Document:

Form of Warrant

 Exhibit 4.2 
 NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES. 
 TUT SYSTEMS, INC. 
 WARRANT

  

			
	Warrant No. [__]	 	Original Issue Date: August 22, 2006

 Tut Systems, Inc., a Delaware corporation (the “Company”), hereby
certifies that, for value received, [NAME] or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of [__] shares of Common Stock (each such share, a “Warrant Share” and all
such shares, the “Warrant Shares”), at any time and from time to time from and after the six month anniversary of the Original Issue Date and through and including August 22, 2011 (the “Expiration Date”), and
subject to the following terms and conditions: 
 1. Definitions. As used in this Warrant, the following terms shall have the
respective definitions set forth in this Section 1. Capitalized terms that are used and not defined in this Warrant that are defined in the Purchase Agreement (as defined below) shall have the respective definitions set forth in the Purchase
Agreement. 
 “Business Day” means any day except Saturday, Sunday and any day that is a federal legal holiday in the United
States or a day on which banking institutions in the State of New York or State of Oregon are authorized or required by law or other government action to close. 
 “Common Stock” means the common stock of the Company, par value $.001 per share, and any securities into which such common stock may hereafter be reclassified. 
 “Exercise Price” means $1.356, subject to adjustment in accordance with Section 9. 

 “Fundamental Transaction” means any of the following: (1) the Company effects any
merger or consolidation of the Company with or into another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by
the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property. 
 “Original Issue Date” means the Original Issue Date first set forth on the first page of this Warrant. 
 “New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan. 
 “Purchase Agreement” means the Securities Purchase Agreement, dated August 22, 2006, to which the Company and the original Holder are parties. 
 “Trading Day” means (i) a day on which the Common Stock is traded on an Eligible Market, or (ii) if the Common Stock is not
listed on an Eligible Market, a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board or the Pink Sheets, LLC, or (iii) if the Common Stock is not quoted on the OTC Bulletin Board, a day
on which the Common Stock is quoted in the over-the-counter market as reported by the Pink Sheets, LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 
 2. Registration of
Warrant. The Company shall register this Warrant upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 
 3. Registration of Transfers. As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the
Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such registration. Subject to such restrictions, the Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon
surrender of this Warrant, with the Form of Assignment attached hereto properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the
Company, an opinion of its counsel to the effect that such transfer is exempt from the registration requirements of the Securities Act, to the Company at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase
Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The 

  

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acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of
a Warrant. 
 4. Exercise and Duration of Warrants. This Warrant shall be exercisable by the registered Holder at any time and from
time to time from and after the six month anniversary of the Original Issue Date through and including the Expiration Date. At 5:30 p.m., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and
become void and of no value. The Company may not call or redeem any portion of this Warrant without the prior written consent of the affected Holder. 
 5. Delivery of Warrant Shares. 
 (a) To effect exercises hereunder, the Holder shall
not be required to physically surrender this Warrant unless the aggregate Warrant Shares represented by this Warrant is being exercised. Upon delivery of the Exercise Notice (in the form attached hereto) to the Company (with the attached Warrant
Shares Exercise Log) at its address for notice set forth herein and upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly (but in no event later than
three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise, which, unless otherwise required by the Purchase Agreement, shall be free of
restrictive legends. The Company shall, upon request of the Holder and subsequent to the date on which a registration statement covering the resale of the Warrant Shares has been declared effective by the Securities and Exchange Commission, use its
reasonable best efforts to deliver Warrant Shares hereunder electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions, if available, provided, that, the Company may, but
will not be required to change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through the Depository Trust Corporation. A “Date of Exercise” means the date on which the Holder shall
have delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly signed and (ii) if such Holder is not utilizing the cashless exercise provisions set forth in this
Warrant, payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to be purchased. 
 (b) If
by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder will have the right to rescind such exercise. 
 (c) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in
connection with the exercise at issue by (B) the closing bid price of the Common Stock on the 

  

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Date of Exercise and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such
exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In. 
 (d) The Company’s obligations to issue
and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof. 
 6. Charges,
Taxes and Expenses. Issuance and delivery of Warrant Shares upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration
of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability, including income taxes due under federal, state, or other law, that may arise as a result of
holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof. 
 7. Replacement of Warrant. If this Warrant
is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply with such
other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant
to the Company as a condition precedent to the Company’s obligation to issue the New Warrant. 
 8. Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which are then 

  

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issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of Persons other than
the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with
the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. 
 9. Certain Adjustments. The Exercise
Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9. 
 (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock in shares of Common Stock or otherwise makes a distribution on
any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. 
 (b) Fundamental Transactions. If, at any time while this Warrant is outstanding there is a Fundamental Transaction, then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall
not effect any such Fundamental Transaction unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such Fundamental Transaction shall assume the obligation to deliver to
the Holder, at the last address of the Holder appearing on the books of the Company, such securities, cash or property as, in accordance with the foregoing provisions, to which the Holder may be entitled. 
  

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 (c) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise
Price pursuant to this Section 9, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for
the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment. 
 (d) Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock. 
 (e) Notice of Adjustments. Upon the occurrence of
each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the
adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which
such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s Transfer Agent. 
 (f) Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other
property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice
describing the material terms and conditions of such transaction (but only to the extent such disclosure would not result in the dissemination of material, non-public information to the Holder) at least 10 calendar days prior to the applicable
record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the
practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the
corporate action required to be described in such notice. 
 10. Payment of Exercise Price. The Holder may pay the Exercise Price in
one of the following manners: 
 (a) Cash Exercise. The Holder may deliver immediately available funds by payment of
certified check or wire transfer; or 
 (b) Cashless Exercise. If an Exercise Notice is delivered at a time when a
registration statement permitting the Holder to resell the Warrant Shares is not then effective or the prospectus forming a part thereof is not then available to the Holder for the resale of the 

  

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Warrant Shares, then the Holder may notify the Company in an Exercise Notice of its election to utilize cashless exercise, in which event the Company shall
issue to the Holder the number of Warrant Shares determined as follows: 
 X = Y [(A-B)/A] 
 where: 
 X = the number
of Warrant Shares to be issued to the Holder. 
 Y = the number of Warrant Shares with respect to which this Warrant is being exercised.

 A = the average of the closing prices for the five Trading Days immediately prior to (but not including) the Exercise Date.

 B = the Exercise Price. 
 For purposes
of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the
Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued. 
 11. Limitations on Exercise.
Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that,
following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the
Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise).
For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict the number of shares of Common Stock which
a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in Section 9 of this Warrant. This restriction
may not be waived, and notwithstanding anything to the contrary in any Transaction Document, may not be amended by agreement of the parties. 
 12. No Fractional Shares. No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would, otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the date of exercise. 
  

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 13. Notices. Any and all notices or other communications or deliveries hereunder (including,
without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified
in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on
a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to Tut Systems, Inc., 6000 SW Meadows Road, Suite 200, Lake Oswego, OR 97035, Attn: Chief Financial Officer,
or to facsimile no.: (971) 217-0456 (or such other address as the Company shall indicate in writing in accordance with this Section), or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such
other address or facsimile number as the Holder may provide to the Company in accordance with this Section. 
 14. Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon 10 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting
from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a
successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the
Holder’s last address as shown on the Warrant Register. 
 15. Miscellaneous. 
 (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject
to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder and their successors and assigns. 
 (b) All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York (except for matters governed by corporate law in the State of Delaware), without
regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated (“Proceedings”)
(whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally
subject to the 

  

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jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably
waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby. If
either party shall commence a Proceeding to enforce any provisions of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding. 
 (c) The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof. 
 (d) In case any
one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the
parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 
 (e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of being a Holder, be entitled to any rights of a
stockholder with respect to the Warrant Shares. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, 
 SIGNATURE PAGE FOLLOWS] 
  

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 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as
of the date first indicated above. 
  

			
	TUT SYSTEMS, INC.
		
	By:	 	  
	Name:	 	Scott Spangenberg
	Title:	 	Chief Financial Officer

  

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 EXERCISE NOTICE 
 TUT SYSTEMS, INC. 
 WARRANT DATED AUGUST 22, 2006 
 The undersigned Holder hereby irrevocably elects to purchase
                     shares of Common Stock pursuant to the above referenced Warrant. Capitalized terms used herein and not otherwise defined
have the respective meanings set forth in the Warrant. 
 (1) The undersigned Holder hereby exercises its right to purchase
                     Warrant Shares pursuant to the Warrant. 
 (2) The Holder intends that payment of the Exercise Price shall be made as (check one): 
  

	 	 ̈	“Cash Exercise” under Section 10 

  

	 	 ̈	“Cashless Exercise” under Section 10 

 (3) If the holder
has elected a Cash Exercise, the holder shall pay the sum of $                         to the Company in accordance with
the terms of the Warrant. 
 (4) Pursuant to this Exercise Notice, the Company shall deliver to the holder
                     Warrant Shares in accordance with the terms of the Warrant. 
 (5) By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder
will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned under Section 11 of this Warrant to which this notice
relates. 
  

									
	Dated:                     ,
            	 		 	Name of Holder:
				
		 		 	(Print)	 	  
				
		 		 	 By:
	 	  
		 		 	 Name:
	 	  
		 		 	 Title:
	 	  
		 		 		 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

  

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 Warrant Shares Exercise Log 
  

							
	 Date
	  	Number of Warrant
Shares Available to be
Exercised	  	Number of Warrant Shares
Exercised	  	Number of
Warrant Shares
Remaining to
be Exercised
		  		  		  	

  

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 TUT SYSTEMS, INC. 
 WARRANT ORIGINALLY ISSUED AUGUST 22, 2006 
 WARRANT NO. [__] 
 FORM OF ASSIGNMENT 
 [To be completed and
signed only upon transfer of Warrant] 
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                        
                     the right represented by the above-captioned Warrant to purchase
                     shares of Common Stock to which such Warrant relates and appoints
                     attorney to transfer said right on the books of the Company with full power of substitution in the premises. 

Dated:                     ,
             
  

	
	
	   
	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
	
	   
	Address of Transferee
	
	   
	
	   

 In the presence of: 
 _______________________________ 
  

 13Purchase Agreement

 Exhibit 10.1 
 PURCHASE AGREEMENT 
 This Purchase Agreement (this “Agreement”) is dated as of
August 22, 2006, among Tut Systems, Inc., a Delaware corporation (the “Company”), and the investors identified on the signature pages hereto (each an “Investor” and, collectively, the
“Investors”). 
 WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires to borrow
certain sums from each of the Investors and, in consideration thereof issue certain convertible notes and warrants to each of the Investors, and each Investor, severally and not jointly, desires to make a loan to the Company and accept such notes
and warrants from the Company, all pursuant to the terms set forth herein. 
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants
contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows: 
 ARTICLE I. 
 DEFINITIONS 
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1: 
 “Action” means any action, claim, suit, inquiry, notice
of violation, proceeding (including, without limitation, any investigation or partial proceeding such as a deposition) or investigation pending or threatened in writing against or affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, provincial, county, local or foreign), stock market, stock exchange or trading facility. 
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person, as such terms are used in and construed under Rule 144. 
 “Bankruptcy
Event” means any of the following events: (a) the Company or any Subsidiary commences a proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction relating to the Company or any Subsidiary thereof; (b) there is commenced against the Company or any Subsidiary any such case or proceeding that is not dismissed within 60 days after commencement; (c) the
Company or any Subsidiary is adjudicated by a court of competent jurisdiction insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any Subsidiary suffers any
appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) under applicable law the Company or any Subsidiary makes a general assignment for the benefit of
creditors; (f) the Company or any Subsidiary fails to pay, or states 

 
that it is unable to pay or is unable to pay, its debts generally as they become due; (g) the Company or any Subsidiary calls a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its debts; or (h) the Company or any Subsidiary, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or
takes any corporate or other action for the purpose of effecting any of the foregoing. 
 “Benefit
Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or Multiemployer Plan and which is maintained or otherwise contributed by the Company. 
 “Benefit Plan” has the meaning set forth in Section 3.1(aa)(ii). 
 “Business Day” means any day except Saturday, Sunday and any day that is a federal legal holiday or a day on which
banking institutions in the State of New York or State of Oregon are authorized or required by law or other governmental action to close. 
 “Closing” means the closing of the purchase and sale of Notes and Warrants contemplated by Section 2.1. 
 “Closing Date” means the Business Day immediately following the date on which all of the conditions set forth in
Section 2.1(d) and 2.1(e) have been satisfied, or such other date as the parties may agree. 
 “Code”
means the Internal Revenue Code of 1986, as amended. 
 “Commission” means the Securities and Exchange
Commission. 
 “Common Stock” means the common stock of the Company, par value $.001 per share, and any
securities into which such common stock may hereafter be reclassified, converted or exchanged. 
 “Common Stock
Equivalents” means any securities of the Company or any Subsidiary which entitle the holder thereof to acquire Common Stock at any time, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument
that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock. 
 “Company Counsel” means DLA Piper Rudnick Gray Cary US LLP. 
 “Contingent Liability” means, as to any Person, any obligation, contingent or otherwise, of such Person guaranteeing or
having the economic effect of guaranteeing or agreeing to pay or become responsible for any Debt or obligation of any other Person in any manner, whether directly or indirectly, including without limitation any obligation of such 

  

 2 

 
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such Debt, (b) to purchase property or services for the purpose of assuring the owner of such Debt of its payment, or (c) to maintain the solvency, working capital,
equity, cash flow, fixed charge or other coverage ratio, or any other financial condition of the primary obligor so as to enable the primary obligor to pay any Debt or to comply with any agreement relating to any Debt or obligation. 
 “Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments issued by such Person, (iii) all obligations of such Person as lessee which (y) are capitalized in accordance with GAAP or
(z) arise pursuant to sale-leaseback transactions, (iv) all reimbursement obligations of such Person in respect of letters of credit or other similar instruments, (v) all Debt of others secured by a Lien on any asset of such Person,
whether or not such Debt is otherwise an obligation of such Person and (vi) all Debt of others guaranteed by such Person. 
 “Disclosure Materials” has the meaning set forth in Section 3.1(h). 
 “Effective
Date” means the date that the Registration Statement required by Section 2(a) of the Registration Rights Agreement is first declared effective by the Commission. 
 “Eligible Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select
Market, the NASDAQ Global Market, or the NASDAQ Capital Market on which the Common Stock is listed or quoted for trading on the date in question. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute. 
 “ERISA Group” means the Company and each Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which,
together with the Company or any Subsidiary, are treated as a single employer under the Code. 
 “Exchange
Act” means the Securities Exchange Act of 1934, as amended. 
 “First Notice” has the meaning set
forth in Section 4.4. 
 “GAAP” means U.S. generally accepted accounting principles. 
 “Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money
or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all 

  

 3 

 
obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (other than unsecured accounts payable incurred in the
ordinary course of business and no more than ninety (90) days past the date of the invoice therefor), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all obligations of such Person in respect of interest rate protection agreements, foreign currency
exchange agreements or other interest or exchange rate hedging arrangements that exceed amounts necessary to hedge the Company’s cross-currency exposure and (h) all obligations of such Person as an account party in respect of letters of
credit and bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner. 
 “Intellectual Property Rights” has the meaning set forth in Section 3.1(p). 
 “Investment Amount” means, with respect to each Investor, the investment amount indicated below such Investor’s
signature page to this Agreement. 
 “Investor Deliverables” has the meaning set forth in
Section 2.1(c). 
 “Investor Party” has the meaning set forth in Section 4.12. 
 “Lien” means any lien, charge, encumbrance, security interest, right of first refusal or other restrictions of any kind.

 “Losses” has the meaning set forth in Section 4.12. 
 “Material Adverse Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and the Subsidiaries or (iii) an adverse impairment to the Company’s
ability to timely perform its obligations under any Transaction Document. 
 “New Issue Securities” has the
meaning set forth in Section 4.4. 
 “New York Courts” means the state and federal courts sitting in the City
of New York, Borough of Manhattan. 
 “Notes” means the 8% convertible senior subordinated promissory notes
issuable by the Company to the Investors at Closing in the Form of Exhibit A, due on the three year anniversary of the Closing Date. 
  

 4 

 “Outside Date” means the twentieth calendar day following the date of
this Agreement. 
 “PBGC” means the Pension Benefit Guarantee Corporation or any entity succeeding to any or
all of its functions under ERISA. 
 “Permitted Indebtedness” has the meaning set forth in Section 5.3.

 “Permitted Liens” means: (a) Liens for taxes, assessments or governmental charges not delinquent or
being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with GAAP are maintained on the books of the Company or the applicable Subsidiary; (b) Liens arising out of deposits in connection with
workers’ compensation, unemployment insurance, old age pensions or other social security or retirement benefits legislation; (c) deposits or pledges to secure bids, tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations, surety and appeal bonds, and other obligations of like nature arising in the ordinary course of business of the Company or a Subsidiary; (d) Liens imposed by law, such as mechanics’, workers’,
materialmens’, carriers’ or other like liens arising in the ordinary course of business of the Company or a Subsidiary which secure the payment of obligations which are not past due or which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP are maintained on the books of the Company or the applicable Subsidiary; (e) Liens existing on the Closing Date, and specified on Schedule 3.1(o);
(f) purchase money security interests or Liens for the purchase of fixed assets to be used in the business of the Company or a Subsidiary, securing solely the fixed assets so purchased and the proceeds thereof; (g) capitalized leases which
do not violate any provision of this Agreement; (h) Liens of commercial depository institutions, arising in the ordinary course of business, constituting a statutory or common law right of setoff against amounts on deposit with such
institution; and (i) rights of way, zoning restrictions, easements and similar encumbrances affecting the Company’s real property which do not materially interfere with the use of such property. 
 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint
venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
 “Plan” means at any time an employee pension plan benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under the Code and either (i) is maintained, or
contributed to, by any member of the ERISA group for employees of any member of the ERISA group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the
ERISA Group for employees of any Person which was at such time a member of the ERISA group. 
 “Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Investors of the Underlying Shares and Warrant Shares. 
  

 5 

 “Registration Rights Agreement” means the Registration Rights Agreement,
dated as of the date of this Agreement, among the Company and the Investors, in the form of Exhibit B hereto. 
 “Required Investors” means one or more Investors representing greater than 50% of the aggregate principal amount of all Notes then outstanding. 
 “Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or
potentially issuable in the future pursuant to the Transaction Documents that the Company is obligated to issue, whether contingently or otherwise, including, without limitation, any Underlying Shares issuable upon conversion in full of all
outstanding Notes and Warrant Shares issuable upon exercise of all outstanding Warrants (without regard to any otherwise applicable conversion or exercise restrictions contained therein) (assuming for such purpose that the Conversion Price (as
defined in the Notes) and the Exercise Price (as defined in the Warrants) equals 50% of the Conversion Price and Exercise Price in effect on the Closing Date). 
 “Restricted Payment” means, with respect to any Person, (a) any direct or indirect distribution, dividend or other
payment on account of any equity interest in, or shares of capital stock or other securities of, such Person and (b) any management, consulting or other similar fees, or any interest thereon, payable by such Person to any affiliate of such
Person (other than the Company), or to any other Person other than an unrelated third party; provided, however, that Restricted Payments shall not include any arms length consulting agreements with consultants of the Company which are
approved by the Board of Directors of the Company. 
 “Rule 144” means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
 “SEC Reports” has the meaning set forth in Section 3.1(h). 
 “Securities” means the Notes, the Warrants, the Underlying Shares and the Warrant Shares. 
 “Securities Act” means the Securities Act of 1933, as amended. 
 “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through
non-US broker dealers or foreign regulated brokers. 
 “Subsidiary” means any subsidiary of the Company
included in the SEC Reports. 
  

 6 

 “Trading Day” means (i) a day on which the Common Stock is traded
on an Eligible Market, or (ii) if the Common Stock is not listed on an Eligible Market, a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board or the Pink Sheets, LLC, or (iii) if
the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the Pink Sheets, LLC (or any similar organization or agency succeeding to its functions of reporting
prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 
 “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market,
the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question. 
 “Transaction Documents” means this Agreement, the Notes, the Registration Rights Agreement, the Warrants and any other documents or agreements executed in connection with the transactions contemplated hereunder. 

“Underlying Shares” means the shares of Common Stock issuable upon conversion of the Notes. 
 “Warrants” means the Common Stock purchase warrants, in the form of Exhibit C, issuable to each Investor at the
Closing. 
 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

 ARTICLE II. 
 PURCHASE AND SALE

 2.1 Closing. 
 (a) Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell to each Investor, and each Investor shall, severally and not jointly, purchase from the Company, the Notes and the Warrants
representing such Investor’s Investment Amount. The Closing shall take place at the offices of Bryan Cave LLP, 1290 Avenue of the Americas, New York, NY 10104 at 4:30 p.m. (New York City time) on the Closing Date or at such other location or
time as the parties may agree. 
  

 7 

 (b) At the Closing, the Company shall deliver or cause to be delivered to each Investor
the following (the “Company Deliverables”): 
 (i) Notes in the aggregate principal amount of the Investment
Amount indicated below such Investor’s name on its signature page of this Agreement, registered in the name of such Investor; 
 (ii) Warrants, registered in the name of such Investor, pursuant to which such Investor shall have the right to acquire the number of shares of Common Stock equal to 50% of the Underlying Shares issuable upon an assumed conversion of the
Notes issuable to such Investor in accordance with Section 2.1(b)(i) (without regard to any conversion restrictions contained thereunder); 
 (iii) the legal opinion of Company Counsel, in agreed form, addressed to the Investors; 
 (iv) the Registration Rights Agreement, duly executed by the Company; 
 (v) a certificate executed by a duly
authorized officer of the Company certifying that (i) all representations and warranties made by the Company and information furnished by the Company in any schedules to this Agreement, are true and correct in all material respects as of the
Closing Date, (ii) all covenants, agreements and obligations required by this Agreement to be performed or complied with by the Company, prior to or at the Closing, have been performed or complied with and (iii) the items referenced in
Sections 2.1(d)(iv)-2.1(d)(vii) are true and correct as of the Closing Date; 
 (vi) a certificate duly executed by Silicon
Valley Bank setting forth (i) the aggregate outstanding amount of any Indebtedness owed to them by the Company, (ii) acknowledging that no defaults exist under the Senior Bank Indebtedness Documents (as defined in the Notes) and
(iii) acknowledging that the transactions contemplated by the Transaction Documents will not constitute a default under any of the Senior Bank Indebtedness Documents (as defined in the Note). 
 (vii) lien and record search reports in form and substance acceptable to the Investors; and 
 (viii) any other documents reasonably requested by such Investor. 
 (c) At the Closing, each Investor shall deliver or cause to be delivered to the Company the following (the “Investor
Deliverables”): 
 (i) the Investment Amount indicated below such Investor’s name on its signature page of this
Agreement, in United States dollars and in immediately available funds, by wire transfer to an account designated in writing by the Company for such purpose; and 
  

 8 

 (ii) the Registration Rights Agreement, duly executed by such Investor. 
 (d) Conditions Precedent to the Obligations of an Investor to Purchase Notes and Warrants. The obligation of each Investor to
acquire Notes and Warrants and make loans at the Closing is subject to the satisfaction or waiver by such Investor, at or before the Closing, of each of the following conditions: 
 (i) Representations and Warranties. The representations and warranties of the Company contained in the Transaction Documents shall
be true and correct as of the date when made and as of the Closing Date as though made on and as of such date; 
 (ii)
Performance. The Company shall have performed, satisfied and complied with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing;

 (iii) Officer’s Certificate. The officer’s certificate described in Section 2.1(b)(vii) hereof shall
have been delivered; 
 (iv) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents; 
 (v) Adverse Changes. Since the execution of this Agreement, no event or series of events shall have occurred that has had or would
reasonably be expected to result in a Material Adverse Effect; 
 (vi) No Suspensions of Trading in Common Stock;
Listing. Trading in the Common Stock shall not have been suspended by the Commission or any Trading Market (except for any suspensions of trading of not more than one Trading Day solely to permit dissemination of material information regarding
the Company) at any time since the date of execution of this Agreement, and the Common Stock shall have been at all times since such date listed for trading on an Eligible Market; 
 (vii) Nasdaq Listing. The Nasdaq Stock Market shall have waived application of the 15 day prior notice contained in NASD
Marketplace Rule 4310(c)(17)(D) or such timeframe shall have expired without objection; and 
 (viii) Company
Deliverables. The Company shall have delivered the Closing Company Deliverables in accordance with Section 2.1(b). 
 (e) Conditions Precedent to the Obligations of the Company to sell Notes and Warrants. The obligation of the Company to sell Notes and Warrants at the Closing is subject to 

  

 9 

 
the satisfaction or waiver by the Company, at or before the Closing, of each of the following conditions: 
 (i) Representations and Warranties. The representations and warranties of each Investor contained herein shall be true and correct
as of the date when made and as of the Closing Date as though made on and as of such date; 
 (ii) Performance. Each
Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Investor at or prior to the
Closing; 
 (iii) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have
been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents; 
 (iv) Nasdaq Listing. The Nasdaq Stock Market shall have waived application of the 15 day prior notice contained in NASD Marketplace
Rule 4310(c)(17)(D) or such timeframe shall have expired without objection; and 
 (v) Investors Deliverables. Each
Investor shall have delivered its Investor Deliverables in accordance with Section 2.1(c). 
 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES 
 3.1
Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to each Investor: 
 (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than as specified in the SEC Reports. Except as disclosed in Schedule 3.1(a), the Company owns, directly or indirectly, all of
the capital stock of each Subsidiary free and clear of any and all Liens (other than Permitted Liens), and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights. 
 (b) Organization and Qualification. The Company and each Subsidiary are duly
incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and
to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. The
Company and each Subsidiary are duly qualified to conduct its respective 

  

 10 

 
businesses and are in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith. Each Transaction Document has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general
application. 
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party
or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses
(ii) and (iii), such as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. Payments of cash on account of principal of or interest under the Notes, upon any Event of Default under
the Notes, as a result of liquidated damages under any Transaction Document or upon a Buy-In under and as such term is defined in a Warrant will not require the consent of, any payment to, or the springing of any Lien in favor of any lender to or
creditor of the Company or any Subsidiary (under a credit facility, loan agreement or otherwise) and will not result in a default under any such credit facilities, loans or other agreements. 
  

 11 

 (e) Filings, Consents and Approvals. Except as set forth in Schedule
3.1(e), the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person
in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration
Rights Agreement, (ii) filings required by state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act (iv) the filings required in accordance with
Section 4.7 and 4.10, and (iv) those that have been made or obtained prior to the date of this Agreement. 
 (f)
Issuance of the Securities. The Securities have been duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens. The
Company has reserved from its duly authorized capital stock a number of shares of Common Stock issuable upon conversion of the Notes and upon exercise of the Warrants, which number of reserved shares is not less than the Required Minimum calculated
as of the date hereof. 
 (g) Capitalization. The number of shares and type of all authorized, issued and outstanding
capital stock of the Company, and all shares of Common Stock reserved for issuance under the Company’s various option and incentive plans, is specified in Schedule 3.1(g). Except as specified in Schedule 3.1(g), no securities of
the Company are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.
Except as specified in Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional
shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. The issuance and sale of the Securities will not, immediately or with the passage of time, obligate the Company to issue shares of Common Stock
or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. 
 (h) SEC Reports; Financial Statements. The Company has filed all reports, forms or other information 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 (or such shorter period as the Company was required by law to file such reports) (the foregoing
materials being collectively referred to herein as the “SEC Reports” and, together with the Schedules to this Agreement (if any), the “Disclosure Materials”) on a timely basis or has timely filed a valid extension
of such time of filing and has filed any such SEC Reports prior 

  

 12 

 
to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the applicable requirements of
the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP applied on a consistent basis
during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for
the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. For purposes of this Agreement, any reports, forms or other
information provided to the Commission whether by filing, furnishing or otherwise providing, is included in the term “filed” (or any derivations thereof). 
 (i) Press Releases. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement
taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and
when made, not misleading. 
 (j) Material Changes. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities (not to exceed
$50,000) not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting or the identity of its
auditors, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the
Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans and consistent with past practice. The Company does not have pending before the Commission any request for
confidential treatment of information. 
 (k) Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) except as specifically disclosed in the SEC Reports, would, if there were an unfavorable 

  

 13 

 
decision, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary,
nor any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty, except as
specifically disclosed in the SEC Reports. There has not been, and to the knowledge of the Company, there is not pending any investigation by the Commission involving the Company or any current or former director or officer of the Company (in his or
her capacity as such). The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. 
 (l) Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the
employees of the Company. 
 (m) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it
is in default under or that it is in violation of, any indenture, loan or credit agreement (including the Senior Bank Indebtedness Documents (as defined in the Notes)) or any other agreement or instrument to which it is a party or by which it or any
of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except
in each case described in clauses (i), (ii) and (iii) as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. The Company is in compliance with all effective requirements of
the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, that are applicable to it, except where such noncompliance could not have or reasonably be expected to result in a Material Adverse Effect. 
 (n) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any such permits. 
 (o) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by
them that is material to their respective businesses and good and valid title in all personal property owned by them that is material to their respective businesses, in each case free and clear of all Liens, except for 

  

 14 

 
Permitted Liens and Liens that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries. To the knowledge of the Company, any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the
Company and the Subsidiaries are in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. 
 (p) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure
to so have could, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a
written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. Except as set forth in the SEC Reports, to the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. 
 (q) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its and the Subsidiaries’ existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business on terms consistent with market for the Company’s and such Subsidiaries’ respective lines of business. 
 (r) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the
Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee or partner. 
 (s) Internal Accounting Controls. The
Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded 

  

 15 

 
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company,
including its Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s Form 10-K or 10-Q, as the case may be, is being prepared. The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and procedures in accordance with Item 307 of Regulation S-K under the Exchange Act for the Company’s most recently ended fiscal quarter or fiscal year-end (such
date, the “Evaluation Date”). If applicable, the Company presented in its most recently filed Form 10-K or Form 10-Q the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal controls that would be required to be disclosed pursuant to Item 308(c) of Regulation S-K under the Exchange
Act or, to the Company’s knowledge, in other factors that could reasonably be expected to have a Material Adverse Effect on the Company’s internal controls. 
 (t) Solvency. Based on the financial condition of the Company as of the Closing Date (and assuming that the Closing shall have
occurred), (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they
mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company has no current intention
to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). 
 (u) Certain Fees. Except as specified in Schedule 3.1(u), no brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Investors shall have no obligation with
respect to any fees or with respect to any claims (other than such fees or commissions owed by a Investor pursuant to written agreements executed by such Investor which fees or commissions shall be the sole responsibility of such Investor) made by
or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement. 
  

 16 

 (v) Certain Registration Matters. Assuming the accuracy of the Investors’
representations and warranties set forth in Section 3.2(b)-3.2(e), no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Investors under the Transaction Documents. The Company is
eligible to register the resale of its Common Stock for resale by the Investors under Form S-3 promulgated under the Securities Act. Except as specified in Schedule 3.1(v), the Company has not granted or agreed to grant to any Person any
rights (including “piggy-back” registration rights) to have any securities of the Company registered with the Commission or any other governmental authority that have not been satisfied or exercised. 
 (w) Listing and Maintenance Requirements. Except as specified in the SEC Reports, the Company has not, in the two years preceding
the date hereof, received notice from any Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements thereof. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with the listing and maintenance requirements for continued listing of the Common Stock on the Trading Market on which the Common Stock is currently listed or quoted. The issuance and sale of the Securities under
the Transaction Documents does not contravene the rules and regulations of the Trading Market on which the Common Stock is currently listed or quoted, and no approval of the shareholders of the Company thereunder is required for the Company to enter
into and to consummate the transactions contemplated by the Transaction Documents, including, without limitation, to issue and deliver to the Investors the Securities contemplated by the Transaction Documents. 
 (x) Investment Company. The Company is not, and is not an Affiliate of, and immediately following Closing will not have become, an
“investment company” within the meaning of the Investment Company Act of 1940, as amended. 
 (y) Application of
Takeover Protections. The Company has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Investors or shareholders of the Company prior to the
Closing Date as a result of the Investors and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation the Company’s issuance of the Securities and the Investors’
ownership of the Securities. 
 (z) No Additional Agreements. The Company does not have any agreement or understanding
with any Investor with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents. 
 (aa) Compliance with ERISA. (i) Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and is in compliance in all
material respects with the presently applicable 

  

 17 

 
provisions of ERISA and the Code with respect to each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under
Section 412 of the Code in respect of any Plan, (ii) failed to make any required contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA. 
 (ii) The benefit plans not covered under clause (a) above (including profit sharing,
deferred compensation, stock option, employee stock purchase, bonus, retirement, health or insurance plans, collectively the “Benefit Plans”) relating to the employees of the Company are duly registered where required by, and are in
good standing in all material respects under, all applicable laws. All required employer and employee contributions and premiums under the Benefit Plans to the date hereof have been made, the respective fund or funds established under the Benefit
Plans are funded in accordance with applicable laws, and no past service funding liabilities exist thereunder. 
 (iii) No
Benefit Plans have any unfunded liabilities, either on a “going concern” or “winding up” basis and determined in accordance with all applicable laws and actuarial practices and using actuarial assumptions and methods that are
reasonable in the circumstances. No event has occurred and no condition exists with respect to any Benefit Plans that has resulted or could reasonably be expected to result in any pension plan having its registration revoked or wound up (in whole or
in part) or refused for the purposes of any applicable laws or being placed under the administration of any relevant pension benefits regulatory authority or being required to pay any taxes or penalties (in any material amounts) under any applicable
laws. 
 (bb) Taxes. All United States federal or state, or foreign income tax returns, and to the knowledge of the
Company, county or municipality local income tax returns and all other material tax returns (including foreign tax returns) which are required to be filed by or on behalf of the Company and each Subsidiary have been filed and all material taxes due
pursuant to such returns or pursuant to any assessment received by the Company and each Subsidiary have been paid except those being disputed in good faith and for which adequate reserves have been established. The charges, accruals and reserves on
the books of the Company and each Subsidiary in respect of taxes or other governmental charges have been established in accordance with GAAP. 
 (cc) Absence of Any Undisclosed Liabilities or Capital Calls. Except for litigation described in the SEC Reports, there are no liabilities of the Company or any Subsidiary of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in such a liability, other than (i) those liabilities
provided for in 

  

 18 

 
the Company’s financial statements and (ii) other undisclosed liabilities which, individually or in the aggregate, could not have, or reasonably be
expected to result in, a Material Adverse Effect. 
 (dd) Secured Indebtedness. Other than as set forth in Schedule
3.1(dd), the Company has no Debt that is secured by any Lien. 
 (ee) Seniority. Except as set forth on Schedule
3.1(ee), no indebtedness of the Company is senior to or pari passu with the Notes in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise. 
 (ff) Consultation with Auditors. The Company has consulted its independent auditors concerning the accounting treatment of the
transactions contemplated by the Transaction Documents, and in connection therewith has furnished such auditors complete copies of the Transaction Documents. 
 (gg) Indebtedness and Other Contracts. Except as disclosed in Schedule 3.1(gg), neither the Company nor any of its
Subsidiaries (i) has any outstanding Indebtedness, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument would result in
a Material Adverse Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the
aggregate, in a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect. Schedule 3.1(gg) provides a detailed description of the material terms of any such outstanding Indebtedness. 
 (hh) Disclosure. The Company confirms that, except pursuant to a non-disclosure agreement, neither it nor any Person acting on its behalf has provided any Investor or its respective agents or counsel with any information that the
Company believes constitutes material, non-public information except insofar as the existence and terms of the proposed transactions hereunder may constitute such information. The Company understands and confirms that the Investors will rely on the
foregoing representations and covenants in effecting transactions in securities of the Company. All disclosure provided to the Investors regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the
Company (including the Company’s representations and warranties set forth in this Agreement) are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. 
 Each Investor acknowledges and
agrees that the Company has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.1. 
  

 19 

 3.2 Representations and Warranties of the Investors. Each Investor hereby, for itself and for no
other Investor, represents and warrants to the Company as follows: 
 (a) Organization; Authority. Such Investor is an
entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the
applicable Transaction Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Investor of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate
or, if such Investor is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Investor. Each of this Agreement and the Registration Rights Agreement has been duly executed by such
Investor, and when delivered by such Investor in accordance with terms hereof, will constitute the valid and legally binding obligation of such Investor, enforceable against it in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general
application. 
 (b) Investment Intent. Such Investor is acquiring the Securities as principal for its own account for
investment purposes only and not with a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such
Securities in compliance with applicable federal and state securities laws. Subject to the immediately preceding sentence, nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period
of time. Such Investor is acquiring the Securities hereunder in the ordinary course of its business. Such Investor does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 

(c) Investor Status. At the time such Investor was offered the Securities, it was, and at the date hereof it is, an
“accredited investor” as defined in Rule 501(a) under the Securities Act. Such Investor is not a registered broker-dealer under Section 15 of the Exchange Act. 
 (d) General Solicitation. 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 any other general solicitation or general advertisement. 
 (e) Access to Information. Such Investor acknowledges that it has reviewed the Disclosure Materials and has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in
the Securities; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and 

  

 20 

 
prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses
or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Investor or its
representatives or counsel shall modify, amend or affect such Investor’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction
Documents. 
 (f) Certain Trading Activities. Such Investor has not directly or indirectly, nor has any Person acting
on behalf of or pursuant to any understanding with such Investor, engaged in any transactions in the securities of the Company (including, without limitations, any Short Sales involving the Company’s securities) since the time that such
Investor was first contacted by the Company or placement agent engaged by the Company regarding an investment in the Company. Such Investor covenants that neither it nor any Person acting on its behalf or pursuant to any understanding with it will
engage in any transactions in the securities of the Company (including Short Sales) prior to the time that the transactions contemplated by this Agreement are publicly disclosed. Notwithstanding the foregoing, in the case of an Investor that is a
multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Investor’s assets and the portfolio managers have no actual knowledge of the investment decisions made by the portfolio managers managing
other portions of such Investor’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this
Agreement. 
 (g) Limited Ownership. The purchase by such Investor of the Securities issuable to it at the Closing will
not result in such Investor (individually or together with other Person with whom such Investor has identified, or will have identified, itself as part of a “group” in a public filing made with the Commission involving the Company’s
securities) acquiring, or obtaining the right to acquire, in excess of 19.999% of the outstanding shares of Common Stock or the voting power of the Company on a post transaction basis that assumes that the Closing shall have occurred. Such Investor
does not presently intend to, alone or together with others, make a public filing with the Commission to disclose that it has (or that it together with such other Persons have) acquired, or obtained the right to acquire, as a result of the Closing
(when added to any other securities of the Company that it or they then own or have the right to acquire), in excess of 19.999% of the outstanding shares of Common Stock or the voting power of the Company on a post transaction basis that assumes
that the Closing shall have occurred. 
 (h) Independent Investment Decision. Such Investor has independently evaluated
the merits of its decision to purchase Securities pursuant to this Agreement, and such Investor confirms that it has not relied on the advice of any other Investor’s business and/or legal counsel in making such decision. 
  

 21 

 The Company acknowledges and agrees that no Investor has made or makes any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
 4.1 (a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of the Securities other than pursuant to an effective registration statement, to the Company, to an Affiliate of an Investor or
in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. 
 (b) Certificates evidencing the Securities will contain the following legend, until such time as they are not required under
Section 4.1(c): 
 [NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE OF THESE SECURITIES HAVE BEEN
REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. [THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE OF THESE SECURITIES] [THESE SECURITIES] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES. 
 The Company acknowledges and agrees that an Investor may from time to time pledge, and/or grant a security interest in some or all of the Securities
pursuant to a bona fide margin agreement in connection with a bona fide margin account and, if required under the terms of such agreement or account, such Investor may transfer pledged or secured Securities to the 

  

 22 

 
pledgees or secured parties. Such a pledge or transfer would not be subject to approval or consent of the Company and no legal opinion of legal counsel to
the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion may be required in connection with a subsequent transfer following default by the Investor transferee of the pledge. No notice shall be
required of such pledge. At the appropriate Investor’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the
Securities including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders thereunder.

 (c) Certificates evidencing Underlying Shares and Warrant Shares shall not contain any legend (including the legend set
forth in Section 4.1(b)): (i) while a registration statement (including the Registration Statement) covering such Underlying Shares or Warrant Shares is then effective, or (ii) following a sale or transfer of such Securities pursuant
to Rule 144 (assuming the transferor is not an Affiliate of the Company), or (iii) while such Securities are eligible for sale under Rule 144(k). If an Investor shall make a sale or transfer of Shares either (x) pursuant to Rule 144 or
(y) pursuant to a registration statement and in each case shall have delivered to the Company or the Company’s transfer agent the certificate representing Shares containing a restrictive legend which are the subject of such sale or
transfer and a representation letter in customary form (the date of such sale or transfer and Share delivery being the “Share Delivery Date”) and (1) the Company shall fail to deliver or cause to be delivered to such Investor a
certificate representing such Shares that is free from all restrictive or other legends by the third Trading Day following the Share Delivery Date and (2) following such third Trading Day after the Share Delivery Date and prior to the time such
Shares are received free from restrictive legends, the Investor, or any third party on behalf of such Investor, purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Investor of
such Shares (a “Buy-In”), then the Company shall pay in cash to the Investor (for costs incurred either directly by such Investor or on behalf of a third party) the amount by which the total purchase price paid for Common Stock as a
result of the Buy-In (including brokerage commissions, if any) exceed the proceeds received by such Investor as a result of the sale to which such Buy-In relates. The Investor shall provide the Company written notice indicating the amounts payable
to the Investor in respect of the Buy-In. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. 
 4.2 Furnishing of Information. As long as any Investor owns the Securities, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as any Investor owns Securities, if the Company is not required to file reports pursuant
to such laws, it will prepare and furnish to the Investors and make publicly available in accordance with Rule 144(c) such information as is required for the Investors to sell the Underlying Shares and Warrant Shares under Rule 144. The Company

  

 23 

 
further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to
enable such Person to sell the Underlying Shares and Warrant Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. 
 4.3 Listing of Securities. The Company agrees, (i) if the Company applies to have the Common Stock traded on any other Trading Market, it
will include in such application the Underlying Shares and Warrant Shares, and will take such other action as is necessary or desirable to cause the Underlying Shares and Warrant Shares to be listed on such other Trading Market as promptly as
possible, and (ii) it will take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all material respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market. 
 4.4 Participation Right. If at any time while the Notes are outstanding, the
Company proposes to offer, issue, or sell any equity Common Stock or Common Stock Equivalents (collectively, “New Issue Securities”), the Company shall first offer the New Issue Securities to the Investors in accordance with the
following provisions: 
 (a) The Company shall give a written notice to each Investor (the “First Notice”)
stating (i) its intention to issue the New Issue Securities, (ii) the number and description of the New Issue Securities proposed to be issued and (iii) the purchase price (calculated as of the proposed issuance date) and the other
terms and conditions upon which the Company is offering the New Issue Securities. 
 (b) Transmittal of the First Notice to
the Investors by the Company shall constitute an offer by the Company to sell to each Investor (i) up to its pro rata portion (based upon such Investor’s percentage ownership of the total number of issued and outstanding shares of Common
Stock) of the New Issue Securities (the “Basic Amount”) for the price and upon the terms and conditions set forth in the First Notice and (ii) with respect to each Investor that elects to purchase its Basic Amount, any
additional portion of the New Issue Securities attributable to the Basic Amounts of other Investors as such Investor shall indicate it will purchase or acquire should the other Investors subscribe for less than their Basic Amounts (the
“Undersubscription Amount”). For a period of ten (10) Trading Days after receipt of the First Notice, each Investor shall have the option, exercisable by written notice to the Company, to accept the Company’s offer as to
all or any part of such Investor’s Basic Amount and, if such Investor shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Investor elects to purchase (in either case, the “Notice of
Acceptance”). If the Basic Amounts subscribed for by all Investors are less than the total of all of the Basic Amounts, then each Investor who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to
purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic
Amounts and the Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Investor who has subscribed for any 

  

 24 

 
Undersubscription Amount shall be entitled to purchase that portion of the Available Undersubscription Amount as the Basic Amount of such Investor bears to
the total Basic Amounts of all Investors that have subscribed for Undersubscription Amounts, subject to rounding by the Board of Directors to the extent its deems reasonably necessary. If two or more types of New Issue Securities are to be issued or
New Issue Securities are to be issued together with other types of securities, including, without limitation, debt securities, in a single transaction or related transactions, the rights to purchase New Issue Securities granted to the Investors
under this Section must be exercised to purchase all types of New Issue Securities and such other securities in the same proportion as such New Issue Securities and other securities are to be issued by the Company. 
 (c) The Company shall have ten (10) Trading Days from the expiration of the period set forth in Section 4.4(b) above to either
(i) issue, sell or exchange all or any part of such New Issue Securities as to which a Notice of Acceptance has not been given by the Investors (the “Refused Securities”) and publicly announce such transaction, but only upon
terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons than those set forth in the First Notice or (ii) notify the Investors that the Company has
abandoned a sale of New Issue Securities and confirm to the Investors that they are not in possession of any non-public information with respect to the Company. 
 (d) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4.4(c) above), then each Investor may, at its sole option and in its sole discretion, reduce the number or amount of the New Issue Securities specified in its Notice of Acceptance to an amount that shall be not less
than the number or amount of New Issue Securities that the Investor elected to purchase pursuant to Section 4.4(b) above multiplied by a fraction, (i) the numerator of which shall be the number or amount of New Issue Securities the Company
actually proposes to issue, sell or exchange (including prior to such reduction) and (ii) the denominator of which shall be the original amount of the New Issue Securities. In the event that any Investor so elects to reduce the number or amount
of New Issue Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the New Issue Securities unless and until such securities have again been offered to the Investors
in accordance with Section 4.4(a) above. 
 (e) Upon the closing of the issuance, sale or exchange of all or less than
all of the Refused Securities, the Investors shall acquire from the Company, and the Company shall issue to the Investors, the number or amount of New Issue Securities specified in the Notices of Acceptance, as reduced pursuant to
Section 4.4(d) the Investors have so elected, upon the terms and conditions specified in the First Notice. The purchase by the Investors of any New Issue Securities is subject in all cases to the preparation, execution and delivery by the
Company and the Investors of a purchase agreement relating to such New Issue Securities reasonably 

  

 25 

 
satisfactory in form and substance to the Investors and the Company and their respective counsel. 
 (f) The participation rights contained in this Section 4.4 shall not apply to the issuance and sale by the Company of shares of
Common Stock issued as a result of: (i) the issuance of Warrant Shares, (ii) to the extent consistent with past practice, the grant of options or warrants, or the issuance of additional securities, under any duly authorized Company stock
option, restricted stock plan or stock purchase plan whether now existing or approved by the Company and its shareholders in the future (but not as to any amendments or other modifications to the number of Common Stock issuable thereunder, the terms
set forth therein, or the exercise price set forth therein, unless such amendments or other modifications are approved by the Company’s shareholders), or (iii) the issuance and sale by the Company of shares of Common Stock issued as
consideration for the acquisition of another company or business in which the shareholders of the Company do not have an ownership interest, which acquisition has been approved by the Board of Directors of the Company. 
 4.5 Acknowledgment of Dilution. The Company acknowledges that the issuance of Underlying Shares upon conversion of Notes and Warrant Shares upon
exercise of Warrants will result in dilution of the outstanding shares of Common Stock, which dilution may be substantial. The Company further acknowledges that its obligation to honor conversions under the Notes is unconditional and absolute and
not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim that the Company may have against any Investor. 
 4.6 Integration. The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Investors, or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market in a manner that would require stockholder approval
of the sale of the Securities to the Investors. 
 4.7 Reservation of Shares. The Company shall maintain a reserve from its duly
authorized shares of Common Stock to comply with its conversion obligations under the Notes. If on any date the Company would be, if notice of conversion were to be delivered on such date, precluded from issuing the number of (i) Underlying
Shares, as the case may be, issuable upon conversion in full of the Notes or (ii) Warrant Shares, as the case may be, issuable upon exercise in full of the Warrants, due to the unavailability of a sufficient number of authorized but unissued or
reserved shares of Common Stock, then the Board of Directors of the Company shall promptly prepare and mail to the stockholders of the Company proxy materials or other applicable materials requesting authorization to amend the Company’s
certificate of incorporation or other organizational document to increase the number of shares of Common Stock which the Company is authorized to issue so as to provide enough shares for issuance of the Underlying Shares and Warrant Shares. In
connection therewith, the Board of Directors shall 

  

 26 

 
(a) adopt proper resolutions authorizing such increase, (b) recommend to and otherwise use its best efforts to promptly and duly obtain stockholder
approval to carry out such resolutions (and hold a special meeting of the stockholders as soon as practicable, but in any event not later than the 60th day after delivery of the proxy or other applicable materials relating to such meeting) and (c) within five Business Days of obtaining such stockholder authorization, file an appropriate
amendment to the Company’s certificate of incorporation or other organizational document to evidence such increase. 
 4.8 Conversion
Procedures. The form of Conversion Notice included in and as defined in the Notes sets forth the totality of the procedures required by the Investors in order to convert the Notes. The Company shall honor conversions of the Notes and shall
deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents. 
 4.9
Subsequent Registrations. Other than pursuant to the Registration Statement, prior to the Effective Date, the Company may not file any registration statement with the Commission with respect to any securities of the Company other than
registration statements on Form S-8 promulgated by the Commission. 
 4.10 Securities Laws Disclosure; Publicity. By 9:00 a.m. (New
York City time) on the Trading Day following the Closing Date, the Company shall issue a press release in a form reasonably acceptable to the Investors disclosing the transactions contemplated hereby. By 9:00 a.m. (New York City time) on the Trading
Day following the Closing Date the Company will file a Current Report on Form 8-K disclosing the material terms of the Transaction Documents (and attach as exhibits thereto the Transaction Documents) and disclosing the Closing. In addition, the
Company will make such other filings and notices in the manner and time required by the Commission and the Trading Market on which the Common Stock is listed. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any
Investor, or include the name of any Investor in any filing with the Commission (other than the Registration Statement and any exhibits to filings made in respect of this transaction in accordance with periodic filing requirements under the Exchange
Act) or any regulatory agency or Trading Market, without the prior written consent of such Investor, except to the extent such disclosure is required by law or Trading Market regulations. 
 4.11 Limitation on Issuance of Future Priced Securities. Until the earlier of (a) the conversion, in full, of the Notes into Common Stock
pursuant to the terms of the Notes, or (b) the prepayment or payment in full of the Notes, the Company shall not issue any “Future Priced Securities” as such term is described by NASD IM-4350-1. 
 4.12 Indemnification of Investors. In addition to the indemnity provided in the Registration Rights Agreement, the Company will indemnify and hold
the Investors and their directors, officers, shareholders, partners, employees and agents (each, an “Investor Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable 

  

 27 

 
attorneys’ fees and costs of investigation (collectively, “Losses”) that any such Investor Party may suffer or incur as a result of or
relating to any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction Document. In addition to the indemnity contained herein, the Company will reimburse each Investor
Party for its reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred. Except as otherwise set forth herein, the
mechanics and procedures with respect to the rights and obligations under this Section 4.12 shall be the same as those set forth in Section 5 of the Registration Rights Agreement. 
 4.13 Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Investor
or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Investor shall have executed a written agreement regarding the confidentiality and use of such
information. 
 4.14 Use of Proceeds. The Company will use the net proceeds from the sale of the Securities hereunder for working
capital purposes and not for the satisfaction of any portion of the Company’s debt (other than payment of trade payables and accrued expenses in the ordinary course of the Company’s business and consistent with prior practices), or to
redeem any Common Stock or Common Stock Equivalents. 
 4.15 Existence; Conduct of Business. The Company will, and will cause each of
the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business,
provided, that the foregoing shall not prohibit (a) any sale, lease, transfer or other disposition permitted by this Agreement, or (b) any merger of (i) any domestic Subsidiary with any other domestic Subsidiary, (ii) any
domestic Subsidiary with and into the Company, or (iii) any foreign Subsidiary with any other foreign Subsidiary. 
 ARTICLE V.

 NEGATIVE COVENANTS 
 The
Company hereby agrees that, from and after the date hereof until the date that the Notes have either been repaid in their entirety and/or converted entirely into Common Stock, the Company shall be bound according to the restrictions set forth in
each of the following negative covenants unless any such restriction shall have been expressly waived in writing by the Required Investors: 
 5.1 Restrictions on Certain Amendments. The Company will not amend the rights and privileges granted under the Notes, to adversely affect the rights or privileges granted under the Notes. 
 5.2 Restricted Payment. The Company shall not make any Restricted Payment. 
  

 28 

 5.3 Debt. The Company shall not create, incur, assume, become or be liable in any manner in
respect of, or suffer to exist, any Debt, except (a) Debt in existence on the date hereof, as shown on Schedule 5.3(a) and any amendment to the Silicon Valley Bank Loan and Security Agreement listed thereon provided, however that
the Company obtains the approval of the Investors holding 80% of the then outstanding principal amount of Notes prior to increasing the size of the overall credit facility, (b) trade payables incurred and paid in the ordinary course of
business, (c) Contingent Liabilities in existence on the date hereof, as shown on Schedule 5.3(c), (d) Contingent Liabilities resulting from the endorsement of negotiable instruments for collection in the ordinary course of
business, (e) Debt in connection with a capital raising transaction that is approved by the Board of Directors of the Company, provided, however, that (1) such Debt is unsecured, (2) such Debt is expressly subordinate to the Notes,
(3) such Debt has a maturity date that is, and the Company does not use any funds towards the payment of such Debt until, 91 days after the date that the Notes are no longer outstanding and (4) the Company obtains the approval of the
Investors holding a majority of the then outstanding principal amount of Notes held by Investors and (f) refinancing of that certain Subordinated Promissory Note, dated November 7, 2002 issued to Tektronix, Inc. (the “Tektronix
Note”), provided, however, (i) that any Debt incurred with respect to such refinancing is expressly subordinate to the Notes and is not for a principal amount greater than the outstanding principal amount of the Tektronix Note
on the date of such refinancing and (ii) the Company obtains the approval of each Investor that, at the time such approval is sought, holds greater than $50,000 in principal amount of Notes (collectively (a) through (f) shall be
referred to as “Permitted Indebtedness”). 
 5.4 Liens. The Company shall not create or suffer to exist any Lien upon
any of its properties, except (a) Liens in existence on the date hereof and disclosed in Schedule 5.4, and (b) Permitted Liens. Except as provided in this Section 5.4, the Company shall not hereafter agree with any Person
(other than the Investors) to grant a Lien on any of its assets or to permit the pledge of any of its equity interests. 
 5.5 Amendment
of Organizational Documents. The Company shall not permit any amendment to its certificate of incorporation that would adversely affect the rights or privileges granted under the Notes. 
 5.6 Sale and Leaseback. The Company shall not enter into any arrangement whereby it sells or transfers any of its assets, and thereafter rents or
leases such assets. 
 5.7 Transactions with Affiliates. The Company shall not, directly or indirectly, pay any funds to or for the
account of, make any investment (whether by acquisition of stock or indebtedness, by loan, advance, transfer of property, guarantee or other agreement to pay, purchase or service, directly or indirectly, any Debt, or otherwise) in, lease, sell,
transfer or otherwise dispose of any assets, tangible or intangible, to, or participate in, or effect any transaction in connection with any joint enterprise or other joint arrangement with, any Affiliate, except, on terms no less favorable than
terms that could be obtained by the Company from a Person that is not an Affiliate of the Company upon negotiation at arms’ length, as determined in 

  

 29 

 
good faith by the Board; provided that no determination of the Board of Directors shall be required with respect to any such transactions entered into
in the ordinary course of business. 
 5.8 Limitation on Restrictions. Other than as permitted by the Transaction Documents, the
Company shall not, and shall not permit any Subsidiary, to enter into, or suffer to exist, any agreement with any Person which prohibits or limits its ability to (a) pay Debt owed to the Investors, and (b) make loans or advances to the
Company, pay dividends or other distributions in respect of its equity interests to the Company (except that Subsidiaries may pay dividends or other distributions) or guarantee Debt of the Company. 
 5.9 Payment of Cash Dividend. The Company agrees, so long as any of the Notes are outstanding, not to declare, pay or make any provision for any
cash dividend or distribution with respect to the Common Stock of the Company, without first obtaining the approval of the Required Investors. 
 ARTICLE VI. 
 MISCELLANEOUS 
 6.1 Fees and Expenses. At the Closing, the Company shall pay to Bryan Cave LLP $50,000 (minus any amounts previously paid) as partial reimbursement of SF Capital Partners Ltd. for their respective legal fees in connection with the
Transaction Documents (SF Capital Partners Ltd. may deduct such amount from the Investment Amount deliverable to the Company at Closing), it being understood that Bryan Cave LLP has only rendered legal advice to SF Capital Partners Ltd., and not to
the Company or any other Investor in connection with the transactions contemplated hereby, and that each of the Company and the other Investors has relied for such matters on the advice of its own respective counsel. Except as specified in the
immediately preceding sentence, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery
and performance of the Transaction Documents. The Company shall pay all stamp and other taxes and duties levied in connection with the sale of the Notes. 
 6.2 Entire Agreement. The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all
prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. 
 6.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or 

  

 30 

 
communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as follows: 
  

			
	If to the Company:	  	Tut Systems, Inc.
		  	6000 SW Meadows Rd., Suite 200
		  	Lake Oswego, Oregon 97035
		  	Facsimile: (971) 217-0456
		  	Attention: Chief Financial Officer
		
	With a copy to:	  	DLA Piper Rudnick Gray Cary US LLP
		  	4365 Executive Drive, Suite 1100
		  	San Diego, CA 92121
		  	Attn: Marty B. Lorenzo, Esq.
		  	Facsimile: (858) 677-1401
		
	If to an Investor:	  	To the address set forth under such Investor’s name on the signature pages hereof;

 or such other address as may be designated in writing hereafter, in the same
manner, by such Person. 
 6.4 Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or
amended except in a written instrument signed by the Company and the Required Investors except as set forth below and except that the conditions precedent set forth in Section 2.1(d) may only be waived by each Investor to be bound by such
waiver. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. No consideration shall be offered or paid to any Investor to amend or consent to a waiver or
modification of any provision of any Transaction Document unless the same consideration is also offered to all Investors who then hold Notes. Without the written consent or the affirmative vote of each Investor affected thereby, an amendment or
waiver under this Section 6.4 may not: 
 (a) change the maturity of the principal amount of, or the interest payment
date under, or the payment of liquidated damages, is due on, any Note or Warrant; 
 (b) make any change that impairs the
conversion or exercise rights of any Securities; 
  

 31 

 (c) amend or modify in any manner adverse to the Holders of Securities the Company’s
obligation to make such payments; 
 (d) amend the definition of Required Investors; 
 (e) change the currency of any amount owed or owing under the Securities or any interest thereon from U.S. Dollars; 
 (f) impair the right of any Investor to institute suit for the enforcement of any payment with respect to, or conversion or exercise of,
any Security; or 
 (g) modify the provisions of this Section 6.4 or Section 6.5. 
 It shall not be necessary for the consent of the Investors under this Section 6.4 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof. 
 6.5 Termination. This Agreement may be terminated prior to the Closing:

 (a) by written agreement of the Investors and the Company; 
 (b) by the Company or an Investor (as to itself but no other Investor) upon written notice to the other, if the Closing shall not have
taken place by 5:30 p.m. (New York City time) on the Outside Date; provided, that the right to terminate this Agreement under this Section 6.5(b) shall not be available to any Person whose failure to comply with its obligations under
this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time. 
 (c) by an
Investor (as to itself but no other Investor) if it concludes in good faith that any of the conditions precedent contained in Sections 2.1(d)(iv), 2.1(d)(v), or 2.1(d)(vi) shall have been breached or shall not be capable of being satisfied by the
Outside Date despite the assumed best efforts of the Company. 
 In the event of a termination pursuant to this Section, the Company shall
promptly notify all non-terminating Investors and shall pay to the terminating Investor(s) all of the fees and expenses incurred by such Investors (including reasonable legal fees and expenses) in connection with this Agreement and the transactions
contemplated by this Agreement through the termination date. Other than as to the foregoing fees and expenses, upon a termination in accordance with this Section 6.5, the Company and the terminating Investor(s) shall not have any further
obligation or liability (including as arising from such termination) to the other and no Investor will have any liability to any other under the Transaction Documents Investor as a result therefrom. 
 6.6 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. 

  

 32 

 
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement or any of the Transaction Documents. 
 6.7 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investors. Any Investor may assign any or all of its
rights under this Agreement to any Person to whom such Investor assigns or transfers any Notes, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the
“Investors.” 
 6.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.12 (as to each Investor Party). 
 6.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Actions concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the
enforcement of the any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Action has been
commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Action by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an Action to enforce any provisions of a Transaction Document, then the prevailing party in such Action shall be reimbursed by the
other party for its 

  

 33 

 
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action. 
 6.10 Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the
Securities. 
 6.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page
were an original thereof. 
 6.12 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 
 6.13 Rescission and
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document
and the Company does not timely perform its related obligations within the periods therein provided, then such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights. 
 6.14 Replacement of Securities. If any
certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. The applicants for a
new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due
to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement. 
 6.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any 

  

 34 

 
breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate. 
 6.16 Payment Set Aside. To the extent that the Company makes a payment or payments
to any Investor pursuant to any Transaction Document or an Investor enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as
if such payment had not been made or such enforcement or setoff had not occurred. 
 6.17 Independent Nature of Investors’
Obligations and Rights. The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations
of any other Investor under any Transaction Document. The decision of each Investor to purchase Securities pursuant to the Transaction Documents has been made by such Investor independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in
any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor acknowledges that no other Investor has acted as agent for such Investor in connection with making
its investment hereunder and that no Investor will be acting as agent of such Investor in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party
in any proceeding for such purpose. The Company acknowledges that each of the Investors has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple Investors and not because it was required or
requested to do so by any Investor. 
 6.18 Limitation of Liability. Notwithstanding anything herein to the contrary, the Company
acknowledges and agrees that the liability of an Investor arising directly or indirectly, under any Transaction Document of any and every nature whatsoever shall be satisfied solely out of the assets of such Investor, and that no trustee, officer,
other investment vehicle or any other Affiliate of such Investor or any investor, shareholder or holder of shares of beneficial interest of such a Investor shall be personally liable for any liabilities of such Investor. 
  

 35 

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

			
	TUT SYSTEMS, INC.
		
	 By:
	 	  
		 	 Name: Salvatore D’Auria

		 	 Title: President and Chief Executive Officer

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOR INVESTORS FOLLOW] 
  

 36 

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

			
	NAME OF INVESTOR
	
	  
		
	By:	 	  
		 	 Name:

		 	 Title:

			
		
	Investment Amount: $ 	 	  

			
		
	Tax ID No.: 	 	  

  

			
	ADDRESS FOR NOTICE
		
	c/o:	 	  

			
		
	Street:	 	  

			
		
	City/State/Zip:	 	  

			
		
	Attention:	 	  

			
		
	Tel:	 	  

			
		
	Fax:	 	  

  

			
	DELIVERY INSTRUCTIONS
	(if different from above)
		
	c/o:	 	  

			
		
	Street:	 	  

			
		
	City/State/Zip:	 	  

			
		
	Attention:	 	  

			
		
	Tel:	 	  

  

 37

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