title:	 	General Partner
		
	Address:	 	527 Madison Avenue, Suite 2600
		 	New York, NY 10022
		
	Tax ID No.:	 	13-3937585
		
	Contact name:	 	Marianne Kelly
		
	Telephone:	 	(212) 319-6625
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: Special Situations Fund III QP, L.P.
		
	By:	 	 /s/ DAVID GREENHOUSE

	Print Name:	 	David Greenhouse
	Title:	 	General Partner
		
	Address:	 	527 Madison Avenue, Suite 2600
		 	New York, NY 10022
		
	Tax ID No.:	 	13-3737427
		
	Contact name:	 	Marianne Kelly
		
	Telephone:	 	(212) 319-6625
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: M/C Venture Partners V, L.P.
	By:	 	M/C VP, LLC, its General Partner

  

			
		
	By:	 	 /s/ MATTHEW J. RUBINS

	Print Name:	 	Matthew J. Rubins
	Title:	 	General Partner
		
	Address:	 	75 State Street, Suite 2500
		 	Boston, MA 02109
		
	Tax ID No.:	 	  

		
	Contact name:	 	  

		
	Telephone:	 	(617) 345-7200
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: M/C Venture Investors, LLC
		
	By:	 	 /s/ MATTHEW J. RUBINS

	Print Name:	 	Matthew J. Rubins
	Title:	 	Managing Member
		
	Address:	 	75 State Street, Suite 2500
		 	Boston, MA 02109
	Tax ID No.:	 	  

		
	Contact name:	 	  

		
	Telephone:	 	(617) 345-7200
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: Chestnut Venture Partners, L.P.
	By:	 	Chestnut Street Partners, Inc., its General Partner

  

			
		
	By:	 	 /s/ MATTHEW J. RUBINS

	Print Name:	 	Matthew J. Rubins
	Title:	 	Duly Authorized Signatory
		
	Address:	 	75 State Street, Suite 2500
		 	Boston, MA 02109
		
	Tax ID No.:	 	  

		
	Contact name:	 	  

		
	Telephone:	 	(617) 345-7200
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: Claudio Chiuchiarelli
		
	By:	 	 /s/ CLAUDIO CHIUCHIARELLI

	Print Name:	 	Claudio Chiuchiarelli
	Title:	 	  

		
	Address:	 	66 Park Dr.
		 	Atherton, CA 94027
		
	Tax ID No.:	 	###-##-####
		
	Contact name:	 	  

		
	Telephone:	 	(415) 601-1942
	
	Name in which shares should be registered (if different):
		 	same

			
	INVESTOR: Jacqueline Chiuchiarelli
		
	By:	 	 /s/ JACQUELINE CHIUCHIARELLI

	Print Name:	 	Jacqueline Chiuchiarelli
	Title:	 	  

		
	Address:	 	66 Park Dr.
		 	Atherton, CA 94027
		
	Tax ID No.:	 	###-##-####
		
	Contact name:	 	Jacqueline Chiuchiarelli
		
	Telephone:	 	(415) 601-1942
	
	Name in which shares should be registered (if different):
		 	same

  

			
	INVESTOR: West Laurelhurst LLC
		
	By:	 	 /s/ PETER H. BAILEY

	Print Name:	 	Peter H. Bailey
	Title:	 	Managing Member
		
	Address:	 	c/o Larry Bailey
		 	Preston Gates & Ellis
		 	925 Fourth Avenue, Suite 2900
		 	Seattle, WA 98104-1158
		
	Tax ID No.:	 	20-1159561
		
	Contact name:	 	Larry Bailey/Peter Bailey
		
	Telephone:	 	LB 206-623-7580
		 	PB 415-255-8495
	
	 Name in which shares should be registered (if different):
  

  

			
	INVESTOR: Pathfinder Ventures IV, L.L.C.
		
	By:	 	RRS Investments II, L.L.C., an Arizona limited liability company
		
	By:	 	Stolworthy Revocable Trust, its Manager

  

			
		
	By:	 	 /s/ R. RANDY STOLWORTHY

	Print Name:	 	R. Randy Stolworthy, its Trustee
		
	Address:	 	Pathfinder Ventures IV, L.L.C.
		 	c/o RRS & Company
		 	4131 N. 24th Street, Suite C-207
		 	Phoenix, AZ 85016
		
	Tax ID No.:	 	51-0605634
		
	Contact name:	 	R. Randy Stolworthy
		
	Telephone:	 	(602) 553-4565
	
	 Name in which shares should be registered (if different):
  

  

 EXHIBIT A 
 SCHEDULE OF INVESTORS 
  

								
	 Investors
	  	Shares	  	Warrants	  	Purchase Price
	 M/C Venture Partners1
	  		  		  		
	 M/C Venture Partners V, L.P.
	  	9,437	  	8,902,516	  	$	9,437,000.00
	 M/C Venture Investors, LLC
	  	176	  	166,667	  	$	176,000.00
	 Chestnut Venture Partners, L.P.
	  	387	  	364,780	  	$	387,000.00
	 M/C Venture Partners Total
	  	10,000	  	9,433,963	  	$	10,000,000.00
	 Pathfinder Ventures IV, L.L.C.
	  	5,000	  	4,716,981	  	$	5,000,000.00
	 William Y. Tauscher
	  	500	  	471,698	  	$	500,000.00
	 LG-Nortel Co., Ltd.
	  	6,500	  	6,132,076	  	$	6,500,000.00
				
	 Additional Investors
	  	Shares	  	Warrants	  	Purchase Price
	 Special Situations Funds III QP, L.P.
	  	1,250	  	1,179,246	  	$	1,250,000.00
	 Special Situations Funds III, L.P.
	  	100	  	94,340	  	$	100,000.00
	 Special Situations Cayman Fund, L.P.
	  	425	  	400,943	  	$	425,000.00
	 Special Situations Private Equity Fund, L.P.
	  	425	  	400,943	  	$	425,000.00
	 Special Situations Technology Fund, L.P.
	  	50	  	47,170	  	$	50,000.00
	 Special Situations Technology Fund II, L.P.
	  	250	  	235,849	  	$	250,000.00
	 Pathfinder Ventures IV, L.L.C.
	  	2,250	  	2,122,642	  	$	2,250,000.00
	 West Laurelhurst LLC
	  	500	  	471,698	  	$	500,000.00
	 Scott Pickett
	  	50	  	47,170	  	$	50,000.00
	 Claudio Chiuchiarelli
	  	50	  	47,170	  	$	50,000.00
	 Jacqueline Chiuchiarelli
	  	50	  	47,170	  	$	50,000.00
		  	 	  	 	  	 	 
	 TOTALS
	  	27,400	  	25,849,059	  	$	27,400,000.00
		  	 	  	 	  	 	 

	1	For purposes of this Agreement, the entities listed below are collectively referred to as “M/C Venture Partners”. 

 EXHIBIT B 
 FORM OF WARRANT 

 EXHIBIT C 
 CERTIFICATE OF DESIGNATIONS 

 EXHIBIT D 
 FORM OF COMPANY COUNSEL OPINION 

 EXHIBIT E 
 Plan of Distribution 
 The selling stockholders, which as used herein includes donees, pledgees, transferees
or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time
to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These
dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. 
 The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein: 
  

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

  

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

  

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

  

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

  

	 	•	 	privately negotiated transactions; 

  

	 	•	 	short sales effected after the date the registration statement of which this Prospectus is a part is declared effective by the SEC; 

  

	 	•	 	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; 

  

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

  

	 	•	 	a combination of any such methods of sale; and 

  

	 	•	 	any other method permitted pursuant to applicable law. 

 The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. 

 In connection with the sale of our common stock or interests therein, the selling stockholders may enter
into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our
common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares
such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). 
 The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right
to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering. Upon any exercise
of the warrants by payment of cash, however, we will receive the exercise price of the warrants. 
 The selling stockholders also may resell
all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule. 
 The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be
“underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act.
Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act. 
 To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public
offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to
the registration statement that includes this prospectus. 
 In order to comply with the securities laws of some states, if applicable, the
common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied with. 
 We have advised the selling stockholders that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, we will make copies of this prospectus (as it may be
supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act. 
 We have
agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus. 

 We have agreed with the selling stockholders to keep the registration statement of which this prospectus
constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (2) the date on which the shares may be
sold pursuant to Rule 144(k) of the Securities Act. 

 EXHIBIT F 
 CERTIFICATE OF SUBSEQUENT SALE 
 [Name and Address of Transfer Agent] 
  

	 	RE:	Sale of Shares of Common Stock of Artisoft, Inc. (the “Company”) pursuant to the Company’s Prospectus dated
                    ,     (the “Prospectus”) 

 Dear Sir/Madam: 
 The undersigned hereby certifies, in
connection with the sale of shares of Common Stock of the Company included in the table of Selling Shareholders in the Prospectus, that the undersigned has sold the shares pursuant to the Prospectus and in a manner described under the caption
“Plan of Distribution” in the Prospectus and that such sale complies with all securities laws applicable to the undersigned, including, without limitation, the Prospectus delivery requirements of the Securities Act of 1933, as amended.

 Selling Shareholder (the beneficial owner):                            
                                        
                                        
                                        
              
 Record Holder (e.g., if held in name of nominee):                       
                                        
                                        
                                        
         
 Restricted Stock Certificate No. (s):                             
                                        
                                        
                                        
                           
 Number of Shares Sold:                                
                                        
                                        
                                        
                                        
  
 Date of Sale:                                  
                                        
                                        
                                        
                                        
                    
 In the event
that you receive a stock certificate(s) representing more shares of Common Stock than have been sold by the undersigned, then you should return to the undersigned a newly issued certificate for such excess shares in the name of the Record Holder and
BEARING A RESTRICTIVE LEGEND. Further, you should place a stop transfer on your records with regard to such certificate. 
  

									
		 		 		 	Very truly yours,
					
	Dated:	 	  
	 		 	By:	 	  

					
		 		 		 	Print Name:	 	  

					
		 		 		 	Title:	 	  

					
		 		 		 	cc:	 	[Company Name and Address]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]