Document:

ex102.htm

 

 

Exhibit 10.2

 

SEVENTH LOAN MODIFICATION AGREEMENT

 

This Seventh Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of March 1, 2013 by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 505 Fifth Avenue, 11th Floor, New York, New York 10017 (“Bank”) and CHYRON CORPORATION, a New York corporation with its chief executive office located at 5 Hub Drive, Melville, New York 11747 (“Borrower”).

 

1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS.  Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of June 19, 2008, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 19, 2008, between Borrower and Bank, as amended by a certain First Loan Modification Agreement dated as of April 16, 2009, between Borrower and Bank, as further amended by a certain Second Loan Modification Agreement dated as of June 18, 2009, between Borrower and Bank, as further amended by a certain Third Loan Modification Agreement dated as of March 24, 2010, between Borrower and Bank, as further amended by a certain Fourth Loan Modification Agreement dated as of March 24, 2011, between Borrower and Bank, as further amended by a certain Fifth Loan Modification Agreement dated as of December 28, 2011, between Borrower and Bank, and as further amended by a certain Sixth Loan Modification Agreement dated as of August 13, 2012, between Borrower and Bank (as amended, the “Loan Agreement”).  Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

 

2. DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”).  Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations, shall be referred to as the “Existing Loan Documents”.

 

3. DESCRIPTION OF CHANGE IN TERMS.

 

	
A.  

	
Modifications to Loan Agreement.

 

	
1.  

	
The Loan Agreement shall be amended by deleting the following provision appearing as Section 2.1.1(a) (Revolving Advances; Availability) thereof:

 

“           (a)           Availability.  Subject to the terms and conditions of this Agreement, Bank shall make Advances not exceeding the Availability Amount.  Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein.”

 

and inserting in lieu thereof the following:

 

“           (a)           Availability.  Subject to the terms and conditions of this Agreement and to deduction of Reserves, Bank shall make Advances not exceeding the Availability Amount.  Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein.”

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

  

  

  

 

 

 

	
2.  

	
The Loan Agreement shall be amended by inserting the following new Section 2.3(g) (entitled “Application of Payments”) to appear immediately following the existing Section 2.3(f) (Payments) thereof:

 

“           (g)           Application of Payments.  Subject to Section 6.11(c) hereof, Bank shall apply the whole or any part of collected funds against the Revolving Line or credit such collected funds to a depository account of Borrower with Bank (or an account maintained by an Affiliate of Bank), the order and method of such application to be in the sole discretion of Bank.  Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any such allocation or application is not specified elsewhere in this Agreement.”

 

 

	
3.  

	
The Loan Agreement shall be amended by deleting the following provisions appearing in Section 3.2 (Conditions Precedent to all Credit Extensions) thereof:

 

 “           (a)           except as otherwise provided in Section 3.4(a), timely receipt of an executed Payment/Advance Form;

 

(b)           the representations and warranties in Section 5 shall be true in all material respects on the date of the Payment/Advance Form and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the Credit Extension.  Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in Section 5 remain true in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and”

 

and inserting in lieu thereof the following:

 

“           (a)           except as otherwise provided in Section 3.4(a), timely receipt of an executed Transaction Report;

 

(b)           the representations and warranties in Section 5 shall be true in all material respects on the date of the Transaction Report and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Default or Event of Default shall have occurred and be continuing or result 

 

 

-2-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

  

  

  

 

 

 

 

from the Credit Extension.  Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in Section 5 remain true in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and”

 

	
4.  

	
The Loan Agreement shall be amended by deleting the following provision appearing as Section 3.4(a) (Procedures for Borrowing; Advances) thereof:

 

“           (a)           Advances.  Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, to obtain an Advance (other than Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time on the Funding Date of the Advance.  Together with any such electronic or facsimile notification, Borrower shall deliver to Bank by electronic mail or facsimile a completed Payment/Advance Form executed by a Responsible Officer or his or her designee.  Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee.  Bank shall credit Advances to the Designated Deposit Account.  Bank may make Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Advances are necessary to meet Obligations which have become due.”

 

and inserting in lieu thereof the following:

 

“           (a)           Advances.  Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, to obtain an Advance, Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time on the Funding Date of the Advance.  In connection with such notification, Borrower must promptly deliver to Bank by electronic mail a completed Transaction Report executed by an Authorized Signer together with such other reports and information, including without limitation, sales journals, cash receipts journals, accounts receivable aging reports, as Bank may request in its sole discretion.  Bank shall credit proceeds of an Advance to the Designated Deposit Account.  Bank may make Advances under this Agreement based on instructions from an Authorized Signer or without instructions if the Advances are necessary to meet Obligations which have become due.”

 

	
5.  

	
The Loan Agreement shall be amended by deleting the following provision appearing as Section 5.3 (Accounts Receivable) thereof in its entirety:

 

“           5.3           Accounts Receivable.  For any Eligible Account in any Borrowing Base Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing such Eligible Accounts are and shall be true and correct and all such invoices, 

 

-3-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

  

  

  

 

 

 

instruments and other documents, and all of Borrower's Books are genuine and in all respects what they purport to be.  After an Event of Default has occurred and is continuing, Bank may notify any Account Debtor owing Borrower money of Bank’s security interest in such funds and verify the amount of such Eligible Account.  All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations.  Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Borrowing Base Certificate.  To the best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.”

 

and inserting in lieu thereof the following:

 

“           5.3           Accounts Receivable.

 

(a)           For each Account with respect to which Advances are requested, on the date each Advance is requested and made, such Account shall be an Eligible Account.

 

(b)           All statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing the Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower's Books are genuine and in all respects what they purport to be.  All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations.  Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Transaction Report.  To the best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.”

 

	
6.  

	
The Loan Agreement shall be amended by deleting the following provision appearing as Section 6.2 (b) thereof:

 

“           (b)           Within thirty (30) days after the last day of each month, deliver to Bank a duly completed Borrowing Base Certificate signed by a Responsible Officer, with aged listings of accounts receivable and accounts payable (by invoice date).”

 

and inserting in lieu thereof the following:

 

“           (b)           within twenty (20) days after the end of each month, (A) monthly accounts receivable agings, aged by invoice date , and (B) monthly accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, as requested by Bank.”

 

 

 

-4-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

 

  

  

  

 

	
7.  

	
The Loan Agreement shall be amended by inserting the following new Section 6.2(e) to appear immediately following the existing Section 6.2(d) thereof:

 

“           (e)           a Transaction Report (and any schedules related thereto) (i) with each request for an Advance,  and (ii) within thirty (30) days after the end of each month.”

 

	
8.  

	
The Loan Agreement shall be amended by deleting the following provision appearing as Section 6.7(b) (Tangible Net Worth) thereof:

 

 

	
  

	
“

	
(b)

	
Tangible Net Worth.  To be tested as of the last day of each of Borrower’s fiscal quarters, Tangible Net Worth of at least: (i) prior to 2009 Effective Date No. 2, Six Million Five Hundred Thousand Dollars ($6,500,000.00), provided, however, that such required amount shall increase by an amount equal to sixty percent (60.0%) of the sum of the (A) gross proceeds received by Borrower from the sale of its equity or the incurrence of Subordinated Debt after the Effective Date, and (B) any positive quarterly Net Income earned by Borrower during any of Borrower’s fiscal quarters ending after the Effective Date, (ii) on and after 2009 Effective Date No. 2 through and including the date that is one (1) day prior to the 2010 Effective Date, Twenty-Four Million Dollars ($24,000,000.00), provided, however, that such required amount shall increase by an amount equal to sixty percent (60.0%) of the sum of the (A) gross proceeds received by Borrower from the sale of its equity or the incurrence of Subordinated Debt after 2009 Effective Date No. 2, and (B) any positive quarterly Net Income earned by Borrower during any of Borrower’s fiscal quarters ending after 2009 Effective Date No. 2, (iii) (x) on and after the 2010 Effective Date through and including the date that is one (1) day prior to the 2011 Effective Date, Twenty-Two Million Dollars ($22,000,000.00), and (y) on and after the 2011 Effective Date, Eighteen Million Five Hundred Thousand Dollars ($18,500,000.00), provided, however, that such amount shall increase by an amount equal to sixty percent (60.0%) of the sum of the (A) gross proceeds received by Borrower from the sale of its equity or the incurrence of convertible or other indebtedness for borrowed money after the 2011 Effective Date, plus (B) any positive quarterly Net Income earned by Borrower during any of Borrower’s fiscal quarters ending after the 2011 Effective Date.”

 

and inserting in lieu thereof the following:

 

 

	
  

	
“

	
(b)

	
Tangible Net Worth.  To be tested as of the last day of each of Borrower’s fiscal quarters, Tangible Net Worth of at least: (i) prior to 2009 Effective Date No. 2, Six Million Five Hundred Thousand Dollars ($6,500,000.00), provided, however, that such required amount shall increase by an amount equal to sixty percent (60.0%) of the sum of the (A) gross proceeds received by Borrower from the sale of its equity or the incurrence of Subordinated Debt after the Effective Date, and (B) any positive quarterly Net Income earned by Borrower during any of Borrower’s fiscal quarters ending after the Effective Date, (ii) on and after 2009 Effective Date No. 2 through and including the date that is one (1) day prior to the 2010 Effective Date, Twenty-Four Million Dollars ($24,000,000.00), provided, however, that such required 

 

 

-5-

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

 

  

  

  

 

 

amount shall increase by an amount equal to sixty percent (60.0%) of the sum of the (A) gross proceeds received by Borrower from the sale of its equity or the incurrence of Subordinated Debt after 2009 Effective Date No. 2, and (B) any positive quarterly Net Income earned by Borrower during any of Borrower’s fiscal quarters ending after 2009 Effective Date No. 2, (iii) (x) on and after the 2010 Effective Date through and including the date that is one (1) day prior to the 2011 Effective Date, Twenty-Two Million Dollars ($22,000,000.00), and (y) on and after the 2011 Effective Date through and including December 31, 2012, Eighteen Million Five Hundred Thousand Dollars ($18,500,000.00), provided, however, that such amount shall increase by an amount equal to sixty percent (60.0%) of the sum of the (A) gross proceeds received by Borrower from the sale of its equity or the incurrence of convertible or other indebtedness for borrowed money after the 2011 Effective Date, plus (B) any positive quarterly Net Income earned by Borrower during any of Borrower’s fiscal quarters ending after the 2011 Effective Date.”

 

 

 

	
9.  

	
The Loan Agreement shall be amended by inserting the following new Section 6.7(c) (entitled “Maximum EBITDA Loss”) to appear immediately following the existing Section 6.7(b) (Tangible Net Worth) thereof:

 

“           (c)           Maximum EBITDA Loss.  Reported as of the last day of each quarter, the cumulative maximum EBITDA loss for each of the following periods shall not exceed the following:  (i) [***] Dollars ($[***]) for the quarter ending March 31, 2013; (ii) [***] Dollars ($[***]) for the six-month period ending on June 30, 2013; (iii) [***] Dollars ($[***]) for the nine-month period ending on September 30, 2013; and (iv) [***] Dollars ($[***]) for the twelve-month period ending on December 31, 2013.”

 

	
10.  

	
The Loan Agreement shall be amended by inserting the following new Section 6.11 (entitled “Accounts Receivable”) to appear immediately following the existing Section 6.10 (Further Assurances) thereof:

 

“           6.11           Accounts Receivable.

 

(a)           Schedules and Documents Relating to Accounts. Borrower shall deliver to Bank transaction reports and schedules of collections, as provided in Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s failure to execute and deliver the same shall not affect or limit Bank’s Lien and other rights in all of Borrower’s Accounts, nor shall Bank’s failure to advance or lend against a specific Account affect or limit Bank’s Lien and other rights therein.  If requested by Bank, Borrower shall furnish Bank with copies (or, at Bank’s request, originals) of all contracts, orders, invoices, and other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the sale or disposition of which gave rise to such Accounts.  In addition, Borrower shall deliver to Bank, on its request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or securing any Accounts, in the same form as received, with all necessary endorsements, and copies of all credit memos.

 

 

-6-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

 

  

  

  

(b)           Disputes.  Borrower shall promptly notify Bank of all disputes or claims relating to Accounts.  Borrower may forgive (completely or partially), compromise, or settle any Account for less than payment in full, or agree to do any of the foregoing so long as (i) Borrower does so in good faith, in a commercially reasonable manner, in the ordinary course of business, in arm’s-length transactions, and reports the same to Bank in the regular reports provided to Bank; (ii) no Default or Event of Default has occurred and is continuing; and (iii) after taking into account all such discounts, settlements and forgiveness, the total outstanding Advances will not exceed the lesser of the Revolving Line or the Borrowing Base.

 

(c)           Collection of Accounts.  Borrower shall have the right to collect all Accounts, unless and until a Default or an Event of Default has occurred and is continuing.  Bank shall require that Borrower direct Account Debtors to deliver or transmit all proceeds of Accounts into a lockbox account, or via electronic deposit capture into a “blocked account” as specified by Bank (either such account, the “Cash Collateral Account”), pursuant to a blocked account agreement in form and substance satisfactory to as Bank.  Whether or not an Event of Default has occurred and is continuing, Borrower shall immediately deliver all payments on and proceeds of Accounts to the Cash Collateral Account to be applied to immediately reduce the Obligations; provided that during a Streamline Period, such payments and proceeds shall be transferred to the Designated Deposit Account.

 

(d)Returns.  Provided no Event of Default has occurred and is continuing, if any Account Debtor returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate amount, and (iii) provide a copy of such credit memorandum to Bank, upon request from Bank.  In the event any attempted return occurs after the occurrence and during the continuance of any Event of Default, Borrower shall hold the returned Inventory in trust for Bank, and immediately notify Bank of the return of the Inventory.  

 

(e) Verification.  Bank may, from time to time, upon the occurrence and during the continuance of a Default or an Event of Default, verify directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts, either in the name of Borrower or Bank or such other name as Bank may choose, and notify any Account Debtor of Bank’s security interest in such Account.

 

(f)           No Liability.  Bank shall not be responsible or liable for any shortage or discrepancy in, damage to, or loss or destruction of, any goods, the sale or other disposition of which gives rise to an Account, or for any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect any Account, or for settling any Account in good faith for less than the full amount thereof, nor shall Bank be deemed to be responsible for any of Borrower's obligations under any contract or agreement giving rise to an Account.  Nothing herein shall, however, relieve Bank from liability for its own gross negligence or willful misconduct.”

 

 

-7-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

  

  

  

 

	
11.  

	
The Loan Agreement shall be amended by inserting the following new Section 6.12 (entitled “Remittance of Proceeds”) to appear immediately following Section 6.11 (Accounts Receivable) thereof:

 

“           6.12           Remittance of Proceeds.  Except as otherwise provided in Section 6.11(c), deliver, in kind, all proceeds arising from the disposition of any Collateral to Bank in the original form in which received by Borrower not later than the following Business Day after receipt by Borrower, to be applied to the Obligations (a) prior to an Event of Default, pursuant to the terms of Section 2.3(g) hereof, and (b) after the occurrence and during the continuance of an Event of Default, pursuant to the terms of Section 9.4 hereof; provided that, if no Event of Default has occurred and is continuing, Borrower shall not be obligated to remit to Bank the proceeds of the sale of worn out or obsolete Equipment disposed of by Borrower in good faith in an arm’s length transaction for an aggregate purchase price of Twenty Five Thousand Dollars ($25,000.00) or less (for all such transactions in any fiscal year).  Borrower agrees that it will not commingle proceeds of Collateral with any of Borrower’s other funds or property, but will hold such proceeds separate and apart from such other funds and property and in an express trust for Bank.  Nothing in this Section limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement.”

 

	
12.  

	
The Loan Agreement shall be amended by deleting the following provision appearing as Section 9.4 (Application of Payments and Proceeds) thereof in its entirety:

 

“           9.4           Application of Payments and Proceeds.  If Borrower fails to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest applicable rate charged by Bank, and secured by the Collateral.  Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter.  No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.”

 

and inserting in lieu thereof the following:

 

“           9.4           Application of Payments and Proceeds.  Pursuant to the terms of Section 6.11(c), Bank shall have the right to apply in any order any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations.  Bank shall pay any surplus to Borrower by credit to the Designated Deposit Account or to other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency.  If Bank, directly or indirectly, enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.”

 

 

-8-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

  

  

  

 

	
13.  

	
The Loan Agreement shall be amended by deleting the following definitions appearing in Section 13.1 thereof:

 

“           “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base minus (b) the outstanding principal balance of any Advances.”

 

“           “Borrowing Base” is eighty percent (80.0%) of Eligible Accounts, as determined by Bank from Borrower’s most recent Borrowing Base Certificate; provided, however, that Bank may decrease the foregoing percentage in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect Collateral.”

 

“           “Net Income” means, as calculated for Borrower for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Borrower for such period taken as a single accounting period.”

 

 “           “Revolving Line” is an Advance or Advances in an amount equal to Three Million Dollars ($3,000,000.00).”

 

and inserting in lieu thereof the following:

 

“           “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base, minus (b) the outstanding principal balance of any Advances, and minus (c) the outstanding principal amount of all Term Loan Advances.”

 

“           “Borrowing Base” is eighty percent (80.0%) of Eligible Accounts, as determined by Bank from Borrower’s most recent Transaction Report; provided, however, that Bank has the right to decrease the foregoing percentage in its good faith business judgment to mitigate the impact of events, conditions, contingencies, or risks which may adversely affect the Collateral or its value.”

 

“           “Net Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.”

 

“           “Revolving Line” is an Advance or Advances in an amount equal to Two Million Dollars ($2,000,000.00).”

 

	
14.  

	
The Loan Agreement shall be amended by inserting the following new definitions to appear alphabetically in Section 13.1 thereof:

 

“           “2013 Effective Date” is March 1, 2013.”

 

“           “Default” means any event which with notice or the passage of time, or both, would constitute an Event of Default.”

 

 

-9-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

  

  

  

 

 

“           “EBITDA” shall mean (a) Net Income, plus (b) net Interest Expense, plus (c) to the extent deducted in the calculation of Net Income, depreciation expense and amortization expense, plus (d) income tax expense.”

 

“           “Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash) determined in accordance with GAAP for the relevant period ending on such date, including, in any event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower and its Subsidiaries, including, without limitation or duplication, all commissions, discounts, or related amortization and other fees and charges with respect to letters of credit and bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and similar arrangements, and the interest portion of any deferred payment obligation (including leases of all types).”

 

“           “Reserves” means, as of any date of determination, such amounts as Bank may from time to time establish and revise in its good faith business judgment, reducing the amount of Advances and other financial accommodations which would otherwise be available to Borrower (a) to reflect events, conditions, contingencies or risks which, as determined by Bank in its good faith business judgment, do or may adversely affect (i) the Collateral or any other property which is security for the Obligations or its value (including without limitation any increase in delinquencies of Accounts), (ii) the assets, business or prospects of Borrower or any Guarantor, or (iii) the security interests and other rights of Bank in the Collateral (including the enforceability, perfection and priority thereof); or (b) to reflect Bank's reasonable belief that any collateral report or financial information furnished by or on behalf of Borrower or any Guarantor to Bank is or may have been incomplete, inaccurate or misleading in any material respect; or (c) in respect of any state of facts which Bank determines constitutes an Event of Default or may, with notice or passage of time or both, constitute an Event of Default.”

 

“           “Streamline Period” is, on and after the 2013 Effective Date, provided no Event of Default has occurred and is continuing, the period of time (a) commencing on the first (1st) day of the month following the month in which Borrower reports to Bank that Borrower has maintained an Adjusted Quick Ratio of greater than or equal to 1.50 to 1.00, as confirmed by Bank in its sole discretion (the “Streamline Threshold”); and (b) ending on the earlier to occur of (i) an Event of Default, and (ii) the first day thereafter in which Borrower fails to maintain the Streamline Threshold, as determined by Bank in its sole discretion. Upon the termination of a Streamline Period, Borrower must maintain the Streamline Threshold each consecutive day for thirty (30) consecutive days, as determined by Bank, in its sole discretion, prior to entering into a subsequent Streamline Period.  Borrower shall give Bank prior-written notice of Borrower’s intention to enter into any such Streamline Period.”

 

“           “Streamline Threshold” is defined in the definition entitled “Streamline Period” appearing alphabetically in this Section 13.1.”

 

“           “Transaction Report” is that certain report of transactions and schedule of collections in the form attached hereto as Exhibit E.”

 

 

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

  

  

  

 

	
15.  

	
The Borrowing Base Certificate appearing as Exhibit C to the Loan Agreement is hereby deleted in its entirety.

 

	
16.  

	
The Compliance Certificate appearing as Exhibit D to the Loan Agreement is hereby replaced with the Compliance Certificate attached as Exhibit 1 hereto.

 

	
17.  

	
The Transaction Report appearing as Exhibit 2 hereto is hereby added to the Loan Agreement as Exhibit E.

 

	
B.  

	
Waivers.

 

 

	
1.  

	
Bank hereby waives Borrower’s existing default under the Loan Agreement by virtue of Borrower’s failure to comply with the Tangible Net Worth covenant set forth in Section 6.7(b) thereof as of the quarter ending December 31, 2012.  Bank’s waiver of Borrower’s compliance of said affirmative covenant shall apply only to the foregoing specific period.

 

4. FEES.  Borrower shall pay to Bank a modification fee equal to Five Thousand Dollars ($5,000.00), which fee shall be due on the date hereof and shall be deemed fully earned as of the date hereof.  Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 

5. RATIFICATION OF PERFECTION CERTIFICATE.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of December 28, 2011, between Borrower and Bank (the “Perfection Certificate”), and acknowledges, confirms and agrees the disclosures and information Borrower provided to Bank in the Perfection Certificate have not changed, as of the date hereof.

 

6. CONSISTENT CHANGES.  The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

 

7. RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to Bank and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

 

8. NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

 

9. CONTINUING VALIDITY.  Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents.  Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing.  No maker will be released by virtue of this Loan Modification Agreement.

 

 

 

-11-

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

  

  

 

 

10. CONFIDENTIALITY.  Bank may use confidential information for the development of databases, reporting purposes, and market analysis, so long as such confidential information is aggregated and anonymized prior to distribution unless otherwise expressly permitted by Borrower.  The provisions of the immediately preceding sentence shall survive the termination of the Loan Agreement.

 

11. COUNTERSIGNATURE.  This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally left blank]

 

 

 

-12-

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

  

  

  

 

 

This Loan Modification Agreement is executed as of the date first written above.

 

BORROWER:

 

CHYRON CORPORATION

 

By: /s/ Jerry Kieliszak

 

Name: Jerry Kieliszak

 

Title: SVP & CFO, Treasurer and Corporate Secretary

 

 

BANK:

 

SILICON VALLEY BANK

 

By: /s/ A. Bonnie Ryan Arrante

 

Name: A. Bonnie Ryan Arrante

 

Title: Vice President

 

-13-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

  

  

  

 

 

 

EXHIBIT 1

EXHIBIT D - COMPLIANCE CERTIFICATE

 

TO:           SILICON VALLEY BANK                                                                                           Date:                                           

 

FROM:  CHYRON CORPORATION

 

The undersigned authorized officer of CHYRON CORPORATION (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.  Attached are the required documents supporting the certification.  The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes.  The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

 

	
Please indicate compliance status by circling Yes/No under “Complies” column.

	  
	
Reporting Covenant

	
Required

	
Complies

	  	  	  
	
Monthly financial statements with

Compliance Certificate

	
Monthly within 30 days

	
Yes   No

	
Annual financial statement (CPA Audited)

	
FYE within 90 days

	
Yes   No

	
Transaction Reports

	
Monthly within 30 days and with each request for an Advance

	
Yes   No

	
A/R & A/P Agings

	
Monthly within 20 days

	
Yes   No

	
Board-approved projections

	
FYE within 60 days, and contemporaneously with any updates or changes thereto

	
Yes   No

	  

 

 

-14-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

 

 

  

  

  

 

 

	
Financial Covenant

	
Required

	
Actual

	
Complies

	  	  	  	  
	
Maintain at all times:

	  	  	  
	  	  	  	  
	
Adjusted Quick Ratio (to be tested on the last day of each month)

	
1.20:1.0

	
____:1.0

	
Yes   No

	
Maximum EBITDA Loss (to be reported on the last day of each quarter)

	
$*

	
$________

	
Yes   No

 

*As set forth in Section 6.7(c) of the Agreement.

 

The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

 

The following are the exceptions with respect to the certification above:  (If no exceptions exist, state “No exceptions to note.”)

 

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

 

 

	
CHYRON CORPORATION

 

 

By:                                                       

Name:                                                       

Title:                                                       

 

	
BANK USE ONLY

 

Received by:                                                       

authorized signer

Date:                                                       

 

Verified:                                                       

authorized signer

Date:                                                       

 

-15-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

  

  

  

 

 

Compliance Status:                                         Yes     No

 

 

 

 

-16-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

  

  

  

 

 

 

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.

Dated:           ____________________

I.           Adjusted Quick Ratio (Section 6.7(a))

 

Required:                      1.20:1.00

 

Actual:                                ____:1.00

 

	 	A.	 	
Aggregate value of the unrestricted cash of Borrower

	 	$	 	 
	 	B.	 	
Aggregate value of the net billed accounts receivable of Borrower

	 	$	 	 
	 	C.	 	
Quick Assets (the sum of lines A through B)

	 	$	 	 
	 	D.	 	
Aggregate value of Obligations to Bank

	 	$	 	 
	 	E.	 	
Aggregate value of liabilities of Borrower (including all Indebtedness) that mature within one (1) year and current portion of Subordinated Debt permitted by Bank to be paid by Borrower

	 	$	 	 
	 	F.	 	
Current Liabilities (the sum of lines D and E)

	 	$	 	 
	 	G	 	
Deferred Revenue

 

	 	$	 	 
	 	H	 	
Line F minus line G

	 	$	 	 
	 	 	 	
 

	 	 	 	 

 

 

 

-17-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

  

  

  

 

	I.	 	
Adjusted Quick Ratio (line C divided by line H)

	 	 	 	 

 

 

 

 

 

 

 

 

 

Is line I equal to or greater than 1.20:1.00?

 

_______  No, not in compliance                                                                                                _______   Yes, in compliance

 

 

 

II.           Maximum EBITDA Loss (Section 6.7(c))

 

Required:                      $_________ (as set forth in Section 6.7(c) of the Agreement)

 

 

Actual:                                $_________

 

 

_______                        No, not in compliance                                                                                     _______                        Yes, in compliance

 

 

 

 

-18-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

  

  

  

 

EXHIBIT 2

EXHIBIT E – TRANSACTION REPORT

[to be provided by Bank]

 

 

-19-

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.ex041rraseriesa

Exhibit B to Series A Convertible Preferred Stock Purchase Agreement      REGISTRATION RIGHTS AGREEMENT   This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and   entered into as of [●], 2013, by and between Magellan Petroleum Corporation, a Delaware   corporation (the “Corporation”) and One Stone Holdings II LP, a Delaware limited partnership   (the “Purchaser”).  The Corporation and the Purchaser are referred to collectively herein as the   “Parties.”   WHEREAS, pursuant to the Series A Convertible Preferred Stock Purchase   Agreement, dated as of May 10, 2013, by and between the Corporation and the Purchaser (the   “Purchase Agreement”), the Corporation is agreeing to issue and sell to the Purchaser, and the   Purchaser is agreeing to purchase from the Corporation, 19,239,734 shares (the “Purchased   Stock”) of the Corporation’s Series A Convertible Preferred Stock, par value $0.01 per share,   which is convertible into shares of common stock, par value $0.01 per share, of the Corporation   (the “Common Stock”) upon the terms and subject to the conditions set forth in the Certificate   of Designations of Series A Convertible Preferred Stock of the Corporation (the “Certificate of   Designations”); and   WHEREAS, in furtherance of the transactions contemplated by the Purchase   Agreement, the Corporation has agreed to provide the registration and other rights set forth in   this Agreement with respect to the Common Stock.   NOW THEREFORE, in consideration of the mutual covenants and agreements   set forth herein and for good and valuable consideration, the receipt and sufficiency of which are   hereby acknowledged, the parties to this Agreement hereby agree as follows:   1. Definitions; Construction.  Capitalized terms used in this Agreement and not   defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.  As   used in this Agreement, the following terms have the following meanings:   “Affiliate” shall mean, with respect to a specified Person, any other Person,   whether now in existence or hereafter created, directly or indirectly controlling, controlled by or   under direct or indirect common control with such specified Person.  For purposes of this   definition, “control” (including, with correlative meanings, “controlling”, “controlled by” and   “under common control with”) shall mean the power to direct or cause the direction of the   management and policies of such Person, directly or indirectly, whether through the ownership   of voting securities, by contract or otherwise; provided, however, that “Affiliate” shall not be   deemed to include any portfolio company in which the Purchaser or any of its investment fund   Affiliates have made a debt or equity investment.   “Agreement” shall have the meaning set forth in the preamble to this Agreement.    “Automatic Shelf Registration Statement” shall mean an “automatic shelf   registration statement” as defined under Rule 405.   “Blackout Period” shall have the meaning set forth in Section 2(a).   “Board of Directors” shall mean the board of directors of the Corporation.    US 1832721v.13     

 

   2   Error! Bookmark not defined.   “Business Day” shall mean any day other than a Saturday, Sunday or other day   on which commercial banks in New York, New York are authorized or required by law or   executive order to close.   “Certificate of Designations” shall have the meaning set forth in the recitals to   this Agreement.   “Common Stock” shall have the meaning set forth in the recitals to this   Agreement.    “Conversion Stock” shall mean the Common Stock issuable upon conversion of   the Purchased Stock in accordance with the Transaction Documents, including any Common   Stock issuable upon conversion of Preferred Stock issued to the Purchaser as payment in kind in   accordance with the terms of the Transaction Documents.    “Corporation” shall have the meaning set forth in the preamble to this   Agreement.    “Corporation Indemnified Persons” shall have the meaning set forth in   Section 5(b).   “Demand Notice” shall have the meaning set forth in Section 2(a).   “Demand Registration” shall have the meaning set forth in Section 2(a).   “Effective Date” shall mean the time and date that a Registration Statement is   first declared effective by the SEC or otherwise becomes effective.   “Effectiveness Period” shall have the meaning set forth in Section 2(a).   “Equity Securities” shall mean any capital stock of the Corporation (including   the Common Stock and the Preferred Stock) or any options, warrants or other securities that are   directly or indirectly convertible into, or exercisable or exchangeable for, any capital stock of the   Corporation (including the Common Stock and the Preferred Stock).   “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended   from time to time, and the rules and regulations promulgated thereunder.   “Form S-3” shall mean a registration statement on Form S-3 under the Securities   Act or such successor forms thereto permitting registration of securities under the Securities Act.   “Governmental Authority” shall mean, with respect to a particular Person, any   state, county, city and political subdivision of the United States in which such Person or such   Person’s property is located or which exercises valid jurisdiction over any such Person or such   Person’s property, and any court, agency, department, commission, board, bureau or   instrumentality of any of them that exercises valid jurisdiction over any such Person or such   Person’s property.  Unless otherwise specified, all references to Governmental Authority herein   with respect to the Corporation shall mean a Governmental Authority having jurisdiction over     

 

   3   Error! Bookmark not defined.   the Corporation, its subsidiaries or any of their respective properties.   “Holder” shall mean (i) the Purchaser unless and until the Purchaser ceases to   hold the Purchased Stock or any Registrable Securities and (ii) any holder of Registrable   Securities to whom registration rights conferred by this Agreement have been transferred in   compliance with Section 7(e) hereof; provided that any Person referenced in clause (ii) shall be a   Holder only if such Person agrees in writing to be bound by and subject to the terms set forth in   this Agreement.   “Holder Indemnified Persons” shall have the meaning set forth in Section 5(a).    “Holder Representatives” shall have the meaning set forth in Section 3(a).   “Initiating Holder” shall have the meaning set forth in Section 2(a).   “Losses” shall have the meaning set forth in Section 5(a).   “Parties” shall have the meaning set forth in the preamble to this Agreement.   “Person” shall mean any individual, corporation, general partnership, limited   partnership, limited liability partnership, joint venture, association, joint-stock company, trust,   limited liability company, unincorporated organization, Governmental Authority or any agency   or political subdivision thereof.   “Piggyback Notice” shall have the meaning set forth in Section 2(b).   “Piggyback Registration” shall have the meaning set forth in Section 2(b).   “Piggyback Request” shall have the meaning set forth in Section 2(b).   “Proceeding” shall mean any action, claim, suit, proceeding or investigation   (including a preliminary investigation or partial proceeding, such as a deposition) pending or, to   the knowledge of the Corporation, threatened.   “Prospectus” shall mean the prospectus included in a Registration Statement   (including a prospectus that includes any information previously omitted from a prospectus filed   as part of an effective Registration Statement in reliance upon Rule 430A, Rule 430B or Rule   430C promulgated under the Securities Act), as amended or supplemented by any prospectus   supplement, with respect to the terms of the offering of any portion of the Registrable Securities   covered by a Registration Statement and all other amendments and supplements to the   Prospectus, including post-effective amendments, and all material incorporated by reference or   deemed to be incorporated by reference in such Prospectus.     “Purchase Agreement” shall have the meaning set forth in the recitals to this   Agreement.   “Purchased Stock” shall have the meaning set forth in the recitals to this   Agreement.     

 

   4   Error! Bookmark not defined.   “Purchaser” shall have the meaning set forth in the preamble to this Agreement.      “Registrable Securities” shall mean the Conversion Stock underlying the   Purchased Stock; provided, however, that Registrable Securities shall not include:  (i) any   Conversion Stock that has been registered under the Securities Act and disposed of pursuant to   an effective registration statement; (ii) any Conversion Stock that has been sold pursuant to Rule   144; (iii) any Conversion Stock that has been otherwise transferred to a Person who is not   entitled to the registration and other rights hereunder; and (iv) any Conversion Stock that ceases   to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise).    “Registration Default” shall have the meaning set forth in Section 2(a).   “Registration Expenses” shall have the meaning set forth in Section 4.   “Registration Statement” shall mean a registration statement in a form that   permits the resale of the Registrable Securities under the Securities Act, and including any   Prospectus, amendments and supplements to each such registration statement or Prospectus,   including pre- and post-effective amendments, all exhibits thereto, and all material incorporated   by reference or deemed to be incorporated by reference in such registration statement.   “Rule 144” shall mean Rule 144 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.   “Rule 405” shall mean Rule 405 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.   “Rule 415” shall mean Rule 415 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.   “Rule 424” shall mean Rule 424 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.   “SEC” shall mean the Securities and Exchange SEC or any other federal agency   then administering the Securities Act or Exchange Act.   “SEC Guidance” shall mean (i) any publicly-available written guidance,   comments, requirements or requests of the SEC staff and (ii) the Securities Act.   “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules   and regulations promulgated thereunder.   “Selling Expenses” shall mean all underwriting discounts, selling commissions   and stock transfer taxes applicable to the sale of Registrable Securities and fees and   disbursements of counsel for any Holder, other than one firm of counsel for the Purchaser.       

 

   5   Error! Bookmark not defined.   “Suspension Notice” shall have the meaning set forth in Section 7(b).   “Suspension Period” shall have the meaning set forth in Section 7(b).   “Trading Market” shall mean the principal national securities exchange on   which the Common Stock is listed.   “Transaction Documents” shall mean, collectively, this Agreement, the   Certificate of Designations and the Purchase Agreement.   “Underwritten Offering” shall have the meaning set forth in Section 3(k).    “Underwritten Offering Notice” shall have the meaning set forth in   Section 3(k).   “VWAP”  shall mean, as of a specified date and in respect of the Common Stock,   the volume weighted average price for such security on the Trading Market with respect to the   Common Stock for the ten (10) trading days immediately preceding, but excluding, such date.   “WKSI” shall mean a “well known seasoned issuer” as defined under Rule 405   under the Securities Act.   Unless the context requires otherwise: (a) any pronoun used in this Agreement   shall include the corresponding masculine, feminine or neuter forms; (b) references to Sections   and Annexes refer to Sections of and Annexes to this Agreement; (c) the terms “include”,   “includes”, “including” or words of like import shall be deemed to be followed by the words   “without limitation”; (d) the terms “hereof”, “herein” or “hereunder” refer to this Agreement as a   whole and not to any particular provision of this Agreement; (e) unless the context otherwise   requires, the term “or” is not exclusive and shall have the inclusive meaning of “and/or”;   (f) defined terms herein will apply equally to both the singular and plural forms and derivative   forms of defined terms will have correlative meanings; (g) references to any law or statute shall   include all rules and regulations promulgated thereunder, and references to any law or statute   shall be construed as including any legal and statutory provisions consolidating, amending,   succeeding or replacing the applicable law or statute; (h) references to any Person include such   Person’s successors and permitted assigns; and (i) references to “days” are to calendar days   unless otherwise indicated.   For the avoidance of doubt, where this Agreement refers to allocation of rights on   a pro-rata basis to holders of Registrable Securities, such allocation shall be determined   considering the Purchased Stock on an as-converted basis. For purposes of this Agreement,   holders of the Purchased Stock will be deemed to be holders of the amount of Conversion Stock   issuable upon conversion of the Purchased Stock in accordance with the terms of the Transaction   Documents.  Any limit imposed by the rules of the Trading Market on the amount of Conversion   Stock issuable to the Purchaser in accordance with the Transaction Documents will not be taken   into account for purposes of this definition.     

 

   6   Error! Bookmark not defined.   2. Registration.   (a) Demand Registration.   (i) A Holder or Holders that hold not less than a majority of the then   outstanding Registrable Securities (such Holder or group being referred to as the   “Initiating Holder”) shall have the option and right, exercisable by delivering a written   notice to the Corporation (a “Demand Notice”), to require the Corporation to, pursuant   to the terms of and subject to the limitations contained in this Agreement, prepare and file   with the SEC a Registration Statement registering the offering and sale of the number and   type of Registrable Securities on the terms and conditions specified in the Demand   Notice in accordance with the intended timing and method or methods of distribution   thereof specified in the Demand Notice, which may include sales on a delayed or   continuous basis pursuant to Rule 415 (a “Demand Registration”).  The Demand Notice   must set forth the number of Registrable Securities that the Initiating Holder intends to   include in such Demand Registration.  Notwithstanding anything to the contrary herein,   in no event shall the Corporation be required to effectuate a Demand Registration for   Registrable Securities having an aggregate value of less than $3.5 million based on the   VWAP of such Registrable Securities as of the date of the Demand Notice.    (ii) Within five Business Days of the receipt of the Demand Notice,   the Corporation shall give written notice of such Demand Notice to all Holders and, as   soon as reasonably practicable thereafter, but in no event more than 60 days following   receipt of the Demand Notice, shall, subject to the limitations of this Section 2(a), file a   Registration Statement covering all of the Registrable Securities that the Holders shall in   writing request (such request to be given to the Corporation within three days of receipt   of such notice of the Demand Notice given by the Corporation pursuant to this   Section 2(a)(ii)) to be included in such Demand Registration as promptly as practicable   as directed by the Initiating Holder in accordance with the terms and conditions of the   Demand Notice and use all commercially reasonable efforts to cause such Registration   Statement to become effective under the Securities Act and remain effective under the   Securities Act until all Registrable Securities covered by such Registration Statement   have been sold or otherwise cease to be Registrable Securities (the “Effectiveness   Period”).   (iii) Subject to the other limitations contained in this Agreement, the   Corporation is not obligated hereunder to effect (A) more than two Demand Registrations   in any 12 month period, (B) more than a total of six Demand Registrations pursuant to   this Agreement and (C) a subsequent Demand Registration pursuant to a Demand Notice   if a Registration Statement covering all of the Registrable Securities held by the Holders   providing such Demand Notice shall have become effective under the Securities Act and   remains effective under the Securities Act and is sufficient to permit offers and sales of   the number and type of Registrable Securities on substantially the terms and conditions   specified in the Demand Notice in accordance in all material respects with the intended   timing and method or methods of distribution thereof specified in the Demand Notice.  In   addition, the Corporation will not be required to file a Registration Statement at a time   when filing a Registration Statement would be prohibited by the terms of a customary     

 

   7   Error! Bookmark not defined.   “lock-up” or “market stand-off” provision included in an underwriting agreement relating   to an Underwritten Offering.      (iv) Notwithstanding any other provision of this Section 2(a), the   Corporation shall not be required to effect a registration or file a Registration Statement   (or any amendment thereto) for a period of up to 60 days, if (A) the Board of Directors   determines that a postponement is in the best interest of the Corporation and its   stockholders generally due to a pending transaction involving the Corporation, (B) the   Board of Directors determines such registration would render the Corporation unable to   comply with applicable securities laws or (C) the Board of Directors determines such   registration would require disclosure of material information that the Corporation has a   bona fide business purpose for preserving as confidential (any such period, a “Blackout   Period”); provided, however, that (i) in no event shall any Blackout Period together with   any Suspension Period collectively exceed an aggregate of 120 days in any 12 month   period, (ii) during any Blackout Period contemplated by Section 2(a)(iv)(B) or any   Suspension Period, the Corporation shall not engage in any transaction involving the   offer, issuance, sale, or purchase of Equity Securities (whether for the benefit of the   Corporation or a third Person), except transactions involving the issuance or purchase of   Equity Securities as contemplated by the Corporation employee benefit plans or   employee or director arrangements (including with respect to related tax withholding   obligations) or in connection with the conversion or exercise of outstanding securities,   including the Purchased Stock, and (iii) during any Blackout Period contemplated by   Section 2(a)(iv)(B) or (C) or any Suspension Period, the Corporation shall not file a   registration statement (or any amendment or supplement thereto) for any other holder of   registration rights.  Notwithstanding any provision of this Agreement to the contrary, in   the event the staff of the SEC indicates to the Corporation that the Corporation is   ineligible to file a Registration Statement on Form S-3 due to accrued and unpaid   dividends on the Purchased Stock, a Suspension Period will be deemed to occur during   the period between the time the Corporation files an Annual Report on Form 10-K and   the time the relevant Registration Statement becomes effective under the Securities Act,   and such period shall not be counted against the 60-day limit described above or   otherwise result in a Registration Default.  The Corporation shall use its commercially   reasonable efforts to cause such Registration Statement to become effective under the   Securities Act as quickly as practicable following the filing of the Annual Report on   Form 10-K.     (v) Notwithstanding any other provision of this Section 2(a), if (A)   any SEC Guidance that definitively applies to an offering of Registrable Securities   pursuant to a Registration Statement sets forth a limitation of the number of Registrable   Securities permitted to be registered on a particular Registration Statement as a secondary   offering or (B) the SEC does not permit the Corporation to register all of the Registrable   Securities in the Registration Statement as a secondary offering because of the SEC’s   application of Rule 415, the number of Registrable Securities to be registered on such   Registration Statement will be reduced on a pro-rata basis based on the number of   Registrable Securities held by all such Holders (including the Initiating Holders). The   Corporation shall use its commercially reasonable efforts to file additional Registration   Statements to register the Registrable Securities that were not registered in the initial     

 

   8   Error! Bookmark not defined.   Registration Statement as promptly as possible and, in any event, not later than sixty (60)   days after the earliest practicable date permitted under applicable SEC Guidance.   (vi) The Corporation may include in any such Demand Registration   other Equity Securities for sale for its own account or for the account of any other Person;   provided that if the managing underwriter, if any, for any Underwritten Offering   effectuated pursuant to such Demand Registration determines that the type or number of   Equity Securities proposed to be offered in such offering would likely have an adverse   effect in any material respect on the price, timing or distribution of the Registrable   Securities proposed to be included in such offering, the Registrable Securities to be sold   by the Holders shall be included in such registration before any Equity Securities   proposed to be sold for the account of the Corporation or any other Person.     (vii) Subject to the limitations contained in this Agreement, the   Corporation shall effect any Demand Registration on Form S-3 (except if the Corporation   is not then eligible to register for resale the Registrable Securities on Form S-3, in which   case such Demand Registration shall be effected on another appropriate form for such   purpose pursuant to the Securities Act) and if the Corporation becomes, and is at the time   of its receipt of a Demand Notice, a WKSI, the Demand Registration for any offering and   selling of Registrable Securities shall be effected pursuant to an Automatic Shelf   Registration Statement, which shall be on Form S-3; provided, however, that if at any   time a Registration Statement on Form S-3 is effective and a Holder provides written   notice to the Corporation that it intends to effect an offering of all or part of the   Registrable Securities included on such Registration Statement, the Corporation will   amend or supplement such Registration Statement as may be reasonably necessary in   order to enable such offering to take place.     (viii) Without limiting Section 3, in connection with any Demand   Registration pursuant to and in accordance with this Section 2(a), the Corporation shall,   (A) promptly prepare and file or cause to be prepared and filed (1) such additional forms,   amendments, supplements, prospectuses, certificates, letters, opinions and other   documents, as may be reasonably necessary or advisable to register or qualify the   securities subject to such Demand Registration, including under the securities laws of   such states as the Holders shall reasonably request; provided, however, that no such   registration or qualification shall be required in any jurisdiction where, as a result thereof,   the Corporation would become subject to general service of process or to taxation or   qualification to do business in such jurisdiction solely as a result of registration and   (2) such forms, amendments, supplements, prospectuses, certificates, letters, opinions and   other documents as may be necessary to apply for listing or to list the Registrable   Securities subject to such Demand Registration on the Trading Market and (B) do any   and all other acts and things that may be reasonably necessary or appropriate or   reasonably requested by the Holders to enable the Holders to consummate a public sale of   such Registrable Securities in accordance with the intended timing and method or   methods of distribution thereof.     (ix) In the event a Holder transfers Registrable Securities included on a   Registration Statement and such Registrable Securities remain Registrable Securities     

 

   9   Error! Bookmark not defined.   following such transfer, at the request of such Holder, the Corporation shall amend or   supplement such Registration Statement as may be necessary in order to enable such   transferee to offer and sell such Registrable Securities pursuant to such Registration   Statement; provided that in no event shall the Corporation be required to file a post-   effective amendment to the Registration Statement unless (A) such Registration   Statement includes only Registrable Securities held by the Holder, Affiliates of the   Holder or transferees of the Holder or (B) the Corporation has received written consent   therefor from the Persons for whom Equity Securities have been registered on (but not   yet sold under) such Registration Statement, other than the Holder, Affiliates of the   Holder or transferees of the Holder.     (x) In the event that a Registration Statement is not timely filed in   accordance with this Section 2(a), or a Blackout Period and/or a Suspension Period   exceeds the maximum period permitted under Section 2(a)(iv) (each, a “Registration   Default”), the Corporation will pay liquidated damages to the Holders of Registrable   Securities with the effect that the interest rate on the Registrable Securities will be   increased by 1.00% per annum from such date until the date such Registration Default   ends.  All liquidated damages will be paid by the Corporation on the next scheduled   interest payment date in cash, unless the Initiating Holder otherwise consents in writing,   in which case unpaid liquidated damages shall bear interest at a rate of 8% per annum   during the pendency of the Registration Default and 7% per annum thereafter.       (b) Piggyback Registration.   (i) If the Corporation shall at any time propose to effect (whether   pursuant to an existing Registration Statement or a new Registration Statement to be filed   pursuant to the Securities Act, but excluding any Demand Registration) a public offering   of Common Stock for cash (whether in connection with a public offering of Common   Stock by the Corporation, a public offering of Common Stock by stockholders, or both,   but excluding an offering relating solely to an employee benefit plan, an offering relating   to a transaction on Form S-4 or S-8 or an offering on any registration statement form that   does not permit secondary sales), the Corporation shall promptly notify all Holders of   such proposal reasonably in advance of (and in any event at least five Business Days   before) the commencement of the offering or the filing of the Registration Statement, as   applicable (the “Piggyback Notice”).  The Piggyback Notice shall offer the Holders the   opportunity to include for offer and sale or registration, as applicable, in any such   Registration Statement the number of Registrable Securities as they may request (a   “Piggyback Registration”).  The Corporation shall use commercially reasonable efforts   to include in each such Piggyback Registration such Registrable Securities for which the   Corporation has received written requests within three Business Days after sending the   Piggyback Notice (“Piggyback Request”) for inclusion therein.  If a Holder decides not   to include all of its Registrable Securities in any Piggyback Registration, such Holder   shall nevertheless continue to have the right to include any Registrable Securities in any   subsequent offering or registration statement as may be filed by the Corporation with   respect to offerings of Common Stock, all upon the terms and conditions set forth herein.     

 

   10   Error! Bookmark not defined.   (ii) If the Piggyback Registration for which the Corporation gives   notice under this Section 2(b) is for an underwritten offering, the Corporation shall so   advise the Holders of Registrable Securities.  In such event, the right of any such Holder   to be included in a registration pursuant to this Section 2(b) shall be conditioned upon   such Holder’s participation in such underwriting and reasonable cooperation with the   Corporation in connection therewith and the inclusion of such Holder’s Registrable   Securities in the underwriting to the extent provided herein.  All Holders proposing to   distribute their Registrable Securities through such underwriting shall enter into an   underwriting agreement in customary form with the underwriter or underwriters selected   for such underwriting by the Corporation.  If the managing underwriter or managing   underwriters of such offering advise the Corporation and the Holders in writing that in   their reasonable opinion that the inclusion of all of the Holders’ Registrable Securities in   the subject Piggyback Registration (or any other Common Stock proposed to be included   in such offering) would likely have an adverse effect in any material respect on the price,   timing or distribution of Common Stock proposed to be included in such offering, the   Corporation shall include in such offering only that number of shares of Common Stock   proposed to be included in such offering that, in the reasonable opinion of the managing   underwriter or managing underwriters, will not have such effect, with such number to be   allocated as follows:  (i) first, to the Corporation or other party on whose behalf the   Piggyback Registration was filed,  (ii) if there remains availability for additional shares of   Common Stock to be included in such registration, second pro-rata among all Holders   desiring to register Registrable Securities based on the number of Registrable Securities   such Holder is entitled to include in such registration and (iii) if there remains availability   for additional shares of Common Stock to be included in such registration, third pro rata   among all other holders of Common Stock who may be seeking to register such Common   Stock based on the number of Common Stock such holder is entitled to include in such   registration.  If any Holder disapproves of the terms of any such underwriting, such   Holder may elect to withdraw therefrom by written notice to the Corporation and the   managing underwriter(s) delivered not less than two Business Days prior to the time of   the commencement of such offering.  Any Registrable Securities withdrawn from such   underwriting shall be excluded and withdrawn from the registration.       (iii) The Corporation shall have the right to terminate or withdraw any   registration initiated by it under this Section 2(b) at any time in its sole discretion whether   or not any Holder has elected to include Registrable Securities in such Piggyback   Registration.  The registration expenses of such withdrawn registration shall be borne by   the Corporation in accordance with Section 4 hereof.     (iv) All registration rights granted under this Section 2 shall continue to   be applicable with respect to any Holder until such securities no longer qualify as   Registrable Securities.   (c) Future Registration Rights.  The Corporation has not entered into and,   unless agreed in writing by Holders that hold a majority of the Registrable Securities, on or after   the date of this Agreement will not enter into, any agreement which (a) is inconsistent with the   rights granted to the Holders with respect to Registrable Securities in this Agreement or   otherwise conflicts with the provisions hereof in any material respect or (b) would allow any     

 

   11   Error! Bookmark not defined.   holder of Equity Securities to include Equity Securities in any Registration Statement filed by the   Corporation on a basis that is superior or more favorable in any material respect to the rights   granted to the Holders hereunder under Section 2 unless the Corporation gives the Initiating   Holder, acting on behalf of all of the Holders, the opportunity to amend this Agreement to   include such materially superior or more favorable term herein.    3. Registration Procedures.   The procedures to be followed by the Corporation and each Holder electing to sell   Registrable Securities in a Registration Statement pursuant to this Agreement, and the respective   rights and obligations of the Corporation and such Holders, with respect to the preparation, filing   and effectiveness of such Registration Statement, are as follows (it being understood and agreed   that, notwithstanding any other provision hereof, the Corporation shall not be required to provide   any non-public information to any Person hereunder unless such Person agrees to maintain the   confidentiality of such information):   (a) In connection with a Demand Registration, the Corporation will at least   two Business Days prior to the anticipated filing of the Registration Statement and any related   Prospectus or any amendment or supplement thereto (other than any filing made under the   Exchange Act that is incorporated by reference into the Registration Statement), (i) furnish to the   Initiating Holder and, if requested, one counsel on behalf of all Holders (such counsel and the   Initiating Holder being referred to collectively as the “Holder Representatives”) copies of all   such documents prior to filing and (ii) use commercially reasonable efforts to address in each   such document when so filed with the SEC such comments as the Holder Representatives   reasonably shall propose prior to the filing thereof.   (b) In connection with a Piggyback Registration, the Corporation will at least   two days prior to the anticipated filing of the initial Registration Statement that identifies the   Holders and any related Prospectus or any amendment or supplement thereto (other than   amendments and supplements that do not materially alter the previous disclosure or do nothing   more than name Holders and provide information with respect thereto, and except for any filing   made under the Exchange Act that is incorporated by reference into the Registration Statement),   (i) furnish to the Holder Representatives copies of all Registration Statements that identify the   Holders and any related Prospectus or any amendment or supplement thereto (other than   amendments and supplements that do not materially alter the previous disclosure or do nothing   more than name Holders and provide information with respect thereto, and except for any filing   made under the Exchange Act that is incorporated by reference into the Registration Statement)   prior to filing and (ii) use commercially reasonable efforts to address in each such document   when so filed with the SEC such comments as such Holders reasonably shall propose prior to the   filing thereof.   (c) The Corporation will use commercially reasonable efforts to as promptly   as reasonably practicable (i) prepare and file with the SEC such amendments, including post-   effective amendments, and supplements to each Registration Statement and the Prospectus used   in connection therewith as may be necessary under applicable law to keep such Registration   Statement continuously effective with respect to the disposition of all Registrable Securities   covered thereby for its Effectiveness Period and, subject to the limitations contained in this     

 

   12   Error! Bookmark not defined.   Agreement, prepare and file with the SEC such additional Registration Statements in order to   register for resale under the Securities Act all of the Registrable Securities held by the Holders;   (ii) cause the related Prospectus to be amended or supplemented by any required prospectus   supplement, and as so supplemented or amended to be filed pursuant to Rule 424; and (iii)   respond to any comments received from the SEC with respect to each Registration Statement or   any amendment thereto and, as promptly as reasonably practicable provide the Holder   Representatives true and complete copies of all correspondence from and to the SEC relating to   such Registration Statement that pertains to the Holders as selling Holders.   (d) The Corporation will comply in all material respects with the provisions of   the Securities Act and the Exchange Act with respect to the Registration Statements and the   disposition of all Registrable Securities covered by each Registration Statement.   (e) The Corporation will notify the Holder Representatives as promptly as   reasonably practicable: (i)(A) when a Prospectus or any prospectus supplement or post-effective   amendment to a Registration Statement in which such Holder is included has been filed; (B)   when the SEC notifies the Corporation whether there will be a “review” of such Registration   Statement and whenever the SEC comments in writing on such Registration Statement (in which   case the Corporation shall provide true and complete copies thereof and all written responses   thereto to the Holders that pertain to the Holders as selling Holders); and (C) with respect to each   such Registration Statement or any post-effective amendment thereto, when the same has been   declared effective; (ii) of any request by the SEC or any other federal or state governmental   authority for amendments or supplements to such Registration Statement or Prospectus or for   additional information that pertains to such Holders as sellers of Registrable Securities; (iii) of   the issuance by the SEC of any stop order suspending the effectiveness of such Registration   Statement covering any or all of the Registrable Securities or the initiation of any Proceedings   for that purpose; (iv) of the receipt by the Corporation of any notification with respect to the   suspension of the qualification or exemption from qualification of any of the Registrable   Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such   purpose; and (v) of the occurrence of any event or passage of time that makes any statement   made in such Registration Statement or Prospectus or any document incorporated or deemed to   be incorporated therein by reference untrue in any material respect or that requires any revisions   to such Registration Statement, Prospectus or other documents so that, in the case of such   Registration Statement or the Prospectus, as the case may be, it will not contain any untrue   statement of a material fact or omit to state any material fact required to be stated therein or   necessary to make the statements therein, in the light of the circumstances under which they were   made, not misleading (provided, however, that no notice by the Corporation shall be required   pursuant to this clause (v) in the event that the Corporation either promptly files a prospectus   supplement to update the Prospectus or a Form 8-K or other appropriate Exchange Act report   that is incorporated by reference into the Registration Statement, which in either case, contains   the requisite information that results in such Registration Statement no longer containing any   untrue statement of material fact or omitting to state a material fact necessary to make the   statements therein, in the light of the circumstances under which they were made, not   misleading), it being understood and agreed that the Corporation shall notify all Holders of an   event contemplated by this clause (v).       

 

   13   Error! Bookmark not defined.   (f) The Corporation will use commercially reasonable efforts to avoid the   issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a   Registration Statement, or (ii) any suspension of the qualification (or exemption from   qualification) of any of the Registrable Securities for sale in any jurisdiction, as promptly as   reasonably practicable, or if any such order or suspension is made effective during any Blackout   Period or Suspension Period, as promptly as reasonably practicable after such Blackout Period or   Suspension Period is over.   (g) During the Effectiveness Period, the Corporation will furnish to each such   Holder, without charge, at least one conformed copy of each Registration Statement and each   amendment thereto and all exhibits to the extent requested by such Holder (including those   incorporated by reference) promptly after the filing of such documents with the SEC; provided   that the Corporation will not have any obligation to provide any document pursuant to this clause   that is available on the SEC’s EDGAR system.   (h) The Corporation will promptly deliver to each Holder, without charge, as   many copies of each Prospectus or Prospectuses (including each form of prospectus) authorized   by the Corporation for use and each amendment or supplement thereto as such Holder may   reasonably request during the Effectiveness Period.  Subject to the terms of this Agreement,   including Section 7(b), the Corporation consents to the use of such Prospectus and each   amendment or supplement thereto by each of the selling Holders in connection with the offering   and sale of the Registrable Securities covered by such Prospectus and any amendment or   supplement thereto in the manner described therein.    (i) The Corporation will cooperate with such Holders to facilitate the timely   preparation and delivery of certificates representing Registrable Securities to be delivered to a   transferee pursuant to a Registration Statement, which certificates shall be free of all restrictive   legends indicating that the Registrable Securities are unregistered or unqualified for resale under   the Securities Act, Exchange Act or other applicable securities laws, and to enable such   Registrable Securities to be issued in such denominations and registered in such names as any   such Holder may request in writing.  In connection therewith, if required by the Corporation’s   transfer agent, the Corporation will promptly, after the Effective Date of the Registration   Statement, cause an opinion of counsel as to the effectiveness of the Registration Statement to be   delivered to and maintained with its transfer agent, together with any other authorizations,   certificates and directions required by the transfer agent which authorize and direct the transfer   agent to issue such Registrable Securities without any such legend upon sale by the Holder of   such Registrable Securities under the Registration Statement.   (j) Upon the occurrence of any event contemplated by Section 3(e)(v),   subject to Section 2(a)(iv), Section 7(b) and this Section 3(j), as promptly as reasonably   practicable, the Corporation will prepare a supplement or amendment, including a post-effective   amendment, if required by applicable law, to the affected Registration Statement or a supplement   to the related Prospectus or any document incorporated or deemed to be incorporated therein by   reference, and file any other required document so that, as thereafter delivered, no Registration   Statement nor any Prospectus relating thereto will contain an untrue statement of a material fact   or omit to state a material fact required to be stated therein or necessary to make the statements   therein, in the light of the circumstances under which they were made, not misleading.     

 

   14   Error! Bookmark not defined.   (k) Such Holders may distribute the Registrable Securities by means of an   underwritten offering; provided that (i) in the case of a Demand Registration, (A) the Initiating   Holder provides written notice to the Corporation of its intention to distribute Registrable   Securities by means of an underwritten offering, which for the avoidance of doubt may be made   at a date later than the original Demand Notice  (the “Underwritten Offering Notice” and such   underwritten offering being referred to herein as an “Underwritten Offering”) and (B) Holders   (including the Initiating Holder) having an aggregate value of at least $3.5 million based on the   VWAP of such Registrable Securities as of the date of such Underwritten Offering Notice desire   to participate in such Underwritten Offering and, in the case of a Piggyback Registration, the   electing Holders must include their Registrable Securities in an underwritten offering if the   Piggyback Notice so requires, (ii) the right of any Holder to include such Holder’s Registrable   Securities in such registration shall be conditioned upon such Holder’s participation in such   underwriting, the inclusion of such Holder’s Registrable Securities in the underwriting to the   extent provided herein and the reasonable cooperation of the Holder therewith, (iii) the managing   underwriter or managing underwriters thereof shall be designated by the Initiating Holder in the   case of a Demand Registration (provided, however, that such designated managing underwriter   or managing underwriters shall be reasonably acceptable to the Corporation) or by the   Corporation in the case of a registration initiated by the Corporation, (iv) each Holder   participating in such underwritten offering agrees to enter into an underwriting agreement in   customary form and sell such Holder’s Registrable Securities on the basis provided in any   underwriting arrangements approved by the Persons entitled to select the managing underwriter   or managing underwriters hereunder and (v) each Holder participating in such underwritten   offering completes and executes all questionnaires, powers of attorney, indemnities,   underwriting agreements and other documents reasonably required under the terms of such   underwriting arrangements.  The Corporation hereby agrees with each Holder that, in connection   with any Underwritten Offering in accordance with the terms hereof, it will negotiate in good   faith and execute all customary indemnities, underwriting agreements and other documents   reasonably required under the terms of such underwriting arrangements, including using all   commercially reasonable efforts to procure customary legal opinions and auditor “comfort”   letters.  Notwithstanding the foregoing, the Corporation is not obligated to effect more than (A)   two Underwritten Offerings in any 12 month period and (B) a total of six Underwritten Offerings   pursuant to this Agreement.  If, in the case of an Underwritten Offering, the managing   underwriter advises the Corporation that the inclusion of all of the Holders’ Registrable   Securities in the subject Underwritten Offering would likely have an adverse effect in any   material respect on the price, timing or distribution of Registrable Securities proposed to be   included in such Underwritten Offering, then the Corporation shall so advise all Holders of   Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of   Registrable Securities that may be included in the Underwritten Offering shall be allocated to the   Holders of such Registrable Securities on a pro-rata basis based on the number of Registrable   Securities held by all such Holders (including the Initiating Holders), subject to Section (2)(a)(vi)   or Section 2(b)(ii), as applicable.  Any Registrable Securities excluded or withdrawn from such   Underwritten Offering shall be withdrawn from the Underwritten Offering.  In the event that the   managing underwriter limits the number of Registrable Securities to be included in the   Underwritten Offering pursuant to this Section 3(k) such that more than fifty percent of the   aggregate Registrable Securities set forth in such Holders’ written requests pursuant to this   Section 3(k) are excluded from the Underwritten Offering, such Underwritten Offering shall not     

 

   15   Error! Bookmark not defined.   be considered to be an Underwritten Offering for purposes of the limitations set forth in this   Section 3(k).   (l) In the event such Holders seek to complete an Underwritten Offering, for   a reasonable period prior to the filing of any Registration Statement and throughout the   Effectiveness Period, the Corporation will make available upon reasonable notice at the   Corporation’s principal place of business or such other reasonable place for inspection during   normal business hours by the managing underwriter or managing underwriters selected in   accordance with Section 3(k) such financial and other information and books and records of the   Corporation, and cause the officers, employees, counsel and independent certified public   accountants of the Corporation to respond to such inquiries, as shall be reasonably necessary   (and in the case of counsel, not violate an attorney-client privilege in such counsel’s reasonable   belief) to conduct a reasonable investigation within the meaning of Section 11 of the Securities   Act.   (m) In connection with any Underwritten Offering, the Corporation will use   commercially reasonable efforts to cause appropriate officers and employees to be available, on a   customary basis and upon reasonable notice, to meet with prospective investors in presentations,   meetings and road shows.   (n) The Corporation may require the Holder to furnish to the Corporation any   other information regarding the Holder and the distribution of such securities as the Corporation   reasonably determines is required to be included in any Registration Statement.   (o) The Corporation is currently eligible to use Form S-3 and shall use   commercially reasonable efforts to remain eligible to use Form S-3, including by timely filing all   reports with the SEC and meeting the other requirements of the Exchange Act.   4. Registration Expenses.  All Registration Expenses incident to the Parties’   performance of or compliance with its obligations under this Agreement or otherwise in   connection with any Demand Registration or Piggyback Registration (in each case, excluding   any Selling Expenses) shall be borne by the Corporation, whether or not any Registrable   Securities are sold pursuant to a Registration Statement, it being understood and agreed that the   Corporation shall be required to pay the reasonable fees and expenses of one firm of counsel for,   and other reasonable costs, fees and expenses of, the Purchaser in connection the foregoing, but   no costs, fees, or expenses incurred by the other Holders.  “Registration Expenses” shall   include, without limitation, (i) all registration and filing fees (including fees and expenses (A)   with respect to filings required to be made with the Trading Market and (B) in compliance with   applicable state securities or “Blue Sky” laws), (ii) printing expenses (including expenses of   printing certificates for Corporation Securities and of printing prospectuses if the printing of   prospectuses is reasonably requested by a Holder of Registrable Securities included in the   Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and   disbursements of counsel, auditors and accountants for the Corporation, (v) Securities Act   liability insurance, if the Corporation so desires such insurance, (vi) fees and expenses of all   other Persons retained by the Corporation in connection with the consummation of the   transactions contemplated by this Agreement and (vii) all expenses relating to marketing the sale   of the Registrable Securities, including expenses related to conducting a “road show.”  In     

 

   16   Error! Bookmark not defined.   addition, the Corporation shall be responsible for all of its expenses incurred in connection with   the consummation of the transactions contemplated by this Agreement (including expenses   payable to third parties and including all salaries and expenses of their officers and employees   performing legal or accounting duties), the expense of any annual audit and the fees and   expenses incurred in connection with the listing of the Registrable Securities on the Trading   Market.     5. Indemnification.   (a) The Corporation shall indemnify and hold harmless each Holder, its   Affiliates and each of their respective officers and directors and any Person who controls any   such Holder (within the meaning of the Securities Act) and any agent thereof (collectively,   “Holder Indemnified Persons”), to the fullest extent permitted by applicable law, from and   against any and all losses, claims, damages, liabilities, joint or several, costs (including   reasonable costs of preparation and reasonable attorneys’ fees) and expenses, judgments, fines,   penalties, interest, settlements or other amounts arising from any and all claims, demands,   actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which   any Holder Indemnified Person may be involved, or is threatened to be involved, as a party or   otherwise, under the Securities Act or otherwise (collectively, “Losses”), as incurred, arising out   of or relating to any untrue or alleged untrue statement of a material fact contained in any   Registration Statement under which any Registrable Securities were registered, in any   preliminary prospectus (if the Corporation authorized the use of such preliminary prospectus   prior to the Effective Date), or in any summary or final prospectus or free writing prospectus (if   such free writing prospectus was authorized for use by the Corporation) or in any amendment or   supplement thereto (if used during the period the Corporation is required to keep the Registration   Statement current), or arising out of, based upon or resulting from the omission or alleged   omission to state therein a material fact required to be stated therein or necessary to make the   statements made therein, in the light of the circumstances in which they were made, not   misleading; provided, however, that the Corporation shall not be liable to any Holder   Indemnified Person to the extent that any such claim arises out of, is based upon or results from   an untrue or alleged untrue statement or omission or alleged omission made in such Registration   Statement, such preliminary, summary or final prospectus or free writing prospectus or such   amendment or supplement, in reliance upon and in conformity with written information   furnished to the Corporation by or on behalf of such Holder Indemnified Person or any   underwriter specifically for use in the preparation thereof.  The Corporation shall notify the   Holders promptly of the institution, threat or assertion of any Proceeding of which the   Corporation is aware in connection with the transactions contemplated by this Agreement.    Notwithstanding anything to the contrary herein, this Section 5 shall survive any termination or   expiration of this Agreement indefinitely.    (b) In connection with any Registration Statement in which a Holder   participates, such Holder shall indemnify and hold harmless the Corporation, its Affiliates and   each of their respective officers, directors and any Person who controls the Corporation (within   the meaning of the Securities Act) and any agent thereof (collectively, the “Corporation   Indemnified Persons”), to the fullest extent permitted by applicable law, from and against any   and all Losses as incurred, arising out of or relating to any untrue or alleged untrue statement of a   material fact contained in any such Registration Statement, in any preliminary prospectus (if     

 

   17   Error! Bookmark not defined.   used prior to the Effective Date of such Registration Statement), or in any summary or final   prospectus or free writing prospectus or in any amendment or supplement thereto (if used during   the period the Corporation is required to keep the Registration Statement current), or arising out   of, based upon or resulting from the omission or alleged omission to state therein a material fact   required to be stated therein or necessary to make the statements made therein, in the light of the   circumstances in which they were made, not misleading, but only to the extent that the same are   made in reliance and in conformity with information relating to the Holder furnished in writing   to the Corporation by such Holder for use therein.   (c) Any Person entitled to indemnification hereunder shall (i) give prompt   written notice to the indemnifying party of any claim with respect to which it seeks   indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of   interest between such indemnified and indemnifying parties may exist with respect to such claim   or there may be reasonable defenses available to the indemnified party that are different from or   additional to those available to the indemnifying party, permit such indemnifying party to   assume the defense of such claim with counsel reasonably satisfactory to the indemnified party.    If such defense is assumed, the indemnifying party shall not be subject to any liability for any   settlement made by the indemnified party without its consent (but such consent will not be   unreasonably withheld).  An indemnifying party who is not entitled to, or elects not to, assume   the defense of a claim shall not be obligated to pay the fees and expenses of more than one   counsel (in addition to any local counsel) for all parties indemnified by such indemnifying party   with respect to such claim, unless in the reasonable judgment of any indemnified party there may   be one or more legal or equitable defenses available to such indemnified party that are in   addition to or may conflict with those available to another indemnified party with respect to such   claim.  Failure to give prompt written notice shall not release the indemnifying party from its   obligations hereunder except to the extent the indemnifying party is prejudiced thereby.   (d) If requested by a Holder, the Corporation shall indemnify and hold   harmless each underwriter, if any, engaged in connection with any registration referred to in   Section 2 and provide customary representations, covenants, opinions and other assurances to   any underwriter in form and substance reasonably satisfactory to such underwriter and the   Corporation.   6. Facilitation of Sales Pursuant to Rule 144.  To the extent it shall be required to   do so under the Exchange Act, the Corporation shall use its commercially reasonable efforts to   timely file the reports required to be filed by it under the Exchange Act or the Securities Act   (including the reports under Sections 13 and 15(d) of the Exchange Act referred to in   subparagraph (c)(1) of Rule 144), and shall take such further action as any Holder may   reasonably request, all to the extent required from time to time to enable the Holders to sell   Registrable Securities without registration under the Securities Act within the limitations of the   exemption provided by Rule 144.  Upon the request of any Holder in connection with that   Holder’s sale pursuant to Rule 144, the Corporation shall deliver to such Holder a written   statement as to whether it has complied with such requirements.   7. Miscellaneous.     

 

   18   Error! Bookmark not defined.   (a) Remedies.  In the event of a breach by the Corporation of any of its   obligations under this Agreement, each Holder, in addition to being entitled to exercise all rights   granted by law and under this Agreement, including recovery of damages, will be entitled to   specific performance of its rights under this Agreement; provided, however that the payment of   liquidated damages as contemplated by Section 2(a)(x) shall be the Holder’s exclusive remedy   for any Registration Default; provided further that the Corporation shall in no event be liable for   any punitive or special damages in the event of any breach by the Corporation or any of its   obligations under this Agreement.  The Corporation agrees that monetary damages would not   provide adequate compensation for any losses incurred by reason of a breach by it of any of the   provisions of this Agreement and further agrees that, in the event of any action for specific   performance in respect of such breach, it shall waive the defense that a remedy at law would be   adequate.   (b) Discontinued Disposition.  Each Holder agrees that the Corporation may   impose a Suspension Period due to, and each Holder agrees that, upon receipt of a notice from   the Corporation of the occurrence of, any event of the kind described in clauses (ii) through (v)   of Section 3(e) (a "Suspension Notice"), such Holder will forthwith discontinue disposition of   such Registrable Securities under the Registration Statement until such Holder’s receipt of the   copies of the supplemental Prospectus or amended Registration Statement as contemplated by   Section 3(j) or until it is advised in writing by the Corporation that the use of the applicable   Prospectus may be resumed, and, in either case, has received copies of any additional or   supplemental filings that are incorporated or deemed to be incorporated by reference in such   Prospectus or Registration Statement (a “Suspension Period”).  The Corporation may provide   appropriate stop orders to enforce the provisions of this Section 7(b).   (c) Amendments and Waivers.  No provision of this Agreement may be   waived or amended except in a written instrument signed by the Corporation and Holders that   hold a majority of the Registrable Securities as of the date of such waiver or amendment.  The   Corporation shall provide prior notice to all Holders of any proposed waiver or amendment.  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 any Party to exercise any right hereunder in any manner impair the exercise of any such right.   (d) 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 (i) the date of transmission, if such notice or communication is   delivered via facsimile or electronic mail as specified in this Section 7(d) prior to 5:00 p.m.   (Denver Time) on a Business Day, (ii) the Business Day after the date of transmission, if such   notice or communication is delivered via facsimile or electronic mail as specified in this   Agreement later than 5:00 p.m. (Denver Time) on any date and earlier than 11:59 p.m. (Denver   Time) on such date, (iii) the Business Day following the date of mailing, if sent by nationally   recognized overnight courier service or (iv) upon actual receipt by the Party to whom such notice   is required to be given.  The address for such notices and communications shall be as follows:     

 

   19   Error! Bookmark not defined.   If to the Corporation: Magellan Petroleum Corporation          1775 Sherman Street, Suite 1950          Denver, Colorado 80203          Attention: Mark Brannum    Email: mbrannum@magellanpetroleum.com      If to the Purchaser or any of its   Affiliates:      One Stone Energy Partners, L.P.    720 Fifth Avenue, 10th Floor    New York, New York 10019    Attention: Robert Israel    Email: ri@1stone-llc.com      If to any other Person who is then   a registered Holder:    To the address of such Holder as it appears in   the applicable register for the Registrable   Securities or such other address as may be   designated in writing hereafter, in the same   manner, by such Person.      (e) Successors and Assigns.  This Agreement shall be binding upon and inure   to the benefit of the Parties hereto and their heirs, executors, administrators, successors, legal   representatives and permitted assigns.  Except as provided in this Section 7(e), this Agreement,   and any rights or obligations hereunder, may not be assigned without the prior written consent of   the Corporation and the Purchaser.  Notwithstanding anything in the foregoing to the contrary,   the registration rights of a Holder pursuant to this Agreement with respect to all or any portion of   its Registrable Securities may be assigned without such consent (but only with all related   obligations) with respect to such Registrable Securities (and any Registrable Securities issued as   a dividend or other distribution with respect to, in exchange for or in replacement of such   Registrable Securities) by such Holder to a transferee of such Registrable Securities; provided   that (i) the Corporation is, within a reasonable time after such transfer, furnished with written   notice of the name and address of such transferee or assignee and the Registrable Securities with   respect to which such registration rights are being assigned and (ii) such transferee or assignee   agrees in writing to be bound by and subject to the terms set forth in this Agreement.  The   Corporation may not assign its respective rights or obligations hereunder without the prior   written consent of the Purchaser.  Any assignment in violation of this Section 7(e) shall be void.   (f) Third Party Beneficiaries.  Other than the Holders (other than the   Purchaser), there are no third party beneficiaries having rights under or with respect to this   Agreement.   (g) Execution  in Counterparts.  This Agreement may be executed in any   number of counterparts, each of which, when so executed and delivered, shall be deemed to be   an original and all of which, taken together, shall constitute one and the same agreement.   (h) Governing Law; Submission to Jurisdiction.  This Agreement, and all   claims or causes of action (whether in contract or tort) that may be based upon, arise out of or     

 

   20   Error! Bookmark not defined.   relate to this Agreement or the negotiation, execution or performance of this Agreement   (including any claim or cause of action based upon, arising out of or related to any representation   or warranty made in or in connection with this Agreement), will be construed in accordance with   and governed by the laws of the State of New York without regard to principles of conflicts of   laws.  Any action against any party relating to the foregoing shall be brought in any federal or   state court of competent jurisdiction located in New York, New York, and the parties to this   Agreement hereby irrevocably submit to the non-exclusive jurisdiction of any federal or state   court located in New York, New York over any such action.  The parties to this Agreement   hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection that   they may now or hereafter have to the laying of venue of any such dispute brought in such court   or any defense of inconvenient forum for the maintenance of such dispute.  Each of the parties to   this Agreement agrees that a judgment in any such dispute may be enforced in other jurisdictions   by suit on the judgment or in any other manner provided by Law.   (i) Waiver of Jury Trial.  THE PARTIES TO THIS AGREEMENT EACH   HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE   FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY   CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS   AGREEMENT OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR   INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS   AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE   WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN   CONTRACT, TORT, EQUITY OR OTHERWISE.  THE PARTIES TO THIS AGREEMENT   EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,   ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A   JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL   COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN   EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR   RIGHT TO TRIAL BY JURY.   (j) Severability.  If any term, provision, covenant or restriction of this   Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or   unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein   shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and   the Parties shall use their reasonable efforts to find and employ an alternative means to achieve   the same or substantially the same result as that contemplated by such term, provision, covenant   or restriction.  It is hereby stipulated and declared to be the intention of the Parties that they   would have executed the remaining terms, provisions, covenants and restrictions without   including any of such that may be hereafter declared invalid, illegal, void or unenforceable.   (k) Entire Agreement.  This Agreement is intended by the parties to this   Agreement as a final expression of their agreement and intended to be a complete and exclusive   statement of the agreement and understanding of such parties in respect of the subject matter   contained herein.  There are no restrictions, promises, warranties or undertakings, other than   those set forth or referred to herein with respect to the rights granted by the Corporation or any of   its Affiliates or the Purchaser or any of its Affiliates set forth herein.  This Agreement supersedes   all prior agreements and understandings between such parties with respect to such subject matter.     

 

   21   Error! Bookmark not defined.   [Signature page follows.]     

 

   SIGNATURE PAGE TO   REGISTRATION RIGHTS AGREEMENT   IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first   written above.   MAGELLAN PETROLEUM CORPORATION         By:          Name:     Title:           ONE STONE HOLDINGS II LP       By:           Name:   Title:

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