Document:

Recapitalization Agreement

 Exhibit 10.1 
 RECAPITALIZATION AGREEMENT 
 This RECAPITALIZATION AGREEMENT, dated March
    , 2008 (this “Agreement) is an amendment to the Securities Purchase Agreement, dated as of October 31, 2005, as amended prior to the date hereof (as amended, the “SPA”), among SendTec
Acquisition Corp., a Delaware corporation (“STAC”), SendTec, Inc. (formerly known as RelationServe Media, Inc.), a Delaware corporation (the “Company”), each Holder identified on the signature pages hereto (each,
including its successors and assigns, a “Holder” and collectively the “Holders”), and Christiana Corporate Services, Inc., a Delaware corporation, in its capacity as administrative agent for the Holders (together
with its successors and assigns in such capacity, the “Agent”). 
 WHEREAS, the parties hereto desire to enter into this
Agreement in order to provide for the exchange of the Original Debentures (as defined herein) into Series B Preferred (as defined herein) of the Company, subject to the terms and conditions set forth in this Agreement and for certain rights and
obligations of the parties from and after the date hereof. 
 WHEREAS, the Holders have agreed that the Original Debentures shall be
exchanged for a combination of Series B Preferred, Debentures (as defined herein) and Residual Debentures (as defined herein), subject to the terms and conditions set forth in this Agreement and for certain rights and obligations of the parties from
and after the date hereof, and that the Debentures and Residual Debentures shall not bear interest. 
 NOW, THEREFORE, IN CONSIDERATION of
the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein
have the meanings given to such terms in the Original Debentures (as defined herein), and (b) the following terms have the meanings indicated in this Section 1.1: 
 “Action” shall have the meaning ascribed to such term in Section 3.1(h). 
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person, as such terms are used in and construed under Rule 144. With respect to a Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such
Holder will be deemed to be an Affiliate of such Holder. 
 “Bloomberg” means Bloomberg Financial L.P. or any
successor thereto, or, if it is not then reporting such prices, by a comparable reporting service of national reputation selected by the Company. 

 “Certificate of Amendment” means the Certificate of Amendment of the
Certificate of Incorporation of the Company, as amended to date providing for the changes set forth in Section 4.1 hereof. 
 “Certificate of Designation” means the Certificate of Designation for the Series B Preferred, a copy of which is attached as Exhibit B hereto. 
 “Commission” means the Securities and Exchange Commission. 
 “Common Stock Equivalents” means any securities of a Person that would entitle the holder thereof to acquire at any time
common stock of such Person, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, common stock. 
 “Common Stock” means the common stock, par value $0.001 per share, of the Company
and any other class of securities into which such securities may hereafter have been reclassified or changed into. 
 “Company Counsel” means Holland & Knight LLP. 
 “Concurrent Offering”
means the sale of shares of Common Stock at the Concurrent Offering Price per share, or if Series B Preferred, on such terms as specified in the Concurrent Purchase Agreements and Certificate of Designation, in an aggregate amount of up to
$7,000,000, pursuant to one or more Concurrent Purchase Agreements, which shares may be acquired in one or more transactions as contemplated herein, during the period terminating one (1) year after the earlier to occur of either of the
following: (a) the Second Closing Date; or (b) 150 days after the date of the First Closing. 
 “Concurrent
Offering Price” means a price of: (a) $0.12 per share for Concurrent Offering sales made no later than three (3) months after the Second Closing Date; and (b) the greater of $0.12 per share or that price per share equal to a
35% discount to market (i.e., the 5-day VWAP as reported by Bloomberg immediately preceding the date of issuance) for Concurrent Offering sales made after three (3) months after the Second Closing Date. 
 “Concurrent Offering Target” means at least $5,000,000 in aggregate gross proceeds raised by the Company in the
Concurrent Offering. 
 “Concurrent Purchase Agreements” means one or more Subscription Agreements for Common
Stock or Series B Preferred, between the Company and the investors identified therein (each, a “New Holder” and collectively, the “New Holders”) in connection with the Concurrent Offering. 
 “Concurrent Shares” means the shares of Common Stock or Series B Preferred being issued in the Concurrent Offering.

  

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 “Conversion Price” means $0.17 per share, as such price may be adjusted
pursuant to the Debentures or the Certificate of Designation, as applicable. 
 “Debentures” means the
Amended and Restated Senior Secured Convertible Debentures issued by STAC to the Holders at the First Closing pursuant to Section 2.1(a)(iii), in substantially the form of the attached Exhibit C hereto. 
 “Disclosure Schedule” has the meaning ascribed to such term in Section 3.1. 
 “Discussion Time” shall have the meaning set forth in Section 3.2(f). 
 “Effective Date” means the date that the Registration Statement filed by Company pursuant to Section 4.17 and the
Registration Rights Agreement to register the full initial Required Minimum of Underlying Shares and Warrant Shares is first declared effective by the Commission. 
 “Evaluation Date” has the meaning ascribed to such term in Section 3.2(k). 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder. 
 “Exempt Issuance” means the issuance of (a) the Concurrent Shares, (b) shares of
Common Stock or options to employees, consultants, officers or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the independent directors of the Board of Directors of the Company or a majority of the
members of a committee of independent directors established for such purpose; provided that the number of shares directly or upon exercise of options to be issued to consultants shall not exceed 100,000 in the aggregate; (c) securities
upon the exercise or exchange of or conversion of any Securities issued hereunder and/or securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement; provided,
that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities; (d) securities issued pursuant to
acquisitions of other companies; provided, that any such issuance (1) shall only be to a Person that is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the
Company receives substantial benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is
investing in securities, (2) shall only be to a Person that is not an Affiliate of the Company or its Subsidiaries and (3) has been approved by a majority of the independent directors of the Company; and (e) securities issued at any
time pursuant to the Sunrise Settlement. For purposes hereof, the independence of directors is determined by the rules of the Commission. 
 “Existing Registration Statement” means the Registration Statement on Form SB-2 (File No. 333-132586) pursuant to which an aggregate of 38,487,272 shares of Common Stock issuable upon conversion
of the Original Debentures or exercise of the Warrants (as originally issued pursuant to the SPA) are registered. 
  

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 “First Closing” means the transactions occurring simultaneously herewith
as set forth in Section 2.1. 
 “GAAP” has the meaning ascribed to such term in
Section 3.2(b). 
 “Guarantors Ratification” means the Guarantors’ Ratification and
Amendment to Guarantor Security Agreement between certain of the Subsidiaries and the Agent dated the date hereof. 
 “Indebtedness” means (a) any liabilities for borrowed money or amounts owed in excess of $75,000 (other than trade accounts payable, accrued liabilities and deferred revenues incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in a Person’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $75,000 due under leases required to be capitalized in
accordance with GAAP. 
 “Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.2(h). 
 “Legend Removal Date” shall have the meaning ascribed to such term in
Section 4.2(d). 
 “Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction. 
 “Material Adverse Effect” shall have the meaning ascribed
to such term in Section 3.1(b). 
 “Material Permits” shall have the meaning ascribed to such
term in Section 3.2(f). 
 “Morrison” means Morrison & Foerster LLP with offices at 1290
Avenue of the Americas, New York, New York 10104-0050. 
 “Original Debentures” means the Senior Secured
Convertible Debentures due March 31, 2008, issued by STAC to the Holders pursuant to the SPA, in the current outstanding principal amount of $32,730,000. 
 “Permitted Indebtedness” shall mean (i) a working capital credit facility, term loan, or a combination thereof, up
to an aggregate amount of $2,000,000, which may have a second priority security interest in the accounts receivable of the Company of the Company and its Subsidiaries (subordinate, for so long as any Debentures or Residual Debentures remain
outstanding, to the security interest of the Holders in such assets), (ii) trade payables and indebtedness consisting of capitalized lease obligations and purchase money indebtedness incurred in connection with acquisition of capital assets and
obligations under sale-leaseback arrangements with respect to newly acquired or leased assets (including, but not limited to equipment financing transactions), (iii) deferred revenues and (iv) accrued liabilities. 
  

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 “Permitted Liens” means the following Liens: (i) Liens for
taxes, assessments or other governmental charges or levies not yet due or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been made; (ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen and other Liens imposed by law for amounts not yet due; (iii) Liens incurred or deposits made in the ordinary course of business in connection with worker’s compensation, unemployment
insurance or other types of social security; (iv) non-monetary Liens that do not impair the marketability of the property subject thereto in any material respect; and (v) Liens pursuant to the Security Documents. 
 “Person” means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition). 
 “Registration Rights Agreement” means the Registration Rights Agreement dated February 3, 2006 among the Company and
the Holders. 
 “Registration Statement” means a registration statement meeting the requirements set forth in
the Registration Rights Agreement and covering the resale of, among other securities, the Transaction Shares by each Holder as provided for in the Registration Rights Agreement. 
 “Required Holders” means the holders of 75% of the principal amount then outstanding of the Debentures or Residual
Debentures, as applicable, or the then outstanding shares of Series B Preferred (excluding any shares of Series B Preferred that may be issued to a New Holder) ; provided, however, that so long as LB I Group Inc. or any of its
Affiliates own any Debentures, Residual Debentures, or Series B Preferred, such holders must include LB I Group Inc. and such Affiliates. 
 “Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable as Underlying Shares issuable upon conversion in full of all then
outstanding Debentures, Residual Debentures, or shares of Series B Preferred, and any Warrant Shares issuable upon exercise in full of the Warrants, ignoring any conversion or exercise limits set forth therein, and assuming that the Conversion Price
or Exercise Price (as defined in the Warrants), as applicable, is at all times on and after the date of determination 90% of the then applicable Conversion Price on the Trading Day immediately prior to the date of determination. 
 “Residual Debentures” means the Residual Senior Secured Convertible Debentures issued by STAC to the Holders at the
Second Closing pursuant to Section 2.2(b) if the Concurrent Offering gross proceeds to the Company by the Second Closing Date are not at least $5,000,000, in substantially the form of the attached Exhibit K hereto. 
  

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 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
 “Second Closing Date” means the third Trading Day following the satisfaction or waiver of all other conditions to the
obligations of the parties set forth in Section 2.3 or such other time or on such other date or at such other place as the parties may mutually agree upon in writing. 
 “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(q). 
 “Securities” means the Debentures, the Residual Debentures, the Series B Preferred, and the Underlying Shares.

 “Securities Act” means the Securities Act of 1933, as amended. 
 “Security Agreement Amendments” means an Amendment to STAC Security Agreement and an Amendment to IP Security Agreement
between certain of the Subsidiaries and the Agent dated the date hereof. 
 “Security Documents” shall mean
the Security Agreement, the Transaction Guaranty, the Guarantor Security Agreement (each as defined in the SPA), Guarantors Ratification, the Security Agreement Amendments, stock certificates and any other documents and filings required thereunder
in order to grant the Holders a security interest in all of the assets of the Company and its Subsidiaries, including all UCC-1 filing receipts and medallion guaranteed stock powers as to any pledged securities. 
 “Series B Preferred” means the Series B preferred stock, par value $0.001 per share, of the Company with the
designations, terms and rights as set forth in the Certificate of Designation. 
 “Short Sales” shall include
all “short sales” of the Common Stock as defined in Rule 200 of Regulation SHO under the Exchange Act. 
 “Special Meeting” means the special meeting of the stockholders of the Company to be called as provided in Section 4.1. 
 “Stockholder Matters” means the proposals to be presented to the stockholders of the Company at the Special Meeting as provided in Section 4.1. 
 “Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a). 
  

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 “Sunrise Settlement” means the proposed Settlement Agreement between the
Company and Sunrise Equity Partners, L.P. 
 “Trading Day” means a day on which the Common Stock is traded on
a Trading Market. 
 “Trading Market” means the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the Nasdaq Capital Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq Global Market or the OTC Bulletin Board. 
 “Transaction Documents” means this Agreement, the Certificate of Designation, the SPA, the Debentures, the Residual
Debentures, the Security Agreement Amendments, the Guarantors Ratification, the Registration Rights Agreement (as amended hereby), the Concurrent Purchase Agreement and any other agreements or documents executed in connection with the transactions
contemplated hereunder. 
 “Transaction Shares” means, collectively, the shares of Series B Preferred and the
Underlying Shares. 
 “Underlying Shares” means the shares of Common Stock issuable upon conversion of any
outstanding Debentures, Residual Debentures, and/or of the Series B Preferred. 
 “Variable Rate Transaction”
shall have the meaning ascribed to such term in Section 4.22. 
 “VWAP” means, for any date, the
price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the primary Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m., Eastern Time) using the VAP function; (b) if the Common Stock is not
then listed or quoted on the Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as determined by a nationally recognized-independent appraiser selected in good faith by Holders
holding a majority of the principal amount of Debentures or Residual Debentures then outstanding. 
 “Warrants” means, collectively, the Common Stock purchase warrants issued on February 3, 2007 in connection with the issuance of the Original Debentures of which warrants to purchase 3,230,730 shares are still
outstanding. 
 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants,
excluding all shares of Common Stock issued upon exercise of the Warrants prior to the date hereof. 
  

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 ARTICLE II 
 EXCHANGE OF DEBENTURES INTO SERIES B PREFERRED 
 2.1 Initial Exchange of Debentures; First
Closing. Simultaneously with the execution and delivery hereof and the transactions set forth below in this Section 2.1 (collectively, the “First Closing”), each of the Holders is exchanging the principal amount of Original
Debentures set forth opposite its name in Schedule I, Column A hereto and will receive upon such exchange the number of shares of Series B Preferred set forth under Schedule I, Column B hereto. In addition to the execution and delivery
of this Agreement by the parties hereto, the following documents and instruments are being executed and delivered and transactions being effected: 
 (a) Each Holder shall receive 
 (i) Payment by wire transfer to the account designated by the
Holder on the signature page hereto of all accrued and unpaid interest through November 16, 2007 on the full outstanding principal amount of its respective Original Debentures as set forth under the column entitled “Aggregate Principal
Amount of Original Debentures” on Schedule I hereto; 
 (ii) a certificate and/or certificates representing the
number of shares of Series B Preferred being issued to such Holder upon partial exchange of the Original Debentures; 
 (iii)
upon delivery to the Agent of the Holder’s Original Debenture, an amended and restated Debenture in the form of Exhibit C hereto with a principal amount equal to the principal amount set forth opposite such Holder’s name in
Schedule I, Column C hereto, which amount is equal to the amount of such Holder’s Original Debenture remaining outstanding after issuance of Series B Preferred to such Holder at the First Closing; 
 (iv) a legal opinion of Company Counsel, in the form of Exhibit D hereto, with respect to certain corporate matters and with
respect to Rule 144; 
 (v) evidence that the wire transfer of the purchase price payable pursuant to any Concurrent Purchase
Agreements entered into in satisfaction of the conditions set forth in Section 2.1(e) has been received by the Company and that the Company has issued certificates for the shares of Common Stock being purchased thereunder; 
 (vi) a copy of the executed employment agreement between the Company and Paul Soltoff in the form of Exhibit E hereto; 

(vii) a certificate of the Secretary of STAC with respect to customary matters including resolutions approving and authorizing this
Agreement, the Debentures and the Residual Debentures (and all other Transaction Documents to which STAC is a party), and a certificate of the Company with respect to customary matters including resolutions approving and authorizing: (1) this

  

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Agreement, (2) the Concurrent Offering and related Concurrent Purchase Agreements, (3) the issuance of the Series B Preferred and the filing of the
Certificate of Designation, (4) setting a record date and holding the Special Meeting for the purpose of approving the Stockholder Matters, (5) the filing of any additional Registration Statement to register additional Underlying Shares,
(6) approval of the new employment agreement with Paul Soltoff in the form of Exhibit E hereto, (7) approval of the engagement of a restructuring consultant, as provided in Section 2.1(a)(ix), (8) the appointment of new
directors pursuant to Section 2.1(f) and the acceptance of the resignation of any applicable directors pursuant to Section 2.1(f) and (9) certain other matters related to this Agreement; 
 (viii) an executed copy of the voting agreement in the form of Exhibit F hereto; 
 (ix) a copy of the executed engagement letter with between the Company and Marotta Gund Budd & Dzera, LLC (the
“CRO”); 
 (x) a copies of the amendments to security agreements in the form of Exhibit L hereto; and

 (xi) a copy of the guarantor ratification and amendment in the form of Exhibit M hereto. 
 (b) The Company shall pay the fees and expenses identified on Exhibit G hereto by wire transfer of immediately available funds to
the persons entitled thereto. 
 (c) INTENTIONALLY OMITTED. 
 (d) The Certificate of Designation shall have been filed with the Delaware Secretary of State. 
 (e) The Company shall have received or shall receive concurrently therewith at least $1,000,000 of gross proceeds pursuant to the
Concurrent Offering; provided, however, that in connection with the Concurrent Offering: (i) executive management of the Company shall purchase a minimum of $500,000 in the aggregate of Common Stock toward the fulfillment of this
condition; and (ii) Paul Soltoff shall individually purchase at least $300,000 of such $500,000 amount. 
 (f) The
Company’s board of directors shall consist of the following: (i) Paul Soltoff; (ii) Vincent Addonisio; (iii) Anthony Abate; (iv) Paul Dzera; and (v) Steve Marotta. 
 (g) The Company shall have paid to the Agent the fees payable pursuant to the Transaction Documents through December 31, 2008.

 2.2 Second Exchange of Debentures; Second Closing. Upon satisfaction of all conditions to the Second Closing as set forth in
Section 2.3, on the Second Closing Date, each Holder shall exchange the entire remaining principal amount of Debentures then owned by it 

  

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into the number of shares of Series B Preferred set forth in Schedule I, Column C, and a cash settlement for any fractional shares in the
amount set forth in Schedule II. Notwithstanding the foregoing, if all conditions to the Second Closing as set forth in Section 2.3 are satisfied but the Concurrent Offering Target has not been satisfied, then on the Second
Closing Date each Holder shall exchange only the principal amount of Debentures set forth opposite its name in Schedule I, Column E hereto, and shall receive a combination of Series B Preferred and a Residual Debenture as provided in
Section 2.2(a), and a cash settlement for any fractional shares in the amount set forth in Schedule II; and in such case the aggregate principal amount of Debentures so exchanged shall equal $3,370,000 and the aggregate amount of
Residual Debentures issued by STAC shall equal $11,000,000. At the Second Closing, the following documents and instruments will also be executed and delivered or transactions will be effected: 
 (a) Each Holder shall receive 
 (i) INTENTIONALLY LEFT BLANK. 
 (ii) a certificate or certificates representing the
number of shares of Series B Preferred being issued to such Holder upon exchange of the Debentures and set forth in Schedule I Column D or F, as applicable; 
 (iii) a “bring down” legal opinion of Company Counsel, in the form of Exhibit D hereto; 
 (iv) a “bring down” certificate of the Secretary of the Company with respect to customary matters, including the resolutions
referenced in Section 2.1(a)(vii); 
 (v) a certificate of the Chief Executive Officer and Chief Financial Officer of
each of the Company and STAC certifying to the satisfaction of the closing conditions set forth in clauses (i) through (iii) of Section 2.3(b); and 
 (vi) if the Concurrent Offering Target is not satisfied at the Second Closing Date, a Residual Debenture with a principal amount equal to
the residual amount set forth opposite its name in Schedule I, Column G hereto. 
 (b) Any Residual Debentures
issued at the Second Closing shall be in substantially the form of the attached Exhibit K hereto and shall: (i) have a term of three (3) years from the Second Closing Date, (ii) not bear interest, (iii) convert into Common Stock
at the Conversion Price per share, (iv) contain no financial covenants, (v) be a senior and secured obligation of the Company, (vi) have pari-passu antidilution protection to the Series B Preferred and (viii) automatically
convert into Series B Preferred when and if the Concurrent Offering Target is satisfied, subject to and all as more specifically set forth in the Residual Debentures. 
 2.3 Conditions to Second Closing. 
 (a) Company Conditions. The obligations of
the Company hereunder in connection with the Second Closing are subject to the following conditions being met: 
 (i) The
approval by the stockholders of the Company of the Stockholder Matters, and the filing of the Certificate of Amendment with the Delaware Secretary of State; 
  

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 (ii) the accuracy in all material respects (except for those representations and
warranties that are qualified by materiality, which shall be true and correct in all respects) when made and on the Second Closing Date of the representations and warranties of the Holders contained herein; and 
 (iii) all obligations, covenants and agreements of the Holders required to be performed at or prior to the Second Closing Date as set
forth in this Agreement shall have been performed. 
 (b) Holder Conditions. The respective obligations of the Holders
hereunder in connection with the Second Closing are subject to the following conditions being met: 
 (i) The approval by the
stockholders of the Company of the Stockholder Matters and the filing of the Certificate of Amendment with the Delaware Secretary of State; 
 (ii) the accuracy in all material respects (except for those representations and warranties that are qualified by materiality, which shall be true and correct in all respects) on the Second Closing Date of the
representations and warranties of the Company and STAC contained herein; 
 (iii) all obligations, covenants and agreements of
the Company and STAC required to be performed at or prior to the Second Closing Date as set forth in this Agreement shall have been performed; and 
 (iv) the delivery by the Company and STAC of the items required to be delivered by it pursuant to Section 2.2. 
 ARTICLE III 
 REPRESENTATIONS, WARRANTIES AND COVENANTS 
 3.1 Representations, Warranties and Covenants of the Company. Except as set forth under the corresponding section of the disclosure schedules
delivered to the Holders concurrently herewith (collectively, the “Disclosure Schedule”), which Disclosure Schedule shall be deemed a part hereof, the Company makes the representations, warranties and covenants set forth below to
each Holder as of the date hereof and as of the Second Closing Date. 
 (a) Subsidiaries. All of the direct and
indirect subsidiaries of the Company are set forth on Schedule 3.1(a). Except as set forth on Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free
and clear of any Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

  

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 (b) Organization and Qualification. The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have (i) a material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s and the Subsidiaries’ respective abilities to perform in any material respect on a timely basis their respective obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”), and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 
 (c) Authorization; Enforcement. (1) The Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company
to which it is a party and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or
stockholders in connection therewith other than in connection with the Required Approvals (as defined in Section 3.1(e)). Each Transaction Document to which the Company is a party has been (or upon delivery will be) duly executed by the
Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against it in accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. 
 (2) Each Subsidiary has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company to which it is a party and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on
the part of such Subsidiary and no further action is required by such Subsidiary, its board of directors (or other managing body) or stockholders (or other equity holders) in 

  

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connection therewith other than in connection with the Required Approvals. Each Transaction Document to which such Subsidiary is a party has been (or upon
delivery will be) duly executed by such Subsidiary and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of such Subsidiary enforceable against it in accordance with its terms except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. 
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and certain of its
Subsidiaries to which it is a party and the consummation by the Company and such Subsidiaries of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, except for any such conflict, default, of creation of a lien or rights of termination, amendment, acceleration or cancellation as could not cause a Material Adverse Effect, and except for certain customer agreements
entered in the ordinary course of business regarding change of control, or (iii) subject to the Required Approvals, result in a material violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected. 
 (e) Filings, Consents and Approvals. Neither the Company nor any Subsidiary is required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the
Company or any Subsidiary of the Transaction Documents, other than (i) filings required pursuant to Section 4.6, (ii) the filing with the Delaware Secretary of State of (A) the Certificate of Designation prior to or on the date
hereof and (b) assuming approval of the Stockholder Matters by the stockholders of the Company, on or prior to the Second Closing Date, the Certificate of Amendment, (iii) the filing of the Proxy Statement (as defined in
Section 4.1) with the Commission, (iv) the filing with the Commission pursuant to the Registration Rights Agreement of one or more Registration Statements with respect to Underlying Shares that are not currently registered pursuant
to an effective Registration Statement, (v) the notice and/or application(s) to each applicable Trading Market for the listing of the Underlying Shares for trading thereon in the time 

  

 13 

 
and manner required thereby, and (vi) the approval by the Company’s and the Subsidiaries’ boards of directors, which have been received
(collectively, the “Required Approvals”). 
 (f) Issuance of the Securities. (A) All shares of
Series B Preferred issuable pursuant to this Agreement, the Underlying Shares related to the shares of Series B Preferred issuable at the First Closing, and the Warrant Shares are duly authorized and, when issued in accordance with this Agreement,
the Certificate of Designation or the Warrant will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company and will have been issued in compliance with all federal and state securities laws.
Subject to (i) approval of the Stockholder Matters by the stockholders of the Company as provided in Section 4.1 and the filing of the Certificate of Amendment with the Delaware Secretary of State, the Underlying Shares in respect
of the shares of Series B Preferred issuable on the Second Closing Date will be duly authorized and, when issued in accordance with this Agreement and the Certificate of Designation will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company and will have been issued in compliance with all federal and state securities laws. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the
Warrant Shares and of the Underlying Shares with respect to the shares of Series B Preferred being issued on the date hereof at the First Closing. On or prior to the Second Closing Date, the Company shall have reserved from its duly authorized
capital stock a number of shares of Common Stock equal to at least the Required Minimum. As of the date hereof, 38,487,272 of the Underlying Shares are registered for resale pursuant to Existing Registration Statement, which are effective within the
meaning of the rules and regulations of the Commission. 
 (B) The Debentures and the Residual Debentures have been duly
authorized by STAC and when duly executed and delivered in accordance with the terms hereof, will constitute the valid and binding obligation of STAC enforceable against it in accordance with their respective terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. 
 (g) Capitalization Matters. The capitalization of the Company is as set forth on Schedule 3.1(g). Except with respect to the Concurrent Offering and any Exempt Issuance: (a) the Company has not
issued any capital stock since September 30, 2007, other than pursuant to the exercise of employee stock options under the Company’s stock option plans and pursuant to the conversion or exercise of outstanding Common Stock Equivalents; and
(b) no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth on Schedule 3.1(g), other
than the Securities and pursuant to the Concurrent Offering or any Exempt Issuance, there are no outstanding options, warrants, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or 

  

 14 

 
exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the Holders) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. All of the
outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase securities. Except as set forth on Schedule 3.1(g), there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. 
 (h) Litigation. Except as set forth in Schedule 3.1(h), there is no Proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) that (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. Neither the Company nor, to the Company’s knowledge, any executive officer, director, or Affiliate of any of them
has been contacted in writing or orally by the Federal Bureau of Investigation for any reason whatsoever since February 3, 2006. 
 (i) Certain Fees. Other than an aggregate fee of $450,000 to Burnham Hill Partners, and any fees payable to the CRO, no brokerage or finder’s fees or commissions are or will be payable by the Company or
any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by the Transaction Documents. The Holders shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents. The Company has
delivered to the Holders a copy of a letter from Burnham Hill Partners confirming the nature and amounts of all fees and other payments due to it in connection with the transactions contemplated by this Agreement and the Concurrent Purchase
Agreements. 
  

 15 

 (j) Private Placement. Assuming the accuracy of the Holders’ representations
and warranties set forth in Section 3.2, no registration under the Securities Act is or will be required for the issuance of the Series B Preferred or the related Underlying Shares by the Company to the Holders as contemplated hereby or
for the issuance and sale of the Concurrent Shares pursuant to the Concurrent Offering. The issuance and sale of the Concurrent Shares pursuant to the Concurrent Purchase Agreements does not contravene the rules and regulations of the Trading
Market. 
 (k) Registration Rights. Except as set forth in Schedule 3.1(k), other than each of the Holders, no
Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary. 
 (l) Disclosure. The Company confirms that neither it nor, to its knowledge, any other Person acting on its behalf has provided any of the Holders or their agents or counsel or any of the New Holders pursuant to
the Concurrent Offering, with any information that will constitute material, nonpublic information following the issuance of the press release and the filing of the Current Report on Form 8-K as contemplated in accordance with
Section 4.7. The Company understands and confirms that the Holders will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. All disclosure provided to the Holders by the Company or,
to the Company’s knowledge, Burnham Hill Partners, regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules and Exhibits to this Agreement, furnished by or on behalf of the Company with
respect to the representations and warranties made herein are true and correct in all material respects (except for those representations and warranties that are qualified by materiality, which shall be true and correct in all respects) and do not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees
that no Holder makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2. 
 (m) No Integrated Offering. Assuming the accuracy of the Holders’ representations and warranties set forth in
Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under
circumstances that would cause the issuance of the Securities pursuant to this Agreement to fail to be entitled to the exemptions afforded by Regulation D under, or Section 4(2) of, the Securities Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of any Trading Market on which any of the securities of the Company are listed or designated, if any. 
 (n) No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the
Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Holders. 
  

 16 

 (o) Acknowledgement Regarding Holders’ Trading Activity. The Company
acknowledges and agrees that (i) except for a Holder’s representation and warranty in Section 3.2(f) and its covenant in Section 4.12, such Holder is not making any representation, warranty or covenant with respect to
purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) that past or future open market or other
transactions by any Holder, including Short Sales, and specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded securities; (iii) that any Holder, and counter parties in “derivative” transactions to which any such Holder is a party, directly or indirectly, presently may have a
“short” position in the Common Stock; and (iv) that each Holder shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further
understands and acknowledges that (a) one or more Holders may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the
Transaction Shares deliverable with respect to Securities are being determined and (b) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the
hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents. 
 (p) Manipulation of Price. Neither the Company nor to the Company’s knowledge, anyone acting on its behalf has
(i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities or (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the Securities. 
 (q) SEC Reports; Financial
Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein filed on or after
December 31, 2005 being collectively referred to herein as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and
the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles 

  

 17 

 
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the
notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. 
 (r) Material Changes. Since December 31, 2006, except as specifically disclosed in the SEC Reports, (i) there has been no
event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect; (ii) the Company and its Subsidiaries have not incurred any liabilities (contingent or otherwise) other than
(A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s consolidated financial statements pursuant to GAAP or
required to be disclosed in filings made with the Commission; (iii) the Company has not altered its method of accounting; (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreement to purchase or redeem any shares of its capital stock; and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option
plans. 
 (s) Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is threatened with
respect to any of the employees of the Company or any Subsidiary which would reasonably be expected to result in a Material Adverse Effect. 
 (t) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or
(iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business, except in each case as could not have a
Material Adverse Effect. 
 (u) Regulatory Permits. The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not
have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation or modification of any
Material Permit. 
  

 18 

 (v) Title to Assets. The Company and the Subsidiaries have good and marketable
title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for Permitted Liens. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the
Company and the Subsidiaries are in material compliance. 
 (w) Patents and Trademarks. The Company and the
Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a
written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property Rights of others. 
 (x) Insurance. The
Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged,
including, but not limited to, adequate directors and officers insurance coverage. To the Company’s knowledge, such insurance contracts and policies are accurate and complete. To the Company’s knowledge, neither the Company nor any
Subsidiary will be unable to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost, where such
failure to renew could have a Material Adverse Effect. 
 (y) Transactions With Affiliates and Employees. Except as set
forth in the SEC Reports, none of the officers or directors of the Company or holders, directly or indirectly, of 5% or more of Common Stock and, to the knowledge of the Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer,
director, trustee or partner, in each case in excess of $60,000 other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company, (iii) for other employee
benefits, including stock option agreements under any stock option plan of the Company, and (iv) for the Debentures or Residual Debentures to the extent any holder thereof is also the holder, directly or indirectly, of 5% or more of Common
Stock. 
  

 19 

 (z) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material
compliance with all provisions of the Sarbanes-Oxley Act of 2002 that are applicable to it as of December 31, 2006. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure
controls and procedures to ensure that material information relating to the Company, including its Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s
most recently filed periodic report under the Exchange Act, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of the date prior to the
filing date of the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as
such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the knowledge of the Company, in other factors that could significantly affect the Company’s internal controls. 
 (aa) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the
Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”). The Company intends to conduct its business in a
manner so that it will not become subject to the Investment Company Act. 
 (bb) Listing and Maintenance Requirements.
The Company files reports pursuant to Section 15(d) of the Exchange Act. The Company has not taken and will not take any action designed to, or which, to its knowledge, is likely to have the effect of, terminating the Company’s reporting
requirement pursuant to Section 15(d). Since February 3, 2006, the Company has not received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with
the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. 
 (cc) Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s 

  

 20 

 
certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Holders as a
result of the Holders and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Holders’ ownership
of the Securities. 
 (dd) Tax Status. Except for matters that would not, individually or in the aggregate, have or
could reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns required to be filed by it and has paid or accrued all taxes
shown as due thereon, other than those being contested in good faith and for which adequate reserves have been provided, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any
Subsidiary. Since December 31, 2006, the Company has not received written notice of any claim made by an authority in a jurisdiction where the Company, does not file tax returns, that the Company is or may be subject to taxation by that
jurisdiction. The Company has not waived any statute of limitations in any jurisdiction in respect of taxes or tax returns or agreed to any extension of time with respect to a tax assessment or deficiency. No federal, state, local or foreign audit,
examination or other administrative proceeding is pending or, to the knowledge of the Company, threatened in writing with regard to any taxes or tax returns of the Company. There is no dispute or claim concerning any tax liability of the Company
either claimed or raised by any taxing authority in writing. 
 (ee) Foreign Corrupt Practices. Neither the Company or
any Subsidiary, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose
fully any contribution made by the Company (or 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. 
 (ff) Accountants. To the Company’s knowledge, Marcus and Kliegman LLP, who expressed their
opinion with respect to the Company’s financial statements included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2006 and Gregory, Sharer & Stuart, who have been engaged by the Company and who
the Company expects will express their opinion with respect to the financial statements to be included in the Company’s Annual Report on Form 10-KSB for the year ending December 31, 2007, are independent registered public accountants with
respect to the Company within the meaning of the Securities Act and the applicable published rules and regulations thereunder adopted by the Commission and the Public Company Accounting Oversight Board (United States). 
 (gg) Indebtedness; Seniority. Except as provided in Section 4.18 and in the Certificate of Designation, no Indebtedness
or other equity security or other security of 

  

 21 

 
the Company or any Subsidiary is or will be senior to the Debentures, Residual Debentures, or the Series B Preferred in right of payment, whether with
respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior
only as to the property covered thereby). 
 (hh) Solvency. After giving effect to the receipt by the Company of the
proceeds from the sale of the Concurrent Shares and exchange in full of the Debentures for Series B Preferred as provided in Article II, to the Company’s knowledge: (i) the fair value of the Company’s property will be greater than the
amount of its liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of
applicable state law; (ii) the present fair saleable value of the Company’s property will not be less than the amount that will be required to pay its probable liability on its debts as they become absolute and matured; (iii) the
Company’s assets will not be inadequate, and will not constitute unreasonably small capital, to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account
the particular capital requirements of the business conducted by it, and projected capital requirements and capital availability therefor; (iv) the Company will be able to realize upon its property and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; and (v) the current cash flow of the Company together with the proceeds it would receive were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. Following the receipt by the Company of the proceeds from the sale of the
Concurrent Shares and exchange in full of the Debentures for Series B Preferred as provided in Article II, the Company does not intend to, nor does it believe that it will, incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its debt). The Company does not have any knowledge of any facts or circumstances that leads it to believe that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one year from the date hereof. 
 (ii) Agent. The Company
has retained the services of the Agent for a period that will extend at least through the Second Closing Date to provide the services set forth in the SPA and this Agreement, and all fees and expenses due and owing to the Agent through
December 31, 2008 have been paid in full. 
 (jj) Arms’ Length Transaction. Each of the Company and STAC
acknowledges and agrees that each of the Holders is acting solely in the capacity of any arm’s length Holder with respect to this Agreement and the transactions contemplated hereby. Each of the Company and STAC further acknowledges and each
other Holder acknowledges that no Holder is acting as a financial advisor or fiduciary of the Company or STAC or any other Holder (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice
given by any Holder or any of 

  

 22 

 
their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the
Holder’s participation in the transactions contemplated by the Transaction Documents. 
 3.2 Representations and Warranties of the
Holders. Each Holder, hereby, for itself and for no other Holder, represents and warrants as of the date hereof to the Company, and the other Holders follows: 
 (a) Organization; Authority. It is an entity duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution,
delivery and performance by it of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on its part. This Agreement has been duly executed and delivered by it and constitutes the valid
and legally binding obligation of it, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law. 
 (b) Own Account. The Holder understands that the
Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law. The Holder is acquiring the Securities as principal for its own account and not with a view to or for
distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any
applicable state securities law and has no arrangement or understanding with any other persons regarding the distribution of such Securities (this representation and warranty not limiting the Holder’s right to sell the Securities pursuant to
the Registration Statement or otherwise in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law. The Holder is acquiring the Securities hereunder in the ordinary
course of its business. The Holder does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
 (c) Holder Status. At the date hereof it is, and on each date on which it exchanges any Debentures or Residual Debentures, or
converts any Series B Preferred, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as
defined in Rule 144A(a) under the Securities Act. The Holder is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 
 (d) Experience of the Holder. The Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and 

  

 23 

 
financial matters so as to be capable of evaluating the merits and risks of its continuing investment in the Securities, and has so evaluated the merits and
risks of such investment. The Holder is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. The Holder acknowledges that there will be no interest payable
on any of the Debentures or Residual Debentures that may be issued pursuant to this Agreement. 
 (e) General
Solicitation. The Holder is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or
radio or presented at any seminar or any other general solicitation or general advertisement. 
 (f) Short Sales and
Confidentiality Prior To The Date Hereof. Other than the transaction contemplated hereunder, the Holder has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Holder, executed any
disposition, including Short Sales (but not including the location and/or reservation of borrowable shares of Common Stock), in the securities of the Company during the period commencing from the time that the Holder first received a term sheet
from the Company or any other Person setting forth the material terms of the transactions contemplated hereunder until the date hereof (“Discussion Time”). Notwithstanding the foregoing, in the case of a Holder that is a
multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the Holder’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other
portions of the Holder’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.
Other than to other Persons party to this Agreement, such Holder has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). 
 (g) Access to Information. The Holder and its advisors, if any, have been furnished with all materials relating to the business,
finances and operations of the Company and its Subsidiaries that have been requested by such Holder. Such Holder and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its Subsidiaries. Neither such
inquiries nor any other due diligence investigations conducted by such Holder or its advisors, if any, or its representatives shall modify, amend or affect such Holder’s right to rely on the Company’s representations and warranties
contained herein. 
 (h) Sale of Shares of Common Stock. Solely to determine the number of Underlying Shares and
Warrant Shares that the Company is required to register pursuant hereto, except as set forth on Schedule 3.2(h), if prior to the date hereof, the Holder has exercised any Warrants or converted any Original Debentures, except as expressly
described in writing by or on behalf of the Holder to the Company, the Holder has sold the shares of Common Stock issued upon such exercise or conversion, as applicable, and such shares of Common Stock do not need to be registered for resale.

  

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 ARTICLE IV 
 OTHER AGREEMENTS OF THE PARTIES 
 4.1 Special Meeting and Proxy Statement. 
 (a) The Company shall promptly file a preliminary proxy statement (the “Proxy Statement”) with the Commission in accordance with
applicable federal securities laws and the General Corporation Law of the State of Delaware, for a special meeting of stockholders to seek approval to increase the authorized Common Stock of the Company to 500,000,000 shares (the
“Stockholder Matters”). The Company has set a record date and meeting date for the special meeting (the “Special Meeting”) as set forth in the resolutions delivered to the Holders pursuant to
Section 2.1(a)(vi). To the extent that any Holder is entitled to vote on such Stockholder Matters, such Holder shall vote in favor of the Stockholder Matters. The Company shall use its best efforts to respond promptly to any comments on
the Proxy Statement from the Commission and to cause the Special Meeting to be held on the date set forth in such resolutions or as soon thereafter as possible. 
 (b) To the extent that at any time after approval of the Stockholder Matters, and for so long as Underlying Shares are potentially issuable, in the event that the Company does not have sufficient authorized Common
Stock of the Company to issue all of the potential Underlying Shares, then the Company shall promptly, and no later than 60 days after such occurrence, file a subsequent proxy statement to seek stockholder approval to further increase the number of
authorized shares to an amount sufficient to permit compliance with any issuance obligations regarding all of the remaining Underlying Shares not yet converted. 
 4.2 Transfer Restrictions. 
 (a) The Securities may only be disposed of in compliance
with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, or to the Company or to an affiliate of a Holder or in connection with a pledge as
contemplated in Section 4.2(c), the Company may require the transferor thereof to provide to it an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the
terms of this Agreement and shall have the rights of a Holder under this Agreement and the Registration Rights Agreement. 
 (b) The Holders agree to the imprinting, so long as is required by this Section 4.2, of a legend on any of the Securities in substantially the following form: 
 NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 

  

 25 

 
1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR UPON DELIVERY TO THE COMPANY OF SUCH EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
 (c) The Company and STAC acknowledge and agree that a Holder may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” (as defined in Rule 501(a) under the Securities Act) and who agrees to be bound by the
provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, such Holder may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not
be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Holder’s
expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities are subject to
registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the
list of “selling stockholders” thereunder. 
 (d) Certificates evidencing the Transaction Shares shall not contain
any legend (including the legend set forth in Section 4.2(b)): (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, (ii) following
any sale of such Transaction Shares pursuant to Rule 144, or (iii) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).
The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly if required by the Company’s transfer agent to effect the removal of the legend hereunder. In connection with the issuance of such
opinion, the Company may request a certificate from the Holder containing customary representations that such Holder has or will meet the applicable requirements, if any, necessary to effect a resale under Rule 144. If all or any portion of any
Debenture, Residual Debenture, any shares of Series B Preferred or any portion of a Warrant is converted or exercised (as applicable) at a time when there is an effective registration statement to cover the resale of the Underlying Shares or Warrant
Shares, or if such Underlying Shares or Warrant Shares may be sold under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial 

  

 26 

 
interpretations thereof), then such Underlying Shares or Warrant Shares shall be issued free of all legends. The Company and STAC agree that following the
Effective Date or at such time as such legend is no longer required under this Section 4.2(d), it will, no later than five (5) Trading Days following the delivery by a Holder to the Company or the Company’s transfer agent of a
certificate representing Transaction Shares issued with a restrictive legend (such fifth Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Holder a certificate representing such shares that is free
from all restrictive and other legends. The Company may not make any notation on its records or give instructions to any transfer agent of such securities that enlarge the restrictions on transfer set forth in this Section. If then applicable,
certificates for Transaction Shares subject to legend removal hereunder shall be transmitted by the transfer agent to the Holders by crediting the account of the Holder’s prime broker with the Depository Trust Company System. 
 (e) In addition to such Holder’s other available remedies, the Company shall pay to a Holder, in cash, as partial liquidated damages
and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to the transfer agent) delivered for removal of the restrictive legend and subject to
Section 4.2(d), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a
legend. Nothing herein shall limit such Holder’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Holder shall have the right to
pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. 
 (f) Each Holder, severally and not jointly with the other Holders, agrees that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.2 is predicated
upon the Company’s reliance that the Holder will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom. 
 4.3 Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including without limitation its obligation to issue the Underlying Shares and
Warrant Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against
any Holder and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company. 
 4.4 Exchange Act Registration; Furnishing of Information. As long as any Holder owns Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports
required to be filed by a Company with a class of securities registered under Section 15(d) of the Exchange Act, whether or not the 

  

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Company is otherwise required to do so by law. As long as any Holder owns Securities, if the Company is not required to file reports pursuant to the Exchange
Act, it will prepare and furnish to the Holders and make publicly available in accordance with Rule 144(c) such information as is required for the Holders to sell the Securities under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the limitation of the exemptions
provided by Rule 144. 
 4.5 Integration. The Company shall not take any intentional action or steps that would cause the offering of
the Securities under this Agreement to fail to be entitled to the exemptions from integration afforded by Regulation D under or Section 4(2) of, the Securities Act. 
 4.6 Conversion and Exercise Procedures. 
 (a) The form of Notice of Exercise included in the Warrants
and the form of Notice of Conversion included in the Series B Preferred set forth the totality of the procedures required of the Holders in order to exercise the Warrants or convert the Series B Preferred. No additional legal opinion or other
information or instructions shall be required of the Holders to exercise their Warrants or convert their Series B Preferred Shares. The Company shall honor exercises of the Warrants and conversions of the Series B Preferred Shares and shall deliver
Underlying Shares or Warrant Shares, as applicable, in accordance with the terms, conditions and time periods set forth in the Transaction Documents. 
 (b) Each Holder agrees that notwithstanding the conversion terms set forth in the Debentures, no Holder will exercise any such conversion rights prior to the Second Closing. 
 4.7 Securities Laws Disclosure; Publicity. The Company shall issue and file the following, as applicable, by 8:30 a.m. Eastern time on the
respective dates: (a) on the Trading Day following the date hereof, issue a press release substantially in the form attached hereto as Exhibit J, and by the third Trading Day following the date hereof, file a Current Report on Form 8-K;
(b) on the Trading Day following the Second Closing Date, issue a press release, and by the third Trading Day following such date file a Current Report on Form 8-K; and (c) on the Trading Day following the date following closing with
respect to the Concurrent Offering Target, issue a press release, and by the third Trading Day following such date file a Current Report on Form 8-K; in each case disclosing the material terms of such respective transactions, and shall attach such
Transaction Documents thereto as may be required by applicable regulations. The Company and each Holder shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and none of the Company
or any Holder shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Holder, or without the prior consent of each Holder, with respect to any
press release of the Company, which consent shall not unreasonably be withheld, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Holder, or include the name of any Holder in any filing 

  

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with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Holder, except (i) as required by federal
securities law, including, without limitation, in connection with the registration statement contemplated by the Registration Rights Agreement and (ii) to the extent such disclosure is required by law or Trading Market regulations, in which
case the Company shall provide the Holders with prior notice of such disclosure permitted under subclause (i) or (ii). 
 4.8
Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Holder or its agents or counsel with any information that the Company believes constitutes material non-public
information, unless prior thereto such Holder shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Holder shall be relying on the foregoing representations
in effecting transactions in securities of the Company. 
 4.9 INTENTIONALLY LEFT BLANK. 
 4.10 Indemnification of Holders. 
 (a) Subject to the provisions of this Section 4.10, the Company indemnifies and holds the Holders and the Agent and each of their directors, officers, shareholders, members, partners, employees and agents
(each, a “Holder Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such Holder Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by STAC, the Company or any
other Subsidiary in this Agreement or in the other Transaction Documents or (b) any action instituted against a Holder Party, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such
Holder, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Holder’s representations, warranties or covenants under the Transaction Documents or any agreements or
understandings such Holder may have with any such stockholder or any violations by the Holder of state or federal securities laws or any conduct by such Holder that constitutes fraud, gross negligence, willful misconduct or malfeasance). 

(b) If any action shall be brought against any Holder Party in respect of which indemnity may be sought pursuant to this Agreement,
such Holder Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing. Any Holder Party shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Holder Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue
between the position of the Company and the position of such Holder Party. The 

  

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Company will not be liable to any Holder Party under this Agreement (i) for any consent settlement by a Holder Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, liability, obligation, claim, contingency, damage, cost or expense is attributable to (A) any Holder
Party’s breach of any of the representations, warranties, covenants or agreements made by the Holders in this Agreement or in the other Transaction Documents, or (B) any violation by the Holder of state or federal securities laws or any
conduct by such Holder that constitutes fraud, gross negligence, willful misconduct or malfeasance. The indemnification obligations under this Section 4.10 are in addition to any liability that the Company may otherwise have, including
but not limited to any other indemnification liability under any other Transaction Document. 
 4.11 Reservation and Listing of
Securities. 
 (a) The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance
pursuant to the Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents. 
 (b) If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date, then the Board of Directors of the Company shall use
commercially reasonable efforts to amend the Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible and in
any event not later than the 90th day after such date. 
 4.12 Short Sales and Confidentiality After The Date Hereof. Each Holder
severally and not jointly with the other Holders covenants that neither it nor any Affiliates acting on its behalf or pursuant to any understanding with it (i) will execute any Short Sales during the period after the Discussion Time and ending
at the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.7 and (ii) thereafter so long as any Debentures, Residual Debentures, or Series B Preferred remain outstanding,
will not execute any Short Sales in Common Stock in an amount greater than the number of shares of Common Stock that such Holder owns or that such Holder reasonably expects it could receive upon conversion of the Debentures, Residual Debentures,
Series B Preferred and Warrants and any other convertible securities of the Company then owned by it. Each Holder, severally and not jointly with the other Holders, covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company as described in Section 4.7 such Holder will maintain, the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this
transaction). Each Holder understands and acknowledges, severally and not jointly with any other Holder, that the Commission currently takes the position that coverage of short sales of shares of the Common Stock “against the box” prior to
the Effective Date of the Registration Statement is a violation of Section 5 of the Securities Act, as set forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available Telephone Interpretations, dated July 1997,
compiled by the Office of Chief Counsel, Division of Corporation Finance. Notwithstanding the foregoing, in the case of a Holder that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such
Holder’s assets and the portfolio managers have no direct 

  

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knowledge of the investment decisions made by the portfolio managers managing other portions of such Holder’s assets, the covenant set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. 
 4.13 Agent for the Holders. So long as any Debentures or Residual Debentures remain outstanding and unpaid, the Company, STAC, the Agent and the Holders acknowledge and agree that the rights and obligations set
forth in Section 4.20 of the SPA of the Agent and the Holders (referred to therein as the “Purchasers”), remain in full force and effect and are incorporated herein by reference as if set forth in full herein. The Company and STAC
agree to timely pay all fees, costs and expenses owed by either of them to the Agent to the extent the Agent has performed its obligations and there is no good faith dispute among such parties. 
 4.14 Release of Security Interests. Upon the exchange of (a) the remaining principal amount of Debentures for shares of Series B Preferred
and, if applicable, Residual Debentures at the Second Closing only with respect to the principal amount of Debentures exchanged into Series B Preferred, and (b) the principal amount of Residual Debentures into Series B Preferred, and in any
event once no Debentures or Residual Debentures are remaining outstanding, the Company and the Holders shall execute such security termination letters and other termination documents reasonably requested by the Company and/or the Agent in order to
terminate the Security Documents, and shall deliver such documents to the Agent; and the Agent shall, subject to receipt of any fees and expenses then due to it, file those security termination documents that are required to be filed with
governmental authorities and return all security for the Debentures and Residual Debentures then held by it to the Company or its Subsidiaries as applicable. 
 4.15 Certain Covenants. Through the Second Closing Date, and if applicable, payment of any Residual Debentures, the Company shall comply with the covenants set forth in this Section 4.15. The
financial covenants of the Company set forth in Section 4.21 of the SPA, as such covenants may have been amended prior to the date hereof, are hereby terminated and of no further force and effect. 
 (a) Payment of Obligations. The Company and its Subsidiaries will pay and discharge, as the same shall become due and payable, all
lawful taxes, assessments and charges or levies made upon it or its property or assets, by any governmental body, agency or official except where any of such items may be diligently contested in good faith by appropriate proceedings, and the Company
and each of its Subsidiaries shall have set aside on its respective books, if required under GAAP, reserves for the liabilities related to such items. 
 (b) Affiliate Transactions. The Company will not, and will not permit any of its Subsidiaries to, authorize, permit or suffer to occur any transactions, contracts or other arrangements by the Company or any of
its Subsidiaries with any Affiliate of the Company or any of its Subsidiaries other than in the ordinary course of business and on terms that are no less favorable to the Company than those that could have been obtained in a comparable transaction
on an arm’s-length basis. 
  

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 (c) Restricted Payments, etc. Except with respect to Exempt Issuances, Permitted
Indebtedness and the Concurrent Offering, the Company will not, and will not permit any of its non-wholly owned Subsidiaries to, declare, pay or make any dividend or distribution (in cash, property or obligations) on any shares of any class of its
stock or on any warrants, options or other rights in respect of any class of its stock without the approval of the Required Holders. The Company will not, and will not permit any of its Subsidiaries to apply any of its funds, property or assets to
the purchase, redemption, sinking fund or other retirement of any shares of any class of stock of the Company or any non-wholly owned Subsidiary, or make any deposit for any of the foregoing. 
 (d) No Investment Company. The Company shall conduct its business in a manner so that it will not become subject to the Investment
Company Act. 
 4.16 Restructuring Consultant. The Company shall cooperate fully with the CRO in its review of the Company’s
business lines and financial operations with the goal of having the CRO present its findings and recommendations to the Company’s Board of Directors within 60 days of engagement. The CRO shall be given full access to the Company’s books
and records and management during regular business hours. 
 4.17 Amendment to the Registration Rights Agreement. The provisions of
this Section 4.17 amends the Registration Rights Agreement as follows: 
 (a) Within 90 days of the First Closing,
in accordance with the terms and conditions of the Registration Rights Agreement, the Company shall file a registration statement (the “New Registration Statement”) on the appropriate form covering all Underlying Shares not
registered under the Existing Registration Statement plus such additional amount as will cause the aggregate amount of Underlying Shares and Warrant Shares registered with the Commission pursuant to the Existing Registration Statement or any other
registration statement filed pursuant to this Agreement to equal to the Required Minimum with the Commission. The Company shall use its best efforts to have the New Registration Statement declared effective by 150 days of the date of the First
Closing. The Concurrent Shares may be included in the New Registration Statement. 
 (b) The Company may, at its option, also
file one or more post-effective amendments to the Existing Registration Statement which may, to the extent consistent with the rules and regulations of the Commission, cause some or all of the Underlying Shares of the Series B Shares issued at the
First Closing and the Second Closing to be included in such registration statement. 
 (c) If the New Registration Statement
has not been declared effective by the 150th day after the date hereof, the Company shall pay to the Holders liquidated damages in a per diem amount equal to: (i) one thirtieth of 1.5% of the principal value of the Debentures set forth in the
first Column of Schedule I hereto, “Aggregate Principal Amount of Original Debentures Outstanding,” less the Stated Value of the issued and outstanding shares of Series B Preferred with respect to which the Underlying Shares are
subject to an effective registration statement (collectively, the “Aggregate Amount”) for such number of days during the first 30-day period that the New Registration Statement 

  

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has not been declared effective; and (ii) one thirtieth of 1.0% of such amount for such number of days during each subsequent 30-day period that the New
Registration Statement has not been declared effective; which amounts shall be pro-rated to the extent any such period is less than 30 days; provided, however, that liquidated damages shall (A) be pro-rated only for that portion
of the Underlying Shares, if any, not registered by such 150th day; and (B) shall not in the aggregate exceed 18.0% of the Aggregate Amount. Such payments shall be made within five (5) Trading Days following the end of the applicable
30-day period. 
 (d) The term “Registrable Securities,” as defined in the Registration Rights Agreement, shall also
include Common Stock issued or issuable upon conversion of the shares of Series B Preferred. 
 (e) In all other respects, the
Registration Rights Agreement shall remain in full force and effect. 
 4.18 Incurrence of Indebtedness. From the date hereof through
the Second Closing Date, and for so long as (i) shares of Series B Preferred with an aggregate liquidation preference of at least $8,182,500 remain outstanding, or (ii) any Debentures or Residual Debentures remain outstanding, except for
Permitted Indebtedness, securities issued pursuant to the Concurrent Offering, and Exempt Issuances, the Company shall not issue any securities or financial instruments that rank senior or pari passu to the Series B Preferred or, if
outstanding, the Debentures or the Residual Debentures without the consent of the Required Holders. 
 4.19 SPA. (A) Effective at
the Second Closing, subject to Section 4.13, the SPA shall terminate and be of no further force and effect except that Section 4.20 of the SPA shall survive in accordance with its terms. Each Holder, severally and not jointly:
(a) agrees that the execution and performance of this Agreement, and all actions taken in furtherance thereof by the Company and its Affiliates shall not constitute a breach or default of the SPA, the Original Debentures or any other document,
agreement or instrument related thereto (the “SPA Documents”); (b) hereby forever waives any and all breaches, defaults or Events of Default under the SPA Documents arising or existing on or before the date hereof except for
such provisions of the SPA that expressly survive the termination thereof, and (c) hereby releases and discharges the Company, the Subsidiaries and their respective officers, directors, employees, representatives, agents, affiliates, successors
and assigns, as the case may be, from and against any and all rights and claims related thereto, any and all obligations, liabilities (including, but not limited to, any liability for any breach or default by any of them of the terms or provisions
of the SPA Documents), actions, causes of action, suits, debts, dues, sums of money, accounts reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, executions,
claims and demands whatsoever, known or unknown, fixed, conditional or contingent in law or in equity (collectively, “Claims”), that the Holder ever had, now has or hereafter can, shall or may have, against any of them for, upon or
by reason of any matter, cause or thing arising out of or based on the SPA Documents from the beginning of time to the date hereof; provided, that nothing herein shall release or discharge any Claim arising out of the Company’s or the
Subsidiaries’ willful misrepresentation or fraud. 
  

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 (B) The Company and the Subsidiaries, on the other hand (each, a “Releasor”), jointly
and severally hereby release and discharge each Holder and purchaser under the SPA and the Agent (each, in such capacity, a “Releasee”), and each of the Releasee’s officers, directors, employees, representatives, agents,
affiliates, subsidiaries, predecessors, successors and assigns, as the case may be, from any and all Claims, which such Releasor ever had, now has or hereafter can, shall or may have, against such Releasee or such other persons, for, upon or by
reason of any matter, cause or thing arising out of or based on the SPA Documents from the beginning of time to the date hereof; provided, however, that nothing herein shall operate to release or discharge any Claim arising out of a Releasee’s
or any such other person’s willful misrepresentation or fraud. 
 4.20 Concurrent Offering. The Company will use commercially
reasonable efforts to complete the Concurrent Offering and to execute and deliver the Concurrent Purchase Agreement in substantially the form previously delivered to the Holders. The Company shall apply the proceeds of the Concurrent Offering as
follows: (a) to pay interest on the Original Debentures accrued through November 16, 2007; (b) costs and expenses arising in connection with or otherwise related to the Transaction Documents, the Concurrent Offering, the First Closing
and the Second Closing; and (c) working capital purposes. The Concurrent Offering will terminate no later than one (1) year from the Second Closing Date. Sales of Common Stock made in connection with the Concurrent Offering shall be at the
Concurrent Offering Price. 
 4.21 New Financing. For a period of twelve (12) months following the Second Closing Date, if the
Company completes a subsequent equity or equity linked financing that does not constitute Permitted Indebtedness, the Concurrent Offering or an Exempt Issuance (a “New Financing”), the Holders of any Residual Debentures may exchange
such securities at 100% of their face value for securities offered in such New Financing. 
 4.22 Variable Rate Transactions. For so
long as any Debentures or Residual Debentures remain outstanding and unpaid, except for transactions provided for pursuant to this Agreement, the Company and its Subsidiaries shall be prohibited from effecting or entering into an agreement to effect
any offering of its securities, including any firm commitment underwritten public offering, involving a “Variable Rate Transaction”. The term “Variable Rate Transaction” shall mean a transaction in which the Company issues or
sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that
is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to
being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or
(ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price. 
 4.23 Board Composition. For such period and as otherwise specified in the voting agreement in the form of Exhibit F hereto, the Company and the Holders shall nominate designees for election to the
Company’s board of directors for election by the Company’s stockholders as set forth in such voting agreement and consistent with the terms of Section 2.1(f) hereof. 
  

 34 

 ARTICLE V 
 MISCELLANEOUS 
 5.1 Termination. This Agreement may be terminated by the Company or by any
Holder, as to such Holder’s obligations hereunder only and without any effect whatsoever on the obligations among the Company, STAC and the other Holders, by written notice to the other parties, if the Second Closing has not been consummated on
or before the date that is 150 days after the date of the First Closing; provided, however, that no such termination will affect the right of any party to sue for any breach by the other party (or parties). 
 5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. Notwithstanding the foregoing, the Company
shall reimburse the Holders for their reasonable out-of-pocket expenses incurred in connection with the transactions contemplated by the Transaction Documents, including reasonable legal fees and disbursements and business diligence expenses, in an
aggregate amount up to $50,000 (excluding the Agent’s fees and expenses) promptly upon receiving reasonable documentation of such expenses by the Holders. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties
levied in connection with the delivery of any Securities. 
 5.3 Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. 
 5.4 Notices. Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via confirmed facsimile at
the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second Trading Day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached
hereto. 
 5.5 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in
the case of an amendment, by the Company, STAC, the Required Holders and, if the Agent could be adversely affected in any way by any such amendment, by the Agent or, in the case of a waiver, by the party against whom 

  

 35 

 
enforcement of any such waiver is sought and the Company shall cause Relationserve Access, Inc., and Friendsand, Inc. to acknowledge in writing each
amendment or waiver agreed to by the Company and/or STAC. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. Copies of waivers and amendments shall
be delivered by the parties executing such instruments to the Agent if the Agent is not a party. Any material consideration provided by the Company to any Holder in exchange for such Holder’s consent to a waiver, modification or amendment to
any material term or condition of any of the Transaction Documents will also be offered by the Company to the other existing Holders on a pro rata basis based on ownership of applicable securities. No amendment or modification of any Transaction
Document may disproportionately affect the equity or debt interests owned by any Holder of applicable securities without the written consent of such Holder. 
 5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
 5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. Neither the Company nor STAC may assign this Agreement or any
rights or obligations hereunder without the prior written consent of the Required Holders. Any Holder may assign any or all of its rights under this Agreement to any Person to whom such Holder assigns or transfers any Securities, provided such
transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Holders”. 
 5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in Section 4.12. 
 5.9 Governing Law. All questions
concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any 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 

  

 36 

 
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. The parties hereby waive all rights to a
trial by jury. If either party shall commence an action or proceeding to enforce any provisions of the 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. 
 5.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery, exercise and/or conversion of the Securities, as applicable for two years after the Consolidation Date or the applicable statue of
limitations. 
 5.11 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, 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 signature page
were an original thereof. 
 5.12 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 
 5.13 Replacement of
Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. 
 5.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Holders and the Agent (acting upon the instructions of the
Required Holders), on the one hand, and the Company and STAC, on the other hand, will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred
by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. 
  

 37 

 5.15 Payment Set Aside. To the extent that the Company or STAC makes a payment or payments to any
Holder or the Agent pursuant to any Transaction Document or a Holder enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company or STAC, a trustee, receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as
if such payment had not been made or such enforcement or setoff had not occurred. 
 5.16 Independent Nature of Holders’ Obligations
and Rights. The obligations of each Holder under any Transaction Document are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other
Holder under any Transaction Document. Nothing contained herein or in any Transaction Document, and no action taken by any Holder pursuant 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 or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Except as set forth in Section 4.20
of the SPA, each Holder shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any
other Holder to be joined as an additional party in any proceeding for such purpose. Each Holder has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative
convenience only, Holders and their respective counsel have chosen to communicate with the Company through Morrison. Morrison does not represent all of the Holders but only Lehman Brothers Inc. and its affiliates. The Company and STAC have elected
to provide all Holders with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Holders. 
 5.17 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial
liquidated damages or other amounts are due and payable shall have been canceled. 
 5.18 Construction. The parties agree that each of
them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation of the Transaction Documents or any amendments hereto. 
  

 38 

 5.19 Further Assurances. Each party agrees (a) to furnish upon request to
each other party such further information, (b) to execute and deliver to each other party such other documents, and (c) to do such other acts and things, all as another party may reasonably request for the purpose of carrying out the
intent of this Agreement and the transactions contemplated by this Agreement. 
 [SIGNATURE PAGE FOLLOWS] 
  

 39 

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

							
		 		 		 	Address for Notice
			
	SENDTEC ACQUISITION CORP.	 		 	
				
	By:	 	  
	 		 	877 Executive Center Drive West
		 	Paul Soltoff, President	 		 	Suite 300
		 		 		 	St. Petersburg, FL 33702
		 		 		 	Fax: 727-576-7790
			
	SENDTEC, INC.	 		 	
				
	By:	 	  
	 		 	877 Executive Center Drive West
		 	Paul Soltoff, Chief Executive Officer	 		 	Suite 300
		 		 		 	St. Petersburg, FL 33702
		 		 		 	Fax: 727-576-7790
			
	With a copy to (which shall not constitute notice):	 		 	Holland & Knight, LLP
		 		 		 	100 North Tampa Street
		 		 		 	Tampa, FL 33609
		 		 		 	Fax: 813-229-0134
		 		 		 	ATT: Robert J. Grammig, Esq.

 Each of RelationServe Access, Inc. and Friendsand, Inc. hereby (1) acknowledges, consents and
agrees to the terms of this Recapitalization Agreement, the Debentures, the Residual Debentures, and all related documents and agreements; (2) ratifies, restates and confirms the Security Documents to which it is a party; (3) agrees that
the Debentures and Residual Debentures constitute Guarantied Obligations and Secured Obligations (as defined in the Security Documents); and (4) agree and intend that this ratification and agreement shall not constitute a novation. 

 

							
	RELATIONSERVE ACCESS, INC.	 		 	
				
	By:	 	  
	 		 	877 Executive Center Drive West
		 	Paul Soltoff, President	 		 	Suite 300
		 		 		 	St. Petersburg, FL 33702
		 		 		 	Fax: 727-576-7790
			
	FRIENDSAND, INC.	 		 	
				
	By:	 	  
	 		 	877 Executive Center Drive West
		 	Paul Soltoff, President	 		 	Suite 300
		 		 		 	St. Petersburg, FL 33702
		 		 		 	Fax: 727-576-7790

  

 Recapitalization AgreementForm of Amended and Restated Senior Secured Convertible Debenture

 Exhibit 10.2 
 NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR UPON DELIVERY TO THE COMPANY OF SUCH
EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE
UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THIS SECURITY. 
 Original Issue Date:
October 31, 2005 
 Conversion Price as of March 26, 2008 (subject to adjustment herein): $0.17 

			
	No.         	 	$                

 AMENDED AND RESTATED SENIOR SECURED CONVERTIBLE DEBENTURE 
 THIS AMENDED AND RESTATED SENIOR SECURED CONVERTIBLE DEBENTURE is one of a series of duly authorized and issued Amended and Restated Senior Secured
Convertible Debentures of SendTec Acquisition Corp., a Delaware corporation (the “Issuer”) having a principal place of business at 877 Executive Center Drive West, Suite 300, St. Petersburg, FL 33702, designated as its “Senior
Secured Convertible Debentures” (this debenture, the “Debenture” and collectively with the other debentures of such series of debentures, the “Debentures”), issued pursuant to the Recapitalization Agreement (as
defined herein), and the Securities Purchase Agreement by and among the Issuer, SendTec, Inc. (f/k/a RelationServe Media, Inc.), a Delaware corporation (the “Company”), each of the Purchasers signatory thereto (the
“Purchasers”), and Christiana Corporate Trust Services, Inc., a Delaware corporation, in its capacity as administrative agent for the Purchasers (together with its successors and assigns in such capacity, the
“Agent”), dated as of October 31, 2005, as amended, modified or supplemented from time to time in accordance with its terms (the “Purchase Agreement”). On March 25, 2008, the Issuer, the Company, the
Purchasers (therein called the “Holders”) and the Agent entered into a Recapitalization Agreement (the “Recapitalization Agreement”) pursuant to which, among other things, a portion of the principal amount of the Original
Debentures (as defined herein) were exchanged for shares of Series B Convertible Preferred Stock, par value $0.001 per share, of the Company (the “Series B Preferred”), and for convenience of the parties, all amendments to the
Original Debentures through the date hereof have been set forth in this Amended and Restated Senior Secured Convertible Debenture. 
 FOR
VALUE RECEIVED, the Issuer promises to pay to
                                        
or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the 

  

 1 

 
principal sum of $                    , on
July 31, 2008, or if earlier, the Second Closing Date (the “Maturity Date”). This Debenture shall not bear interest except as expressly set forth herein. This Debenture is subject to the following additional provisions:

 Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture:
(a) capitalized terms not otherwise defined herein shall have the meanings given to such terms in the Recapitalization Agreement, and if not otherwise defined in the Recapitalization Agreement, shall have the meaning given to such terms in the
Purchase Agreement and (b) the following terms shall have the following meanings: 
 “Alternate
Consideration” shall have the meaning set forth in Section 5(d). 
 “Base Conversion
Price” shall have the meaning set forth in Section 5(b). 
 “Bloomberg” shall mean
Bloomberg Financial L.P. or any successor thereto, or, if it is not then reporting such prices, by a comparable reporting service of national reputation selected by the Issuer or the Company. 
 “Business Day” means any day except Saturday, Sunday and any day that shall be a federal legal holiday in the United
States or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. 
 “Buy-In” shall have the meaning set forth in Section 4(d)(v). 
 “Change of Control Price” shall have the meaning set forth in Section 6. 
 “Change of Control Put Date” shall have the meaning set forth in Section 6. 
 “Change of Control Put Notice” shall have the meaning set forth in Section 6. 
 “Change of Control Transaction” means the occurrence after the date hereof of any of (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1)
promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Issuer or the Company, by contract or otherwise) of in excess of 33% of the voting securities of the Issuer or the
Company, (ii) the Issuer or the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Issuer or the Company and, after giving effect to such transaction, the stockholders of the Issuer or
the Company, as applicable, immediately prior to such transaction own less than 66% of the aggregate voting power of the Issuer or the Company, as applicable, or the successor entity of such transaction, (iii) the Issuer or the Company sells or
transfers its assets, as an entirety or substantially as an entirety, to another Person and the stockholders of the Issuer or the Company, as applicable, immediately prior to such transaction own less than 66% of the aggregate voting power of the
acquiring entity immediately after the transaction, (iv) a replacement at one time or within a three (3)-year period of more than one-half of the members of the Issuer’s or the Company’s board of directors that is not approved by a
majority of those individuals who are members of such board of directors on the date hereof (or by those individuals who are serving as members of such board of 

  

 2 

 
directors on any date whose nomination to such board of directors was approved by a majority of the members of such board of directors who are members on the
date hereof), or (v) the execution by the Issuer or the Company of an agreement to which it is a party or by which it is bound, providing for any of the events set forth above in (i) or (iv). Notwithstanding the foregoing, exchange of
debentures pursuant to the Recapitalization Agreement shall constitute a Change of Control for purposes hereof. 
 “Common Stock” means the common stock, par value $0.001 per share, of the Company and stock of any other class of securities into which such securities may hereafter have been reclassified or changed into. 
 “Conversion Date” shall have the meaning set forth in Section 4(a). 
 “Conversion Price” shall have the meaning set forth in Section 4(b). 
 “Conversion Shares” means the shares of Common Stock issuable upon conversion of this Debenture. 
 “Debenture Register” shall have the meaning set forth in Section 2(c). 
 “Dilutive Issuance” shall have the meaning set forth in Section 5(b). 
 “Dilutive Issuance Notice” shall have the meaning set forth in Section 5(b). 
 “Effectiveness Period” shall have the meaning given to such term in the Registration Rights Agreement. 
 “Equity Conditions” shall mean, during the period in question, (i) the Company and the Issuer shall have duly
honored all conversions and redemptions and puts, if any, scheduled to occur or occurring by virtue of one or more Notice of Conversions of the Holder or other appropriate notice, (ii) all liquidated damages and other amounts owing to the
Holder in respect of this Debenture shall have been paid, (iii) there is an effective Registration Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares issuable pursuant to the
Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future), (iv) the Common Stock is trading on the Trading Market and all of the shares of Common Stock
issuable pursuant to the Transaction Documents are listed for trading on a Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable future),
(v) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares of Common Stock issuable pursuant to the Transaction Documents, (vi) there is then existing
no Event of Default or event that, with the passage of time or the giving of notice, would constitute an Event of Default, (vii) the issuance of the shares in question (or, in the case of a redemption, the shares issuable upon conversion in
full of the principal amount of the Debentures being redeemed) to the Holder would not violate the limitations set forth in Section 4(c) and (viii) no public announcement of a pending or proposed Fundamental Transaction or Change of
Control Transaction has occurred that has not been consummated. 
  

 3 

 “Event of Default” shall have the meaning set forth in
Section 8(a). 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder. 
 “Fundamental Transaction” shall have the meaning set forth
in Section 5(d). 
 “Mandatory Default Amount” shall equal the sum of: (x) the greater of
(i) 120% of the principal amount of this Debenture to be prepaid, or (ii) 100% of the product of (A) the principal amount of this Debenture divided by the Conversion Price then in effect and (B) the greater 5 day VWAP of Company
Common Stock in the Trading Market as reported by Bloomberg on the date of (i) such notice by the Holder, or (ii) payment of such amount; and (y) any outstanding interest, liquidated damages, or any other outstanding amounts owed in
respect of this Debenture. 
 “New York Courts” shall have the meaning set forth in
Section 10(d). 
 “Notice of Conversion” shall have the meaning set forth in
Section 4(a). 
 “Original Debenture(s)” means the Senior Secured Convertible Debentures due
March 31, 2008 issued by the Issuer to the Holders pursuant to the Purchase Agreement. 
 “Original Issue
Date” shall mean the date of the first issuance of the Debentures regardless of the number of transfers of any Debenture and regardless of the number of instruments that may be issued to evidence such Debenture. The Original Issue Date
shall be the Closing Date, as defined in the Purchase Agreement. 
 “Qualified Offering” means a private or
public offering of Common Stock or Common Stock Equivalents where the gross proceeds to the Company equal or exceed $25 million and the effective price per share equals or exceeds twice the Conversion Price. 
 “Permitted Indebtedness” shall have the meaning set forth in the Recapitalization Agreement. 
 “Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or
political subdivision thereof or a governmental agency. 
 “Registration Rights Agreement” means the
Registration Rights Agreement, dated as of February 3, 2006, to which the Company and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms. 
  

 4 

 “Registration Statement” means a registration statement meeting the
requirements set forth in the Registration Rights Agreement, covering, among other things, the resale of the Conversion Shares and naming the Holder as a “selling stockholder” thereunder. 
 “Required Holders” shall have the meaning set forth in the Recapitalization Agreement. 
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 “Subsidiary” shall have the meaning given to such term in the Purchase Agreement. 
 “Trading Day” means a day on which the Common Stock is traded on a Trading Market, or if the Common Stock is not traded
on a Trading Market, it means a Business Day. 
 “Trading Market” means the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq Capital Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Bulletin Board.

 “Transaction Documents” shall have the meaning set forth in the Recapitalization Agreement. 
 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the
Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the primary Trading Market on which the Common Stock is then listed or quoted as
reported by Bloomberg (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m., Eastern Time) using the VAP function; (b) if the Common Stock is not then listed or quoted on the Trading Market and if prices for the Common Stock are then
reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (c) in all
other cases, the fair market value of a share of Common Stock as determined by a nationally recognized-independent appraiser selected in good faith by Holders holding a majority of the principal amount of Debentures then outstanding. 
 Section 2. INTENTIONALLY OMITTED. 
 Section 3. Registration of Transfers and Exchanges. 
 (a) Different Denominations. This Debenture is exchangeable
for an equal aggregate principal amount of Debentures of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration of transfer or exchange. 
  

 5 

 (b) Investment Representations. This Debenture has been issued pursuant to the terms of the
Recapitalization Agreement and the SPA, and is subject to certain investment representations of the original Holder set forth in the Recapitalization Agreement and may be transferred or exchanged only in compliance with the Recapitalization
Agreement and applicable federal and state securities laws and regulations. 
 (c) Reliance on Debenture Register. Prior to due
presentment to the Issuer for transfer of this Debenture, the Issuer and any agent of either of them may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither the Issuer nor any such agent shall be affected by notice to the contrary. 
 Section 4. Conversion. 
 (a)
Voluntary Conversion. At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and
from time to time (subject to the limitations on conversion set forth in Section 4(c)). The Holder shall effect conversions by delivering to the Issuer and the Company, the form of Notice of Conversion attached hereto as Annex A
(a “Notice of Conversion”), specifying therein the principal amount of this Debenture to be converted and the date on which such conversion is to be effected (a “Conversion Date”). If no Conversion Date is specified
in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is provided hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Issuer unless the
entire principal amount of this Debenture has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable conversion. The Holder and the Issuer
shall maintain records showing the principal amount converted and the date of such conversions in substantially the form of the attached Schedule 1. The Issuer or the Company shall deliver any objection to any Notice of Conversion within one
Business Day of receipt of such notice. In the event of any dispute or discrepancy, the records of the Issuer shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Debenture,
acknowledge and agree that, by reason of the provisions of this Section 4(a), following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the
face hereof. 
 (b) Conversion Price. The conversion price in effect on any Conversion Date shall be equal to $.17 (subject to
adjustment herein) (the “Conversion Price”). 
 (c) Holder’s Restriction on Conversion. This
Section 4(c) shall apply only at and during such time as the Company is required to file reports and other documents pursuant to Section 13(a) or 15(d) of the Exchange Act. The Issuer and the Company shall not effect or cause
the effectuation of any conversion of this Debenture, and the Holder shall not have the right to convert any portion of this Debenture, pursuant to Section 4(a) or otherwise, to the extent that after giving effect to such conversion, the
Holder (together with the Holder’s affiliates), as set forth on the applicable Notice of Conversion, would beneficially own in excess of 9.99% of 

  

 6 

 
the number of shares of the Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon conversion of this Debenture with respect to which the determination of such sentence is being
made, but shall exclude the number of shares of Common Stock that would be issuable upon (A) conversion of the remaining, nonconverted portion of this Debenture beneficially owned by the Holder or any of its affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Debentures or any warrants) subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(c), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this section applies, the determination of whether this Debenture is convertible (in relation to other securities owned by the
Holder) and of which portion of this Debenture is convertible shall be in the sole discretion of such Holder. To ensure compliance with this restriction, the Holder will be deemed to represent to the Issuer and the Company each time it delivers a
Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Issuer and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(c), in
determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the most recent Form 10-QSB, Form 10-KSB, Form 10-Q or Form 10-K, as the
case may be, of the Company, (y) a more recent public announcement by the Issuer or the Company, as applicable or (z) any other notice by the Issuer, the Company or the Transfer Agent for the Common Stock setting forth the number of shares
of Common Stock outstanding. Upon the written or oral request of the Holder, the Issuer and/or the Company shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Debenture, by the Holder or its affiliates since the
date as of which such number of outstanding shares of Common Stock was reported. The provisions of this Section 4(c) may be waived by the Holder, at the election of the Holder, upon not less than 61 days’ prior notice to the Issuer,
and the provisions of this Section 4(c) shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). Notwithstanding the foregoing, (i) if the Issuer
delivers notice of a Change of Control Transaction pursuant to the first sentence of Section 6(d), then the Holder may elect, no earlier than the 10th Trading Day prior to the Change of Control Date to waive the provisions of this
Section 4(c) for a period ending on the 30th Trading Day following the Change of Control Date; or (ii) if the Issuer delivers a notice pursuant to Section 5(f)(ii), then the Holder may elect, as of the applicable record
or date of the applicable transaction, to waive the provisions of this Section 4(c) for a period ending on the 30th Trading Day following such record or other applicable date. The provisions of this Section 4(c) shall be
implemented in a manner otherwise than in strict conformity with the terms of this Section 4(c) to correct this paragraph (or any portion hereof) which may be defective or 

  

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inconsistent with the intended 9.99% beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such 9.99% limitation. The limitations contained in this paragraph shall apply to a successor holder of this Debenture. 
 (d)
Mechanics of Conversion. 
 (i) Conversion Shares Issuable Upon Conversion of Principal Amount. The number of shares of Common
Stock issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted by (y) the Conversion Price. 
 (ii) Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after any Conversion Date, the Company will deliver or
cause to be delivered to the Holder a certificate or certificates representing the Conversion Shares, which certificate shall be free of restrictive legends and trading restrictions (other than those required by the Recapitalization Agreement)
representing the number of shares of Common Stock being acquired upon the conversion of this Debenture. The Company shall, if available and if allowed under applicable securities laws, use its best efforts to deliver any certificate or certificates
required to be delivered by the Company under this Section electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions. 
 (iii) Failure to Deliver Certificates. If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as
directed by the applicable Holder by the third Trading Day after a Conversion Date, the Holder shall be entitled by written notice to the Issuer and the Company, at any time on or before its receipt of such certificate or certificates thereafter, to
rescind such conversion, in which event the Issuer shall immediately return the certificates representing the principal amount of this Debenture tendered for conversion. 
 (iv) Obligation Absolute; Partial Liquidated Damages. If the Company, fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(d)(ii) by the third Trading
Day after the Conversion Date, the Issuer shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day after five
(5) Trading Days after such damages begin to accrue) for each Trading Day after such third Trading Day until such certificates are delivered. The obligations to issue and deliver the Conversion Shares upon conversion of this Debenture in
accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or
any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Issuer or the Company, any violation or alleged violation
of law by the Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Issuer or the Company to the Holder in connection with the issuance of such Conversion Shares; provided,
however, such delivery shall not operate as a waiver by the Issuer or the Company of any such action the Issuer or the Company may have against the Holder. In the 

  

 8 

 
event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount hereof, the Issuer and the Company may not refuse
conversion based on any claim that the Holder or any one associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless, an injunction from a court, on notice, restraining and or
enjoining conversion of all or part of this Debenture shall have been sought and obtained and the Issuer or the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the principal amount of this Debenture outstanding
that is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of an
injunction precluding the same, the Issuer shall cause the issuance of the Conversion Shares or, if applicable, cash, upon a properly noticed conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event
of Default pursuant to Section 8 for the Issuer’s or the Company’s failure to deliver the Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under
applicable law. 
 (v) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other
rights available to the Holder, if the Company, fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(d)(ii) by the third Trading Day after the Conversion Date, and if after such third
Trading Day the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares that the Holder anticipated receiving upon
such conversion (a “Buy-In”), then the Issuer or the Company, as applicable, shall (A) pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder anticipated receiving from the conversion at
issue multiplied by (2) the actual sale price of the Common Stock at the time of the sale (including brokerage commissions, if any) giving rise to such purchase obligation and (B) at the option of the Holder, either reissue (if
surrendered) this Debenture in a principal amount equal to the principal amount of the Debenture at the time of the attempted conversion or deliver to the Holder the number of shares of Common Stock that would have been issued had the Issuer and the
Company timely complied with the delivery requirements under Section 4(d)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this
Debenture with respect to which the actual sale price of the Conversion Shares at the time of the sale (including brokerage commissions, if any) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately
preceding sentence, the Issuer or the Company shall be required to pay the Holder $1,000. The Holder shall provide the Issuer and the Company, if applicable, prompt written notice indicating the amounts payable to the Holder in respect of the
Buy-In. Notwithstanding anything contained herein to the contrary, if a Holder requires the Issuer or the Company to make payment in respect of a Buy-In for the failure to timely deliver certificates hereunder and the Issuer or the Company timely
pays in full such payment, the Issuer and the Company shall not be required to pay such Holder liquidated 

  

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damages under Section 4(d)(iv) in respect of the certificates resulting in such Buy-In. The Issuer and the Company shall be jointly and severally
liable for any payments due to the Holder under this Section 4(d)(v). 
 (vi) Reservation of Shares Issuable Upon
Conversion. From and after the date of satisfaction of all the conditions to the Second Closing as set forth in Section 2.3 of the Recapitalization Agreement, the Company covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of this Debenture, each as herein provided, free from preemptive rights or any other contingent purchase rights of persons other than the
Holder (and the other holders of the Debentures), not less than such number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Recapitalization Agreement) be issuable (taking into account the adjustments and
restrictions of Section 5) upon the conversion of the outstanding principal amount of this Debenture. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and
fully paid, nonassessable and registered for public sale in accordance with the Registration Statement. 
 (vii) Fractional Shares.
Upon a conversion hereunder the Company shall not be required to issue stock certificates representing fractions of shares of the Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on
the VWAP at such time. If the Issuer or the Company, as applicable, elects not, or is unable, to make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

 (viii) Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Debenture shall be made
without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Issuer shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Debenture so converted and the Company shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance thereof shall have paid to the Issuer or the Company the amount of such tax or shall have established to the satisfaction of the Issuer that such tax has been paid. 
 Section 5. Certain Adjustments. 
 (a) Stock Dividends and Stock Splits. If the Issuer or the Company at any time while this Debenture is outstanding: (A) pays a stock dividend or otherwise makes a distribution or distributions on shares of Common Stock or any
other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued pursuant to this Debenture), (B) subdivides outstanding shares of Common Stock
into a larger number of shares, (C) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issues by reclassification of shares of Common Stock any shares of capital
stock of the Issuer, or the Company, as applicable, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of 

  

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shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. 
 (b) Subsequent Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Debenture is outstanding, shall
offer, sell, grant any option to purchase or offer, sell or grant any right to reprice its securities, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common
Stock Equivalents entitling any Person to acquire shares of Common Stock, at an effective price per share less than the then Conversion Price, other than pursuant to any Concurrent Offering (as defined in the Recapitalization Agreement) (such lower
price, the “Base Conversion Price” and such issuances collectively, a “Dilutive Issuance”), as adjusted hereunder (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether
by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which is issued in connection with such issuance, be entitled to receive
shares of Common Stock at an effective price per share which is less than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then (i) if such issuance
occurs during the period from the Original Issue Date until the closing date of a Qualified Offering, the Conversion Price shall be reduced to equal the Base Conversion Price, and (ii) if such issuance occurs thereafter until this Debenture is
no longer outstanding, the Conversion Price shall be reduced and only reduced by multiplying the Conversion Price by a fraction, the numerator of which is the number of shares of Common Stock issued and outstanding immediately prior to the Dilutive
Issuance plus the number of shares of Common Stock which the offering price for such Dilutive Issuance would purchase at the then Conversion Price, and the denominator of which shall be the sum of the number of shares of Common Stock issued and
outstanding immediately prior to the Dilutive Issuance plus the number of shares of Common Stock so issued or issuable in connection with the Dilutive Issuance (such fractional result, the “Average Conversion Price”). Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. The Issuer shall notify the
Holder in writing, no later than the Business Day following the issuance of any Common Stock or Common Stock Equivalents subject to this section, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion
price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Issuer provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence
of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive the number of Conversion Shares based upon the Base Conversion Price or the Average Conversion Price, as applicable, regardless of whether the
Holder accurately refers to the Base Conversion Price or the Average Conversion Price, as applicable, in the Notice of Conversion. 
 (c)
Pro Rata Distributions. If the Issuer or the Company at any time while this Debenture is outstanding shall distribute to all holders of Common Stock (and not to the holders of the Debenture) evidences of its indebtedness or assets (including
cash and cash or 

  

 11 

 
stock dividends) or rights or warrants to subscribe for or purchase any security, then in each such case the Conversion Price shall be adjusted by
multiplying such Conversion Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date
mentioned above, and of which the numerator shall be such VWAP on such record date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of
the Common Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription
rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above. 
 (d) Fundamental Transaction. If, at any time while this Debenture is outstanding, (A) the Company, effects any merger or consolidation of the
Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer by the Company is completed pursuant to
which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property or (D) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then upon any subsequent conversion of this Debenture, the Holder shall have the right
to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to
receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “Alternate Consideration”). Notwithstanding the foregoing,
no transaction pursuant to the Recapitalization Agreement (including any transaction that constitutes a part of the Concurrent Offering) shall constitute a Fundamental Transaction for purposes hereof. For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the
Conversion Price shall be apportioned among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. To
the extent necessary to effectuate the foregoing provisions, any successor to the Company, or surviving entity in such Fundamental Transaction shall issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the
Holder’s right to convert such debenture into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the
provisions of this paragraph (d) and insuring that this Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 
  

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 (e) Calculations. All calculations under this Section 5 shall be made to the nearest cent or
the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding. 
 (f) Notice to the Holder. 
 (i) Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Issuer shall
promptly mail to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. If the Company issues a variable rate security, despite the prohibition
thereof in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised in the case of a
Variable Rate Transaction (as defined in the Recapitalization Agreement). 
 (ii) Notice to Allow Conversion by Holder. If
(A) the Company shall declare a dividend (or any other distribution) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the Issuer or the Company, as applicable, is a party, any sale or transfer of all or substantially all of the assets of the Issuer or the Company, as applicable, of any
compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Issuer or the
Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Debenture, and shall cause to be mailed to the Holder at its last addresses as it shall appear upon the stock
books of the Company at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of
the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to be specified in such notice. Subject to the provisions of this Debenture, the Holder is entitled to convert this Debenture during the 20 Business Day period commencing the
date of such notice to the effective date of the event triggering such notice. 
  

 13 

 Section 6. Change of Control Put. The Issuer or the Company shall give the Holder not less
than 30 days’ prior written notice of a Change of Control Transaction. Upon the occurrence of a Change of Control Transaction (the date of such consummation being the “Change of Control Date”), the Holder of this Debenture
shall have the option to elect, within 60 days after such Change of Control Date, to require the Issuer or the Company or the acquiring entity to repurchase this Debenture, in whole or in part, in integral multiples of $1,000, in cash at the Change
of Control Price determined pursuant to this Section 6 (the “Change of Control Put Date”), by delivering written notice thereof to the Issuer or the Company or the acquiring entity (a “Change of Control Put
Notice”), which notice shall indicate the principal amount of the Debenture that the Holder is electing to have redeemed. Upon receipt of a Change of Control Put Notice(s) from any other Holders, the Issuer or the Company or the acquiring
entity, shall promptly, but in no event later than one (1) Business Day following such receipt, notify the Holder of the their receipt thereof. The Issuer or the Company or the acquiring entity shall deliver the Change of Control Price
simultaneously with the consummation of the Change of Control if the Change of Control Put Notice is delivered prior to the Change of Control Date and within five (5) Business Days after receipt of such notice otherwise. Payments provided for
in this Section 6 shall have priority to payments to Issuer or Company stockholders, as applicable, in connection with a Change of Control. The “Change of Control Price” shall be 120% of the principal amount to be
repurchased. The Issuer and the Company shall be jointly and severally liable for any payments to the Holder under this Section 6. 
 Section 7. Negative Covenants. Except in connection with the execution, delivery and performance of the Recapitalization Agreement and the transactions contemplated pursuant thereto, and except with respect to the Permitted
Indebtedness, the Concurrent Offering, the Exempt Issuances and as otherwise permitted pursuant to the Recapitalization Agreement, so long as any portion of this Debenture is outstanding, the Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly: 
 (a) enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed
money of any kind, including but not limited to, a guarantee, but excluding Permitted Indebtedness; 
 (b) enter into, create, incur, assume
or suffer to exist any liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom except in connection with Permitted Indebtedness; 
 (c) amend its certificate of incorporation, bylaws or other charter documents so as to materially and adversely affect any rights of the Holder;

 (d) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of Common Stock or
Common Stock Equivalents other than to the extent permitted or required under this Debenture or the Transaction Documents; 
 (e) enter into
any agreement with respect to any of the foregoing; or 
 (f) pay cash dividends or distributions on any equity securities. 
  

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 Section 8. Events of Default. 
 (a) “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be
voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body): 
 (i) any default in the payment of (A) the principal amount on or (B) liquidated damages or any other amounts due in respect of, any Debenture,
as and when the same shall become due and payable (whether pursuant to Section 8(b)), a Conversion Date, a Change in Control Date or the Maturity Date or by acceleration or otherwise), which default, solely in the case of a default under
clause (B) above, is not cured within five (5) Trading Days; 
 (ii) the Issuer or the Company shall fail to observe or perform
any other covenant or agreement contained in this Debenture or any other Debenture (other than a breach by the Issuer or the Company, as applicable, of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is
addressed in clause (x) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days after written notice of such default sent by the Agent (acting upon instructions from the
Required Holders) and (B) ten (10) Trading Days after the Issuer or the Company, as applicable, shall become or should have become aware of such failure; 
 (iii) a default or event of default (subject to any grace or cure period provided for in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any
other material agreement, lease, document or instrument to which the Issuer or the Company, is bound, where such default or event of default is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days after
written notice of such default sent by the Agent (acting upon instructions from the Required Holders) and (B) ten (10) Trading Days after the Issuer or the Company, as applicable, shall become or should have become aware of such failure;

 (iv) any representation or warranty made herein, in any other Transaction Document, in any written statement pursuant hereto or thereto,
or in any other report, financial statement or certificate made or delivered to the Agent, the Holder or any other holder of Debentures by the Issuer or the Company, as applicable, shall be untrue or incorrect in any material respect as of the date
when made or deemed made; 
 (v) (1) the Issuer, the Company or any of its Subsidiaries, shall commence a case, as debtor, a case under any
applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company or any Subsidiary commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Issuer; or (2) there is commenced a case against the Issuer, the Company or any Subsidiary, under any applicable
bankruptcy or insolvency laws, as now or hereafter in effect or any successor thereto which remains undismissed for a period of 60 days; or (3) the Issuer, the Company or any Subsidiary is adjudicated by a court of competent jurisdiction
insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; or (4) the Issuer, the Company or any Subsidiary suffers any appointment of any custodian or the like for it or any substantial part
of its property that continues undischarged or 

  

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unstayed for a period of 60 days; or (5) the Issuer, the Company or any Subsidiary makes a general assignment for the benefit of creditors; or
(6) the Issuer, the Company or any Subsidiary shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or (7) the Issuer, the Company or any Subsidiary thereof shall
call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (8) the Issuer, the Company or any Subsidiary shall by any act or failure to act expressly indicate its consent to, approval of
or acquiescence in any of the foregoing; or (9) any corporate or other action is taken by the Issuer, the Company or any Subsidiary for the purpose of effecting any of the foregoing; 
 (vi) the Issuer, the Company or any of its Subsidiaries, shall default in any of its material obligations under any mortgage, credit agreement or other
facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring
arrangement of any of them in an amount exceeding $75,000 ($150,000 in the case of the Company), whether such indebtedness now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise become due and payable; 
 (vii) the Common Stock shall not be eligible for quotation
on or quoted for trading on a Trading Market and shall not again be eligible for and quoted or listed for trading thereon within seven (7) Trading Days of such cessation of eligibility; 
 (viii) a Registration Statement shall not have been filed with the Commission on or prior to the
90th calendar day after the date of the First Closing (as defined in the Recapitalization Agreement); 
 (ix) if, during the Effective Period, the effectiveness of the Registration Statement lapses for any reason or the Holder shall not be permitted to
resell Registrable Securities (as defined in the Registration Rights Agreement) under the Registration Statement, in either case, for more than ten (10) consecutive Trading Days or 15 non-consecutive Trading Days during any twelve (12)-month
period; provided, however, that in the event that registrant thereof, is negotiating a Fundamental Transaction and in the written opinion of counsel to such registrant, the Registration Statement would be required to be amended to
include information concerning such transactions or the parties thereto that is not available or may not be publicly disclosed at the time, the registrant thereof shall be permitted an additional ten (10) consecutive Trading Days or 15
non-consecutive Trading Days during any twelve (12)-month period relating to such an event; and 
 (x) from and after the date the
Certificate of Amendment (as defined in the Recapitalization Agreement) is filed, the Company shall fail for any reason within its control to deliver certificates to a Holder prior to the seventh Trading Day after a Conversion Date pursuant to and
in accordance with Section 4 or Section 6, or the Company shall provide notice to the Holder, including by way of public announcement, at any time, of its intention not to comply with requests for conversions of any
Debentures in accordance with the terms hereof. 
  

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 Notwithstanding the foregoing, the execution, delivery and performance of the Recapitalization Agreement,
and the transactions contemplated thereby, shall not constitute a default or Event of Default hereunder. Within two (2) Business Days after the occurrence of any Event of Default, the Issuer or the Company shall deliver written notice thereof
via facsimile and overnight courier to the Agent and the Holders. 
 (b) Declaration of Event of Default; Remedies. If any Event of
Default occurs, the Agent, upon receiving the written elections of the Required Holders, may declare such Event of Default and may elect that the full principal amount of this Debenture and the other outstanding Debentures, together with interest
and other amounts owing in respect thereof shall (i) become immediately due and payable in cash in an aggregate amount equal to the Mandatory Default Amount or (ii) remain outstanding and continue to be paid in the ordinary course.
Commencing five (5) days after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on this Debenture shall accrue at the rate of 18% per annum, or such lower maximum amount
of interest permitted to be charged under applicable law. Upon the payment in full of the Mandatory Default Amount on this entire Debenture, the Holder shall promptly surrender this Debenture to or as directed by the Issuer. Neither the Agent nor
any Holder need provide, and the Issuer and the Company, hereby waive any presentment, demand, protest or other notice of any kind, and the Agent may immediately and without expiration of any grace period enforce any and all of its rights and
remedies hereunder and under any Security Document and all other remedies available to it under applicable law. No rescission or annulment of any Event of Default by the Agent (acting upon instructions of the Required Holders) shall affect any
subsequent Event of Default or impair any right consequent thereon. 
 Section 9. Security Interest. The Debentures are ratably
secured by the STAC Security Agreement dated as of October 31, 2005 between the Issuer and the Agent (together with all amendments and supplements thereto, the “Security Agreement”) and by the related financing statements and
certain other instruments as provided in the Security Agreement. Reference is hereby made to the Security Agreement for a description of the collateral thereby pledged and assigned, the nature and extent of the security for the Debentures, and the
rights of the Agent, on behalf of the Holders, in respect of such security and otherwise. 
 Section 10. General Continuing
Guaranty. The due and punctual payment of the amounts owed by the Issuer under this Debenture and the other Debentures, and the due and punctual payment of all other obligations owed by the Company, the Issuer or any other Subsidiary of the
Company pursuant to the Transaction Documents, are jointly and severally guarantied by the Company and the Subsidiaries (other than the Issuer) pursuant to the Transaction Guaranty in favor of the Holders and the Agent. The obligations of the
Company and the Subsidiaries hereunder and under the Transaction Guaranty are ratably secured by the Guarantor Security Agreement dated as of the date hereof among the Issuer, the Company, the other grantors party thereto and the Agent (together
with all amendments and supplements thereto, the “Guarantor Security Agreement”). Reference is hereby made to (i) the Transaction Guaranty for a description of the obligations guarantied thereunder, the conditions of such
Guaranty, and the rights of the Holders and the Agent in respect thereof and (ii) the Guarantor Security Agreement for a description of the collateral thereby pledged and assigned, the nature and extent of the security for the Debentures, and
the rights of the Holders in respect of such security and otherwise. 
  

 17 

 Section 11. Concerning the Agent. The rights and obligations of the Agent under this
Debenture are subject to the terms and conditions of the Purchase Agreement and in particular Section 4.20 thereof. Reference is hereby made to the Purchase Agreement for additional information relating to those rights and obligations.

 Section 12. Miscellaneous. 
 (a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Issuer and the Company, at the address set forth above, facsimile number 727-576-4864 Attn: Chief Executive Officer, or such other address or
facsimile number as the Issuer or the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section; and all notices or other communications or deliveries to be provided hereunder shall be in writing and
delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Issuer, or if no such facsimile
telephone number or address appears, at the principal place of business of the Holder. Copies of any and all notices or other communications by the Holder, the Issuer or the Company hereunder shall also be delivered to the Agent personally, by
facsimile, or sent by a nationally recognized overnight courier service at 1314 King Street, Wilmington, Delaware 19801, facsimile number: 302-421-9015, or to such other address or facsimile number as the Agent may specify for such purposes by
notice to the Holders, the Issuer and the Company delivered in accordance with this Section. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. 
 (b) Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal and
liquidated damages (if any) on, this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation of the Issuer. This Debenture ranks pari passu with all other Debentures
now or hereafter issued under the terms set forth herein. 
 (c) Lost or Mutilated Debenture. If this Debenture shall be mutilated,
lost, stolen or destroyed, the Issuer shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the
principal amount of this Debenture so mutilated, 

  

 18 

 
lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, and indemnity,
if requested, all reasonably satisfactory to the Issuer. 
 (d) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Debenture shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the
New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are 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 Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Debenture or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Debenture, 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. 
 (e) Waiver. Any waiver by the Issuer, the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other
provision of this Debenture. The failure of any party to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Debenture. Any waiver must be in writing. 
 (f) Amendments; Waivers. No provision of
this Debenture may be waived or amended except in a written instrument signed, in the case of an amendment, by the Issuer, the Required Holders and, (a) if the Agent could be adversely affected in any way by any such amendment, by the Agent,
and (b) with respect to the Maturity Date or any reduction of the indebtedness owed pursuant to this Debenture, by the Holder against whom enforcement of any such waiver or amendment is sought. No waiver of any default with respect to any
provision, condition or requirement of this Debenture shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or 

  

 19 

 
requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.
Copies of waivers and amendments shall be delivered by the parties executing such instruments to the Agent if the Agent is not a party. Any material consideration provided by the Issuer to any Holder in exchange for such Holder’s consent to a
waiver, modification or amendment to any material term or condition of any of the Debentures will also be offered by the Company to the other Holders on a pro rata basis. 
 (g) Severability. If any provision of this Debenture is found to be invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of
interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Issuer covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Issuer from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Debenture, and the Issuer (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such power as though no such law has been enacted. 

(h) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day. 
 (i) Headings. The headings contained herein are for convenience only, do not
constitute a part of this Debenture and shall not be deemed to limit or affect any of the provisions hereof. 
 (j)
Assumption. Any successor to the Issuer or surviving entity in a Fundamental Transaction shall, if this Debenture remains outstanding after such Fundamental Transaction, (i) assume in writing all of the obligations of the Issuer
under this Debenture and the other Transaction Documents pursuant to written agreements in form and substance satisfactory to the Holder (such approval not to be unreasonably withheld or delayed) prior to such Fundamental Transaction and
(ii) to issue to the Holder a new debenture of such successor entity evidenced by a written instrument substantially similar in form and substance to this Debenture, including, without limitation, having a principal amount equal to the
principal amounts of the Debentures held by the Holder and having similar ranking to this Debenture, and satisfactory to the Holder (any such approval not to be unreasonably withheld or delayed). The provisions of this Section 12(j)
shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations of this Debenture. 
  

 20 

 (k) Replacement of Original Debenture. This Debenture supersedes, amends, restates and replaces in
its entirety the Original Debenture that was exchanged for this Debenture pursuant to the Recapitalization Agreement. Effective upon the issuance, execution and delivery of this Debenture to the Holder, the Original Debenture is cancelled and shall
be of no further force or effect. 
 [Signature Page Follows] 
  

 21 

 IN WITNESS WHEREOF, the Issuer has caused this Debenture to be duly executed by a duly authorized officer
as of the date first above indicated. 
  

			
	SENDTEC ACQUISITION CORP.
		
	By:	 	  

		 	Paul Soltoff, President

 SENDTEC, INC. (f/k/a RelationServe Media, Inc.) (the “Company”), a Delaware corporation,
agrees to be bound by all provisions of this Debenture, jointly and severally with the Issuer, and in particular to comply with all provisions relating to the conversion of the Debentures into shares of Common Stock of the Company, including without
limitation the provisions of Sections 2, 4, 5 and 6. 
  

			
	 SENDTEC, INC.

	 (F/K/A RELATIONSERVE MEDIA, INC.)

		
	 By:
	 	  

		 	Paul Soltoff, Chief Executive Officer

  

 22

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