Document:

csal-ex102_756.htm

 

Exhibit 10.2 

 

EXECUTION VERSION

Registration Rights Agreement 

by and among 

Each of the parties listed on the signature pages hereto,

and 

Communications Sales & Leasing, Inc. 

Dated as of June 15, 2016

 

 

 

 

TABLE OF CONTENTS 

 

	
Article I

	
 
	
 
	
 
	
 
	
 

	
DEFINITIONS

	
Section 1.01
	
 
	
Definitions.
	
 
	
1

	
Section 1.02
	
 
	
Interpretation.
	
 
	
6

	
 
	
 
	
 
	
 
	
 

	
Article II

	
 
	
 
	
 
	
 
	
 

	
REGISTRATION RIGHTS

	
Section 2.01
	
 
	
Registration.
	
 
	
7

	
Section 2.02
	
 
	
Piggyback Registrations.
	
 
	
10

	
Section 2.03
	
 
	
Registration Procedures.
	
 
	
12

	
Section 2.04
	
 
	
Underwritten Offerings.
	
 
	
17

	
Section 2.05
	
 
	
Registration Expenses Paid by CS&L.
	
 
	
18

	
Section 2.06
	
 
	
Indemnification.
	
 
	
18

	
Section 2.07
	
 
	
Reporting Requirements; Rule 144.
	
 
	
21

	
 
	
 
	
 
	
 
	
 

	
Article III

	
 

	
MISCELLANEOUS

	
Section 3.01
	
 
	
Term.
	
 
	
22

	
Section 3.02
	
 
	
Counterparts; Entire Agreement; Corporate Power
	
 
	
22

	
Section 3.03
	
 
	
Governing Law; Waiver of Jury Trial.
	
 
	
23

	
Section 3.04
	
 
	
Amendment.
	
 
	
23

	
Section 3.05
	
 
	
Waiver of Default.
	
 
	
23

	
Section 3.06
	
 
	
Successors, Assigns and Transferees.
	
 
	
23

	
Section 3.07
	
 
	
Further Assurances.
	
 
	
24

	
Section 3.08
	
 
	
Performance.
	
 
	
24

	
Section 3.09
	
 
	
Notices.
	
 
	
24

	
Section 3.10
	
 
	
Severability.
	
 
	
25

	
Section 3.11
	
 
	
No Reliance on Other Party.
	
 
	
25

	
Section 3.12
	
 
	
Windstream and PEG Registration Rights Agreements.
	
 
	
25

	
Section 3.13
	
 
	
Mutual Drafting.
	
 
	
26

 

Exhibit AForm of Agreement to be Bound

 

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made as of June 15, 2016, by and among each of the parties on the signature pages hereto (the “Holders”), and Communications Sales & Leasing, Inc., a Maryland corporation (“CS&L”). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Section 1.01.

RECITALS

A. Pursuant to the Subscription Agreements, each dated as of June 9, 2016 (the “Subscription Agreements”), by and among Citigroup Global Markets Inc. (“Citi”) as Selling Shareholder and the Holders, the Holders have severally agreed to acquire 14,703,993 shares of common stock, par value $0.0001 per share, of CS&L (the “Common Stock”) from Citi.

B. CS&L desires to grant to the Holders the Registration Rights for the Registrable Securities (as defined below), subject to the terms and conditions of this Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

Article I

DEFINITIONS 

Section 1.01 Definitions.  

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

Affiliate” means, when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. As used in this definition, the term “control” (including with correlative meanings, “controlled by” and “under common control with”), when used with respect to any specified Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise; provided that, with respect to Searchlight, “Affiliate” shall not include any portfolio company of Searchlight. 

“Agreement” has the meaning set forth in the preamble. 

“Ancillary Filings” has the meaning set forth in Section 2.03(a)(i). 

“Blackout Notice” has the meaning set forth in Section 2.01(d). 

 

 

“Blackout Period” has the meaning set forth in Section 2.01(d). 

“Board” means the board of directors of CS&L.

“Business Day” means any day that is not a Saturday, Sunday or other day on which banking institutions doing business in New York, New York are authorized or obligated by law or required by executive order to be closed.

“Citi” has the meaning set forth in the recitals.

“Common Stock” has the meaning set forth in the recitals.

“CS&L” has the meaning set forth in the preamble and shall include CS&L’s successors by merger, acquisition, reorganization or otherwise.

“CS&L Group” means CS&L and each Subsidiary of CS&L.

“CS&L Public Sale” has the meaning set forth in Section 2.02(a).

“Demand” has the meaning set forth in Section 2.01(a).

“Disadvantageous Condition” has the meaning set forth in Section 2.01(d).

“Disadvantageous Condition Blackout Notice” has the meaning set forth in Section 2.01(d).

“Disadvantageous Condition Blackout Period” has the meaning set forth in Section 2.01(d).

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

“Governmental Authority” means any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, government and any executive official thereof.

“Group” means the Holders or the CS&L Group, as applicable.

“Holder Group” means with respect to each Holder, such Holder and its Affiliates.

“Holder” means each Holder (as set forth in the preamble), so long as such Person holds any Registrable Securities, and any Permitted Transferee of such Holder, so long as such Person holds any Registrable Securities.

“Indemnifying Party” has the meaning set forth in Section 2.06(d). 

“Indemnitee” has the meaning set forth in Section 2.06(d). 

2

 

“Initiating Holder” has the meaning set forth in Section 2.01(a) 

“Lock Up Agreement” has the meaning set forth in Section 2.04(b).

“Loss” and “Losses” have the meaning set forth in Section 2.06(a).

“Offering Confidential Information” means, with respect to a Piggyback Registration, (i) CS&L’s plan to file the relevant Registration Statement and engage in the offering so registered, (ii) any information regarding the offering being registered (including the potential timing, price, number of shares, underwriters or other counterparties, selling stockholders or plan of distribution), (iii) any information contained in, or the existence of, a Blackout Notice, and (iv) any other information (including information contained in draft supplements or amendments to offering materials) provided to any Holders by CS&L (or by third parties) in connection with a Piggyback Registration; provided, that Offering Confidential Information shall not include information that (x) was or becomes generally available to the public (including as a result of the filing of the relevant Registration Statement) other than as a result of a disclosure by any Holder, (y) was or becomes available to any Holder from a source not bound by any confidentiality agreement with CS&L or (z) was otherwise in such Holder’s possession prior to it being furnished to such Holder by CS&L or on CS&L’s behalf.

“Other Holders” has the meaning set forth in Section 2.01(e).

“PEG Registration Rights Agreement” means that certain Stockholders’ and Registration Rights Agreement, dated as of May 2, 2016, by and among CS&L and PEG Bandwith Holdings, LLC.

“Person” means an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.

“Permitted Transferee” has the meaning set forth in Section 3.06.

“Piggyback Registration” has the meaning set forth in Section 2.02(a).

“Pledgee Transferee” has the meaning set forth in Section 2.01(c).

“Prospectus” means the prospectus included in any Registration Statement, all amendments and supplements to such prospectus, including post-effective amendments, and all other material incorporated by reference in such prospectus.

“Registrable Securities” means the shares of Common Stock purchased by the Holders pursuant to the Subscription Agreements and any shares of Common Stock or other securities issued with respect to, in exchange for, or in replacement of such shares (including (i) any and all securities of CS&L into which such shares of Common Stock are converted, exchanged or substituted in any recapitalization or other capital reorganization by CS&L and (ii) any and all securities of any kind whatsoever of CS&L or any successor or permitted assign of CS&L (whether by merger, consolidation, sale of assets or otherwise) which may be issued on or after the date hereof in respect of, in conversion of, in exchange for or in substitution of, such shares of Common Stock), in each case as appropriately adjusted for any stock dividends, or other distributions, stock splits 

3

 

or reverse stock splits, combinations, recapitalizations, mergers, consolidations, exchange offers or other reorganizations occurring after the date hereof; provided, that the term “Registrable Securities” excludes any security (i) the offering and Sale of which has been registered effectively under the Securities Act and which has been Sold in accordance with a Registration Statement, (ii) that has been Sold by a Holder in a transaction or transactions exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(a)(1) thereof (including transactions pursuant to Rule 144) such that the further Sale of such securities by the transferee or assignee is not restricted under the Securities Act or (iii) that has been Sold by a Holder in a transaction in which such Holder’s rights under this Agreement are not, or cannot be, assigned.

“Registration” means a registration with the SEC of the offer and Sale to the public of any Registrable Securities under the Registration Statement. The terms “Register” and “Registering” shall have correlative meanings.

“Registration Expenses” means all expenses incident to the CS&L Group’s performance of or compliance with this Agreement, including all (i) registration, qualification and filing fees, (ii) printing expenses, messenger, telephone and delivery expenses of the CS&L Group, (iii) internal expenses of the CS&L Group (including all salaries and expenses of employees of members of the CS&L Group performing legal or accounting duties), (iv) fees and disbursements of counsel for CS&L and customary fees and expenses for independent certified public accountants retained by the CS&L Group and (v) fees and expenses of listing any Registrable Securities on any securities exchange on which the shares of Common Stock are then listed and Financial Industry Regulatory Authority registration and filing fees.  “Registration Expenses” shall exclude any fees or disbursements of any Holder or underwriter, all expenses incurred in connection with the printing, mailing and delivering of copies of any Registration Statement, any Prospectus, any other offering documents and any amendments and supplements thereto to any underwriters and dealers; any underwriting discounts, fees or commissions attributable to the offer and Sale of any Registrable Securities; any fees and expenses of the underwriters or dealer managers, the cost of preparing, printing or producing any agreements among underwriters, underwriting agreements and blue sky or legal investment memoranda, any selling agreements and any other similar documents in connection with the offering, Sale, distribution or delivery of the Registrable Securities or other shares of Common Stock to be sold, including any fees of counsel for any underwriters in connection with the qualification of the Registrable Securities or other shares of Common Stock to be Sold for offering and Sale or distribution under state securities laws, any stock transfer taxes, and out-of-pocket costs and expenses relating to any investor presentations on any “road show” presentations undertaken in connection with marketing of the Registrable Securities and any fees and expenses of any counsel to the Holders, underwriters or dealer managers.

“Registration Rights” means the rights of the Holders to cause CS&L to Register Registrable Securities pursuant to Article II.

“Registration Statement” means any registration statement of CS&L filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference into such 

4

 

registration statement.  For the avoidance of doubt, it is acknowledged and agreed that such Registration Statement may be on any form that shall be applicable, including Form S-11 or Form S-3 and may be a Shelf Registration Statement.

“Sale” means the direct or indirect transfer, sale, assignment or other disposition of a security. The terms “Sell” and “Sold” shall have correlative meanings.

“Searchlight ” means Searchlight II CLS, L.P., a Delaware limited partnership, together with its controlled affiliated funds.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the U.S. Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time.

“Shelf Registration Statement” means a Registration Statement of CS&L for an offering of Registrable Securities to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (or similar provisions then in effect).

“Subscription Agreements” has the meaning set forth in the recitals.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (i) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (x) the total combined voting power of all classes of voting securities of such Person, (y) the total combined equity interests or (z) the capital or profit interests, in the case of a partnership, or (ii) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

“Trading Blackout Notice” has the meaning set forth in Section 2.01(d)

“Trading Blackout Period” has the meaning set forth in Section 2.01(d)

“Transferee” has the meaning set forth in Section 3.06.

“Underwritten Offering” means a Registration in which Registrable Securities are Sold to an underwriter or underwriters on a firm commitment basis for reoffering to the public.

“Windstream Registration Rights Agreement” means that certain Stockholder’s and Registration Rights Agreement, dated as of April 24, 2015, by and among CS&L and Windstream Services, LLC.

5

 

Section 1.02 Interpretation. 

In this Agreement, unless the context clearly indicates otherwise:

(a) words used in the singular include the plural, and words used in the plural include the singular;

(b) references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement;

(c) any reference to any gender includes the other gender and the neuter;

(d) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”;

(e) the words “shall” and “will” are used interchangeably and have the same meaning;

(f) the word “or” shall have the inclusive meaning represented by the phrase “and/or”;

(g) any reference to any Article, Section, Exhibit or Schedule means such Article or Section of, or such Exhibit or Schedule to, this Agreement, as the case may be, and references in any Section or definition to any clause means such clause of such Section or definition;

(h) the words “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision of this Agreement;

(i) any reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement;

(j) any reference to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability;

(k) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including”;

(l) the table of contents and titles to Articles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement;

6

 

(m) any portion of this Agreement obligating a party to take any action or refrain from taking any action, as the case may be, shall mean that such party shall also be obligated to cause its relevant Subsidiaries to take such action or refrain from taking such action, as the case may be;

(n) the language of this Agreement shall be deemed to be the language the parties hereto have chosen to express their mutual intent, and no rule of strict construction shall be applied against any party; and

(o) except as otherwise indicated, all periods of time referred to herein shall include all Saturdays, Sundays and holidays; provided, however, that if the date to perform the act or give any notice with respect to this Agreement shall fall on a day other than a Business Day, such act or notice may be performed or given timely if performed or given on the next succeeding Business Day.

Article II

REGISTRATION RIGHTS

Section 2.01 Registration. 

(a) On or prior to 60 days following the date of this Agreement, subject to Section 2.01(d), CS&L shall file with the SEC a Shelf Registration Statement on Form S-3 (the “Registration Statement”) relating to, in addition to any other securities registered thereby, the offer and sale of all Registrable Securities by the Holders from time to time in accordance with the methods of distribution elected by the Holders and set forth in the Registration Statement, and, if applicable, shall use its reasonable best efforts to cause the Registration Statement to become effective under the Securities Act.

(b) CS&L shall use its reasonable best efforts to keep the Registration Statement (or a replacement Registration Statement) continuously effective under the Securities Act in order to permit the Prospectus forming a part thereof to be usable by the Holders until the termination date as set forth in Section 3.01, subject to Section 2.01(d). 

(c) Prior to the termination of this Agreement as set forth in Section 3.01, any Holders acting together which collectively hold 40% or more of the Registrable Securities held by Holders then party hereto (collectively, the “Initiating Holders”) shall have the right to request that CS&L effect an offering of all or any portion of the Registrable Securities held by such Initiating Holders, by delivering a written request thereof to CS&L specifying the number of Registrable Securities such Initiating Holder wishes to register (a “Demand”); provided, that so long as Searchlight or any of its Permitted Transferees that acquired such Registrable Securities pursuant to foreclosure (a “Pledgee Transferee”) holds an amount of Registrable Securities representing at least 50% of the Registrable Securities acquired by Searchlight pursuant to its Subscription Agreement, the Initiating Holders must include Searchlight or such Pledgee Transferee; provided further, that (i) Holders may not make more than two Demands during the term of this Agreement and not more than one Demand during any 365-day period (unless, with respect to any such Demand, such Demand is withdrawn prior to the launch of the offering relating to such Demand or the Demand effected pursuant thereto becomes subject to a 

7

 

Blackout Period, in each case pursuant to Section 2.01(d) and is not completed), and (ii) a Holder may not make any Demand for a period of 90 days following consummation of a Piggyback Registration effected pursuant to Section 2.02 in which such Holder participated or elected not to participate. CS&L shall (i) within three days of the receipt of a Demand, give written notice of such Demand to all Holders of Registrable Securities whose Registrable Securities are included in the Registration Statement (other than the Initiating Holders) and (ii) use its reasonable best efforts to prepare and file the prospectus supplement promptly and to effectuate the offering. CS&L shall include in such Demand all Registrable Securities with respect to which CS&L receives, within the 5 days immediately following the receipt by the Holder(s) of such notice from CS&L, a request for inclusion in the Demand from the Holder(s) thereof. Each such request from a Holder of Registrable Securities for inclusion in the Demand shall also specify the aggregate amount of Registrable Securities proposed to be offered. 

(d) With respect to the Registration Statement, whether filed or to be filed pursuant to this Agreement, if CS&L shall reasonably determine, upon the good faith advice of legal counsel, that maintaining the effectiveness of the Registration Statement or filing an amendment or supplement thereto (or, if the Registration Statement has yet been filed, filing the Registration Statement) or permitting its use would require the public disclosure of material nonpublic information concerning any transaction or negotiations involving CS&L or any of its consolidated Subsidiaries that would require the public disclosure of material non-public information concerning any transaction or negotiations involving CS&L or any of its consolidated subsidiaries that would materially interfere with such transaction or negotiations (a “Disadvantageous  Condition”), CS&L may, for the shortest period reasonably practicable, and in any event for not more than 30 consecutive calendar days (a “Disadvantageous Condition Blackout Period”), notify the Holders whose offers and Sales of Registrable Securities are covered (or to be covered) by the Registration Statement (a “Disadvantageous Condition Blackout Notice”) that the Registration Statement is unavailable for use (or will not be filed as requested).  In addition, CS&L may notify the Holders whose offers and Sales of Registrable Securities are covered (or to be covered) by the Registration Statement (a “Trading Blackout Notice” and together with a Disadvantageous Condition Blackout Notice, a “Blackout Notice”) that it will suspend the use of the Registration Statement during the regular quarterly period during which directors and officers of CS&L are not permitted to trade under the insider trading policy of CS&L then in effect until the expiration of such quarterly period (a “Trading Blackout Period,” and each of a Trading Blackout Period or Disadvantageous Condition Blackout Period referred to as a “Blackout Period”).  Upon the receipt of any Blackout Notice, the Holders shall forthwith discontinue use of the Prospectus contained in the Registration Statement; provided, that, if at the time of receipt of such Disadvantageous Condition Blackout Notice any Holder shall have Sold its Registrable Securities (or have signed a firm commitment underwriting agreement with respect to the purchase of such shares) and the Disadvantageous Condition is not of a nature that would require a post-effective amendment to the Registration Statement, then CS&L shall use its reasonable best efforts to take such action as to eliminate any restriction imposed by federal securities laws on the timely delivery of such Registrable Securities to the extent permitted under such applicable laws prior to disclosure of material information relating to such Disadvantageous Condition. When any Disadvantageous Condition as to which a Disadvantageous Condition Blackout Notice has been previously delivered shall cease to exist or any Trading Blackout Period as to which a Trading Blackout Notice has been previously delivered shall have ended, as applicable, CS&L shall as promptly as reasonably practicable 

8

 

notify the Holders and take such actions in respect of the Registration Statement as are otherwise required by this Agreement. CS&L shall not impose, in any 365-day period, more than two Disadvantageous Condition Blackout Periods; such Disadvantageous Condition Blackout Periods shall not be permitted to run consecutively; and such Disadvantageous Condition Blackout Periods may not be prompted by the same Disadvantageous Condition. In addition, CS&L may not exercise Blackout Periods to suspend the use of the Registration Statement for more than 120 days collectively during any 365-day period.   If CS&L declares a Blackout Period with respect to a Demand for the Registration Statement which has not yet been declared effective, (i) the Holders may by notice to CS&L withdraw the related Demand request without such Demand request counting against the number of Demand requests permitted to be made under Section 2.01(c) and (ii) the Holders shall not be responsible for any of CS&L’s related Registration Expenses.

(e) If the Initiating Holder so indicates at the time of its request pursuant to Section 2.01(a), such offering of Registrable Securities shall be in the form of an Underwritten Offering, and CS&L shall include such information in the written notice to the Holders required under Section 2.01(a). In the event that the Initiating Holder intends to sell the Registrable Securities by means of an Underwritten Offering, the right of any Holder to include Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in the Underwritten Offering to the extent provided herein. The Holders of a majority of the outstanding Registrable Securities being included in any Underwritten Offering shall select the underwriter(s), provided that such underwriter(s) are reasonably acceptable to CS&L (it being understood and agreed that UBS Securities LLC is reasonably acceptable to CS&L).  For the avoidance of doubt, no Holder is entitled to sell Registrable Securities in an Underwritten Offering except in a Demand made in accordance with Section 2.01(a).

(f) If the managing underwriter or underwriters of a proposed Underwritten Offering of Registrable Securities included in a Registration pursuant to this Section 2.01 inform(s) in writing the Holders participating in such Registration that, in its or their opinion, the number of securities requested to be included in such Registration exceeds the number that can be Sold in such offering without being reasonably likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the number of Registrable Securities to be included in such Registration shall be (i) reduced to the maximum number recommended by the managing underwriter or underwriters, and (ii) allocated first to the Initiating Holders and then to the other Holders, in each case on a pro rata basis in proportion to the number of Registrable Securities each Holder has requested to be included in such Registration; provided that the Initiating Holder may notify CS&L in writing that the Registration Statement shall be abandoned or withdrawn, in which event CS&L shall abandon or withdraw such Registration Statement. In the event the Initiating Holder notifies CS&L that such Registration Statement shall be abandoned or withdrawn prior to the filing of the Registration Statement, such Holder shall not be deemed to have requested a Demand pursuant to Section 2.01(a). If the amount of Registrable Securities to be underwritten has not been limited in accordance with the first sentence of this Section 2.01(e), CS&L and the holders of Common Stock or, if the Registrable Securities include securities other than Common Stock, the holders of securities of the same class of those securities included in the Registrable Securities, in each case, other than the Holders (“Other Holders”), may include such securities 

9

 

for their own account or for the account of Other Holders in such Registration if the underwriter(s) so agree and to the extent that, in the opinion of such underwriter(s), the inclusion of such additional amount will not adversely affect the offering of the Registrable Securities included in such Registration. 

Section 2.02 Piggyback Registrations.

(a) Prior to the termination of this Agreement as provided in Section 3.01, if CS&L proposes to file a Registration Statement (other than a Shelf Registration) or a Prospectus supplement filed pursuant to a Shelf Registration Statement under the Securities Act with respect to any offering of Common Stock for its own account and/or for the account of any Person (other than (i) a Registration under Section 2.01, (ii) a Registration pursuant to a Registration Statement on Form S-8 or on Form S-4 or similar form that relates to a transaction subject to Rule 145 under the Securities Act, (iii) in connection with any dividend reinvestment or similar plan, (iv) for the sole purpose of offering securities to another entity or its security holders in connection with the acquisition of assets or securities of such entity or any similar transaction or (v) a Registration in which the only Common Stock being registered is Common Stock issuable upon conversion of other securities that are also being registered) (each, a “CS&L Public Sale”), then, as soon as practicable, but in any event not less than 15 days prior to the proposed date of filing such Registration Statement, CS&L shall give written notice of such proposed filing to each Holder who owns at least 1% of CS&L’s then-issued and outstanding Common Stock, and such notice shall offer such Holders the opportunity to Register under such Registration Statement or offer under such Prospectus supplement such number of Registrable Securities as each such Holder may request in writing (each, a “Piggyback Registration”). Subject to Section 2.02(b) and Section 2.02(c), CS&L shall use its commercially reasonable efforts to include in a Registration Statement or offer under a Prospectus supplement with respect to a CS&L Public Sale all Registrable Securities that are requested to be included therein within five Business Days after the receipt of any such notice; provided, however, that if at any time after giving written notice of its intention to Register any securities and prior to the effective date of the Registration Statement filed in connection with such Registration, CS&L shall determine for any reason not to Register or to delay Registration of the CS&L Public Sale, CS&L may, at its election, give written notice of such determination to each such Holder and, thereupon, (x) in the case of a determination not to Register, shall be relieved of its obligation to Register any Registrable Securities in connection with such Registration, without prejudice, however, to the rights of any Holder to request that such Registration be effected as a Demand under Section 2.01 and (y) in the case of a determination to delay Registration, shall be permitted to delay Registering any Registrable Securities for the same period as the delay in Registering such other shares of Common Stock in the CS&L Public Sale. No Registration effected under this Section 2.02 shall relieve CS&L of its obligation to effect any Demand under Section 2.01.

(b) In the case of any Underwritten Offering, each Holder shall have the right to withdraw such Holder’s request for inclusion of its Registrable Securities in such Underwritten Offering pursuant to Section 2.02(a) at any time prior to the execution of an underwriting agreement with respect thereto by giving written notice to CS&L of such Holder’s request to withdraw and, subject to the preceding clause, each Holder shall be permitted to withdraw all or part of such Holder’s Registrable Securities from a Piggyback Registration at any time prior to the effective date thereof.

10

 

(c) If the managing underwriter or underwriters of any proposed Underwritten Offering of a class of Registrable Securities included in a Piggyback Registration informs CS&L and each Holder in writing that, in its or their opinion, the number of securities of such class that such Holder and any other Persons intend to include in such offering exceeds the number that can be Sold in such offering without being reasonably likely to have an adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the securities to be included in such Registration shall be 

	
 
	
(i)
	
first, all securities of CS&L and any other Persons (other than CS&L’s executive officers and directors) for whom CS&L is effecting the Registration, as the case may be, proposes to Sell, 

	
 
	
(ii)
	
second, (A) to the extent holders of securities are exercising “piggyback” registration rights under the PEG Registration Rights Agreement or the Windstream Registration Rights Agreement, securities to be sold by such holders, and (B) securities of executive officers and directors of CS&L for whom CS&L is effecting the Registration, in each case in the order set forth in, and allocated in accordance with, the PEG Registration Rights Agreement and the Windstream Registration Rights Agreement, 

	
 
	
(iii)
	
third, the number, if any, of Registrable Securities of such class that, in the opinion of such managing underwriter or underwriters, can be Sold without having such adverse effect, with such number to be allocated pro rata among the Holders that have requested to participate in such Registration based on the relative number of Registrable Securities of such class requested by such Holder to be included in such Sale and any other Holder who has similar “piggyback registration” rights, and

	
 
	
(iv)
	
fourth, any other securities eligible for inclusion in such Registration, allocated among the holders of such securities in such proportion as CS&L and those holders may agree.

(d) After a Holder has been notified of its opportunity to include Registrable Securities in a Piggyback Registration, such Holder (i) shall treat the Offering Confidential Information as confidential information, (ii) shall not use any Offering Confidential Information for any purpose other than to evaluate whether to include its Registrable Securities (or other shares of Common Stock) in such Piggyback Registration, (iii) shall not trade while aware of such Offering Confidential Information if such information shall constitute material non-public information unless and until such information shall become public or shall cease to be material and (iv) shall not disclose any Offering Confidential Information to any Person other than such of its agents, employees, advisors and counsel as have a need to know such Offering Confidential Information, and to cause such agents, employees, advisors and counsel to comply with the requirements of this Section 2.02(d); provided, that any such Holder may disclose Offering Confidential Information if such disclosure is required by legal process, but such Holder shall cooperate with CS&L to limit the extent of such disclosure through protective order or otherwise, and to seek confidential treatment of the Offering Confidential Information.

11

 

Section 2.03 Registration Procedures.

(a) In connection with CS&L’s Registration obligations under Section 2.01 and Section 2.02, CS&L shall use its reasonable best efforts to effect such Registration to permit the offer and Sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable and, in connection therewith, CS&L shall, and shall cause the members of the CS&L Group to:

(i) prepare and file the required Registration Statement, including all exhibits and financial statements (collectively, the “Ancillary Filings”) required under the Securities Act to be filed therewith, and before filing with the SEC a Registration Statement or Prospectus, or any amendments or supplements thereto, and in connection with a Demand made pursuant to Section 2.01 (A) furnish to the underwriters, if any, and to the Holders, copies of all documents prepared to be filed, which documents shall be subject to the review and comment of such underwriters and such Holders and their respective counsel, and provide such underwriters, if any, and such Holders and their respective counsel reasonable time to review and comment thereon and (B) not file with the SEC any Registration Statement or Prospectus or amendments or supplements thereto or any Ancillary Filing to which the Holders or the underwriters, if any, shall reasonably object;

(ii) prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and supplements to the Prospectus and any Ancillary Filing as may be reasonably requested by the participating Holders;

(iii) promptly notify the participating Holders and the managing underwriters, if any, and, if requested, confirm such advice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by any member of the CS&L Group (A) when the Registration Statement or any amendment thereto has been filed or becomes effective, the applicable Prospectus or any amendment or supplement to such Prospectus has been filed, or any Ancillary Filing has been filed, (B) of any comments (written or oral) by the SEC or any request (written or oral) by the SEC or any other Governmental Authority for amendments or supplements to such Registration Statement, such Prospectus or any Ancillary Filing, or for any additional information, (C) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement, any order preventing or suspending the use of any preliminary or final Prospectus or any Ancillary Filing, or the initiation or threatening of any proceedings for such purposes, (D) in connection with a Demand made pursuant to Section 2.01 if, at any time, the representations and warranties (written or oral) in any applicable underwriting agreement cease to be true and correct in all material respects and (E) of the receipt by any member of the CS&L Group of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or Sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(iv) (A) promptly notify each participating Holder and the managing underwriter(s), if any, when CS&L becomes aware of the occurrence of any 

12

 

event as a result of which the Registration Statement, the Prospectus included in the Registration Statement (as then in effect) or any Ancillary Filing contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such Prospectus and any preliminary Prospectus, in light of the circumstances under which they were made) not misleading, or if for any other reason it shall be necessary during such time period to amend or supplement the Registration Statement, Prospectus or any Ancillary Filing in order to comply with the Securities Act, and (B) in either case, as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to each participating Holder and the underwriter(s), if any, an amendment or supplement to the Registration Statement, Prospectus or Ancillary Filing that will correct such statement or omission or effect such compliance;

(v) use its reasonable best efforts to prevent or obtain the withdrawal of any stop order or other order suspending the use of any preliminary or final Prospectus;

(vi) promptly (A) incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriter(s), if any, and the Holders agree should be included therein relating to the plan of distribution with respect to such Registrable Securities and (B) make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(vii) furnish to each participating Holder and each underwriter, if any, without charge, as many conformed copies as such Holder or underwriter may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);

(viii) deliver to each participating Holder and each underwriter, if any, without charge, as many copies of the applicable Prospectus (including each preliminary Prospectus) and any amendment or supplement thereto as such Holder or underwriter may reasonably request (it being understood that CS&L consents to the use of such Prospectus or any amendment or supplement thereto by each participating Holder and the underwriter(s), if any, in connection with the offering and Sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto) and such other documents as such participating Holder or underwriter may reasonably request in order to facilitate the Sale of the Registrable Securities by such Holder or underwriter, it being understood that no Prospectus supplement will be prepared except in connection with a Demand made pursuant to Section 2.01;

(ix) on or prior to the date on which the applicable Registration Statement is declared effective or becomes effective, use its reasonable best efforts to register or qualify, and cooperate with each participating Holder, the managing 

13

 

underwriter(s), if any, and their respective counsel, in connection with the registration or qualification of, such Registrable Securities for offer and Sale under the securities or “blue sky” laws of each state and other jurisdiction of the United States as any participating Holder or managing underwriter(s), if any, or their respective counsel reasonably request, and in any foreign jurisdiction mutually agreeable to CS&L and the participating Holders, and do any and all other acts or things reasonably necessary or advisable to keep such registration or qualification in effect for so long as such Registration Statement remains in effect and so as to permit the continuance of offers and Sales and dealings in such jurisdictions for so long as may be necessary to complete the distribution of the Registrable Securities covered by the Registration Statement; provided that CS&L will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, to take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject or conform its capitalization or the composition of its assets at the time to the securities or blue sky laws of any such jurisdiction;

(x) in connection with any Sale of Registrable Securities that will result in such securities no longer being Registrable Securities, cooperate with each participating Holder and the managing underwriter(s), if any, to (A) if the Registrable Securities are certificated, facilitate the timely preparation and delivery of certificates representing Registrable Securities to be Sold and not bearing any restrictive Securities Act legends and (B) register such Registrable Securities in such denominations and such names as such participating Holder or the underwriter(s), if any, may request at least two Business Days prior to such Sale of Registrable Securities; provided that CS&L may satisfy its obligations hereunder without issuing physical stock certificates through the use of the Depository Trust Company’s Direct Registration System;

(xi) in connection with a Demand made pursuant to Section 2.01, cooperate and assist in any filings required to be made with the Financial Industry Regulatory Authority Inc. (or any successor organization) and each securities exchange, if any, on which any of CS&L’s securities are then listed or quoted and on each inter-dealer quotation system or trading market on which any of CS&L’s securities are then quoted, and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of each such exchange, and use its reasonable best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other Governmental Authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the Sale of such Registrable Securities;

(xii) not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable transfer agent with printed certificates for the Registrable Securities which are in a form eligible for deposit with the Depository Trust Company; provided, that CS&L may satisfy its obligations hereunder without issuing physical stock certificates through the use of the Depository Trust Company’s Direct Registration System; 

14

 

(xiii) in connection with a Demand made pursuant to Section 2.01, obtain for delivery to and addressed to each participating Holder and to the underwriter(s), if any, opinions from the general counsel of CS&L, dated the effective date of the Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement and in each such case in customary form and content for the type of Underwritten Offering;

(xiv) in connection with a Demand made pursuant to Section 2.01 and in the form of an Underwritten Offering, obtain for delivery to and addressed to CS&L and the managing underwriter(s), if any, and, to the extent requested, each participating Holder, a comfort letter from CS&L’s independent registered public accounting firm in customary form and content for the type of Underwritten Offering, dated the date of execution of the underwriting agreement and brought down to the closing, whether under the underwriting agreement, or otherwise;

(xv) use its reasonable best efforts to comply with all applicable rules and regulations of the SEC and make generally available to its security holders, as soon as reasonably practicable, but in any event no later than 90 days, after the end of the 12-month period beginning with the first day of CS&L’s first quarter commencing after the effective date of the applicable Registration Statement, an earnings statement satisfying the provisions of Section 11 (a) of the Securities Act and covering the period of at least 12 months, but not more than 18 months, beginning with the first month after the effective date of the Registration Statement;

(xvi) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement;

(xvii) cause all Registrable Securities covered by the applicable Registration Statement to be listed on each securities exchange on which any of CS&L’s securities are then listed or quoted and on each inter-dealer quotation system or trading market on which any of CS&L’s securities are then quoted;

(xviii) in connection with a Demand made pursuant to Section 2.01, provide (A) each Holder participating in the Registration, (B) the underwriters (which term, for purposes of this Agreement, shall include any Person deemed to be an underwriter within the meaning of Section 2(a) (11) of the Securities Act), if any, of the Registrable Securities to be registered, (C) the Sale or placement agent therefor, if any, (D) counsel for such Holder, underwriters, or agent and (E) any attorney, accountant or other agent or representative retained by such Holder or any such underwriter, as selected by such Holder, in each case, the opportunity to participate in the preparation of the applicable Prospectus filed with the SEC, and each amendment or supplement thereto; and for a reasonable period prior to the filing of such Prospectus, upon execution of a customary confidentiality agreement, make available for inspection upon reasonable notice at reasonable times and for reasonable periods, by the parties referred to in clauses (A) through (E) above, all pertinent financial and other records, pertinent corporate and other documents and properties of the CS&L Group that are available to CS&L, and 

15

 

cause all of the CS&L Group’s officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available at reasonable times and for reasonable periods to discuss the business of CS&L and to supply all information available to CS&L reasonably requested by any such Person in connection with such Prospectus as shall be necessary to enable them to exercise their due diligence or other responsibility, subject to the foregoing; provided, that in no event shall any member of the CS&L Group be required to make available any information which the Board determines in good faith to be competitively sensitive or confidential. The recipients of such information shall coordinate with one another so that the inspection permitted hereunder will not unnecessarily interfere with the CS&L Group’s conduct of business. Each Holder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of CS&L or its Affiliates unless and until such information is made generally available to the public by CS&L or such Affiliate or for any reason not related to the Registration of Registrable Securities;

(xix) in connection with a Demand made pursuant to Section 2.01, cause the senior executive officers of CS&L to participate at reasonable times and for reasonable periods in the customary “road show” presentations that may be reasonably requested by the managing underwriter(s), if any, and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;

(xx) comply with all requirements of the Securities Act, Exchange Act and other applicable laws, rules and regulations, as well as all applicable stock exchange rules; and

(xxi) take all other customary steps reasonably necessary or advisable to effect the Registration and distribution of the Registrable Securities contemplated hereby; 

provided that notwithstanding anything to the contrary set forth above CS&L shall have no obligation to prepare any Prospectus supplement, participate in any due diligence, execute any agreements or certificates or deliver legal opinions or obtain comfort letters except in connection with a Demand made pursuant to Section 2.01.

(b) As a condition precedent to any Registration hereunder, CS&L may require each Holder as to which any Registration is being effected to furnish to CS&L such information regarding the distribution of such securities and such other information relating to such Holder, its ownership of Registrable Securities and other matters as CS&L may from time to time reasonably request in writing. Each such Holder agrees to furnish such information to CS&L and to cooperate with CS&L as reasonably necessary to enable CS&L to comply with the provisions of this Agreement. If a Holder fails to promptly provide the requested information after prior written notice of such request and the requested information is required by applicable law to be included in the Registration Statement, CS&L shall be entitled to refuse to include for registration such Holder’s Registrable Securities or other shares of Common Stock in the Registration Statement or applicable offering.

16

 

(c) Each Holder shall, as promptly as reasonably practicable, notify CS&L, at any time when a Prospectus is required to be delivered (or deemed delivered) under the Securities Act, of the occurrence of an event, of which such Holder has knowledge, relating to such Holder or its Sale of Registrable Securities thereunder requiring the preparation of a supplement or amendment to such Prospectus so that, as thereafter delivered (or deemed delivered) to the purchasers of such Registrable Securities, such Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.

(d) Each Holder agrees by acquisition of such Registrable Securities, that, upon receipt of any written notice from CS&L of the occurrence of a Blackout or any event of the kind described in Section 2.03(a)(iv), such Holder will treat such notice as Offering Confidential Information and comply with Section 2.02(d), regardless of the nature of the Registration, and will forthwith discontinue Sale of Registrable Securities pursuant to such Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 2.03(a)(iv), or until such Holder is advised in writing by CS&L that the use of the Prospectus may be resumed. In the event CS&L shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice through the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended Prospectus contemplated by Section 2.03(a)(iv) or is advised in writing by CS&L that the use of the Prospectus may be resumed.

Section 2.04 Underwritten Offerings.

(a) in connection with a Demand made pursuant to Section 2.01 in the form of an Underwritten Offering, if requested by the managing underwriter(s) for any such Underwritten Offering, CS&L shall enter into an underwriting agreement with such underwriter(s) for such offering, such agreement to be reasonably satisfactory in substance and form to CS&L and the underwriter(s). Such agreement shall contain such representations and warranties by CS&L and such other terms as are generally prevailing in agreements of that type. Each Holder with Registrable Securities to be included in any Underwritten Offering by such underwriter(s) shall enter into such underwriting agreement at the request of CS&L, which agreement shall contain such reasonable representations and warranties by the Holder and such other reasonable terms as are generally prevailing in agreements of that type.

(b) In the event of a CS&L Public Sale involving an offering of Common Stock or other equity securities of CS&L in an Underwritten Offering (whether in a Demand or a Piggyback Registration), each Holder participating therein hereby agrees, and, in the event of a CS&L Public Sale of Common Stock or other equity securities of CS&L in an Underwritten Offering, CS&L shall agree, and it shall cause its executive officers and directors to agree, if requested by the managing underwriter or underwriters in such Underwritten Offering or by the Holder, not to effect any Sale or distribution (including any offer to Sell, contract to Sell, short Sale or any option to purchase) of any securities (except, in each case, as part of the applicable Registration, if permitted hereunder) that are of the same type as those being Registered in 

17

 

connection with such public offering and Sale, or any securities convertible into or exchangeable or exercisable for such securities, during the period beginning five days before, and ending 90 days (or such lesser period as may be permitted by CS&L or the participating Holder(s), as applicable, or such managing underwriter or underwriters) after, the effective date of the Registration Statement filed in connection with such Registration (or, if later, the date of the Prospectus), to the extent requested by such selling Person or the managing underwriter or underwriters, subject to such exceptions as are customarily provided in covenants of this type.  The participating Holders and CS&L, as applicable, also agree to execute an agreement (a “Lock Up Agreement”) evidencing the restrictions in this Section 2.04(b) in customary form, which form is reasonably satisfactory to CS&L or the participating Holder(s), as applicable, and the underwriter(s), as applicable; provided that such restrictions may be included in the underwriting agreement, if applicable. CS&L may impose stop-transfer instructions with respect to the securities subject to the foregoing restriction until the end of the required stand-off period.  Notwithstanding any other provision of this Agreement, Holders will not be entitled to initiate a Demand pursuant to Section 2.01 during the period covered by any Lock Up Agreement if such Holders were given the opportunity to participate in an Underwritten Offering and declined to participate.

(c) No Holder may participate in any Underwritten Offering hereunder unless such Holder (i) agrees to Sell such Holder’s securities on the basis provided in any underwriting arrangements approved by CS&L or other Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements or this Agreement.

Section 2.05 Registration Expenses Paid by CS&L.

In the case of any Registration of Registrable Securities required pursuant to this Agreement, CS&L shall pay all Registration Expenses regardless of whether the Registration Statement becomes effective; provided, however, that CS&L shall not be required to pay for any expenses of any Registration begun pursuant to Section 2.01 if the Demand request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be Registered (in which case all participating Holders shall bear such expenses pro rata in accordance with the number of Registrable Securities requested to be registered by each Holder), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one Demand to which they have the right pursuant to Section 2.01(c).

Section 2.06 Indemnification. 

(a) CS&L agrees to indemnify and hold harmless, to the full extent permitted by law, each Holder whose shares are included in a Registration Statement, such Holder’s Affiliates and their respective officers, directors, agents, advisors, employees and each Person, if any, who controls (within the meaning of the Securities Act or the Exchange Act) such Holder, from and against any and all losses, claims, damages, liabilities (or actions or proceedings in respect thereof, whether or not such indemnified party is a party thereto) and expenses, joint or several (including reasonable costs of investigation and legal expenses) (each, a “Loss” and collectively “Losses”) arising out of or based upon (i) any untrue or alleged untrue 

18

 

statement of a material fact contained or incorporated by reference in any Registration Statement under which the offering and Sale of such Registrable Securities was Registered under the Securities Act (including any final or preliminary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein), or any such statement made in any free writing prospectus (as defined in Rule 405 under the Securities Act) that CS&L has filed or is required to file pursuant to Rule 433(d) of the Securities Act or any Ancillary Filing, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, preliminary Prospectus or free writing prospectus, in light of the circumstances under which they were made) not misleading; provided, that with respect to any untrue statement or omission or alleged untrue statement or omission made in any Prospectus, the indemnity agreement contained in this paragraph shall not apply to the extent that any such liability results from or arises out of (A) the fact that a current copy of the Prospectus was not sent or given to the Person asserting any such liability at or prior to the written confirmation of the Sale of the Registrable Securities concerned to such Person if it is determined by a court of competent jurisdiction in a final and non-appealable judgment that CS&L has provided such Prospectus and it was the responsibility of such Holder or its agents to provide such Person with a current copy of the Prospectus and such current copy of the Prospectus would have cured the defect giving rise to such liability, (B) the use of any Prospectus by or on behalf of any Holder after CS&L has notified such Person (x) that such Prospectus contains or incorporates by reference an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (y) that a stop order has been issued by the SEC with respect to a Registration Statement or (z) that a Disadvantageous Condition or a Blackout exists or (C) information furnished in writing by such Holder or on such Holder’s behalf, in either case expressly for use in such Registration Statement, Prospectus, free writing prospectus or Ancillary Filing relating to such Holder’s Registrable Securities. This indemnity shall be in addition to any liability CS&L may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder or any indemnified party and shall survive the Sale of such securities by such Holder.

(b) Each participating Holder whose Registrable Securities are included in a Registration Statement agrees (severally and not jointly) to indemnify and hold harmless, to the full extent permitted by law, CS&L, its directors, officers, agents, advisors, employees and each Person, if any, who controls (within the meaning of the Securities Act and the Exchange Act) CS&L from and against any and all Losses (i) arising out of or based upon information furnished in writing by such Holder or on such Holder’s behalf to CS&L, in either case expressly for use in a Registration Statement, Prospectus, free writing prospectus or Ancillary Filing relating to such Holder’s Registrable Securities or (ii) arising out of or based upon (A) the fact that a current copy of the Prospectus was not sent or given to the Person asserting any such liability at or prior to the written confirmation of the Sale of the Registrable Securities concerned to such Person if it is determined by a court of competent jurisdiction in a final and non-appealable judgment that it was the responsibility of such Holder or its agent to provide such Person with a current copy of the Prospectus and such current copy of the Prospectus would have cured the defect giving rise to such liability, or (B) the use of any Prospectus by or on behalf of any Holder after CS&L has notified such Person (x) that such Prospectus contains or incorporates by reference an untrue statement of a material fact or omits to state a material fact required to be stated therein or 

19

 

necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (y) that a stop order has been issued by the SEC with respect to a Registration Statement or (z) that a Disadvantageous Condition or a Blackout exists. This indemnity shall be in addition to any liability the participating Holder may otherwise have. In no event shall the liability of any participating Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such holder under the Sale of the Registrable Securities giving rise to such indemnification obligation. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of CS&L or any indemnified party.

Each person entitled to indemnification under this Section 2.06 (each, an “Indemnitee”) shall give notice as promptly as reasonably practicable to each party obligated to provide indemnification under this Section 2.06 (each, an “Indemnifying Party”) of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an Indemnifying Party shall not relieve such Indemnifying Party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this Section 2.06. In the case of parties indemnified pursuant to Section 2.06(a), counsel to the Indemnitee shall be selected by Holders representing a majority of the Registrable Securities included in the Registration Statement, and in the case of parties indemnified pursuant to Section 2.06(b) by CS&L. An Indemnifying Party may participate at its own expense in the defense of any such action; provided, however, that counsel to the Indemnifying Party shall not (except with the consent of the Indemnitee) also be counsel to the Indemnitee. In no event shall the Indemnifying Parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances unless (i) the employment of more than one counsel has been authorized in writing by the Indemnifying Party, (ii) the Indemnitee has reasonably concluded that there are legal defenses available to it that are different from or in addition to those available to the other Indemnitees, or (iii) a conflict or potential conflict exists or may exist between such Indemnitee and the other Indemnitees, in each of which cases the Indemnifying Party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels. No Indemnifying Party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification could be sought under this Section 2.06 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each Indemnitee in form and substance reasonably satisfactory to such Indemnitees from all liability arising out of such litigation, investigation, proceeding or claim, (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnitee, and (iii) any sums payable in connection with such settlement are paid in full by the Indemnifying Party. An Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnitee from and against any Losses (to the extent stated above) by reason of such settlement or final judgment.  If at any time an Indemnitee shall have requested an Indemnifying Party to reimburse the Indemnitee for fees 

20

 

and expenses of counsel, such Indemnifying Party agrees that it shall be liable for any settlement of the nature contemplated by this Section 2.06(c) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such Indemnifying Party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such Indemnifying Party shall not have reimbursed such Indemnified Party in accordance with such request prior to the date of such settlement.

(c) If for any reason the indemnification provided for in Section 2.06(a) or Section 2.06(b) is unavailable to an Indemnitee or insufficient to hold it harmless as contemplated by Section 2.06(a) or Section 2.06(b), then the Indemnifying Party shall contribute to the amount paid or payable by the Indemnitee as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the Indemnitee on the other hand. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or the Indemnitee and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. For the avoidance of doubt, the establishment of such relative fault, and any disagreements or disputes relating thereto, shall be subject to Section 3.03. Notwithstanding anything in this Section 2.06(c) to the contrary, no Indemnifying Party (other than CS&L) shall be required pursuant to this Section 2.06(c) to contribute any amount in excess of the amount by which the net proceeds received by such Indemnifying Party from the Sale of Registrable Securities in the offering to which the Losses of the Indemnitees relate (before deducting expenses, if any) exceeds the amount of any damages which such Indemnifying Party has otherwise been required to pay by reason of such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.06(c) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 2.06(c). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The amount paid or payable by an Indemnitee hereunder shall be deemed to include, for purposes of this Section 2.06(c), any legal or other expenses reasonably incurred by such Indemnitee in connection with investigating, preparing to defend or defending against or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability, action, investigation or proceeding. If indemnification is available under this Section 2.06, the Indemnifying Parties shall indemnify each Indemnitee to the full extent provided in Section 2.06(a) and Section 2.06(b) without regard to the relative fault of said Indemnifying Parties or Indemnitee. Any Holders’ obligations to contribute pursuant to this Section 2.06(c)  are several and not joint.

Section 2.07 Reporting Requirements; Rule 144.

Until the earlier of (a) the expiration or termination of this Agreement in accordance with its terms and (b) the date upon which the Holders cease to own any Registrable Securities, CS&L shall use its commercially reasonable efforts to be and remain in compliance with the periodic filing requirements imposed under the SEC’s rules and regulations, including 

21

 

the Exchange Act, and any other applicable laws or rules, and thereafter shall timely file such information, documents and reports as the SEC may require or prescribe under Sections 13, 14 and 15(d), as applicable, of the Exchange Act in order to enable the Holders to Sell Registrable Securities without registration under the Securities Act consistent with the exemptions from registration under the Securities Act provided by (i) Rule 144 or Regulation S under the Securities Act, as amended from time to time, or (ii) any similar SEC rule or regulation then in effect. From and after the date hereof through the earlier of the expiration or termination of this Agreement in accordance with its terms and the date upon which the Holders cease to own any Registrable Securities, CS&L shall forthwith upon request furnish any Holder (x) a written statement by CS&L as to whether it has complied with such requirements and, if not, the specifics thereof, (y) a copy of the most recent annual or quarterly report of CS&L and (z) such other reports and documents filed by CS&L with the SEC, as such Holder may reasonably request in availing itself of an exemption for the offering and Sale of Registrable Securities without registration under the Securities Act.

Article III

MISCELLANEOUS

Section 3.01 Term. 

This Agreement shall terminate upon (i) in respect of Searchlight, (a) three months after the date that Searchlight (1) does not have a director on CS&L’s board of directors, (2) does not have a right to designate a director to CS&L’s board of directors, and (3) does not own Registrable Securities representing at least 3% of CS&L’s issued and outstanding Common Stock, and (ii) in respect of any other Holder, upon the later of (x) six months after the date of this Agreement , and (y) the date such Holder does not own Registrable Securities representing at least 3% of CS&L’s issued and outstanding Common Stock; provided, that the provisions of  Section 2.05 and Section 2.06 and this Article III shall survive any such termination.

Section 3.02Counterparts; Entire Agreement; Corporate Power

(a) This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each party and delivered to each other party.

(b) This Agreement and the exhibit hereto contain the entire agreement between the parties with respect to the subject matter hereof, supersedes all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the parties with respect to such subject matter other than those set forth or referred to herein.

(c) Each of the Holders represents on behalf of itself, and CS&L represents on behalf of itself and each other member of the CS&L Group, as follows:  (i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby, and (ii) this Agreement has been 

22

 

duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms hereof.

Section 3.03 Governing Law; Waiver of Jury Trial. 

(a) This Agreement (and any claims or disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the laws of the State of New York, including all matters of validity, construction, effect, enforceability, performance and remedies.

(b) THE PARTIES EXPRESSLY WAIVE AND FOREGO ANY RIGHT TO TRIAL BY JURY. 

Section 3.04 Amendment. 

No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of CS&L, if such waiver, amendment, supplement or modification is sought to be enforced against CS&L, or the Holders of a majority of the Registrable Securities, if such waiver, amendment, supplement or modification is sought to be enforced against one or more Holders.

Section 3.05 Waiver of Default.

Waiver by any party of any default by the other party of any provision of this Agreement shall not be deemed a waiver by the waiving party of any subsequent or other default, nor shall it prejudice the rights of such party. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.

Section 3.06 Successors, Assigns and Transferees.

(a) This Agreement and all provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. CS&L may assign this Agreement at any time in connection with a sale or acquisition of CS&L, whether by merger, consolidation, sale of all or substantially all of CS&L’s assets or similar transaction, without the consent of the Holders; provided, that the successor or acquiring Person agrees in writing to assume all of CS&L’s rights and obligations under this Agreement. 

(b) Each Holder shall be permitted to Sell without restriction all or any portion of its Registrable Securities (1) in a transaction that is registered under the Securities Act and applicable state securities laws, or (2) upon receipt by CS&L of a legal opinion reasonably acceptable to CS&L from counsel reasonably acceptable to CS&L, or other documentation requested by CS&L, that registration under such laws is not required in connection with such offer, Sale or transfer.  Upon any such Sale pursuant to clause (2) in which the Common Stock 

23

 

Sold is still subject to restrictions on transfer under the Securities Act and bears a restrictive legend, the Holder shall be permitted to assign its Registration related rights and obligations under this Agreement relating to the Registrable Securities Sold; provided that (x) CS&L is given written notice prior to or at the time of such Sale stating the name and address of the transferee and identifying the securities with respect to which the Registration related rights and obligations are being Sold, and (y) the transferee executes a counterpart in the form attached hereto as Exhibit A and delivers the same to CS&L (a “Permitted Transferee”). In addition, a Holder may assign its Registration related rights under this Agreement to a Pledgee Transferee upon foreclosure; provided that (x) CS&L is given written notice prior to or at the time of such foreclosure stating the name and address of the Pledgee Transferee and identifying the securities with respect to which the Registration related rights and obligations are being Sold, and (y) the Pledgee Transferee executes a counterpart in the form attached hereto as Exhibit A and delivers the same to CS&L, in which case the Pledgee Transferee shall also be a Permitted Transferee.  In all cases, the Registration related rights shall not be transferred unless the transferee thereof executes a counterpart attached hereto as Exhibit A and delivers the same to CS&L. Any transfers of Registrable Securities not made in accordance with the provisions of this Section 3.06 shall cause such securities to no longer be deemed to be Registrable Securities under this Agreement.

Section 3.07 Further Assurances.

In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable on its part under applicable laws, regulations and agreements, to consummate and make effective the transactions contemplated by this Agreement.

Section 3.08 Performance. 

Each of the Holders shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by such Holder’s Group. CS&L shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by any member of the CS&L Group. Each party (including its permitted successors and assigns) further agrees that it shall (a) give timely notice of the terms, conditions and continuing obligations contained in this Section 3.08 to all of the other members of its Group and (b) cause all of the other members of its Group not to take, or omit to take, any action which action or omission would violate or cause such party to violate this Agreement.

Section 3.09 Notices. 

All notices, requests, claims, demands or other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile or electronic transmission with receipt confirmed (followed by delivery of an original via overnight courier service), or by registered or certified mail (postage prepaid, return receipt requested) to 

24

 

the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 3.09):

If to a Holder, to the address for such Holder listed on the signature page hereto.

If to CS&L, to:

Communications Sales & Leasing, Inc.
10802 Executive Center Drive
Benton Building Suite 300
Little Rock, AR 72211
Attention:  General Counsel

Any party may, by notice to the other party, change the address and contact person to which any such notices are to be given.

Section 3.10 Severability. 

If any provision of this Agreement or the application hereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the parties.

Section 3.11 No Reliance on Other Party.

The parties hereto represent to each other that this Agreement is entered into with full consideration of any and all rights which the parties hereto may have. The parties hereto have relied upon their own knowledge and judgment and have conducted such investigations they and their counsel have deemed appropriate regarding this Agreement and their rights in connection with this Agreement. The parties hereto are not relying upon any representations or statements made by any other party, or any such other party’s employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The parties hereto are not relying upon a legal duty, if one exists, on the part of any other party (or any such other party’s employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or its preparation, it being expressly understood that no party hereto shall ever assert any failure to disclose information on the part of any other party as a ground for challenging this Agreement or any provision hereof.

Section 3.12 Windstream and PEG Registration Rights Agreements.

The rights granted to Holders hereunder are subject in all respects to the rights granted to (i) Windstream and its Affiliates under the Windstream Registration Rights Agreement and PEG and its Affiliates under the PEG Registration Rights 

25

 

Agreement.  Notwithstanding anything to the contrary in this Agreement, the rights so granted to the Holders hereunder shall not limit or restrict the rights of (i) Windstream or its Affiliates under the Windstream Registration Rights Agreement, or (ii) PEG or its Affiliates under the PEG Registration Rights Agreement.

Section 3.13 Mutual Drafting.

This Agreement shall be deemed to be the joint work product of the parties, and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

[The remainder of this page has been left blank intentionally.]

 

 

 

26

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their authorized representatives as of the date first above written.

 

	
Searchlight II CLS, L.P.

	
By:
	
 
	
Searchlight II CLS GP, LLC,

	
 
	
 
	
its general partner

	
 
	
 
	
 

	
By:
	
 
	
/s/ Andrew Frey

	
Name:
	
 
	
Andrew Frey

	
Title:
	
 
	
Authorized Officer

Address for Notice:

 

Searchlight II CLS, L.P.
c/o Searchlight Capital Partners, L.P.
745 5th Avenue
New York, NY 10151

 

	
Name:
	
 
	
Andrew Frey

	
Title:
	
 
	
Partner

	
Telephone:
	
 
	
212-293-3722

	
Email:
	
 
	
afrey@searchlightcap.com

	
 
	
 
	
 

	
Name:
	
 
	
Nadir Nurmohamed

	
Title:
	
 
	
General Counsel

	
Telephone:
	
 
	
416-687-6591

	
Email:
	
 
	
nnurmohamed@searchlightcap.com

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

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Attention of Monica K. Thurmond
Telephone:  212-373-3055
Email: mthurmond@paulweiss.com

[Signature Page to Registration Rights Agreement]

27

 

 

	
CG CORE VALUE FUND, L.P.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Holly L. Larkin

	
Name:
	
 
	
Holly L. Larkin

	
Title:
	
 
	
Chief Operating Officer

 

Address for Notice: 

 

One Information Way

Ste. 405

Little Rock, AR 72202

 

	
CG CONCENTRATED POSITIONS FUND, LP

	
 
	
 
	
 

	
By:
	
 
	
/s/ Holly L. Larkin

	
Name:
	
 
	
Holly L. Larkin

	
Title:
	
 
	
Chief Operating Officer

 

Address for Notice: 

 

One Information Way

Ste. 405

Little Rock, AR 72202

 

	
GLOBAL LONG SHORT PARTNERS, MASTER LP

	
 
	
 
	
 

	
By:
	
 
	
/s/ Michelle Barone

	
Name:
	
 
	
Michelle Barone

	
Title:
	
 
	
Authorized Signatory

 

Address for Notice: 

 

Michelle Barone

200 West Street, 34th floor

New York, NY 10282

+1 212 934 0784

michelle.baron@gs.com

[Signature Page to Registration Rights Agreement]

28

 

 

	
JANA MASTER FUND, LTD.

	
By:
	
 
	
JANA Partners LLC, its Investment Manager

	
 
	
 
	
 

	
By:
	
 
	
/s/ Charles Penner

	
Name:
	
 
	
Charles Penner

	
Title:
	
 
	
Partner and Chief Legal Officer

 

Address for Notice: 

 

c/o JANA Partners LLC

767 Fifth Avenue, 8th Floor

New York, NY 10153

 

	
JANA NIRVANA MASTER FUND, LTD.

	
By:
	
 
	
JANA Nirvana Capital LLC,

	
 
	
 
	
its General Partner

	
 
	
 
	
 

	
By:
	
 
	
/s/ Charles Penner

	
Name:
	
 
	
Charles Penner

	
Title:
	
 
	
Authorized Signatory

 

Address for Notice: 

 

c/o JANA Partners LLC

767 Fifth Avenue, 8th Floor

New York, NY 10153

 

	
P Zimmer LTD

	
 
	
 
	
 

	
By:
	
 
	
/s/ Stuart J. Zimmer

	
Name:
	
 
	
Stuart J. Zimmer

	
Title:
	
 
	
CEO of Zimmer Partners, LP 

as Investment Manager

 

Address for Notice: 

 

c/o Zimmer Partners, LP

888 Seventh Avenue, 23rd Floor

New York, NY 10106

 [Signature Page to Registration Rights Agreement]

29

 

 

	
ZP MATER UTILITY FUND, LTD.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Stuart J. Zimmer

	
Name:
	
 
	
Stuart J. Zimmer

	
Title:
	
 
	
Director

 

Address for Notice: 

 

c/o Zimmer Partners, LP

888 Seventh Ave, 23rd Floor

New York, New York 10106

 

	
PEG BANDWIDTH HOLDINGS, LLC

	
 
	
 
	
 

	
By:
	
 
	
/s/ Scott G. Bruce

	
Name:
	
 
	
Scott G. Bruce

	
Title:
	
 
	
Managing Director

 

Address for Notice: 

 

3 Bala Plaza East, Suite 502

Bala Cynwyd, PA 19004

 

	
Communications Sales & Leasing, Inc.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Daniel Heard

	
Name:
	
 
	
Daniel Heard

	
Title:
	
 
	
Executive Vice President, General Counsel

 [Signature Page to Registration Rights Agreement]

 

 

30

 

Exhibit A

Form of

Agreement to be Bound

THIS INSTRUMENT forms part of the Registration Rights Agreement (the “Agreement”), dated as of June 15, 2016, by and among ach of the parties on the signature pages hereto (collectively, the “Holders”), and Communications Sales & Leasing, Inc., a Maryland corporation (“CS&L”). The undersigned hereby acknowledges having received a copy of the Agreement and having read the Agreement in its entirety, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, hereby agrees that the terms and conditions of the Agreement binding upon and inuring to the benefit of such Holder shall be binding upon and inure to the benefit of the undersigned and its successors and permitted assigns as if it were an original party to the Agreement.

IN WITNESS WHEREOF, the undersigned has executed this instrument on this _____day of _____________, 20__.

	
 

	
(Signature of transferee)

	
 

	
 

	
Print name

	
 

	
 

	
Number of Registrable Securities Transferred

 

A-1Exhibit
10.1 

 

STOCK PURCHASE AGREEMENT

 

by and among

 

DERMA SCIENCES, INC.

 

and

 

THE PARTIES LISTED ON SCHEDULE 1 HERETO

 

Dated as of July 27, 2016

 

CONFIDENTIAL

 

     

     

    

 

Stock Purchase Agreement

 

This Stock Purchase Agreement (this “Agreement”)
is made and entered into as of July 27, 2016, by and among Derma Sciences, Inc., a corporation organized under the laws of the
state of Delaware (the “Company”), and the Investors listed on Schedule 1 (each, an “Investor”,
and collectively, the “Investors”).

 

WHEREAS, the Company desires to sell
to the Investors, and the Investors desire to purchase from the Company, a number of shares of the Company’s common stock,
par value $0.01 per share (the “Common Stock”), in the amounts listed on Schedule 1 (the
“Securities”), subject to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration
of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Investors, severally
and not jointly, hereby agree as follows:

 

1.             Definitions.
As used in this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings specified
or referred to in this Section 1:

 

“Affiliate” means,
when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified. For purposes of this definition, “control,”
when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise. The terms “controlling” and “controlled”
have meanings correlative to the foregoing.

 

“Court Order”
means any judgment, order, award or decree of any foreign, federal, state, local or other court or administrative or regulatory
body and any award in any arbitration proceeding.

 

“Encumbrance”
means any lien (statutory or other), encumbrance, claim, charge, security interest, mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale or other title retention agreement, preference, priority or other security agreement or preferential
arrangement of any kind or nature, and any easement, encroachment, covenant, restriction, right of way, defect in title or other
encumbrance of any kind.

 

“Governmental Body”
means any foreign, federal, state, local or other government, governmental, statutory or administrative authority or regulatory
body, self-regulatory organization or any court, tribunal or judicial or arbitral body.

 

“Person” means
any individual, partnership, corporation, limited liability company, association, joint venture, joint-stock company, trust, unincorporated
organization, Governmental Body or other entity.

 

    	 	1	 

     

    

  

“Prospectus” means
the prospectus included in, or pursuant to the rules and regulations of the Securities Act, deemed a part of, a Registration Statement,
including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including
a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration
Statement, and by all other amendments and supplements to such prospectus, and in each case including any document incorporated
by reference therein.

 

“Registrable Securities”
means any Securities issued pursuant to this Agreement; provided, however, that shares of Common Stock cease to be
Registrable Securities upon the earlier of (i) when a Registration Statement of the Company with respect to such Securities has
become effective under the Securities Act and such Securities have been disposed of pursuant to the Registration Statement, (ii)
when such Securities cease to be outstanding or (iii) on the first anniversary following the Closing Date or, if earlier, on the
date upon which all such Securities beneficially owned by the applicable Investor or its permitted transferees on such date first
becomes eligible for resale under Rule 144 promulgated under the Securities Act without regard to the volume or manner of sale
restrictions set forth therein.

 

“Registration Statement”
means any registration statement of the Company, including a Shelf Registration Statement, that covers any of the Registrable Securities
pursuant to the provisions of this Agreement and all amendments and supplements to any such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document
incorporated by reference therein.

 

“Requirements of Law”
means any applicable foreign, federal, state and local laws, statutes, regulations, rules, codes, ordinances, Court Orders and
requirements enacted, adopted, issued or promulgated by any Governmental Body or common law or any applicable consent decree or
settlement agreement entered into with any Governmental Body.

 

“SEC Reports”
means, collectively, all reports of the Company 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 twelve months preceding the date hereof.

 

“Shelf Registration Statement”
means a “shelf” registration statement of the Company that covers all or a portion of the Registrable Securities on
an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments
and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained
therein or deemed a part thereof, all exhibits thereto, and any documents incorporated by reference therein.

 

    	 	2	 

     

    

  

“Subsidiary” means
any corporation or other entity in which the Company owns or controls more than fifty percent (50%) of (i) the equity interests
or (ii) the voting power of the voting equity securities of any such corporation or other entity.

 

2.              Subscription.
Subject to the terms and conditions hereof, each Investor hereby irrevocably subscribes for the Securities set forth on Schedule
1 for the aggregate purchase price set forth on Schedule 1 (the aggregate purchase price of such Securities, the “Purchase
Price”), which is payable as described in Section 4. The obligations of each Investor hereunder are several
and not joint. Each Investor acknowledges that the Securities will be subject to restrictions on transfer as set forth in this
Agreement.

 

3.             Acceptance
of Subscription and Issuance of Securities. It is understood and agreed that the Company shall have the sole right, at
its complete discretion, to accept or reject any Investor subscription (each, a “Subscription” and collectively,
the “Subscriptions”), in whole or in part, for any reason and that the same shall be deemed to be accepted
by the Company only when this Agreement is signed by a duly authorized officer of the Company and delivered to such Investor. Subscriptions
need not be accepted in the order received, and the Securities may be allocated among subscribers. Notwithstanding anything in
this Agreement to the contrary, the Company shall have no obligation to issue any of the Securities to any Person who is a resident
of a jurisdiction in which the issuance of Securities to such Person would constitute a violation of the securities, “blue
sky” or other similar laws of such jurisdiction (collectively referred to as the “State Securities Laws”).

 

4.             Payment
and Settlement.

 

(a)          Signing. On or before 5:00 p.m.,
New York City time, on Wednesday, July 27, 2016, each Investor shall deliver to the Company a copy of this Agreement executed by
a duly authorized officer of such Investor. The Company shall indicate its acceptance of such Subscription by providing each Investor
with a countersigned copy of this Agreement on or before 11:59 p.m. New York City time on July 27, 2016 (such date, the “Signing
Date”).

 

(b)          Funding.
Upon satisfaction or waiver of all of the conditions to funding set forth in Sections 8 and 9, on or prior to
10:00 a.m., New York City time, on such date (the “Funding Time”), each Investor shall make payment for
its Subscription by wire transfer of immediately available funds or other means approved by the Company in the amount set forth
on Schedule 1 under the column “Aggregate Purchase Price to be Paid” (such amounts, individually, the “Funds”).

 

(c)          Closing.
Subject to the termination provisions set forth in Section 10, the closing of the transactions contemplated hereby (the
“Closing”) shall occur following the receipt of all Funds by the Company and the satisfaction or waiver
of all of the conditions set forth in Sections 8 and 9 (other than those conditions that by their nature are satisfied
at the Closing); or at such other time and date to be agreed between the Company and the Investors purchasing a majority of the
Securities (such date and time of delivery and payment for the Securities being herein called the “Closing Date”).

 

    	 	3	 

     

    

 

 (d)          Settlement.
At the Closing, to effect the purchase and sale of the Securities, (i) the Company shall have received the Funds by wire transfer
in immediately available U.S. federal funds to the account designated by the Company in writing in accordance with the terms of
this Agreement (such payment to constitute payment in full by each Non-Defaulting Investor (as defined below) for its Subscription),
(ii) the Company shall deliver, or cause to be delivered, to each Non-Defaulting Investor confirmation of recordation, in book-entry
form, of the Securities with the Company’s transfer agent, such recordation to include a notation, in the form set forth
in Section 7(g), that the Securities were sold in reliance upon an exemption from registration under the Securities Act
of 1933, as amended (the “Securities Act”), and (iii) the Company and each Investor shall deliver all
other documents and certificates as required by this Agreement.

 

(e)          Defaulting
Investor. If any Investor defaults in the payment of the applicable Purchase Price for such Investor’s Securities at
the Funding Time (including if such Investor is unable or unwilling to pay the Purchase Price, in which case such Investor (a “Defaulting
Investor”) shall notify the Company and the other Investors (each, a “Non-Defaulting Investor”)
within three (3) business days prior to the Funding Time), the Non-Defaulting Investors may make arrangements reasonably satisfactory
to the Company for the purchase of the Securities that were to be purchased by the Defaulting Investor by any of the Non-Defaulting
Investors or by any other Person reasonably acceptable to the Company; provided, that such arrangements and purchase by
any Non-Defaulting Investor or other Person shall in no way relieve such Defaulting Investor of any liability under this Agreement.
Notwithstanding anything to the contrary herein, the Company may proceed with the Closing with the Non-Defaulting Investors and/or
any other Person that, pursuant to the previous sentence, has agreed to purchase the Defaulting Investor(s) Subscriptions.

 

5.             Representations
and Warranties of the Company. The Company represents and warrants that:

 

(a)          Organization.
The Company and each of the Subsidiaries is duly incorporated or formed and validly existing and in good standing under the law
of its jurisdiction of incorporation or formation. The Company and each of the Subsidiaries is duly qualified and in good standing
as a foreign company in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires
it to be so qualified or licensed, except where the failure to be so qualified and in good standing would not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on the business, properties, financial condition, results
of operations, or prospects of the Company and its Subsidiaries, taken as a whole (a “Material Adverse Effect”).

 

    	 	4	 

     

    

 

(b)          Authorization.
The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder
in accordance with the terms hereof. The execution, delivery and performance of this Agreement by the Company have been duly authorized
by all necessary corporate action. This Agreement has been duly executed and delivered by the Company, and this Agreement constitutes
the legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting
the enforcement of creditors’ rights generally and by general equitable principles.

 

(c)          No
Violation; Consents and Approvals. The execution and delivery by the Company of this Agreement does not, and the consummation
by the Company of any of the transactions contemplated hereby and compliance by the Company with the terms, conditions and provisions
hereof (including the offer and sale of the Securities by the Company) will not:

 

(i)          conflict
with, violate, result (with the giving of notice or passage of time or both) in a breach of the terms, conditions or provisions
of, or constitute a default, an event of default or an event creating rights of acceleration, termination or cancellation or a
loss of rights under, or result in the creation or imposition of any Encumbrance upon any of the material assets or properties
of the Company or any Subsidiary under (A) the articles of incorporation or certificate of formation or the by-laws or limited
liability company agreement, each as applicable, of the Company or any Subsidiary, (B) any note, instrument, agreement, contract,
mortgage, lease, license, franchise, guarantee, permit or other authorization, right, restriction or obligation to which the Company
or any Subsidiary is a party or any of their respective assets or properties is subject or by which the Company or any Subsidiary
is bound, (C) any Court Order to which the Company or any Subsidiary is a party or any of their respective assets or properties
is subject or by which the Company or any Subsidiary is bound, or (D) any Requirements of Law applicable to the Company or any
Subsidiary or any of their respective assets or properties; or

 

(ii)         require
the approval, consent, authorization or act of, or the making by the Company or any Subsidiary of any declaration, filing or registration
with, any Person, including under the Securities Act or State Securities Laws, except for the applicable reporting requirements
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the filing of
a notice of an exempt offering on Form D for the transactions contemplated by this Agreement, as applicable and filings that may
be required by the rules and regulations of the NASDAQ Stock Market LLC.

 

(d)          Compliance
with Laws.

 

(i)          The
Company and each of the Subsidiaries is in material compliance with all laws and regulatory requirements to which it is subject,
including U.S. sanctions laws and the Foreign Corrupt Practices Act, 15 U.S.C. §78 et seq., as it may be amended from time
to time, except for such non-compliance that could not reasonably be expected to have a Material Adverse Effect.

 

(ii)         The
Company shall not directly or, to the best of the Company’s knowledge, indirectly, use the proceeds of the sale of the Securities
to be issued pursuant to this Agreement, or lend, contribute or otherwise make available such proceeds directly or, to the best
of the Company’s knowledge (after due and careful inquiry), indirectly, to any subsidiary, joint venture partner or other
person in any manner or for any purpose prohibited by U.S. economic or trade sanctions.

 

    	 	5	 

     

    

  

(e)          Private
Offering. No form of general solicitation or general advertising was used by the Company, or to the knowledge of the Company,
its authorized representatives, in connection with the offer or sale of the Securities to be issued under this Agreement. Assuming
the accuracy of the representations and warranties of the Investors contained in Section 6, the issuance and sale of the
Securities pursuant to this Agreement is exempt from the registration requirements of the Securities Act, and neither the Company
nor, to the knowledge of the Company, any authorized representative acting on its behalf has taken or will take any action hereafter
that would cause the loss of such exemption. The Company agrees that neither it, nor, anyone authorized to act on its behalf, shall
offer to sell the Securities to be issued under this Agreement or any other securities of the Company so as to require the registration
of the Securities being offered hereby pursuant to the provisions of the Securities Act or any State Securities Laws or “blue
sky” laws, unless the offer and sale of the Securities to be issued under this Agreement or such other securities is so registered.
Neither the Company nor to its knowledge any Affiliate of the Company, directly or indirectly through any agent, sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of any security that is or will be integrated with the sale
of the Securities in a manner that would require registration of the Securities under the Securities Act.

 

(f)          Disclosure.
The Company is in compliance with its reporting requirements under Section 13 of the Exchange Act. The SEC Reports, when filed
with the SEC (or in the case of registration statements, solely on the dates of effectiveness) (except to the extent corrected
by a subsequent SEC Report), conformed in all material respects to the requirements of the Exchange Act or the Securities Act,
as the case may be, and did not contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. There are no unresolved comment letters from the SEC in respect of any SEC Report. Except with respect to the material
terms and conditions of the transactions contemplated hereby, and the anticipated use of proceeds from the sale of the Securities,
which shall be publicly disclosed by the Company pursuant to the Exchange Act, the Company confirms that neither it nor any person
acting on its behalf has provided any Investor with any other information that the Company believes constitutes material, non-public
information. The Company understands that the Investors will rely on the foregoing representations in effecting transactions in
the securities of the Company.

 

(g)          Financial
Statements. The historical audited consolidated financial statements included in the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2015 (the “Audited Financial Statements”) and the historical
unaudited consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the period ended
March 31, 2016 (the “Interim Financial Statements” and, together with the Audited Financial Statements,
the “Financial Statements”), present fairly in all material respects the financial position of the Company
and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and
such financial statements have been prepared in all material respects in conformity with the generally accepted accounting principles
in the United States (“GAAP”) applied on a consistent basis for the periods shown.

 

    	 	6	 

     

    

  

(h)          Absence
of Changes. Since March 31, 2016 through the date hereof, there have been no events that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.

 

6.              Representations
and Warranties of the Investors. As an inducement to the Company to enter into this Agreement and to consummate the transactions
contemplated hereby, each Investor, severally and not jointly, represents and warrants as follows:

 

(a)          Organization.
Such Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

 

(b)          Authorization.
Such Investor has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder in accordance
with the terms hereof. This Agreement has been, and at or prior to the Closing will have been, duly executed and delivered by such
Investor, and constitutes the legal, valid and binding obligation of such Investor, enforceable against such Investor in accordance
with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting the enforcement of creditors’ rights generally and by general equitable
principles.

 

(c)          No
Consents Required. No approval, authorization, consent or order of or filing with any federal, state, local or foreign government
or regulatory commission, board, body, authority or agency, or of or with any self-regulatory organization or other non-governmental
regulatory authority (including any national securities exchange), is required in connection with the execution, delivery and performance
of this Agreement by such Investor or the consummation by such Investor of the transactions contemplated hereby, except for such
approvals, authorizations, consents, orders or filings that have been obtained or made and are in full force and effect.

 

(d)          No
Violation. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated
hereby will not conflict with, result in any breach or violation of or constitute a default under (or constitute any event which
with notice, lapse of time or both would result in any breach or violation of or constitute a default under or give the holder
of any indebtedness (or a Person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment
of all or a part of such indebtedness under) (or result in the termination of, or in the creation or imposition of a lien, charge
or Encumbrance on any property or assets of such Investor pursuant to) (i) the organizational or other governing documents of such
Investor, (ii) any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which such Investor is a party or by which such Investor or any of
its properties may be bound or affected, (iii) any federal, state, local or foreign law, regulation or rule, (iv) any rule or regulation
of any self-regulatory organization or other non-governmental regulatory authority (including any national securities exchange)
or (v) any Court Order applicable to such Investor or any of its properties, except in the case of the foregoing clauses (ii),
(iii), (iv) and (v) as would not individually or in the aggregate, materially and adversely affect such Investor’s ability
to perform its obligations under this Agreement or consummate the transactions contemplated herein on a timely basis.

 

    	 	7	 

     

    

  

(e)           Financial
Capability. At the Funding Time, the Investor will have available funds necessary to consummate the Closing on the terms and
conditions contemplated by this Agreement.

 

(f)            Accredited
Investor and Qualified Institutional Buyer.

 

(i)          Such
Investor is acquiring the Securities to be issued under this Agreement to such Investor for its own account, not as nominee or
agent, with the present intention of holding such securities for purposes of investment, and not with the view to the public resale
or distribution of any part thereof, and such Investor has no present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the U.S. federal securities laws or any applicable State Securities Laws or “blue sky”
laws. Such Investor is purchasing and holding any purchased Securities for its own account and is not party to any co-investment,
joint venture, partnership or other understandings or arrangements with any other party relating to the Securities or any other
transactions contemplated hereunder.

 

(ii)         Such
Investor is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act
or a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act or, in the case of an
Investor that is a non-U.S. Investor, is an entity acting on its own account that in the aggregate owns and invests on a discretionary
basis at least $100 million of securities of issuers that are not affiliated with such Investor.

 

(iii)        Such
Investor acknowledges that it has completed the Investor Questionnaire contained in Appendix A and that the information
contained therein is complete and accurate as of the date thereof and is hereby affirmed as of each of the Signing Date and the
Closing Date. Any information that has been furnished or that will be furnished by such Investor to evidence its status as an accredited
investor is accurate and complete, and does not contain any misrepresentation or material omission.

 

(iv)        Such
Investor has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Company, and has so evaluated the merits and risks of such investment,
and understands that it may be required to bear the risks thereof. Such Investor has previously invested in securities similar
to the Securities and fully understands the limitations on transfer and restrictions on sales of the Securities. Such Investor
represents that it is able to bear the economic risk of its investment in the Securities and is able to afford the complete loss
of any such investment.

 

    	 	8	 

     

    

  

(v)         Such
Investor has conducted its own independent evaluation, made its own analysis and consulted with advisors as it has deemed necessary,
prudent, or advisable in order for such Investor to make its own determination and decision to enter into the transactions contemplated
by this Agreement and to execute and deliver this Agreement.

 

(vi)        Such
Investor is familiar with the business and financial condition and operations of the Company. Such Investor has adequate information
concerning the Company and the Securities to enable it to evaluate the transactions contemplated by this Agreement and to make
an informed investment decision concerning the Securities, and such Investor has had the opportunity to discuss such information
with a representative of the Company and to obtain and review information reasonably requested by such Investor.

 

(vii)       Such
Investor 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, to such Investor’s knowledge, any other general solicitation or general advertisement. Neither such Investor nor its
Affiliates or any person acting on its or any of their behalf has engaged, or will engage, in any form of general solicitation
or general advertising (within the meaning of Rule 502(c) under the Securities Act) in connection with the offering of the Securities.

 

(g)          No
Broker’s Fees. No brokerage or finder’s fees or commissions are or will be payable by such Investor or any of its
Affiliates or subsidiaries (if applicable) to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the issuance of the Securities, and such Investor has not taken any action that could
cause the Company to be liable for any such fees or commissions. The Investor is not a broker-dealer registered with the SEC under
the Exchange Act or an entity engaged in a business that would require it to be so registered.

 

(h)          Compliance
with Law. Such Investor will comply with all applicable laws and regulations in effect in any jurisdiction in which such Investor
purchases or sells Securities and obtain any consent, approval or permission required for such purchases or sales under the laws
and regulations of any jurisdiction to which such Investor is subject or in which the Investor makes such purchases or sales, and
the Company shall have no responsibility therefor.

 

(i)          Advisors.
Such Investor acknowledges that, prior to entering into this Agreement, it was advised by Persons deemed appropriate by the Investor
concerning this Agreement and the transactions contemplated hereunder and conducted its own due diligence investigation and made
its own investment decision with respect to this Agreement, the transactions contemplated hereunder and the purchase of the Securities.

 

    	 	9	 

     

    

  

(j)          Arm’s
Length Transaction. Such Investor is acting solely in the capacity of an arm’s length contractual counterparty to the
Company with respect to the transactions contemplated hereby. Additionally, without derogating from or limiting the representations
and warranties of the Company, the Investor (i) is not relying on the Company for any legal, tax, investment, accounting or regulatory
advice; (ii) has consulted with its own advisors concerning such matters; and (iii) shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby.

 

(k)          No
Further Reliance. Such Investor acknowledges that it is not relying upon any representation or warranty made by the Company
that is not set forth in this Agreement. Such Investor confirms that the Company has not (i) given any guarantee or representation
as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an
investment in the Securities or (ii) made any representation to such Investor regarding the legality of an investment in the Securities
under applicable legal investment or similar laws or regulations. Such Investor confirms that (x) it has conducted a review and
analysis of the business, assets, condition, operations and prospects of the Company and its Subsidiaries, and the terms of the
Securities, and has access to such financial and other information regarding the Company, in each case that such Investor considers
sufficient for purposes of the purchase of the Securities; (y) at a reasonable time prior to its purchase of the Securities, it
had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of
the Securities and to obtain additional information necessary to verify any information furnished to such Investor or to which
such Investor had access; and (z) it has not received any offering memorandum or offering document in connection with the offering
of the Securities. Such Investor acknowledges that the Company has the right in its sole and absolute discretion to abandon this
private placement at any time prior to the Signing Date.

 

(l)          Private
Placement. Such Investor understands and acknowledges that:

 

(i)          The
Securities that it is acquiring under this Agreement are being sold pursuant to an exemption from registration under the Securities
Act, including (but not limited to) Regulation D promulgated thereunder.

 

(ii)         Its
representations and warranties contained herein are being relied upon by the Company as a basis for such exemption under the Securities
Act and under the securities laws of various other foreign and domestic jurisdictions. Such Investor further understands that,
unless it notifies the Company in writing to the contrary at or before the Closing Date, each of such Investor’s representations
and warranties contained in this Agreement will be deemed to have been automatically (and without any further action of the Investor)
reaffirmed and confirmed as of the Closing Date, as applicable, taking into account all information received by the Investor.

 

    	 	10	 

     

    

  

(iii)        No
U.S. state or federal agency or any other securities regulator of any state or country has passed upon the merits or risks of an
investment in the Securities or made any finding or determination as to the fairness of the terms of the offering of the Securities
or any recommendation or endorsement thereof.

 

(iv)        The
Securities are “restricted securities” under applicable federal securities laws and that the Securities Act and the
rules of the SEC provide in substance that the Investor may dispose of the Securities only pursuant to an effective registration
statement under the Securities Act or an exemption therefrom, and the Investor understands that the Company has no obligation,
other than as disclosed in the SEC Reports, or intention to register any of the Securities, or to take action so as to permit sales
pursuant to the Securities Act (including Rule 144 thereunder). Accordingly, the Investor understands that under the SEC’s
rules, the Investor may dispose of the Securities principally only in “private placements” that are exempt from registration
under the Securities Act, in which event the transferee will acquire “restricted securities” subject to the same limitations
as in the hands of the Investor. Consequently, the Investor understands that the Investor must bear the economic risks of the investment
in the Securities for an indefinite period of time. The Investor will not sell, assign, pledge, give, transfer or otherwise dispose
of the Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration
of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the
registration provisions of the Securities Act and all applicable State Securities Laws. Such Investor understands that that the
recordation of the Securities in book-entry form will include a legend substantially in the form indicated in Section 7
(which such Investor has read and understands), and that the Company and its Affiliates shall not be required to give effect to
any purported transfer of such Securities except upon compliance with the foregoing restrictions.

 

(m)          No
ERISA Plans.  Either (i) such Investor is not purchasing or holding Securities (or any interest in Securities) with the
assets of (A) an employee benefit plan that is subject to Title I of ERISA, (B) a plan, individual retirement account or other
arrangement that is subject to Section 4975 of the Code, (C) an entity whose underlying assets are considered to include “plan
assets” of any of the foregoing by reason of such plan’s, account’s or arrangement’s investment in such
entity, or (D) a governmental, church, non-U.S. or other plan that is subject to any similar laws; or (ii) the purchase and holding
of such Securities by such Investor, throughout the period that it holds such Securities, and the disposition of such Securities
or an interest therein will not constitute (x) a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code, (y) a breach of fiduciary duty under ERISA or (z) a similar violation under any applicable similar laws.

 

7.            Additional
Agreements.

 

(a)          Conduct
Prior to Closing. From and after the Signing Date until the earlier of the Closing Date and the date on which this Agreement
is terminated, the Company covenants and agrees as to itself and its Subsidiaries not to take any action that is intended or would
reasonably be expected to result in any condition in Sections 8 and 9 not being satisfied. Each Investor hereby covenants
and agrees to notify the Company upon the occurrence of any event prior to the Closing Date which would cause any representation,
warranty, or covenant of the Investors contained in this Agreement to be false or incorrect.

 

    	 	11	 

     

    

  

(b)          Use
of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities for working capital to support
future operations and potential targeted business development initiatives.

 

(c)          Existence
and Compliance. The Company and each Subsidiary will maintain their respective existence, good standing and qualification to
do business where required and comply with all agreements, instruments, judgments, laws, regulations and governmental requirements,
applicable to them or to any of their respective properties, business operations and transactions, except for such non-compliance
with this Section 7 that could not reasonably be expected to have a Material Adverse Effect, and provided that nothing in
this Section 7 shall prevent the merger of a Subsidiary into the Company or another Subsidiary.

 

(d)          Short
Selling Acknowledgement and Agreement. Each Investor understands and acknowledges, severally and not jointly with any other
Investor, that the SEC currently takes the position that coverage of Short Sales of securities “against the box” prior
to the effective date of a registration statement is a violation of Section 5 of the Securities Act and of Securities Act Compliance
Disclosure Interpretation 239.10. Each Investor agrees, severally and not jointly that it will abide by such interpretation and
will not engage in any Short Sales that result in the disposition of the Securities acquired hereunder by such Investor until such
time as a resale registration statement is declared or deemed effective by the SEC or such Securities are no longer subject to
any restrictions on resale. “Short Sales” means all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and forward sale contracts, options, puts,
calls, short sales, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements,
and sales and other transactions through non-U.S. broker dealers or foreign regulated brokers.

 

(e)          Legend.
The book-entry account maintained by the transfer agent evidencing ownership of the Securities sold pursuant to this Agreement
will bear the following restrictive legend in substantially the following form:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT,
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), OR (2)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.”

 

    	 	12	 

     

    

  

8.             Conditions
to Obligations of the Company. The obligations of the Company to sell and issue the Securities being sold and issued by
it to any Investor on the Closing Date is subject to the fulfillment on or before the Closing Date, of the following conditions,
any of which may be waived (in whole or in part) by the Company in its sole discretion:

 

(a)          Closing
of the BioD Merger. The Company’s purchase of all of the issued and outstanding equity interests of BioD, LLC, a Delaware
limited liability company (“BioD”), pursuant to that certain Agreement and Plan of Merger, dated as of July
27, 2016, between the Company, DP Merger Sub LLC, BioD, Cynthia Weatherly, and BD Acquisition Group, LLC (the “Merger
Agreement”), shall have been completed in accordance with and pursuant to the terms of the Merger Agreement, including,
specifically, Article VI thereof.

 

(b)          No
Injunction. No Governmental Body nor any other Person shall have issued an order, injunction, judgment, decree, ruling or assessment
which shall then be in effect restraining or prohibiting the completion of the transactions contemplated by this Agreement, nor
to the Company’s knowledge, shall any such order, injunction, judgment, decree, ruling or assessment be threatened or pending.

 

(c)          Securities
Law Compliance. The offer and sale of the Securities to the Investors pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act and the registration and/or qualification requirements of all applicable State Securities Laws.

 

(d)          Purchase
Price Paid. Such Investor shall have paid the Purchase Price to the Company in the amount set forth on Schedule 1 on
the Funding Time.

 

(e)          
Covenants and Agreements. Such Investor shall have performed and complied with the covenants and agreements required to
be performed or complied with by such Investor hereunder on or prior to the Closing Date.

 

(f)          Representations
and Warranties. The representations and the warranties of such Investor contained in this Agreement shall be true and correct
as of the Signing Date and the Closing Date, with the same effect as though such representations and warranties had been made on
and as of such date.

 

9.             Conditions
to Obligations of the Investors. The obligation of each Investor to pay the Company the Purchase Price in respect of the
Securities to be issued under this Agreement to such Investor in accordance with Schedule 1 is subject to the fulfillment
to the reasonable satisfaction of, or, to the extent permitted by law, waiver by, such Investor prior to the Closing Date, as the
case may be, each of the following conditions:

 

    	 	13	 

     

    

  

(a)          Closing
of the BioD Merger. The Company’s purchase of all of the issued and outstanding equity interests of BioD, pursuant to
the Merger Agreement, shall have been completed in accordance with and pursuant to the terms of the Merger Agreement, including,
specifically, Article VI thereof.

 

(b)          Covenants
and Agreements. The Company shall have performed and complied in all material respects with the covenants and agreements required
to be performed or complied with by it hereunder.

 

(c)          Legal
Opinions. On the Closing Date, the Investors shall have received an opinion from in-house counsel to the Company reasonably
acceptable to the Investors.

 

(d)          Officer’s
Certificate. The Investors shall have received a customary officer’s certificate, signed by an authorized officer of
the Company, in a form reasonably satisfactory to the Investors.

 

(e)          Secretary’s
Certificate. The Investors shall have received a customary secretary’s certificate, in a form reasonably satisfactory
to the Investors.

 

(f)          No
Injunction. No Governmental Body or any other Person shall have issued an order, injunction, judgment, decree, ruling or assessment
which shall then be in effect restraining or prohibiting the completion of the transactions contemplated by this Agreement, nor
to the Investor’s knowledge, shall any such order, injunction, judgment, decree, ruling or assessment be threatened or pending.

 

(g)          Representations
and Warranties. The representations and the warranties of the Company contained in this Agreement shall be true and correct
in all material respects, except with respect to provisions including the terms “material,” “Material Adverse
Effect” or words of similar import and except with respect to materiality, as reflected under GAAP, in the representations
and warranties contained in Section 5(g) relating to the financial statements, with respect to which such representations
and warranties shall be true and correct at and as of the applicable date, with the same effect as though such representations
and warranties had been made on and as of such date, except that representations and warranties made as of a specified date need
be true and correct only as of that date.

 

(h)          No
Material Adverse Effect. No Material Adverse Effect shall have occurred since the Signing Date.

 

10.           Termination.

 

(a)          Termination
and Effects. This Agreement may be terminated on an Investor-by-Investor basis by mutual consent between the Company and such
Investor evidenced in writing, provided that the party seeking to terminate this Agreement pursuant to this Section 10
shall not have breached in any material respects its representations, warranties or covenants set forth in this Agreement. If this
Agreement is terminated by either the Company or an Investor pursuant to the provisions of this Section 10, this Agreement
with respect to the Company and such Investor shall forthwith become void and there shall be no further obligations on the part
of the Company or such Investor or their respective stockholders, directors, officers, employees, agents or representatives, except
for the provisions of Section 13, which shall survive any termination of this Agreement; provided, however,
that nothing in this Section 10 shall relieve any party from liability for any breach of any representation, warranty, covenant,
or agreement under this Agreement prior to such termination or for any willful breach of this Agreement.

 

    	 	14	 

     

    

  

(b)          Extension;
Waiver. At any time prior to any applicable compliance time (including the termination provisions set forth herein) the Company
and any Investor may (a) extend the time for the performance of any of the obligations or other acts of the Company or such Investor,
respectively, (b) waive any inaccuracies in the representations and warranties contained herein and (c) waive compliance with any
of the agreements or conditions herein. Any agreement on the part of an Investor to any such extension or waiver shall be valid
if set forth in an instrument in writing signed on behalf of such Investor and the Company and shall be deemed to modify the terms
and conditions of this Agreement as between such Investor and the Company.

 

11.          Registration
Rights. 

 

(a)          Shelf
Registration Statement.

 

(i)          Following
the Closing Date, the Company shall as promptly as reasonably practicable, prepare, and not later than the eightieth
(80th) calendar day following the Closing Date (the “Filing Deadline”), file with the SEC a
Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Investors from time to time
in accordance with the methods of distribution elected by such Investors and set forth in such Shelf Registration Statement
and, thereafter, shall use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective
under the Securities Act as promptly as reasonably practicable after the filing thereof, but in no event later than the one
hundred and tenth (110th) calendar day following the Filing Deadline (the “Effectiveness
Deadline”).

 

(ii)         So
long as there continue to be Registrable Securities, the Company shall use commercially reasonable efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus forming a part thereof to be lawfully delivered by the Investors.
Notwithstanding the foregoing, there may be periods of time in which the use of the Shelf Registration Statement may be restricted
due to applicable law, including the Securities Act. Upon the occurrence of any such restriction, the Company shall give notice
to the Investors of such restriction (using the electronic notice information provided pursuant to this Agreement), and the Investors
shall not utilize the Shelf Registration Statement until notified by the Company that its use is again permitted.

 

(iii)        Notwithstanding
any provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related Prospectus
and any amendment or supplement thereto, as of the date on which the SEC declares the Shelf Registration Statement effective, (A)
to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the
SEC and (B) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

 

    	 	15	 

     

    

  

(b)          Registration
Procedures. Subject to the provisions of Sections 11(a) hereof, in connection with the registration of the sale of Registrable
Securities hereunder, the Company will as promptly as reasonably practicable:

 

(i)          furnish
to the Investors holding Registrable Securities, if requested, prior to the filing of the applicable Registration Statement, copies
of such applicable Registration Statement as is proposed to be filed, and thereafter such number of copies of such applicable Registration
Statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference
therein), the Prospectus, any and all transmittal letters or other correspondence with the SEC relating to the applicable Registration
Statement and such other documents as the Investors may reasonably request from time to time in order to facilitate the disposition
of the Registrable Securities;

 

(ii)         notify
each Investor, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the Prospectus contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading, and the Company will prepare a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of the Registrable Securities, such Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;

 

(iii)        use
commercially reasonable efforts to take such actions as are reasonably required in order to expedite or facilitate the disposition
of the Registrable Securities;

 

(iv)        otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC, and make generally available
to its security holders, within the required time period, an earnings statement covering a period of twelve months, beginning with
the first fiscal quarter after the effective date of the applicable Registration Statement (as the term “effective date”
is defined in Rule 158(c) under the Securities Act), which earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder or any successor provisions thereto; and

 

    	 	16	 

     

    

  

(v)         use
commercially reasonable efforts to cause all Registrable Securities to be listed or quoted on the exchange or automated quotation
system on which similar securities issued by the Company are listed quoted.

 

12.          Lock-up
Agreement. Each Investor shall not, directly or indirectly, transfer any Securities for the period beginning on the Closing
Date and ending on the date that is forty-five (45) days from the Closing Date. Any transfer or attempted transfer of any of the
Securities in violation of this Section 12 shall, to the fullest extent permitted by law, be null and void ab initio, and
the Company shall not, and shall instruct its transfer agent and other third parties not to, record or recognize any such purported
transfer on the share register of the Company.

 

13.          Fees
and Expenses. 

 

(a)          Expenses
and Reimbursement. On the Closing Date, and following the completion of the Closing, the Company shall reimburse the Investors
for their reasonable out-of-pocket expenses (including, but not limited to, the reasonable and documented fees and disbursements
of one counsel on behalf of the Investors) incurred in connection with the transactions contemplated hereby, in an amount not to
exceed $15,000.00; provided, however, that the Company shall not be liable for any fees or disbursements of more
than one counsel for the Investors, other than local counsel. The Company shall pay all delivery expenses and stamp, transfer,
issue, documentary and similar taxes, assessments and charges levied under the laws of any applicable jurisdiction in connection
with the issuance of the Securities. Each Investor shall be responsible for its own fees and expenses.

 

(b)          Registration
Expenses. All fees and expenses incident to the Company’s performance of or compliance with the registration obligations
provided in Section 11, including all fees and expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses of the Company, any registration or filing feds payable under any Federal or state securities or
blue sky laws, the feds and expenses incurred in connection with any listing or quoting of the securities to be registered on any
national securities exchange or automated quotation system, fees and disbursements of counsel for the Company and its independent
certified public accountants (including the expenses of any comfort letters required by or incident to such performance) and the
fees and expenses of other Persons retained by the Company, will be borne by Company. Any Investor registering Registrable Securities
will bear and pay any underwriting and placement discounts and commissions, agency and placement fees and brokers’ commissions
applicable to securities offered for its or its affiliates’ account and transfer taxes, if any, relating the sale or disposition
of such securities.

 

    	 	17	 

     

    

  

14.          Indemnification.

 

(a)          Company
Indemnity.

 

(i)          The
Company will indemnify and hold harmless each Investor, each of its officers, directors, agents and partners, and each person controlling
each of the foregoing, within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder with respect
to which registration, qualification or compliance has been effected pursuant to this Agreement, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus (including any related registration statement) incident to any such registration, qualification
or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances under which they were made, or any violation
by the Company of the Securities Act or any state securities law or in either case, any rule or regulation thereunder applicable
to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification
or compliance, and will reimburse each Investor, each of its officers, directors, agents and partners, and each person controlling
each of the foregoing, for any legal and any other expenses reasonably incurred in connection with investigating and defending
any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to an Investor
to the extent that any such claim, loss, damage, liability or expense arises out of or is based (A) on any untrue statement or
omission based upon written information furnished to the Company by an Investor therefore, (B) the failure of an Investor to deliver
at or prior to the written confirmation of sale, the most recent prospectus, as amended or supplemented, or (C) the failure of
an Investor otherwise to comply with this Agreement. The indemnity agreement contained in this Section 14(a)(i) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent will not be unreasonably withheld).

 

(ii)         Investor
Indemnity. Each Investor will, severally and not jointly, if Registrable Securities held by it are included in the securities
as to which such registration, qualification or compliance is being effected, indemnify and hold harmless the Company, each of
its directors, officers, agents and partners, each person who controls the Company within the meaning of Section 15 of the Securities
Act and the rules and regulations thereunder, each other Investor (if any), and each of their officers, directors and partners,
and each person controlling such other Investor(s) against all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make a statement therein not misleading in light of the circumstances under which
they were made, and will reimburse the Company and such other Investor(s) and their directors, officers and partners or control
persons for any legal or any other expenses reasonably incurred in connection with investigating and defending any such claim,
loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration statement or prospectus in reliance upon and in conformity
with written information furnished to the Company by such Investor and stated to be specifically for use therein, and provided
that the maximum amount for which such Investor shall be liable under this indemnity shall not exceed the net proceeds received
by such Investor from the sale of the Registrable Securities pursuant to the registration statement in question. The indemnity
agreement contained in this Section 14(a)(ii) shall not apply to amounts paid in settlement of any such claims, losses,
damages or liabilities if such settlement is effected without the consent of such Investor (which consent shall not be unreasonably
withheld).

 

    	 	18	 

     

    

  

(iii)        Procedure.
Each party entitled to indemnification under this Section 14 (the “Indemnified Party”) shall give
notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party
to assume the defense of any such claim in any litigation resulting therefrom, provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at its own expense, and
provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying
Party of its obligations under this Section 14 except to the extent that the Indemnifying Party is materially and adversely
affected by such failure to provide notice. No Indemnifying Party, in the defense of any such claim or litigation, shall, except
with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Each Indemnified Party shall furnish such non-privileged information regarding itself or
the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection
with the defense of such claim and litigation resulting therefrom.

 

(b)          Contribution.

 

(i)          If
the indemnification provided for in Section 14 herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of the exceptions provided therein), then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages or liabilities as between the Company on the one hand and any Investor on the other,
in such proportion as is appropriate to reflect the relative fault of the Company and of such Investor in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand and of any Investor on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Investor.

 

(ii)          In no event shall the obligation
of any Indemnifying Party to contribute under this Section 13(b) exceed the amount that such Indemnifying Party would
have been obligated to pay by way of indemnification if the indemnification provided for under Section 14(a) hereof
had been available under the circumstances.

 

    	 	19	 

     

    

  

(iii)        The
Company and the Investors agree that it would not be just and equitable if contribution pursuant to this Section 14 were
determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraphs. The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding paragraphs shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this section, no Investor shall be required to contribute
any amount in excess of the amount by which the net proceeds received by such Investor from the sale of Registrable Securities
pursuant to the registration statement in question. No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

(c)           Survival.
The indemnity and contribution agreements contained in Section 14 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Indemnified Party or by or on behalf
of the Company, and (iii) the consummation of the sale or successive resales of the Registrable Securities.

 

(d)           Information
by Investors. Each Investor shall promptly furnish to the Company such information regarding such Investor and the distribution
and/or sale proposed by such Investor as the Company may from time to time reasonably request in writing in connection with any
registration, filing qualification or compliance referred to in this Agreement, and the Company may exclude from such registration
the Registrable Securities of any Investor who unreasonably fails to furnish such information within a reasonable time after receiving
such request. The intended method or methods of disposition and/or sale of such securities as so provided by such purchaser shall
be included without alteration in the Registration Statement covering the Registrable Securities and shall not be changed without
written consent of such Investor. Each Investor agrees that, other than ordinary course brokerage arrangements, in the event it
enters into any arrangement with a broker dealer for the sale of any Registrable Securities through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or dealer, such Investor shall promptly deliver to the
Company in writing all applicable information required in order for the Company to be able to timely file a supplement to the Prospectus
pursuant to Rule 424(b), or take any other action, under the Securities Act, to the extent that such supplement or other action
is legally required. Such information shall include a description of (i) the name of such Investor and of the participating broker
dealer(s), (ii) the number of Registrable Securities involved, (iii) the price at which such Registrable Securities were or are
to be sold, and (iv) the commissions paid or to be paid or discounts or concessions allowed or to be allowed to such broker dealer(s),
where applicable.

    	 	20	 

     

    

 

15.          Miscellaneous.

 

(a)           Survival
of Obligations. All representations, warranties, covenants, agreements and obligations contained in this Agreement shall survive
(i) the acceptance of the Subscriptions by the Company and the Closing and (ii) the death or disability of any of the Investors.

 

(b)           Notices.
All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered
(i) when delivered personally, (ii) when delivered by electronic mail (so long as notification of a failure to deliver such electronic
mail is not received by the sending party), (iii) if transmitted by facsimile when confirmation of transmission is received by
the sending party, (iv) if sent by registered or certified mail, postage prepaid, return receipt requested, on the third business
day after mailing or (v) if sent by reputable overnight courier when received; and shall be addressed to each Investor as set forth
on its respective signature pages and if to the Company as follows:

 

	If to the Company:	
        Derma Sciences Inc.

        214 Carnegie Center, Suite 300

        Princeton, New Jersey 08540

        Attention: Stephen T. Wills

        Facsimile: 609.514.8554

        Email: swills@dermasciences.com

	 	 
	with a copy to:	
        Thompson Hine LLP

        335 Madison Ave

        New York, New York 10017

        Attention: Todd Mason

        Facsimile: 212.344.6101

        Email: todd.mason@thompsonhine.com

	 	 
	If to the Investors: 	To the address specified on Schedule 1, or at such other address or addresses as may have been furnished to the Company in writing in accordance with this Agreement. 

 

Any party hereto may, from time to time,
change its address, facsimile number, e-mail address or other information for the purpose of notices to that such party by giving
notice specifying such change to the other parties hereto.

 

(c)           Execution
in Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument, and shall become binding when one or more
counterparts have been signed by and delivered to each of the parties hereto.

 

    	 	21	 

     

    

 

 

(d)           Amendments.
Except as contemplated by Section 10(b), this Agreement shall not be amended, modified or supplemented prior to the Closing
except by a written instrument signed by all the parties hereto.

 

(e)           Waiver.
Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the party entitled to
the benefit thereof. Any such waiver shall be validly and sufficiently authorized for the purposes of this Agreement if, as to
any party, it is in writing signed by an authorized representative of such party. The failure or delay of any party to enforce
at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.

 

(f)           Severability.
Wherever possible, each provision hereof shall be interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability
without invalidating the remainder of such invalid, illegal or unenforceable provision or provisions or any other provisions hereof,
unless such a construction would be unreasonable.

 

(g)           Assignment;
Successors and Assigns. Neither this Agreement nor any of the rights and obligations of any party hereunder may be assigned,
delegated or otherwise transferred by such party without the prior written consent of each other party; provided, that any
Investor may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to any of
its Affiliates or to any transferee of the Securities following the Closing. No such assignment, delegation or other transfer shall
relieve the assignor of any of its obligations or liabilities hereunder. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective successors and permitted assigns.

 

(h)           No
Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon
any third Person, other than the parties and their respective successors and assigns permitted by Section 15(g), any right,
remedy or claim under or by reason of this Agreement.

 

(i)           Governing
Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of New Jersey without
regard to its conflict of laws principles.

 

    	 	22	 

     

    

 

(j)          Submission
to Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to
the non-exclusive jurisdiction of the Supreme Court of the State of New Jersey sitting in Mercer County and of the United States
District Court of the District of New Jersey, and any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in the State
of New Jersey or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this Agreement shall affect any right that any Investor may otherwise have to bring any
action or proceeding relating to this Agreement against the Company and its subsidiaries or their respective properties in the
courts of any jurisdiction or any right that the Company may otherwise have to bring any action or proceeding relating to this
Agreement against any Investor or its properties in the courts of any jurisdiction. Each party hereto irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such proceeding
brought in such a court referred to in the first sentence of this Section 15(j) and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.

 

(k)          Waiver
of Jury Trial. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY (i) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

(l)          Public
Announcements. No Investor shall make any public announcements or otherwise communicate with the news media with respect to
this Agreement or the transactions contemplated hereby without the prior written consent of the Company. Notwithstanding the forgoing,
any Investor may make or cause to be made any press release or similar public announcement or communication as may be required
to comply with (i) the requirements of applicable law, including the Exchange Act or (ii) its disclosure obligations or practices
with respect to its investors; provided that prior to making any such disclosure under this clause (ii), such Investor shall
provide a copy of such proposed disclosure to the Company and shall only publicly make such disclosure with the consent of the
Company, which consent shall not be unreasonably withheld or delayed, if the Company has not previously made a public announcement
of the transactions contemplated hereby. For the avoidance of doubt, the Company may issue any such press release or make any such
announcement as may be required by law or the applicable rules or regulations of the NASDAQ Stock Market LLC.

 

    	 	23	 

     

    

 

(m)         Right
to Conduct Activities.  The Company and each Investor acknowledge that some or all of the Investors are professional
investors, and as such invest in numerous portfolio companies, some of which may be competitive with the Company’s business.
No Investor shall be liable to the Company or to another Investor for any claim arising out of, or based upon, (i) the investment
by the Investor or any Affiliate of the Investor in any entity competitive to the Company or (ii) actions taken by the Investor
or any Affiliate of the Investor to assist any such competitive company, whether or not such action was taken as a board member
of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company, so long as such
Investor or such Affiliate does not use or permit the use of confidential or proprietary information of the Company or of its affiliates.

 

(n)         Entire
Agreement. This Agreement, the Appendices, Exhibits and the Schedules and the documents delivered pursuant hereto and thereto
constitute the entire agreement and understanding among the parties with respect to the subject matter contained herein or therein,
and supersede any and all prior agreements, negotiations, discussions, understandings, term sheets or letters of intent between
or among any of the parties with respect to such subject matter.

 

(o)         Interpretation.

 

In this Agreement, unless the context
clearly indicates otherwise: 

 

(i)          words
used in the singular include the plural and words in the plural include the singular;

 

(ii)         reference
to any gender includes the other gender;

 

(iii)        the
word “including” (and with correlative meaning “include”) means “including but not limited to”
or “including without limitation”;

 

(iv)        reference
to any Section, Exhibit or Schedule means such Section of, or such Exhibit or Schedule to, this Agreement, as the case may be,
and reference in any Section or definition to any clause means such clause of such Section or definition;

 

(v)         the
words “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall
be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof;

 

(vi)        reference
to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and
modified from time to time to the extent permitted by the provisions thereof and by this Agreement;

 

(vii)       reference
to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder) as amended,
modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability;

 

    	 	24	 

     

    

 

(viii)      relative
to the determination of any period of time, “from” means “from and including,” “to” means “to
but excluding” and “through” means “through and including”; and

 

(ix)         the
titles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not
be deemed to be a part of or to affect the meaning or interpretation of this Agreement.

 

(p)           This
Agreement was negotiated by the parties with the benefit of legal representation, and no rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against any party shall apply to any construction or interpretation
hereof. Subject to Section 15(f), this Agreement shall be interpreted and construed to the maximum extent possible so as
to uphold the enforceability of each of the terms and provisions hereof.

 

[SIGNATURE PAGES FOLLOW]

 

    	 	25	 

     

    

 

IN WITNESS WHEREOF, the undersigned
has executed this Agreement this ______ OF JULY, 2016.

 

	INVESTOR:	 
	 	 	 
	By	 	 
	Legal Name of Entity	 
	 	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 
	 	 
	Address: 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	E-mail Address:	 
	 	 

 

	State/Country of Domicile or Formation:	 	 

 

	Purchase Price: US$	 	 

 

The offer to purchase Securities as set forth above is confirmed
and accepted by the Company as to __________ shares of Common Stock.

 

     

     

    

 

IN WITNESS WHEREOF, the undersigned
has executed this Agreement this TWENTY SEVENTH DAY OF JULY, 2016.

 

	 	DERMA SCIENCES, inc.
	 	 	 
	 	By:	 
	 	 	Name: Stephen T. Wills
	 	 	Title: Executive Chairman

 

     

     

    

 

SCHEDULE
1

 

INVESTORS

 

	Investor	 	Number of 

Securities to be

 Acquired	 	Aggregate Purchase

 Price to be Paid	 	Address	 
	1.          [__]	 	[__]	 	US$[__]	 	 	[__]	 
	2.          [__]	 	[__]	 	[__]	 	 	[__]	 
	3.          [__]	 	[__]	 	[__]	 	 	[__]	 
	4.          [__]	 	[__]	 	[__]	 	 	[__]	 
	5.          [__]	 	[__]	 	[__]	 	 	[__]	 
	6.          [__]	 	[__]	 	[__]	 	 	[__]	 
	7.          [__]	 	[__]	 	[__]	 	 	[__]	 

 

     A-1

     

    

 

APPENDIX A

 

INVESTOR QUESTIONNAIRE

 

	Name of investor:  	 

 

	State or jurisdiction of residence:  	 

 

With respect to a potential investment in
Derma Sciences, Inc., a corporation organized under the laws of the State of Delaware (the “Company”),
the undersigned represents and warrants that he/she/it qualifies as an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Act”),
because (please check the box that applies):

 

		 ̈	He/she is a natural person whose individual net worth, or joint net worth with his/her spouse, at the time of his/her purchase
of securities of the Company, exceeds $1,000,000, excluding the value of his/her primary residence; or

 

		 ̈	He/she is a natural person who had an individual income in excess of $200,000 in each of the two most recent years or had a
joint income with his/her spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the
same income level in the current year; or

 

		 ̈	He/she is a director, executive officer or general partner of the Company or a director, executive officer or general partner
of a general partner of the Company; or

 

		 ̈	It is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, a corporation, Massachusetts
or similar business trust, or partnership that was not formed for the specific purpose of acquiring the securities of the Company
being offered in this offering, with total assets in excess of $5,000,000; or

 

		 ̈	It is a “private business development company” as defined in Section 202(a)(22) of the Investment Advisers Act
of 1940; or

 

		 ̈	It is a “bank” as defined in Section 3(a)(2) of the Act; or

 

		 ̈	It is a “savings and loan association” or other institution as defined in Section 3(a)(5)(A) of the Act, whether
acting in its individual or fiduciary capacity; or

 

		 ̈	It is a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; or

 

		 ̈	It is an “insurance company” as defined in Section 2(a)(13) of the Act; or

 

     A-2

     

    

 

		 ̈	It is an investment company registered under the Investment Company Act of 1940; or

 

		 ̈	It is a “business development company” as defined in Section 2(a)(48) of the Investment Company Act of 1940; or

 

		 ̈	It is a “Small Business Investment Company” licensed by the U.S. Small Business Administration under either Section
301(c) or (d) of the Small Business Investment Act of 1958; or

 

		 ̈	It is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state
or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; or

 

		 ̈	It is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is one of the following:

 

		 ̈	A bank;

 

		 ̈	A savings and loan association;

 

		 ̈	An insurance company; or

 

		 ̈	A registered investment adviser; or

 

		 ̈	It is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 with total assets
in excess of $5,000,000; or

 

		 ̈	It is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 that is a self-directed
plan with investment decisions made solely by persons that are accredited investors; or

 

		 ̈	It is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered
by the Company in this offering, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii); or

 

		 ̈	It is an entity in which all of the equity owners are accredited investors.

 

     A-3

     

    

 

	Date:	 	 
	 	 
	PARTNERSHIP, CORPORATION, TRUST	 
	OR OTHER ENTITY INVESTORS:	 
	 	 
	 	 
	Print Name of Partnership, Corporation,	 
	Trust or Other Entity	 
	 	 	 
	By:	 	 
	 	Signature of Authorized Representative	 
	 	 	 
	 	 	 
	 	Print Name of Authorized Representative	 
	 	 	 
	 	 	 
	 	Title of Authorized Representative	 

 

Investor
Questionnaire

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00261-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00261-of-00352.parquet"}]]