Document:

EX-10.E

Viad Corp

Defined Contribution

Supplemental Executive Retirement Plan

Master Plan Document

Effective as of January 1, 2013

TABLE OF CONTENTS

	 	 	 
	 	 	Page

	 	 	 

	ARTICLE 1

ARTICLE 2

2.1

2.2

ARTICLE 3

3.1

3.2

3.3

3.4

3.5

ARTICLE 4

4.1

4.2

ARTICLE 5

5.1
	 	Definitions

Selection, Enrollment, Eligibility

Selection by Committee

Enrollment and Eligibility Requirements; Commencement of Participation

Company Discretionary Contribution Amounts/Supplemental Contribution Amounts/Vesting/Crediting/Taxes

Company Discretionary Contribution Amount

Supplemental Contribution Amount

Vesting

Crediting/Debiting of Account Balances

FICA and Other Taxes

Retirement Benefit

Retirement Benefit

Payment of Retirement Benefit

Termination Benefit

Termination Benefit

	 	5.2	 	Payment of Termination Benefit	 

	 	 	 
	ARTICLE 6	 	Disability Benefit
	6.1	 	Disability Benefit
	6.2	 	Payment of Disability Benefit
	ARTICLE 7	 	Death Benefit
	7.1	 	Death Benefit
	7.2	 	Payment of Death Benefit
	ARTICLE 8	 	Beneficiary Designation
	8.1	 	Beneficiary
	8.2	 	Acknowledgement
	8.3	 	No Beneficiary Designation
	8.4	 	Doubt as to Beneficiary
	8.5	 	Discharge of Obligations
	ARTICLE 9	 	Termination of Plan, Amendment or Modification
	9.1	 	Termination of Plan
	9.2	 	Amendment
	9.3	 	Plan Certificate of Participation
	9.4	 	Effect of Payment
	ARTICLE 10	 	Administration
	10.1	 	Committee Duties
	10.2

10.3

10.4

10.5

10.6

ARTICLE 11

11.1

ARTICLE 12

12.1

12.2

12.3

12.4

12.5

ARTICLE 13

13.1

13.2

13.3

ARTICLE 14

14.1

14.2

14.3

14.4

14.5

14.6

14.7

14.8

14.9

14.10

14.11

14.12

14.13

14.14

14.15

14.16

14.17
	 	Administration Upon Change In Control

Agents

Binding Effect of Decisions

Indemnity of Committee

Employer Information

Other Benefits and Agreements

Coordination with Other Benefits

Claims Procedures

Presentation of Claim

Notification of Decision

Review of a Denied Claim

Decision on Review

Legal Action

Trust

Establishment of the Trust

Interrelationship of the Plan and the Trust

Distributions From the Trust

Miscellaneous

Status of Plan

Unsecured General Creditor

Employer’s Liability

Nonassignability

Not a Contract of Employment

Furnishing Information

Terms

Captions

Governing Law

Notice

Successors

Spouse’s Interest

Validity

Incompetent

Domestic Relations Orders

Distribution in the Event of Income Inclusion Under Code Section 409A

Deduction Limitation on Benefit Payments

VIAD CORP

DEFINED CONTRIBUTION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Effective as of January 1, 2013

Purpose

The purpose of this Plan is to provide specified benefits to a select group of management or
highly compensated Employees who contribute materially to the continued growth, development and
future business success of Viad Corp, a Delaware corporation, and its subsidiaries, if any, that
sponsor this Plan. This Plan shall be unfunded for tax purposes and for purposes of Title I of
ERISA.

This Plan is intended to comply with all applicable law, including Code Section 409A and
related Treasury guidance and Regulations, and shall be operated and interpreted in accordance with
this intention.

ARTICLE 1

Definitions

For the purposes of this Plan, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings:

	1.1	 	“Account Balance” shall mean, with respect to a Participant, an entry on the records of the
Employer equal to the sum of the Participant’s (a) Company Discretionary Contribution Account
balance and (b) Supplemental Contribution Account balance. The Account Balance shall be a
bookkeeping entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her designated
Beneficiary, pursuant to this Plan.

	1.2	 	“Annual Installment Method” shall mean the method used to determine the amount of each
payment due to a Participant who has elected to receive a benefit over a period of years in
accordance with the applicable provisions of the Plan. The amount of each annual payment due
to the Participant shall be calculated by multiplying the balance of the Participant’s vested
benefit by a fraction, the numerator of which is one and the denominator of which is the
remaining number of annual payments due to the Participant. The amount of the first annual
payment shall be calculated as of the close of business on or around the Participant’s Benefit
Distribution Date, and the amount of each subsequent annual payment shall be calculated on or
around each anniversary of such Benefit Distribution Date. For purposes of this Plan, the
right to receive a benefit payment in annual installments shall be treated as the entitlement
to a single payment.

	1.3	 	“Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated
in accordance with Article 8, that are entitled to receive benefits under this Plan upon the
death of a Participant.

	1.4	 	“Beneficiary Designation Form” shall mean the form, which may be in electronic format,
established from time to time by the Committee that a Participant completes, signs and returns
to the Committee to designate one or more Beneficiaries.

	1.5	 	“Benefit Distribution Date” shall mean the date upon which a Participant’s vested benefits
will become eligible for distribution. Except as otherwise provided in the Plan, a
Participant’s Benefit Distribution Date shall be determined based on the applicable event set
forth in Articles 4 through 7, as applicable.

	1.6	 	“Board” shall mean the board of directors of the Company.

	1.7	 	“Cause” shall mean (a) the conviction of a Participant for committing a felony under federal
law or the law of the state in which such action occurred, (b) dishonesty in the course of
fulfilling a Participant’s employment duties or (c) willful and deliberate failure on the part
of a Participant to perform his or her employment duties in any material respect, or such
other events as will be determined by the Committee.

	1.8	 	“Change of Control” shall mean a “Change of Control” as defined in the 2007 Viad Corp Omnibus
Incentive Plan, which definition is hereby incorporated by reference.

	1.9	 	“Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

	1.10	 	“Committee” shall mean the committee described in Article 10.

	1.11	 	“Company” shall mean Viad Corp, a Delaware corporation, and any successor to all or
substantially all of the Company’s assets or business.

	1.12	 	“Company Discretionary Contribution Account” shall mean (i) the sum of the Participant’s
Company Discretionary Contribution Amounts, plus (ii) amounts credited or debited to the
Participant’s Company Discretionary Contribution Account in accordance with this Plan, less
(iii) all distributions made to the Participant or his or her Beneficiary pursuant to this
Plan that relate to the Participant’s Company Discretionary Contribution Account.

	1.13	 	“Company Discretionary Contribution Amount” shall mean, for any one Plan Year, the amount
determined in accordance with Section 3.1.

	1.14	 	“Death Benefit” shall mean the benefit set forth in Article 7.

	1.15	 	“Disability” or “Disabled” shall mean that a Participant is either (a) unable to engage in
any substantial gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (b) by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan covering employees of the
Participant’s Employer. For purposes of this Plan, a Participant shall be deemed Disabled if
determined to be totally disabled by the Social Security Administration. A Participant shall
also be deemed Disabled if determined to be disabled in accordance with the applicable
disability insurance program of such Participant’s Employer, provided that the definition of
“disability” applied under such disability insurance program complies with the requirements of
this Section.

	1.16	 	“Disability Benefit” shall mean the benefit set forth in Article 6.

	1.17	 	“Election Form” shall mean the form, which may be in electronic format, established from time
to time by the Committee that a Participant completes, signs and returns to the Committee to
make an election under the Plan.

	1.18	 	“Employee” shall mean a person who is an employee of an Employer.

	1.19	 	“Employer(s)” shall be defined as follows:

	 	(a)	 	Except as otherwise provided in part (b) of this Section, the term “Employer”
shall mean the Company and/or any of its subsidiaries (now in existence or hereafter
formed or acquired) that have been selected by the Board to participate in the Plan and
have adopted the Plan as a sponsor.

	 	(b)	 	For the purpose of determining whether a Participant has experienced a
Separation from Service, the term “Employer” shall mean:

	 	(i)	 	The entity for which the Participant performs services and with
respect to which the legally binding right to compensation deferred or
contributed under this Plan arises; and

	 	(ii)	 	All other entities with which the entity described above would be
aggregated and treated as a single employer under Code Section 414(b)
(controlled group of corporations) and Code Section 414(c) (a group of trades or
businesses, whether or not incorporated, under common control), as applicable.
In order to identify the group of entities described in the preceding sentence,
the Committee shall use an ownership threshold of at least 50% as a substitute
for the 80% minimum ownership threshold that appears in, and otherwise must be
used when applying, the applicable provisions of (A) Code Section 1563 for
determining a controlled group of corporations under Code Section 414(b), and
(B) Treas. Reg. §1.414(c)-2 for determining the trades or businesses that are
under common control under Code Section 414(c).

	1.20	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended
from time to time.

	1.21	 	“Director” shall mean any member of the board of directors of any Employer.

	1.22	 	“Participant” shall mean any Employee (a) who is selected to participate in the Plan,
(b) whose executed Plan Certificate of Participation, Election Form and Beneficiary
Designation Form are accepted by the Committee, and (c) whose Plan Certificate of
Participation has not terminated.

	1.23	 	“Plan” shall mean the Viad Corp Defined Contribution Supplemental Executive Retirement Plan,
which shall be evidenced by this instrument, as it may be amended from time to time, and by
any other documents that together with this instrument define a Participant’s rights to
amounts credited to his or her Account Balance.

	1.24	 	“Plan Certificate of Participation” shall mean a written certificate, which may be in
electronic format, provided to the Participant by the Employer that evidences a Participant’s
agreement to the terms of the Plan and which may establish additional terms or conditions of
Plan participation for a Participant. Unless otherwise determined by the Committee, the most
recent Plan Certificate of Participation accepted with respect to a Participant shall
supersede any prior Plan Certificates of Participation for such Participant. Plan
Certificates of Participation may vary among Participants and may provide additional benefits
not set forth in the Plan or limit the benefits otherwise provided under the Plan; provided,
however, that any such additional benefits or benefit limitations must be agreed to by both
the Employer and the Participant.

	1.25	 	“Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year.

	1.26	 	“Retirement,” “Retire(s)” or “Retired” shall mean a Separation from Service on or after the
attainment of age 55.

	1.27	 	“Retirement Benefit” shall mean the benefit set forth in Article 4.

	1.28	 	“Separation from Service” shall mean a termination of services provided by a Participant to
his or her Employer, whether voluntarily or involuntarily, other than by reason of death or
Disability, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(h). In
determining whether a Participant has experienced a Separation from Service, the following
provisions shall apply:

	 	(a)	 	For a Participant who provides services to an Employer as an Employee, except
as otherwise provided in part (c) of this Section, a Separation from Service shall
occur when such Participant has experienced a termination of employment with such
Employer. A Participant shall be considered to have experienced a termination of
employment when the facts and circumstances indicate that the Participant and his or
her Employer reasonably anticipate that either (i) no further services will be
performed for the Employer after a certain date, or (ii) that the level of bona fide
services the Participant will perform for the Employer after such date (whether as an
Employee or as an independent contractor) will permanently decrease to no more than 20%
of the average level of bona fide services performed by such Participant (whether as an
Employee or an independent contractor) over the immediately preceding 36-month period
(or the full period of services to the Employer if the Participant has been providing
services to the Employer less than 36 months).

If a Participant is on military leave, sick leave, or other bona fide leave of
absence, the employment relationship between the Participant and the Employer shall
be treated as continuing intact, provided that the period of such leave does not
exceed 6 months, or if longer, so long as the Participant retains a right to
reemployment with the Employer under an applicable statute or by contract. If the
period of a military leave, sick leave, or other bona fide leave of absence exceeds 6
months and the Participant does not retain a right to reemployment under an
applicable statute or by contract, the employment relationship shall be considered to
be terminated for purposes of this Plan as of the first day immediately following the
end of such 6-month period. In applying the provisions of this paragraph, a leave of
absence shall be considered a bona fide leave of absence only if there is a
reasonable expectation that the Participant will return to perform services for the
Employer.

	 	(b)	 	For a Participant who provides services to an Employer as an independent
contractor, except as otherwise provided in part (c) of this Section, a Separation from
Service shall occur upon the expiration of the contract (or in the case of more than
one contract, all contracts) under which services are performed for such Employer,
provided that the expiration of such contract(s) is determined by the Committee to
constitute a good-faith and complete termination of the contractual relationship
between the Participant and such Employer.

	 	(c)	 	For a Participant who provides services to an Employer as both an Employee and
an independent contractor, a Separation from Service generally shall not occur until
the Participant has ceased providing services for such Employer as both as an Employee
and as an independent contractor, as determined in accordance with the provisions set
forth in parts (a) and (b) of this Section, respectively. Similarly, if a Participant
either (i) ceases providing services for an Employer as an independent contractor and
begins providing services for such Employer as an Employee, or (ii) ceases providing
services for an Employer as an Employee and begins providing services for such Employer
as an independent contractor, the Participant will not be considered to have
experienced a Separation from Service until the Participant has ceased providing
services for such Employer in both capacities, as determined in accordance with the
applicable provisions set forth in parts (a) and (b) of this Section.

Notwithstanding the foregoing provisions in this part (c), if a Participant provides
services for an Employer as both an Employee and as a Director, to the extent
permitted by Treas. Reg. §1.409A-1(h)(5) the services provided by such Participant as
a Director shall not be taken into account in determining whether the Participant has
experienced a Separation from Service as an Employee, and the services provided by
such Participant as an Employee shall not be taken into account in determining
whether the Participant has experienced a Separation from Service as a Director.

	1.29	 	“Specified Employee” shall mean any Participant who is determined to be a “key employee” (as
defined under Code Section 416(i) without regard to paragraph (5) thereof) for the applicable
period, as determined annually by the Committee in accordance with Treas. Reg. §1.409A-1(i).
In determining whether a Participant is a Specified Employee, the following provisions shall
apply:

	 	(a)	 	The Committee’s identification of the individuals who fall within the
definition of “key employee” under Code Section 416(i) (without regard to paragraph (5)
thereof) shall be based upon the 12-month period ending on each December
31st (referred to below as the “identification date”). In applying the
applicable provisions of Code Section 416(i) to identify such individuals,
“compensation” shall be determined in accordance with Treas. Reg. §1.415(c)-2(a)
without regard to (i) any safe harbor provided in Treas. Reg. §1.415(c)-2(d), (ii) any
of the special timing rules provided in Treas. Reg. §1.415(c)-2(e), and (iii) any of
the special rules provided in Treas. Reg. §1.415(c)-2(g); and

	 	(b)	 	Each Participant who is among the individuals identified as a “key employee” in
accordance with part (a) of this Section shall be treated as a Specified Employee for
purposes of this Plan if such Participant experiences a Separation from Service during
the 12-month period that begins on the April 1st following the applicable
identification date.

	1.30	 	“Supplemental Contribution Account” shall mean (a) the sum of the Participant’s Supplemental
Contribution Amounts, plus (b) amounts credited or debited to the Participant’s Supplemental
Contribution Account in accordance with this Plan, less (c) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s
Supplemental Contribution Account.

	1.31	 	“Supplemental Contribution Amount” shall mean, for any one Plan Year, the amount determined
in accordance with Section 3.2.

	1.32	 	“Termination Benefit” shall mean the benefit set forth in Article 5.

	1.33	 	“Trust” shall mean one or more trusts established by the Company in accordance with Article
13.

	1.34	 	“Years of Service” shall mean the total number of full years in which a Participant has been
employed by one or more Employers. For purposes of this definition, a year of employment
shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first
year of employment, commences on the Employee’s date of hiring and that, for any subsequent
year, commences on an anniversary of that hiring date. A partial year of employment shall not
be treated as a Year of Service.

ARTICLE 2

Selection, Enrollment, Eligibility

	2.1	 	Selection by Committee. Participation in the Plan shall be limited to a select group
of management or highly compensated Employees, as determined by the Committee in its sole
discretion. From that group, the Committee shall select, in its sole discretion, those
individuals who may actually participate in this Plan.

	2.2	 	Enrollment and Eligibility Requirements; Commencement of Participation.

	 	(a)	 	As a condition to participation, each selected Employee who is eligible to
participate in the Plan effective as of the first day of a Plan Year shall complete,
execute and return to the Committee a Plan Certificate of Participation, an Election
Form and a Beneficiary Designation Form prior to the first day of such Plan Year, or
such other earlier deadline as may be established by the Committee in its sole
discretion. In addition, the Committee shall establish from time to time such other
enrollment requirements as it determines, in its sole discretion, are necessary.

	 	(b)	 	A selected Employee who first becomes eligible to participate in this Plan
after the first day of a Plan Year must complete, execute and return to the Committee a
Plan Certificate of Participation, an Election Form, and a Beneficiary Designation Form
within thirty (30) days after he or she first becomes eligible to participate in the
Plan, or within such other earlier deadline as may be established by the Committee, in
its sole discretion, in order to participate for that Plan Year. In such event, such
person’s participation in this Plan shall not commence earlier than the date determined
by the Committee pursuant to Section 2.2(b).

	 	(c)	 	Each selected Employee who is eligible to participate in the Plan shall
commence participation in the Plan on the date that the Committee determines that the
Employee has met all enrollment requirements set forth in this Plan and required by the
Committee, including returning all required documents to the Committee within the
specified time period.

	 	(d)	 	If an Employee fails to meet all requirements contained in this Section or
otherwise established by the Committee within the period required, that Employee shall
not be eligible to participate in the Plan during such Plan Year.

ARTICLE 3

Company Discretionary Contribution Amounts/Supplemental Contribution Amounts/

Vesting/Crediting/Taxes

	3.1	 	Company Discretionary Contribution Amount.

	 	(a)	 	For each Plan Year, an Employer may be required to credit amounts to a
Participant’s Company Discretionary Contribution Account in accordance with employment
or other agreements entered into between the Participant and the Employer, or in
accordance with Board or Committee resolutions or other written commitments by the
Employer, which amounts shall be part of the Participant’s Company Contribution Amount
for that Plan Year. Such amounts shall be credited on the date or dates prescribed by
such agreements or commitments.

	 	(b)	 	For each Plan Year, an Employer, in its sole discretion, may, but is not
required to, credit any other amount it desires to any Participant’s Company
Discretionary Contribution Account under this Plan, which amount shall be part of the
Participant’s Company Discretionary Contribution Amount for that Plan Year. The amount
so credited to a Participant may be smaller or larger than the amount credited to any
other Participant, and the amount credited to any Participant for a Plan Year may be
zero, even though one or more other Participants receive a Company Discretionary
Contribution Amount for that Plan Year. The Company Discretionary Contribution Amount
described in this Section, if any, shall be credited on a date or dates to be
determined by the Committee, in its sole discretion.

	 	(c)	 	If not otherwise specified in the Participant’s employment or other agreement
entered into between the Participant and the Employer, or in any Board or Committee
resolutions or other written commitments by the Employer, the amount (or the method or
formula for determining the amount) of a Participant’s Company Discretionary
Contribution Amount shall be set forth in writing in one or more documents, which shall
be deemed to be incorporated into this Plan in accordance with Section 1.23, no later
than the date on which such Company Discretionary Contribution Amount is credited to
the Company Discretionary Contribution Account of the Participant.

	3.2	 	Supplemental Contribution Amount.

	 	(a)	 	For each Plan Year, an Employer may credit a Supplemental Contribution Amount
to any Participant’s Supplemental Contribution Account under this Plan, which amount
shall be for that Participant the Supplemental Contribution Amount for that Plan Year.
The Supplemental Contribution Amount so credited to a Participant may be smaller or
larger than the amount credited to any other Participant, and the amount credited to
any Participant for a Plan Year may be zero, even though one or more other Participants
receive a Supplemental Contribution Amount for that Plan Year. The Supplemental
Contribution Amount described in this Section, if any, shall be credited on a date or
dates to be determined by the Committee, in its sole discretion.

	 	(b)	 	The amount (or the method or formula for determining the amount) of a
Participant’s Supplemental Contribution Amount shall be set forth in writing in one or
more documents, which shall be deemed to be incorporated into this Plan in accordance
with Section 1.23, no later than the date on which such Supplemental Contribution
Amount is credited to the Supplemental Contribution Account of the Participant.

	3.3	 	Vesting.

	 	(a)	 	A Participant shall be vested in his or her Company Discretionary Contribution
Account in accordance with the vesting schedule(s) set forth in his or her Plan
Certificate of Participation, employment agreement or any other agreement entered into
between the Participant and his or her Employer or written commitment by the Employer.
If not addressed in such agreements, a Participant shall vest in his or her Company
Discretionary Contribution Account in accordance with the vesting schedule declared by
the Committee in its sole discretion.

	 	(b)	 	A Participant shall be vested in his or her Supplemental Contribution Account
in accordance with the vesting schedule(s) set forth in his or her Plan Certificate of
Participation, employment agreement or any other agreement entered into between the
Participant and his or her Employer. If not addressed in such agreements, a
Participant shall vest in his or her Supplemental Contribution Account on the basis of
the Participant’s Years of Service, in accordance with the following schedule:

	 	 	 	 	 
	Years of Service	 	Vested Percentage
	Less than 5 years

	 	 	0	%
	 

	 	 	 	 
	5 years or more

	 	 	100	%
	 

	 	 	 	 

	 	(c)	 	Notwithstanding anything to the contrary contained in this Section 3.3, (i) in
the event of a Change of Control while the Participant is employed by an Employer,
(ii) upon a Participant’s death while the Participant is employed by an Employer, or
(iii) upon a Participant’s Disability while the Participant is employed by an Employer,
a Participant’s Company Discretionary Contribution Account and Supplemental
Contribution Account shall immediately become 100% vested (if it is not already vested
in accordance with the above vesting provisions).

	 	(d)	 	Notwithstanding subsection 3.3 above, the vesting schedule for a Participant’s
Company Discretionary Contribution Account and Supplemental Contribution Account shall
not be accelerated upon a Change of Control to the extent that the Committee determines
that such acceleration would cause the deduction limitations of Code Section 280G to
become effective. In the event that all of a Participant’s Company Discretionary
Contribution Account and/or Supplemental Contribution Account is not vested pursuant to
such a determination, the Participant may request independent verification of the
Committee’s calculations with respect to the application of Section 280G. In such
case, the Committee must provide to the Participant within 90 days of such a request an
opinion from a nationally recognized accounting firm selected by the Participant (the
“Accounting Firm”). The opinion shall state the Accounting Firm’s opinion that any
limitation in the vested percentage hereunder is necessary to avoid the limits of
Section 280G and contain supporting calculations. The cost of such opinion shall be
paid for by the Company.

	 	(e)	 	Section 3.3 shall not prevent the acceleration of the vesting schedule
applicable to a Participant’s Company Discretionary Contribution Account and/or
Supplemental Contribution Account if such Participant is entitled to a “gross-up”
payment, to eliminate the effect of the Code Section 4999 excise tax, pursuant to his
or her employment agreement or other agreement entered into between such Participant
and the Employer.

	3.4	 	Crediting/Debiting of Account Balances. In accordance with, and subject to, the
rules and procedures that are established from time to time by the Committee, in its sole
discretion, amounts shall be credited or debited to a Participant’s Account Balance in
accordance with the following rules:

	 	(a)	 	Measurement Funds. The Participant may elect one or more of the
measurement funds selected by the Committee, in its sole discretion, which are based on
certain mutual funds (the “Measurement Funds”), for the purpose of crediting or
debiting additional amounts to his or her Account Balance. As necessary, the Committee
may, in its sole discretion, discontinue, substitute or add a Measurement Fund. Each
such action will take effect no earlier than the first day of the first month that
begins at least 30 days after the day on which the Committee gives Participants advance
written notice of such change.

	 	(b)	 	Election of Measurement Funds. A Participant, in connection with his
or her initial enrollment in the Plan in accordance with Article 2 above, shall elect,
on the Election Form, one or more Measurement Fund(s) (as described in Section 3.4(a)
above) to be used to determine the amounts to be credited or debited to his or her
Account Balance. If a Participant does not elect any of the Measurement Funds as
described in the previous sentence, the Participant’s Account Balance shall
automatically be allocated into the lowest-risk Measurement Fund, as determined by the
Committee, in its sole discretion. The Participant may (but is not required to) elect,
by submitting an Election Form to the Committee that is accepted by the Committee, to
add or delete one or more Measurement Fund(s) to be used to determine the amounts to be
credited or debited to his or her Account Balance, or to change the portion of his or
her Account Balance allocated to each previously or newly elected Measurement Fund. If
an election is made in accordance with the previous sentence, it shall apply as of the
first business day deemed reasonably practicable by the Committee, in its sole
discretion, and shall continue thereafter for each subsequent day in which the
Participant participates in the Plan, unless changed in accordance with the previous
sentence. Notwithstanding the foregoing, the Committee, in its sole discretion, may
impose limitations on the frequency with which one or more of the Measurement Funds
elected in accordance with this Section 3.4(b) may be added or deleted by such
Participant; furthermore, the Committee, in its sole discretion, may impose limitations
on the frequency with which the Participant may change the portion of his or her
Account Balance allocated to each previously or newly elected Measurement Fund.

	 	(c)	 	Proportionate Allocation. In making any election described in Section
3.4(b) above, the Participant shall specify on the Election Form, in increments of one
percent (1%), the percentage of his or her Account Balance or Measurement Fund, as
applicable, to be allocated/reallocated.

	 	(d)	 	Crediting or Debiting Method. The performance of each Measurement Fund
(either positive or negative) will be determined on a daily basis based on the manner
in which such Participant’s Account Balance has been hypothetically allocated among the
Measurement Funds by the Participant.

	 	(e)	 	No Actual Investment. Notwithstanding any other provision of this Plan
that may be interpreted to the contrary, the Measurement Funds are to be used for
measurement purposes only, and a Participant’s election of any such Measurement Fund,
the allocation of his or her Account Balance thereto, the calculation of additional
amounts and the crediting or debiting of such amounts to a Participant’s Account
Balance shall not be considered or construed in any manner as an actual investment of
his or her Account Balance in any such Measurement Fund. In the event that the Company
or the Trustee (as that term is defined in the Trust), in its own discretion, decides
to invest funds in any or all of the investments on which the Measurement Funds are
based, no Participant shall have any rights in or to such investments themselves.
Without limiting the foregoing, a Participant’s Account Balance shall at all times be a
bookkeeping entry only and shall not represent any investment made on his or her behalf
by the Company or the Trust; the Participant shall at all times remain an unsecured
creditor of the Company.

	3.5	 	FICA and Other Taxes.

	 	(a)	 	Company Discretionary Contribution Accounts and Supplemental Contribution
Accounts. When a Participant becomes vested in a portion of his or her Company
Discretionary Contribution Account and/or Supplemental Contribution Account, the
Participant’s Employer(s) shall withhold from the Participant’s wages or other
compensation due from the Employer(s), in a manner determined by the Employer(s), the
Participant’s share of FICA and other employment taxes on such amounts. If necessary,
the Committee may reduce the vested portion of the Participant’s Company Discretionary
Contribution Account and/or Supplemental Contribution Account, as applicable, in order
to comply with this Section 3.5.

	 	(b)	 	Distributions. The Participant’s Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under this Plan all
federal, state and local income, employment and other taxes required to be withheld by
the Employer(s), or the trustee of the Trust, in connection with such payments, in
amounts and in a manner to be determined in the sole discretion of the Employer(s) and
the trustee of the Trust.

ARTICLE 4

Retirement Benefit

	4.1	 	Retirement Benefit. If a Participant experiences a Separation from Service that
qualifies as a Retirement, the Participant shall be eligible to receive his or her vested
Account Balance in either a lump sum or annual installment payments, as elected by the
Participant in accordance with Section 4.2 (the “Retirement Benefit”). A Participant’s
Retirement Benefit shall be calculated as of the close of business on or around the applicable
Benefit Distribution Date for such benefit, which shall be (i) the first day after the end of
the 6-month period immediately following the date on which the Participant experiences such
Separation from Service if the Participant is a Specified Employee, and (ii) for all other
Participants, the date on which the Participant experiences a Separation from Service;
provided, however, if a Participant changes the form of distribution for the Retirement
Benefit in accordance with Section 4.2(b), the Benefit Distribution Date for the Retirement
Benefit shall be determined in accordance with Section 4.2(b). If a Participant experiences
a Separation from Service that is involuntary and without Cause anytime within 3 years of a
Change of Control, then his or her vested Account Balance that is distributed in accordance
with this Section 4.1 shall include any Company Discretionary Contribution Amount that would
have been credited to his or her Company Discretionary Contribution Account had he or she
continued to be employed by the Employer through the earlier of (a) age 60 or (b) the third
anniversary of the date of his or her Separation from Service.

	4.2	 	Payment of Retirement Benefit.

	 	(a)	 	A Participant, in connection with his or her commencement of participation in
the Plan, shall elect on an Election Form to receive the Retirement Benefit in a lump
sum or pursuant to an Annual Installment Method of up to 20 years. If a Participant
does not make any election with respect to the payment of the Retirement Benefit, then
such Participant shall be deemed to have elected to receive the Retirement Benefit in a
lump sum.

	 	(b)	 	A Participant may change the form of payment for the Retirement Benefit by
submitting an Election Form to the Committee in accordance with the following criteria:

	 	(i)	 	The election shall not take effect until at least 12 months after
the date on which the election is made;

	 	(ii)	 	The new Benefit Distribution Date for the Participant’s
Retirement Benefit shall be 5 years after the Benefit Distribution Date that
would otherwise have been applicable to such benefit; and

	 	(iii)	 	The election must be made at least 12 months prior to the
Benefit Distribution Date that would otherwise have been applicable to the
Participant’s Retirement Benefit.

For purposes of applying the provisions of this Section 4.2(b), a Participant’s
election to change the form of payment for the Retirement Benefit shall not be
considered to be made until the date on which the election becomes irrevocable. Such
an election shall become irrevocable no later than the date that is 12 months prior
to the Benefit Distribution Date that would otherwise have been applicable to the
Participant’s Retirement Benefit. Subject to the requirements of this Section
4.2(b), the Election Form most recently accepted by the Committee that has become
effective shall govern the form of payout of the Participant’s Retirement Benefit.

	 	(c)	 	The lump sum payment shall be made, or installment payments shall commence, no
later than 60 days after the Participant’s Benefit Distribution Date. Remaining
installments, if any, shall be paid no later than 60 days after each anniversary of the
Participant’s Benefit Distribution Date.

ARTICLE 5

Termination Benefit

	5.1	 	Termination Benefit. If a Participant experiences a Separation from Service that
does not qualify as a Retirement, the Participant shall receive his or her vested Account
Balance in either a lump sum payment or annual installment payments, as elected by the
Participant in accordance with Section 5.2 (the “Termination Benefit”). A Participant’s
Termination Benefit shall be calculated as of the close of business on or around the
applicable Benefit Distribution Date for such benefit, which shall be (i) the first day after
the end of the 6-month period immediately following the date on which the Participant
experiences such Separation from Service if the Participant is a Specified Employee, and
(ii) for all other Participants, the date on which the Participant experiences a Separation
from Service; provided, however, if a Participant changes the form of distribution for the
Termination Benefit in accordance with Section 5.2(b), the Benefit Distribution Date for the
Termination Benefit shall be determined in accordance with Section 5.2(b). If a Participant
experiences a Separation from Service that is involuntary and without Cause anytime within 3
years of a Change of Control, then his or her vested Account Balance that is distributed in
accordance with this Section 5.1 shall include any Company Discretionary Contribution Amount
that would have been credited to his or her Company Discretionary Contribution Account had he
or she continued to be employed by the Employer through the earlier of (a) age 60 or (b) the
third anniversary of the date of his or her Separation from Service.

	5.2	 	Payment of Termination Benefit.

	 	(a)	 	A Participant, in connection with his or her commencement of participation in
the Plan, shall elect on an Election Form to receive the Termination Benefit in a lump
sum or pursuant to an Annual Installment Method of up to 20 years. If a Participant
does not make any election with respect to the payment of the Termination Benefit, then
such Participant shall be deemed to have elected to receive the Termination Benefit in
a lump sum.

	 	(b)	 	A Participant may change the form of payment for the Termination Benefit by
submitting an Election Form to the Committee in accordance with the following criteria:

	 	(i)	 	The election shall not take effect until at least 12 months after
the date on which the election is made;

	 	(ii)	 	The new Benefit Distribution Date for the Participant’s
Termination Benefit shall be 5 years after the Benefit Distribution Date that
would otherwise have been applicable to such benefit; and

	 	(iii)	 	The election must be made at least 12 months prior to the
Benefit Distribution Date that would otherwise have been applicable to the
Participant’s Termination Benefit.

For purposes of applying the provisions of this Section 5.2(b), a Participant’s
election to change the form of payment for the Termination Benefit shall not be
considered to be made until the date on which the election becomes irrevocable. Such
an election shall become irrevocable no later than the date that is 12 months prior
to the Benefit Distribution Date that would otherwise have been applicable to the
Participant’s Retirement Benefit. Subject to the requirements of this Section
5.2(b), the Election Form most recently accepted by the Committee that has become
effective shall govern the form of payout of the Participant’s Termination Benefit.

	 	(c)	 	The lump sum payment shall be made, or installment payments shall commence, no
later than 60 days after the Participant’s Benefit Distribution Date. Remaining
installments, if any, shall be paid no later than 60 days after each anniversary of the
Participant’s Benefit Distribution Date

ARTICLE 6

Disability Benefit

	6.1	 	Disability Benefit. If a Participant becomes Disabled prior to the occurrence of a
distribution event described in Articles 4, 5 or 7, as applicable, the Participant shall
receive his or her vested Account Balance in the form of a lump sum payment (the “Disability
Benefit”). The Disability Benefit shall be calculated as of the close of business on or
around the Participant’s Benefit Distribution Date for such benefit, which shall be the date
on which the Participant becomes Disabled.

	6.2	 	Payment of Disability Benefit. The Disability Benefit shall be paid to the
Participant no later than 60 days after the Participant’s Benefit Distribution Date.

ARTICLE 7

Death Benefit

	7.1	 	Death Benefit. In the event of a Participant’s death prior to the complete
distribution of his or her vested Account Balance, the Participant’s Beneficiary(ies) shall
receive the Participant’s unpaid vested Account Balance in a lump sum payment (the “Death
Benefit”). The Death Benefit shall be calculated as of the close of business on or around the
Benefit Distribution Date for such benefit, which shall be the date of the Participant’s
death.

	7.2	 	Payment of Death Benefit. The Death Benefit shall be paid to the Participant’s
Beneficiary(ies) no later than 60 days after the Participant’s Benefit Distribution Date.

ARTICLE 8

Beneficiary Designation

	8.1	 	Beneficiary. Each Participant shall have the right, at any time, to designate his or
her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable
under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated
under this Plan may be the same as or different from the Beneficiary designation under any
other plan of an Employer in which the Participant participates.

	8.2	 	Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received and acknowledged in writing by the Committee or its designated agent.

	8.3	 	No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Sections 8.1 above or, if all designated Beneficiaries predecease the Participant
or die prior to complete distribution of the Participant’s benefits, then the Participant’s
designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant
has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary
shall be payable to the executor or personal representative of the Participant’s estate.

	8.4	 	Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary
to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in
its discretion, to cause the Participant’s Employer to withhold such payments until this
matter is resolved to the Committee’s satisfaction.

	8.5	 	Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary
shall fully and completely discharge all Employers and the Committee from all further
obligations under this Plan with respect to the Participant, and that Participant’s Plan
Certificate of Participation shall terminate upon such full payment of benefits.

ARTICLE 9

Termination of Plan, Amendment or Modification

	9.1	 	Termination of Plan. Although each Employer anticipates that it will continue the
Plan for an indefinite period of time, there is no guarantee that any Employer will continue
the Plan or will not terminate the Plan at any time in the future. Accordingly, each Employer
reserves the right to terminate the Plan with respect to all of its Participants. In the
event of a Plan termination the affected Participants shall no longer be eligible to receive
new Company contributions. However, after the Plan termination the Account Balances of such
Participants shall continue to be credited or debited to such Participants’ Account Balances
pursuant to Section 3.4. The Measurement Funds available to Participants following the
termination of the Plan shall be comparable in number and type to those Measurement Funds
available to Participants in the Plan Year preceding the Plan Year in which the Plan
termination is effective. In addition, following a Plan termination, Participant Account
Balances shall remain in the Plan and shall not be distributed until such amounts become
eligible for distribution in accordance with the other applicable provisions of the Plan.
Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg.
§1.409A-3(j)(4)(ix), the Employer may provide that upon termination of the Plan, all Account
Balances of the Participants shall be distributed, subject to and in accordance with any rules
established by such Employer deemed necessary to comply with the applicable requirements and
limitations of Treas. Reg. §1.409A-3(j)(4)(ix).

	9.2	 	Amendment. Any Employer may, at any time, amend or modify the Plan in whole or in
part with respect to that Employer. Notwithstanding the foregoing, (i) no amendment or
modification shall be effective to decrease the value of a Participant’s vested Account
Balance in existence at the time the amendment or modification is made, and (ii) no amendment
or modification of this Section 9.2 or Section 10.2 of the Plan shall be effective.

	9.3	 	Plan Certificate of Participation. Despite the provisions of Sections 9.1 and 9.1,
if a Participant’s Plan Certificate of Participation contains benefits or limitations that are
not in this Plan document, the Employer may only amend or terminate such provisions with the
written consent of the Participant.

	9.4	 	Effect of Payment. The full payment of the Participant’s vested Account Balance in
accordance with the applicable provisions of the Plan shall completely discharge all
obligations to a Participant and his or her designated Beneficiaries under this Plan, and the
Participant’s Plan Certificate of Participation shall terminate.

ARTICLE 10

Administration

	10.1	 	Committee Duties. Except as otherwise provided in this Article 10, this Plan shall
be administered by a Committee, which shall consist of the Board, or such committee as the
Board shall appoint. Members of the Committee may be Participants under this Plan. The
Committee shall also have the discretion and authority to (a) make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of this Plan, and
(b) decide or resolve any and all questions, including benefit entitlement determinations and
interpretations of this Plan, as may arise in connection with the Plan. Any individual
serving on the Committee who is a Participant shall not vote or act on any matter relating
solely to himself or herself. When making a determination or calculation, the Committee shall
be entitled to rely on information furnished by a Participant or the Company.

	10.2	 	Administration Upon Change Of Control. Within 120 days following a Change of Control,
the individuals who comprised the Committee immediately prior to the Change of Control
(whether or not such individuals are members of the Committee following the Change of Control)
may, by written consent of the majority of such individuals, appoint an independent third
party administrator (the “Administrator”) to perform any or all of the Committee’s duties
described in Section 10.1 above, including without limitation, the power to determine any
questions arising in connection with the administration or interpretation of the Plan, and the
power to make benefit entitlement determinations. Upon and after the effective date of such
appointment, (a) the Company must pay all reasonable administrative expenses and fees of the
Administrator, and (b) the Administrator may only be terminated with the written consent of
the majority of Participants with an Account Balance in the Plan as of the date of such
proposed termination.

	10.3	 	Agents. In the administration of this Plan, the Committee or the Administrator, as
applicable, may, from time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed representative) and may from
time to time consult with counsel.

	10.4	 	Binding Effect of Decisions. The decision or action of the Committee or
Administrator, as applicable, with respect to any question arising out of or in connection
with the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.

	10.5	 	Indemnity of Committee. All Employers shall indemnify and hold harmless the members
of the Committee, any Employee to whom the duties of the Committee may be delegated, and the
Administrator against any and all claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, any of its members, any such Employee or the Administrator.

	10.6	 	Employer Information. To enable the Committee and/or Administrator to perform its
functions, the Company and each Employer shall supply full and timely information to the
Committee and/or Administrator, as the case may be, on all matters relating to the Plan, the
Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the
compensation of its Participants, the date and circumstances of the termination of employment,
Separation from Service, Disability or death of its Participants, and such other pertinent
information as the Committee or Administrator may reasonably require.

ARTICLE 11

Other Benefits and Agreements

	11.1	 	Coordination with Other Benefits. The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits available to
such Participant under any other plan or program for employees of the Participant’s Employer.
The Plan shall supplement and shall not supersede, modify or amend any other such plan or
program except as may otherwise be expressly provided.

ARTICLE 12

Claims Procedures

	12.1	 	Presentation of Claim. Any Participant or Beneficiary of a deceased Participant
(such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the
Committee a written claim for a determination with respect to the amounts distributable to
such Claimant from the Plan. If such a claim relates to the contents of a notice received by
the Claimant, the claim must be made within 60 days after such notice was received by the
Claimant. All other claims must be made within 180 days of the date on which the event that
caused the claim to arise occurred. The claim must state with particularity the determination
desired by the Claimant.

	12.2	 	Notification of Decision. The Committee shall consider a Claimant’s claim within a
reasonable time, but no later than 90 days after receiving the claim. If the Committee
determines that special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior to the termination of
the initial 90 day period. In no event shall such extension exceed a period of 90 days from
the end of the initial period. The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Committee expects to render the
benefit determination. The Committee shall notify the Claimant in writing:

	 	(a)	 	that the Claimant’s requested determination has been made, and that the claim
has been allowed in full; or

	 	(b)	 	that the Committee has reached a conclusion contrary, in whole or in part, to
the Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

	 	(i)	 	the specific reason(s) for the denial of the claim, or any part
of it;

	 	(ii)	 	specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;

	 	(iii)	 	a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary;

	 	(iv)	 	an explanation of the claim review procedure set forth in
Section 12.3 below; and

	 	(v)	 	a statement of the Claimant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

	12.3	 	Review of a Denied Claim. On or before 60 days after receiving a notice from the
Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s
duly authorized representative) may file with the Committee a written request for a review of
the denial of the claim. The Claimant (or the Claimant’s duly authorized representative):

	 	(a)	 	may, upon request and free of charge, have reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable ERISA
regulations) to the claim for benefits;

	 	(b)	 	may submit written comments or other documents; and/or

	 	(c)	 	may request a hearing, which the Committee, in its sole discretion, may grant.

	12.4	 	Decision on Review. The Committee shall render its decision on review promptly, and
no later than 60 days after the Committee receives the Claimant’s written request for a review
of the denial of the claim. If the Committee determines that special circumstances require an
extension of time for processing the claim, written notice of the extension shall be furnished
to the Claimant prior to the termination of the initial 60 day period. In no event shall such
extension exceed a period of 60 days from the end of the initial period. The extension notice
shall indicate the special circumstances requiring an extension of time and the date by which
the Committee expects to render the benefit determination. In rendering its decision, the
Committee shall take into account all comments, documents, records and other information
submitted by the Claimant relating to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination. The decision must be
written in a manner calculated to be understood by the Claimant, and it must contain:

	 	(a)	 	specific reasons for the decision;

	 	(b)	 	specific reference(s) to the pertinent Plan provisions upon which the decision
was based;

	 	(c)	 	a statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the Claimant’s
claim for benefits; and

	 	(d)	 	a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a).

	12.5	 	Legal Action. A Claimant’s compliance with the foregoing provisions of this
Article 12 is a mandatory prerequisite to a Claimant’s right to commence any legal action with
respect to any claim for benefits under this Plan. 

ARTICLE 13

Trust

	13.1	 	Establishment of the Trust. In order to provide assets from which to fulfill its
obligations to the Participants and their Beneficiaries under the Plan, the Company may
establish a trust by a trust agreement with a third party, the trustee, to which each Employer
may, in its discretion, contribute cash or other property, including securities issued by the
Company, to provide for the benefit payments under the Plan (the “Trust”).

	13.2	 	Interrelationship of the Plan and the Trust. The provisions of the Plan and the Plan
Certificate of Participation shall govern the rights of a Participant to receive distributions
pursuant to the Plan. The provisions of the Trust shall govern the rights of the Employers,
Participants and the creditors of the Employers to the assets transferred to the Trust. Each
Employer shall at all times remain liable to carry out its obligations under the Plan.

	13.3	 	Distributions From the Trust. Each Employer’s obligations under the Plan may be
satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such
distribution shall reduce the Employer’s obligations under this Plan.

ARTICLE 14

Miscellaneous

	14.1	 	Status of Plan. The Plan is intended to be a plan that is not qualified within the
meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group of management
or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted (a) to the extent possible in a
manner consistent with the intent described in the preceding sentence, and (b) in accordance
with Code Section 409A and related Treasury guidance and Regulations.

	14.2	 	Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors
and assigns shall have no legal or equitable rights, interests or claims in any property or
assets of an Employer. For purposes of the payment of benefits under this Plan, any and all
of an Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of
the Employer. An Employer’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.

	14.3	 	Employer’s Liability. An Employer’s liability for the payment of benefits shall be
defined only by the Plan and the Plan Certificate of Participation, as entered into between
the Employer and a Participant. An Employer shall have no obligation to a Participant under
the Plan except as expressly provided in the Plan and his or her Plan Certificate of
Participation.

	14.4	 	Nonassignability. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.

	14.5	 	Not a Contract of Employment. The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between any Employer and the Participant. Such
employment is hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without cause, and with or
without notice, unless expressly provided in a written employment agreement. Nothing in this
Plan shall be deemed to give a Participant the right to be retained in the service of any
Employer, in any capacity, or to interfere with the right of any Employer to discipline or
discharge the Participant at any time.

	14.6	 	Furnishing Information. A Participant or his or her Beneficiary will cooperate with
the Committee by furnishing any and all information requested by the Committee and take such
other actions as may be requested in order to facilitate the administration of the Plan and
the payments of benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.

	14.7	 	Terms. Whenever any words are used herein in the masculine, they shall be construed
as though they were in the feminine in all cases where they would so apply; and whenever any
words are used herein in the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all cases where they would so
apply.

	14.8	 	Captions. The captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of any of its
provisions.

	14.9	 	Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and
interpreted according to the internal laws of the State of Delaware without regard to its
conflicts of laws principles.

	14.10	 	Notice. Any notice or filing required or permitted to be given to the Committee
under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or
certified mail, to the address below:

	 
	Viad Corp

	 

	Attn: Chief Human Resources Officer

	 

	1850 North Central Avenue, Suite 1900

	 

	Phoenix, AZ 85004-4565

	 

With a copy to:

	 
	Viad Corp

	 

	Attn: General Counsel & Secretary

	 

	1850 North Central Avenue, Suite 1900

	 

	Phoenix, AZ 85004-4565

	 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or certification.

Any notice or filing required or permitted to be given to a Participant under this Plan
shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known
address of the Participant.

	14.11	 	Successors. The provisions of this Plan shall bind and inure to the benefit of the
Participant’s Employer and its successors and assigns and the Participant and the
Participant’s designated Beneficiaries.

	14.12	 	Spouse’s Interest. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall automatically pass to the Participant
and shall not be transferable by such spouse in any manner, including but not limited to such
spouse’s will, nor shall such interest pass under the laws of intestate succession.

	14.13	 	Validity. In case any provision of this Plan shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal or invalid provision had never been
inserted herein.

	14.14	 	Incompetent. If the Committee determines in its discretion that a benefit under
this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of
handling the disposition of that person’s property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. The Committee may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the Participant
and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of
any liability under the Plan for such payment amount.

	14.15	 	Domestic Relations Orders. If necessary to comply with a domestic relations order,
as defined in Code Section 414(p)(1)(B), pursuant to which a court has determined that a
spouse or former spouse of a Participant has an interest in the Participant’s benefits under
the Plan, the Committee shall have the right to immediately distribute the spouse’s or former
spouse’s interest in the Participant’s benefits under the Plan to such spouse or former
spouse.

	14.16	 	Distribution in the Event of Income Inclusion Under Code Section 409A. If any
portion of a Participant’s Account Balance under this Plan is required to be included in
income by the Participant prior to receipt due to a failure of this Plan to comply with the
requirements of Code Section 409A and related Treasury Regulations, the Committee may
determine that such Participant shall receive a distribution from the Plan in an amount equal
to the lesser of (a) the portion of his or her Account Balance required to be included in
income as a result of the failure of the Plan to comply with the requirements of Code Section
409A and related Treasury Regulations, or (b) the unpaid vested Account Balance.

	14.17	 	Deduction Limitation on Benefit Payments. If an Employer reasonably anticipates
that the Employer’s deduction with respect to any distribution from this Plan would be limited
or eliminated by application of Code Section 162(m), then to the extent permitted by Treas.
Reg. §1.409A-2(b)(7)(i), payment shall be delayed as deemed necessary to ensure that the
entire amount of any distribution from this Plan is deductible. Any amounts for which
distribution is delayed pursuant to this Section shall continue to be credited/debited with
additional amounts in accordance with Section 3.4. The delayed amounts (and any amounts
credited thereon) shall be distributed to the Participant (or his or her Beneficiary in the
event of the Participant’s death) at the earliest date the Employer reasonably anticipates
that the deduction of the payment of the amount will not be limited or eliminated by
application of Code Section 162(m). In the event that such date is determined to be after a
Participant’s Separation from Service and the Participant to whom the payment relates is
determined to be a Specified Employee, then to the extent deemed necessary to comply with
Treas. Reg. §1.409A-3(i)(2), the delayed payment shall not be made before the end of the
six-month period following such Participant’s Separation from Service.

IN WITNESS WHEREOF, the Company has signed this Plan as of March 4, 2013.

“Company”

Viad Corp,

a Delaware corporation

By: /s/ David C. Robertson

David C. Robertson

Chief Human Resources Officertbuff_ex101.htm

EXHIBIT 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of February 27, 2013, between TRIBUTE PHARMACEUTICALS CANADA INC., an Ontario corporation (f/k/a Stellar Pharmaceuticals Inc.) (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act (as defined below) and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, each of the Company and the Purchasers intending to be legally bound hereby, hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

1.1 Definitions. Unless otherwise expressly set forth herein, all references to dollars or currency in the Transaction Documents shall mean U.S. dollars.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

 

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.

 

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or Canada, or any day on which banking institutions in the State of New York or Province of Ontario are authorized or required by law or other governmental action to close.

 

“Closing” means the closing of the purchase and sale of the Shares and Warrants pursuant to Section 2.1.

 

  

1

  

 

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Shares and Warrants, in each case, have been satisfied or waived, but in no event later than the third Trading Day following the date hereof.

 

 “Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common shares of the Company, no par value  per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Company Counsel” means Folger, Rubinoff LLP, 77 King Street West, Suite 3000, PO Box 95, TD Centre, Toronto, Ontario, Canada M5K 1E8 and Herrick, Feinstein LLP, 2 Park Avenue, New York, NY 10016.

 

“Disclosure Schedules” shall have the meaning ascribed to such term in Section 3.1.

 

“EGS” means Ellenoff Grossman & Schole LLP, with offices located at 150 East 42nd Street, New York, New York 10017.

 

 “Effective Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission, (b) all of the Registrable Securities (as defined in the Registration Rights Agreement) have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions or (c) following the one year anniversary of the Closing Date, provided that a holder of Registrable Securities is not an Affiliate of the Company, all of the Registrable Securities may be sold pursuant to an exemption from registration under Section 4(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a written opinion that resales may then be made by such holders of the Registrable Securities pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.

 

  

2

  

 

“Escrow Agent” means Signature Bank, a New York State chartered bank, with offices at 261 Madison Avenue, New York, New York 10016.

 

“Escrow Agreement” means the escrow agreement entered into prior to the date hereof among the Company, the Escrow Agent and the Placement Agent pursuant to which the Purchasers shall deposit Subscription Amounts with the Escrow Agent to be applied to the transactions contemplated hereunder.

 

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(r).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and (d) with the prior consent of the Placement Agent, up to an amount of Common Stock and warrants equal to the difference between $5,000,000 and the aggregate Subscription Amounts hereunder, on the same terms and conditions and prices as hereunder, with investors executing definitive agreements for the purchase of such securities and such transactions having closed on or before the earlier of (i) the date the initial Registration Statement is filed with the Commission or (ii) March 22, 2013.

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

 

“FDA” means the United States Food and Drug Administration.

 

 “GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).

 

  

3

  

 

 “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).

 

“Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).

 

“Liens” means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

 “Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(m).

 

“OTCQB” means the middle tier of the OTC Markets Group Inc.

 

“Participation Maximum” shall have the meaning ascribed to such term in Section 4.11(a).

 

“Per Share Purchase Price” equals $0.40, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement and prior to the Closing Date.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Pharmaceutical Product” shall have the meaning ascribed to such term in Section 3.1(jj).

 

“Placement Agent” means Ladenburg Thalmann & Co. Inc.

 

  

4

  

 

 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Public Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).

 

“Public Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).

 

 “Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, between the Company and each of the Purchasers in the form of Exhibit A annexed hereto.

 

“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Shares and the Warrant Shares.

 

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

  

5

  

 

“Securities” means the Shares, the Warrants and the Warrant Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Series A Warrants” means the Common Stock warrants in the form of Exhibit C annexed hereto providing for a term of two years commencing on the Closing Date.

 

“Series B Warrants” means the Common Stock warrants in the form of Exhibit C annexed hereto providing for a term of five years commencing on the Closing Date.

 

 “Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock). 

 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.

 

 “Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

“Trading Day” means a day on which the principal Trading Market is open for trading.

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Toronto Stock Exchange, the TSX Venture Exchange, the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or the OTC Bulletin Board (or any successors to any of the foregoing).

 

  

6

  

 

“Transaction Documents” means this Agreement, the Warrants, the Registration Rights Agreement, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Equity Transfer & Trust Company, the current transfer agent of the Company, with a mailing address of 200 University Avenue, Suite 400, Toronto, Ontario Canada M5H 4H1 and a facsimile number of (416) 361-0470, and any successor transfer agent of the Company.

 

“Variable Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(b).

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on a Trading Market or the OTC Bulletin Board (if the OTC Bulletin Board is not a Trading Market), (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Shares then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Warrants” means, collectively, the Series A Warrants and Series B Warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a).

 

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

 

  

7

  

 

ARTICLE II.

PURCHASE AND SALE

 

2.1 Closing.  On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,  agree to purchase, up to an aggregate of $5,000,000 of Shares and Warrants.  Each Purchaser shall deliver to the Escrow Agent, via wire transfer or a certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser its respective Shares and Warrants, as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree.

 

2.2 Deliveries.

 

(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i) this Agreement duly executed by the Company;

 

(ii) legal opinions of Company Counsel, substantially in the form of Exhibit B annexed hereto;

 

(iii) a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, a certificate evidencing a number of Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser;

 

(iv) a Series A Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to fifty percent (50%) of such Purchaser’s Shares, with an exercise price equal to $0.50, subject to adjustment therein (it being understood that such Series A Warrant may be delivered within three Trading Days of the Closing Date);

 

(v) a Series B Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to fifty percent (50%) of such Purchaser’s Shares, with an exercise price equal to $0.60, subject to adjustment therein (it being understood that such Series B Warrant may be delivered within three Trading Days of the Closing Date); and

 

(vi) the Registration Rights Agreement duly executed by the Company.

 

  

8

  

 

(b) On or prior to the Closing Date, except as noted, each Purchaser shall deliver or cause to be delivered to the Company or the Escrow Agent, as applicable, the following:

 

(i) this Agreement duly executed by such Purchaser;

 

(ii) to Escrow Agent, such Purchaser’s Subscription Amount by wire transfer to the account specified in the Escrow Agreement;

 

(iii) with respect to Purchasers that are residents of Canada, a completed Canadian investor questionnaire in the form provided to such Purchaser(s) by the Company; and

 

(iv) the Registration Rights Agreement duly executed by such Purchaser.

 

2.3 Closing Conditions.

 

(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i) the accuracy in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

(ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

 

(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

(b) The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:

 

(i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

  

9

  

 

(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

 

(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement required to be delivered on the Closing Date;

 

(iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

 

(v) from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Shares and Warrants at the Closing.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser as of the date hereof and as of the Closing Date (unless as of a specific date therein):

 

(a) Subsidiaries.  As of the date hereof, the Company has no Subsidiaries.  Accordingly, on and after the date hereof and continuing for so long as the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

 

  

10

  

 

(b) Organization and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and to the Company’s knowledge, no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(c) Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of each of this Agreement and the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals.  This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

  

11

  

 

(d) No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including provincial, United States federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(e) Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other provincial, United States federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission pursuant to the Registration Rights  Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state and/or provincial securities laws (collectively, the “Required Approvals”).

 

(f) Issuance of the Securities.  The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Warrant Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants.

 

  

12

  

 

(g) Capitalization.  The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof (it being understood that with respect to Affiliates of the Company that are not officers or directors of the Company, such schedule shall be based on a review of Section 16 and Schedule 13D or 13G filings by such Persons). The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale of the Securities, options outstanding under the Company’s stock option plans and the warrants set forth on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  Except as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all provincial, United States federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.  There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

(h) SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  Except as set forth on Schedule 3.1(h), as of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

  

13

  

 

(i) Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  Except as set forth on Schedule 3.1(i), the Company does not have pending before the Commission any request for confidential treatment of information.  Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists, or is reasonably expected to occur or exist, with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

 

(j) Litigation.  There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (provincial, federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under provincial, federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

 

  

14

  

 

(k) Labor Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.  None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good.  To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in compliance with all provincial, United States federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(l) Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all provincial, foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(m) Regulatory Permits.  Except as set forth on Schedule 3.1(m), the Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate provincial, federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

  

15

  

 

(n) Title to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case, free and clear of all Liens, except for (i) Liens set forth on Schedule 3.1(n) and such other Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of provincial, federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

(o) Intellectual Property.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective businesses and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(p) Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

  

16

  

 

(q) Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 (U.S.), other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(r) Sarbanes-Oxley; Internal Accounting Controls.  The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.  The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company or its Subsidiaries.

 

  

17

  

 

(s) Certain Fees.  No brokerage or finder’s fees or commissions are or will be payable by the Company or  any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents, other than the Placement Agent.  The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.1(s) that may be due in connection with the transactions contemplated by the Transaction Documents.

 

(t) Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

 

(u) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

 

(v) Registration Rights.  Other than (i) as set forth on Schedule 3.1(v) and (ii) each of the Purchasers, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

 

(w) Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

 

(x) Application of Takeover Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

 

  

18

  

 

(y) Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers (other than Purchasers that are members of the Company’s board of directors and/or senior management) or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information.   The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.  The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

 

(z) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

 

(aa) Solvency.  Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder: (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.  Schedule 3.1(aa) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (U.S.) (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 (U.S.) due under leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

  

19

  

 

(bb) Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all Canadian, United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

 

(cc) No General Solicitation.  Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising.  The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

(dd) Foreign Corrupt Practices.  Neither the Company nor any Subsidiary, to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.

 

(ee) Accountants.  The Company’s accounting firm is set forth on Schedule 3.1(ee) of the Disclosure Schedules. To the knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2012.

 

(ff) No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.

 

  

20

  

 

(gg)  Acknowledgment Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities.  The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(hh) Acknowledgment Regarding Purchaser’s Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.  The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

 

(ii) Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent.

 

  

21

  

 

(jj) FDA.  Except as set forth on Schedule 3.1(jj), as to each medical product or medical device (each a “Pharmaceutical Product”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by or on behalf of the Company or any of its Subsidiaries, to the Company’s knowledge, such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by or on behalf of the Company in compliance with all material applicable regulatory requirements under the FDA, the Canadian Therapeutic Products Directorate, Health Canada and similar authorities,  laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect.  There is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or acting on behalf of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect.  The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.

 

(kk) Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the market price of the Common Stock on the date preceding the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated.  The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

 

(ll) Office of Foreign Assets Control.  Neither the Company nor any Subsidiary  nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department (“OFAC”).

 

  

22

  

 

(mm) U.S. Real Property Holding Corporation.  The Company is not and has never been a United States real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.

 

(nn) Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”), and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

(oo) Money Laundering.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

 

3.2 Representations and Warranties of the Purchasers.  Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):

 

(a) Organization; Authority.  Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.  Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

  

23

  

 

(b) Own Account.  Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other person to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws).  Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

 

(c) Purchaser Status.  At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501 under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

 

(d) Experience of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(e) General Solicitation.  Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

(f) Certain Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder, such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.  Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any action, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

 

  

24

  

 

(g) The Purchaser is solely responsible for obtaining such legal advice, investment advice and tax advice as it considers appropriate in connection with the execution, delivery and performance by it of this Agreement and the completion of the transactions contemplated hereby and neither the Company’s counsel, Fogler, Rubinoff LLP and Herrick Feinstein LLP, nor the Placement Agent’s counsel, Ellenoff Grossman & Schole LLP are acting as counsel for the Purchasers.

 

(h) By executing this Agreement, the Purchaser (on its own behalf and on behalf of any beneficial purchaser) hereby consents to the collection, use and disclosure of the information provided herein and any other personally identifiable information reasonably necessary in connection with the Purchaser’s subscription for the Shares and Warrants (collectively, “personal information”) for the following purposes: (a) the Company may use and disclose to intermediaries such as the Company’s legal counsel and withholding agents such personal information for the purposes of determining the Purchaser’s eligibility to invest in the Shares and Warrants and for managing and administering the Purchaser’s investment in the Shares and Warrants; (b) the Company, its agents and advisors, may each collect, use and disclose such personal information for the purposes of meeting legal, regulatory and audit requirements (including money laundering or anti-terrorism legislation, rules or regulations) and as otherwise permitted or required by law (including as required by applicable foreign law).

 

(i) None of the funds being used to purchase the Shares or Warrants are, to the knowledge of the Purchaser and the beneficial purchaser, if any, proceeds obtained or derived directly or indirectly as a result of illegal activities.  The funds being used to purchase the Shares and Warrants which will be advanced by the Purchaser to the Company hereunder will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLTFA”) and the Purchaser acknowledges that the Company may in the future be required by law to disclose the Purchaser’s name and other information relating to this Agreement and the Purchaser’s subscription hereunder, on a confidential basis, pursuant to the PCMLTFA.  To the best of its knowledge, none of the funds to be provided by the Purchaser or the beneficial purchaser are being tendered on behalf of a person or entity who has not been identified to the Purchaser. The Purchaser covenants to promptly notify the Company if the Purchaser discovers that any of such representations ceases to be true, and to provide the Company with appropriate information in connection therewith.

 

In addition, severally and not jointly, the following representations and warranties are made by each Purchaser that is a resident of Canada:

 

(j) Residence. The Purchaser, and each beneficial purchaser, if any, for whom it is acting as agent or trustee, was offered the Shares and Warrants in, and is a resident of, the jurisdiction referred to as the address of the Purchaser and/or the beneficial purchaser, as the case may be, on the signature page of this Agreement and intends that the securities laws of that jurisdiction govern any transaction involving the Shares or Warrants subscribed for by the Purchaser or any beneficial purchaser for whom it is contracting hereunder and that such addresses were not created and are not used solely for the purpose of acquiring the Shares and Warrants;

 

  

25

  

 

(k) Private Placement Exemptions. If the Purchaser is resident in Canada, the Purchaser and each beneficial purchaser, if any, for whom it is acting as agent or trustee is eligible to purchase the Shares and Warrants pursuant to the “accredited investor” exemption from the prospectus requirements of Securities Laws provided by section 2.3 of National Instrument 45-106, and the Purchaser has properly completed, executed and delivered to the Company the certificate set forth in Schedule “A” attached hereto and the information contained therein is true and correct and the representations, warranties and covenants contained in Schedule “A” attached hereto will be true and correct both as of the date of execution of this Subscription Agreement and as at the Closing Date;

 

(l) Purchasing as Principal.  Unless paragraph (o) below applies, the Purchaser is purchasing the Shares and Warrants as principal (within the meaning of applicable securities laws) for its own account, and not for the benefit of any other person;

 

(m) Purchasing for Investment Only. Unless paragraph (o) below applies, the Purchaser is purchasing the Shares and Warrants for investment only and not with a view to resale or distribution;

 

(n) No Syndication.  Unless paragraph (o) below applies, the Purchaser was not created solely to purchase or hold securities as an accredited investor as described in paragraph (m) of the definition of “accredited investor” provided in Schedule “A” hereto;

 

(o) Purchasing as Agent or Trustee.  In the case of the purchase by the Purchaser of the  Shares and Warrants as agent or trustee for any principal, the Purchaser is the duly authorized agent or trustee of such beneficial purchaser with due and proper power and authority to execute and deliver, on behalf of such beneficial purchaser, this Agreement and all other documentation in connection with the purchase of the Shares and Warrants hereunder, to agree to the terms and conditions herein and therein set out and to make the representations, warranties, acknowledgements and covenants herein and therein contained, all as if such beneficial purchaser were the Purchaser and the Purchaser’s actions as agent or trustee are in compliance with applicable law and the Purchaser and the beneficial purchaser acknowledge that the Company is required by law to disclose to certain regulatory authorities the identity of each beneficial purchaser of Shares and Warrants for whom the Purchaser may be acting, and:

 

(i)  in the case of the purchase by the Purchaser of the Purchaser’s Shares as agent or trustee for any principal whose identity is disclosed or identified, the beneficial purchaser of the Shares and Warrants for whom the Purchaser is acting: (1) is purchasing its  Shares and Warrants as principal for its own account and not for the benefit of any other person; (2) is purchasing its Shares and Warrants for investment only and not with a view to resale or distribution; and (3) is an “accredited investor” as defined in National Instrument 45-106 and was not created solely to purchase or hold securities as an accredited investor as described in paragraph (m) of Schedule “A” hereto; or

 

  

26

  

 

(ii) in the case of the purchase by the Purchaser of the Shares and Warrants on behalf of an undisclosed beneficial purchaser, the Purchaser represents that it is a category of purchaser that is deemed under applicable securities laws to be purchasing as principal and is purchasing the Shares and Warrants as an “accredited investor” as defined in NI 45-106;

 

(p) Resale Restrictions. The Purchaser, and each beneficial purchaser for whom it is contracting hereunder, has been advised by its own legal advisors with respect to trading in the Shares and Warrants and with respect to the resale restrictions imposed by the applicable securities laws of the province in which the Purchaser or any beneficial purchaser for whom it is contracting hereunder resides and other applicable securities laws, and acknowledges that no representation has been made respecting the applicable hold periods imposed by the securities laws or other resale restrictions applicable to such Shares and Warrants which restrict the ability of the Purchaser (or any beneficial purchaser for whom it is contracting hereunder) to resell the Shares and Warrants, that the Purchaser (or any beneficial purchaser for whom it is contracting hereunder) is solely responsible to find out what these restrictions are and the Purchaser (or any beneficial purchaser for whom it is contracting hereunder) is solely responsible (and the Company is not in any way responsible) for compliance with applicable resale restrictions and the Purchaser is aware that it (or any beneficial purchaser for whom it is contracting hereunder) may not be able to resell the Shares or Warrants except in accordance with limited exemptions under applicable securities laws.  For purposes of complying with the securities laws and National Instrument 45-102 - Resale of Securities, the Purchaser and each beneficial purchaser, if any, understands and acknowledges that upon the issuance of the Shares and Warrants and the Shares issuable on exercise of the Warrants, if exercised prior to the date that is four months and one day following the Closing Date, the certificates representing the Shares, Warrants and the Shares issuable on exercise of the Warrants, shall bear the following legend:

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [DATE THAT IS FOUR MONTHS AND ONE DAY AFTER THE CLOSING DATE].”

 

(q) Reliance on Information. In purchasing the Shares and Warrants, the Purchaser (and, if applicable, the beneficial purchaser, if any), has relied solely upon the Company’s public disclosure record and this Agreement and not upon any verbal or written representation as to any fact or otherwise made by or on behalf of the Company or any director, officer, employee, agent or affiliate thereof or any other person associated therewith.

 

  

27

  

 

(r) Personal Information. If the Purchaser is resident in or otherwise subject to the Securities Laws applicable in the province of Ontario, the information provided by the Purchaser identifying the name, address and telephone number of the Purchaser, the number of Shares and Warrants being purchased hereunder and the total purchase price as well as the Closing Date and the exemption that the Purchaser is relying on in purchasing the Shares and Warrants will be disclosed to the Ontario Securities Commission, and such information is being indirectly collected by the Ontario Securities Commission under the authority granted to it under securities legislation. This information is being collected for the purposes of the administration and enforcement of the securities legislation of Ontario. Each Purchaser (for certainty including each beneficial purchaser) hereby authorizes the indirect collection of such information to the Ontario Securities Commission. In the event the Purchaser has any questions with respect to the indirect collection of such information by the Ontario Securities Commission, the Purchaser should contact the Ontario Securities Commission, Administrative Support Clerk at (416) 593-3684 or in person or writing at 20 Queen Street West, Suite 1903, Box 55, Toronto, Ontario M5H 3S8.

 

The Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby or thereby.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1 Transfer Restrictions.

 

(a) The Securities may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser that is an “accredited investor” or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act.  As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and the Registration Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement.

 

  

28

  

 

(b) The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form(s):

 

THIS SECURITY HAS NOT BEEN  REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [DATE THAT IS FOUR MONTHS AND ONE DAY AFTER THE CLOSING DATE

 

The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties.  Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.  Further, no notice shall be required of such pledge.  At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder.

 

  

29

  

 

(c) Certificates evidencing the Shares and Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b)), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Shares or Warrant Shares pursuant to Rule 144, (iii) if such Shares or Warrant Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Shares and Warrant Shares and without volume or manner-of-sale restrictions, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).  The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date if required by the Transfer Agent to effect the removal of the legend hereunder.  If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares, or if such Shares or Warrant Shares may be sold under Rule 144 and the Company is then in compliance with the current public information required under Rule 144, or if the Shares or Warrant Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Shares or Warrant Shares or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Warrant Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Shares or Warrant Shares, as the case may be, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.  In furtherance of the foregoing, the Company shall use commercially reasonable efforts to cause the Legend Removal Date to occur as soon as practicable. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.  Certificates for Securities subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser.

(d) In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 (U.S.) of Shares or Warrant Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 (U.S.) per Trading Day for each Trading Day after the second Trading Day following the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

  

30

  

 

(e) Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.

 

4.2 Furnishing of Information; Public Information.

 

(a) Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

(b) At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (a “Public Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to one and one-half percent (1.5%) of the aggregate Subscription Amount of such Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required  for the Purchasers to transfer the Shares and Warrant Shares pursuant to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to herein as “Public Information Failure Payments.”  Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured.  In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of twelve percent (12%) per annum (prorated for partial periods) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

  

31

  

 

4.3 Integration.  The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

4.4 Securities Laws Disclosure; Publicity.  The Company shall (a) by 9:30 a.m. (New York City time) on the Trading Day immediately following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act.  From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.  The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of a majority in interest of the Purchasers (plus any Purchasers specifically named in any subsequent press release(s)), with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the (i) the Purchasers, if the disclosing party shall promptly provide the Company with prior notice of such public statement or communication and (ii) the Company, if the disclosing party shall promptly provide the Placement Agent with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except: (a) as required by federal securities law in connection with any registration statement contemplated by the Registration Rights Agreement and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

 

4.5 Shareholder Rights Plan.  No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

 

4.6 Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such information.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

  

32

  

 

4.7 Use of Proceeds.  Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds: (a)  for the satisfaction of any portion of the Company’s debt (other than (i) payment of trade payables in the ordinary course of the Company’s business and prior practices and (ii) principal and interest debt service payments under that certain Loan and Security Agreement dated as of May 12, 2002 with MidCap Funding III, LLC and any successor debt financing facility), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

 

4.8 Indemnification of Purchasers.   Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses (other than lost profits or consequential, special or punitive damages), liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Parties, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Parties may have with any such stockholder or any violations by such Purchaser Parties of United States, Canadian, provincial, state or federal securities laws or any conduct by such Purchaser Parties which constitutes fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel for a Purchaser or a Purchaser Party.  The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.  The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

  

33

  

 

4.9 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.

 

4.10 Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market or any other foreign trading market or exchange, it will then include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible.  The Company will then take all action reasonably necessary to continue the listing or quotation and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. Notwithstanding the foregoing, nothing contained herein shall prevent or restrict the Company from engaging in one or more transactions which result in the Company ceasing to maintain the listing or quotation of its Common Stock on any Trading Market if the Board of Directors has determined that such transaction or transactions are in the best interest of the Company.

 

4.11 [Reserved].

 

4.12 Subsequent Equity Sales.

 

(a) From the date hereof until thirty (30) days after the Effective Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.

 

  

34

  

 

(b) From the date hereof until such time as no Purchaser holds any of the Warrants, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction.  “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.  Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

(c) Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.

 

4.13 Equal Treatment of Purchasers.  No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties to this Agreement.  For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

 

4.14 Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4.Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.

 

  

35

  

 

4.15 Form D; Blue Sky Filings.  The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

 

4.16 Acknowledgment of Dilution.  The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions.  The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares and Warrant Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

 

ARTICLE V.

MISCELLANEOUS

 

5.1 Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before March 5, 2013; provided, however, that such termination will not affect the right of any party to sue for any breach by any other party (or parties).

 

5.2 Fees and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

 

5.3 Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4 Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by United States internationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

  

36

  

 

5.5 Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except by means of a written agreement signed, in the case of an amendment, by the Company and the Purchasers holding at least 67% in interest of the Shares then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.  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.

 

5.6 Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

5.7 Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

5.8 No Third-Party Beneficiaries.  The Placement Agent shall be a third party beneficiary with respect to the representations and warranties of the Purchasers in Section 3.2.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.

 

5.9 Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  If one or more parties shall commence an action, suit or proceeding to enforce any provision of the Transaction Documents, then in addition to the obligations of the Company under Section 4.8, the prevailing party or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation, preparation and prosecution of such action, suit or proceeding.

 

  

37

  

 

5.10 Survival.  The representations and warranties contained herein shall survive the Closing for a period of two (2) years.

 

5.11 Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

5.12 Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

5.13 Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).

 

  

38

  

 

5.14 Replacement of Securities.  If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

 

5.15 Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

5.16 Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

5.17 Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereof or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.  For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through EGS.  EGS does not represent any of the Purchasers and only represents the Placement Agent.  The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.

 

  

39

  

 

5.18 Liquidated Damages.  The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

 

5.19 Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

5.20 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

5.21 WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

5.22 Knowledge.  As to any provision contained herein which is qualified “to the knowledge of the Company,” such qualifier shall mean the actual knowledge, after reasonable investigation, of the Company’s Chief Executive Officer and Chief Financial Officer.

 

 

 

(Remainder of page intentionally left blank. Next page is signature page.)

 

  

40

  

 

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

 

	
TRIBUTE PHARMACEUTICALS CANADA INC.

 

 

 

	
Address for Notice:

151 Steeles Avenue East

Milton, Ontario

Canada L9T 1Y1

	
 

By:__________________________________________

     Name:

     Title:

 

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

	
 

Fax:

	
 

Folger, Rubinoff LLP

77 King Street West

Suite 3000, PO Box 95

TD Centre

Toronto, Ontario

Canada M5K 1E8

Attn: Eric Roblin

Fax: (416) 941-8852

 

Herrick, Feinstein LLP

2 Park Avenue

New York, NY 10016

Attn: Daniel A. Etna

Fax: (212)545-3322

	  

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE FOR PURCHASERS FOLLOWS.]

  

41

  

[PURCHASER SIGNATURE PAGES TO TBUFF SECURITIES PURCHASE AGREEMENT]

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

 

Name of Purchaser: ________________________________________________________________________________________________

Signature of Authorized Signatory of Purchaser: _________________________________________________________________________

Name of Authorized Signatory: _______________________________________________________________________________________

Title of Authorized Signatory: ________________________________________________________________________________________

Email Address of Authorized Signatory: ________________________________________________________________________________

Facsimile Number of Authorized Signatory: ______________________________________________________________________________

Address for Notice to Purchaser:

 

Address for Delivery of Securities to Purchaser (if not same as address for notice):

 

Subscription Amount: $___________________(U.S.)

Shares: _______________________________

Series A Warrant Shares: __________________

Series B Warrant Shares: __________________

EIN Number: ___________________________

[SIGNATURE PAGES CONTINUE]

 

 

 42

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00213-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00213-of-00352.parquet"}]]