Document:

ai-ex415_322.htm

 

Exhibit 4.15

 

ARLINGTON ASSET INVESTMENT CORP.

DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

General

In this Exhibit 4.15, “we”, “us”, “our”, or “the Company”, refers to Arlington Asset Investment Corp.

As of December 31, 2019, the Company had six classes of securities registered under Section 12 of the Securities Exchange Act, as amended (the “Exchange Act”): our Class A common stock, par value $0.01 per share (the “Class A common stock”), our 7.00% Series B Cumulative Perpetual Redeemable Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”), our 8.250% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), our 6.625% Senior Notes due 2023 (the “6.625% Notes”), our 6.75% Senior Notes due 2025 (the “6.75% Notes”) and rights to purchase Series A junior preferred stock (as defined below).

Description of Capital Stock

The Company has authorized common share capital of 450,000,000 shares of Class A common stock and 100,000,000 shares of Class B common stock, par value $0.01 per share (the “Class B common stock”). As of December 31, 2019, there were 36,755,387 outstanding shares of Class A common stock and no outstanding shares of Class B common stock. The Company has authorized preferred share capital of (i) 100,000 shares designated as Series A Preferred Stock that is unissued; (ii) 2,000,000 shares designated as Series B Preferred Stock; (iii) 2,500,000 shares designated as Series C Preferred Stock; and (iv) 20,400,000 shares of undesignated preferred stock. As of December 31, 2019, there were no shares of Series A Preferred Stock outstanding, 354,039 shares of Series B Preferred Stock outstanding and 1,200,000 shares of Series C preferred Stock outstanding.

The following description of the terms of our Class A common stock, Series B Preferred Stock and Series C Preferred Stock are not complete and are qualified in their entirety by reference to our amended and restated articles of incorporation, as amended, and our amended and restated bylaws, as amended, each of which is incorporated by reference as exhibits to the Annual Report on Form 10-K of which this Exhibit 4.15 is a part.

Common Stock

Subject to any preferential or other rights of any outstanding series of preferred stock that may be designated by our Board of Directors, the holders of shares of common stock are entitled to receive such dividends as may be declared from time to time by our Board of Directors from funds available therefor. All decisions regarding the declaration and payment of dividends will be at the discretion of our Board of Directors and will be evaluated on a quarterly basis in light of our financial condition, earnings, growth prospects, funding requirements, applicable law and other factors our Board of Directors deems relevant.

The holders of shares of Class A common stock are entitled to one vote for each share on all matters voted on by shareholders. Each of the holders of Class A common stock possess all voting power, except as otherwise required by law or provided in any resolution adopted by our Board of Directors with respect to any series of our preferred stock. Our Board of Directors consists of five directors. The directors are elected at each annual meeting of shareholders. Provided a quorum has been properly established in accordance with our bylaws, the holders of a majority of shares of common stock voting for the election of our directors can elect all of the directors, if they choose to do so, subject to any rights of the holders of preferred stock to elect directors, provided that in a contested director election (i.e., where the number of nominees exceeds the number of directors to be elected at such meeting), the directors will be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting. Except for directors elected by the holders of outstanding shares of preferred stock as a separate voting group, any director may be removed from office with or without cause by the affirmative vote of the holders of at least two-

 

 

thirds of the voting power of all outstanding shares of the company entitled to vote generally in the election of directors. There are no cumulative voting rights.

Subject to the rights of any outstanding series of preferred stock and except as otherwise required by law or pursuant to the listing standards of the exchange on which our securities are listed, in all matters other than the election of directors, certain amendments of our bylaws or certain provisions of our articles of incorporation, the affirmative vote of the holders of a majority of shares of common stock present in person or represented by proxy at a meeting of shareholders and entitled to vote on the subject matter is required for approval, provided a quorum is established. For more information regarding the voting rights of our capital stock, see “Important Provisions of Virginia Law and Our Articles of Incorporation, Bylaws and Shareholder Rights Agreement.”

When we issue shares of our common stock, for and in receipt of consideration approved by our Board of Directors, the shares will be fully paid and nonassessable, which means that the full purchase price of the shares will have been paid and holders of the shares will not be assessed any additional monies for the shares. There may be restrictions imposed by applicable securities laws on any transfer of shares of our common stock. Holders of our Class A common stock have no redemption rights, conversion rights or preemptive rights to purchase or subscribe for our securities. There are no redemption provisions or sinking fund provisions applicable to our common stock.

In the event of our liquidation, dissolution or winding up, the holders of Class A common stock are entitled to share ratably in all of our assets that are legally available for distribution after payment of or adequate provision for all of our known debts and other liabilities and subject to any preferential rights of holders of preferred stock, if any preferred stock is outstanding at such time.

The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock that we may designate and issue in the future.

Our common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “AI.” The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company.

7.00%Series B Cumulative Perpetual Redeemable Preferred Stock

Maturity

The Series B Preferred Stock has no stated maturity and will not be subject to any sinking fund. Shares of the Series B Preferred Stock will remain outstanding indefinitely unless repurchased or redeemed by us. We are not required to set apart for payment the funds to redeem the Series B Preferred Stock.

Ranking

The Series B Preferred Stock ranks, with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up:

	
 
	
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senior to all classes or series of our common stock and any other Junior Stock we may issue;

	
 
	
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on a parity with our Series C Preferred Stock and any other Parity Stock we may issue;

	
 
	
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junior to any Senior Stock we may issue; and

	
 
	
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effectively junior to all of our existing and future indebtedness (including indebtedness convertible into or exchangeable for our common stock or preferred stock) and the indebtedness of our existing and future subsidiaries.

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Dividends

Holders of shares of the Series B Preferred Stock are entitled to receive, when, as and if authorized by our Board of Directors and declared by us, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 7.00% of the $25.00 per share liquidation preference per annum (equivalent to $1.75 per annum per share). Dividends on the Series B Preferred Stock will accumulate daily and be cumulative and will be payable quarterly in arrears on the 30th day of each December, March, June and September (each, a “dividend payment date”); provided that if any dividend payment date is not a business day, as defined in the articles of amendment designating the Series B Preferred Stock, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day with the same force and effect as if paid on such dividend payment date. No interest, additional dividends or sums in lieu of interest will be payable for the period from and after that dividend payment date to that next succeeding business day. Any dividend payable on the Series B Preferred Stock, including dividends payable for any partial dividend period, will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear on our stock records at the close of business on the applicable record date, which will be no fewer than ten days and no more than 35 days prior to the applicable dividend payment date, as shall be fixed by the Board of Directors (each, a “dividend record date”). The dividends payable on any dividend payment date shall include dividends accumulated to, but not including, such dividend payment date.

No dividends on shares of Series B Preferred Stock may be authorized by our Board of Directors or paid or set apart for payment by us at any time when the terms and provisions of any agreement of ours, including any agreement relating to our indebtedness, prohibits the authorization, payment or setting apart for payment thereof or provides that the authorization, payment or setting apart for payment thereof would constitute a breach of the agreement or a default under the agreement, or if the authorization, payment or setting apart for payment is restricted or prohibited by law. You should review the information appearing above under “Risk Factors-We may not be able to pay dividends or other distributions on the Series B Preferred Stock” for more information as to, among other things, other circumstances under which we may be unable to pay dividends on the Series B Preferred Stock.

Notwithstanding the foregoing, dividends on the Series B Preferred Stock will accumulate whether or not (i) the terms and provisions of any laws or agreements referred to in the preceding paragraph at any time prohibit the current payment of dividends, (ii) we have earnings, (iii) there are funds legally available for the payment of those dividends and (iv) those dividends are declared. No interest, or sum in lieu of interest, will be payable in respect of any dividend payment or payments on the Series B Preferred Stock which may be in arrears, and holders of Series B Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends described above. Any dividend payment made on the Series B Preferred Stock will first be credited against the earliest accumulated but unpaid dividend due with respect to those shares.

Future dividends on our common stock and preferred stock, including the Series B Preferred Stock offered pursuant to this prospectus supplement, will be at the discretion of our Board of Directors and will depend on, among other things, our results of operations, cash flow from operations, financial condition and capital requirements, applicable law, any debt service requirements and any other factors our Board of Directors deems relevant. Accordingly, we cannot guarantee that we will be able to make cash distributions on the Series B Preferred Stock or what the actual dividends will be for any future period.

Except as noted below, unless full cumulative dividends on the Series B Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past dividend periods, no dividends (other than in shares of our common stock or other Junior Stock we may issue) may be declared or paid or set apart for payment upon our common stock or other Junior Stock or our Series C Preferred Stock or other Parity Stock we may issue and no other distribution may be declared or made upon our common stock or other Junior Stock or our Series C Preferred Stock or other Parity Stock we may issue. In addition, our common stock and other Junior Stock or Parity Stock we may issue may not be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such securities) by us (except by conversion into or exchange for shares of, or options, warrants or rights to purchase or subscribe for, our common stock or other Junior Stock we may issue or pursuant to an exchange offer made on the same terms to all holders of Series B Preferred Stock and all Parity Stock we may issue). The foregoing will not, however, prevent the redemption, purchase or acquisition by us of shares of any class or series of 

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stock for the purpose of enforcing restrictions on transfer and ownership of our stock contained in our articles of incorporation, or the redemption, purchase or acquisition by us of shares of our common stock for purposes of and in compliance with any incentive or benefit plan of ours.

When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series C Preferred Stock and any Parity Stock we may issue, all dividends declared upon the Series B Preferred Stock, Series C Preferred Stock and such other Parity Stock must be declared pro rata so that the amount of dividends declared per share of Series B Preferred Stock, Series C Preferred Stock and such other Parity Stock will in all cases bear to each other the same ratio that accumulated dividends per share on the Series B Preferred Stock, Series C Preferred Stock and such other Parity Stock (which will not include any accrual in respect of unpaid dividends for prior dividend periods if such Parity Stock do not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, will be payable in respect of any dividend payment or payments on the Series B Preferred Stock which may be in arrears.

Liquidation Preference

In the event of our voluntary or involuntary liquidation, dissolution or winding up, the holders of Series B Preferred Stock will be entitled to be paid out of the assets we have legally available for distribution to our stockholders, subject to the preferential rights of the holders of any Senior Stock, a liquidation preference of $25.00 per share, plus any accumulated and unpaid dividends thereon (whether or not authorized or declared) to, but excluding, the payment date, before any distribution of assets is made to holders of common stock or other Junior Stock we may issue; and the holders of Series B Preferred Stock will not be entitled to any further payment.

In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series B Preferred Stock, Series C Preferred Stock and any other Parity Stock we may issue, then the holders of

Series B Preferred Stock, Series C Preferred Stock and such other Parity Stock will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

Notice of any such liquidation stating the payment date or dates when, and the place or places where, the amounts distributable in each circumstance shall be payable, will be given no fewer than 30 days and no more than 60 days prior to the payment date, to each holder of record of Series B Preferred Stock at the address of such holder as it appears on our stock records. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series B Preferred Stock will have no right or claim to any of our remaining assets. The consolidation, conversion or merger of us with or into any other corporation, trust or entity or of any other entity with or into us, the sale, lease, transfer or conveyance of all or substantially all of our property or business or a statutory share exchange, will not be deemed to constitute a liquidation, dissolution or winding up of us (although such events may give rise to the mandatory redemption rights described below).

No distribution (other than as part of our dissolution), by dividend, redemption or other acquisition of shares of stock or otherwise, is permitted under Virginia law with respect to any share of any class or series of our stock, if we would not be able to pay our debts as they become due in the usual course of business, or if our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

Redemption

The Series B Preferred Stock is not redeemable by us prior to May 12, 2022, except as described below under “Mandatory Redemption” upon the occurrence of a Change of Control.

Optional Redemption. On and after May 12, 2022, we may, at our option, upon not less than 30 nor more than 60 days’ notice, redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time, for 

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cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon (whether or not authorized or declared) to, but excluding, the redemption date, without interest.

Mandatory Redemption. Following a Change of Control the Company will redeem the Series B Preferred Stock, in whole but not in part, on the effective date of any such Change of Control, for cash at $25.00 per share plus accumulated and unpaid dividends (whether or not declared). Any redemption pursuant to this provision will follow generally the procedures set forth below under “-Redemption Procedures.”

A “Change of Control” is deemed to occur when, after the original issuance of the Series B Preferred Stock, the following have occurred and are continuing:

	
 
	
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the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of our directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

	
 
	
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following the closing of any transaction referred to in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts representing such securities) listed on the NYSE, the NYSE American LLC or the Nasdaq Stock Market, or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American LLC or the Nasdaq Stock Market.

Redemption Procedures. In the event we redeem Series B Preferred Stock pursuant to our optional redemption right or mandatory redemption, the notice of redemption will be given to each holder of record of Series B Preferred Stock called for redemption at such holder’s address as it appears on our stock records and will state the following:

	
 
	
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the redemption date;

	
 
	
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the number of shares of Series B Preferred Stock to be redeemed;

	
 
	
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the redemption price;

	
 
	
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the place or places where certificates (if any) for the Series B Preferred Stock are to be surrendered for payment of the redemption price;

	
 
	
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that dividends on the shares to be redeemed will cease to accumulate on the redemption date; and

	
 
	
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if applicable, that such redemption is being made in connection with a Change of Control and, in that case, a brief description of the transaction or transactions constituting such Change of Control.

If less than all of the Series B Preferred Stock held by any holder is to be redeemed, the notice given to such holder shall also specify the number of shares of Series B Preferred Stock held by such holder to be redeemed. No failure to give such notice or any defect thereto or in the giving thereof will affect the validity of the proceedings for the redemption of any shares of Series B Preferred Stock, except as to the holder to whom notice was defective or not given.

Holders of shares of Series B Preferred Stock to be redeemed must surrender such shares at the place designated in the notice of redemption and will be entitled to the redemption price and any accumulated and unpaid dividends payable upon the redemption following the surrender. If notice of redemption of any shares of Series B Preferred Stock has been given and if we have irrevocably set apart for payment the funds necessary for redemption (including any accumulated and unpaid dividends) in trust for the benefit of the holders of the shares of Series B 

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Preferred Stock so called for redemption, then from and after the redemption date (unless we default in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends will cease to accumulate on those shares of Series B Preferred Stock, those shares of Series B Preferred Stock will no longer be deemed outstanding and all rights of the holders of those shares will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption. If any redemption date is not a business day, then the redemption price and accumulated and unpaid dividends, if any, payable upon redemption may be paid on the next business day and no interest, additional dividends or other sums will accumulate on the amount payable for the period from and after that redemption date to that next business day. If less than all of the outstanding shares of Series B Preferred Stock are to be redeemed, the shares of Series B Preferred Stock to be redeemed will be selected pro rata (as nearly as may be practicable without creating fractional shares) or by lot. If such redemption is to be by lot and if, as a result of such redemption, any holder of Series B Preferred Stock would violate any other restriction or limitation of our stock set forth in our articles of incorporation, then, except as otherwise permitted in our articles of incorporation, we will redeem the requisite number of shares of Series B Preferred Stock of that holder such that the holder will not violate any restriction or limitation of our stock set forth in our articles of incorporation.

Immediately prior to any redemption of Series B Preferred Stock, we will pay, in cash, any accumulated and unpaid dividends to, but excluding, the redemption date, unless a redemption date falls after a dividend record date and prior to the corresponding dividend payment date, in which case each holder of Series B Preferred Stock at the close of business on such dividend record date will be entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding the redemption of such shares before such dividend payment date. Except as provided above, we will make no payment or allowance for unpaid dividends, whether or not in arrears, on shares of the Series B Preferred Stock to be redeemed.

Unless full cumulative dividends on all shares of Series B Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment for all past dividend periods, no shares of Series B Preferred Stock may be redeemed unless all outstanding shares of Series B Preferred Stock are simultaneously redeemed, and we may not purchase or otherwise acquire directly or indirectly any shares of Series B Preferred Stock (except by conversion into or exchange for shares of, or options, warrants or rights to purchase or subscribe for, our common stock or other Junior Stock we may issue or pursuant to a purchase or exchange offer made on the same terms to all holders of Series B Preferred Stock); provided, however, that the foregoing will not prevent the redemption, purchase or acquisition by us of shares of Series B Preferred Stock for the purpose of enforcing restrictions on ownership and transfer of our stock contained in our articles of incorporation.

Subject to applicable law, we may purchase shares of Series B Preferred Stock in the open market, by tender or by privately negotiated transactions. Any shares of Series B Preferred Stock that we acquire, by redemption or otherwise, shall be reclassified as authorized but unissued shares of preferred stock, without designation as to class or series, and may thereafter be issued as any class or series of preferred stock.

No Conversion Rights

The Series B Preferred Stock is not convertible into or exchangeable for any other property or securities of the Company.

Voting Rights

Holders of Series B Preferred Stock have no voting rights, except as set forth below.

Whenever dividends on any shares of Series B Preferred Stock are in arrears for six or more full quarterly dividend periods, whether or not consecutive, the number of directors constituting our Board of Directors will be automatically increased by two (if not already increased by two by reason of the election of directors by the holders of any other class or series of preferred stock we may issue and upon which like voting rights have been conferred and are exercisable, including the Series C Preferred Stock) and the holders of Series B Preferred Stock, voting as a single class with holders of the Series C Preferred Stock and all other classes or series of Parity Stock we may issue and upon which like voting rights have been conferred and are exercisable, will be entitled to vote for the election of 

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those two additional directors at a special meeting called by us at the request of the holders of record of at least 25% of the outstanding shares of Series B Preferred Stock, Series C Preferred Stock and all other classes or series of preferred stock we may issue and upon which like voting rights have been conferred and are exercisable to be held no later than 90 days after our receipt of such request (unless the request is received less than 90 days before the date fixed for the next annual or special meeting of our stockholders, in which case, such vote will be held at the earlier of the next annual or special meeting of the stockholders to the extent permitted by applicable law), and at each subsequent annual meeting until all dividends accumulated on the Series B Preferred Stock for all past dividend periods and the then current dividend period will have been fully paid. In that case, the right of holders of Series B Preferred Stock to elect any directors will cease and, unless there are other classes or series of our preferred stock upon which like voting rights have been conferred and are exercisable, the term of office of any directors elected by holders of Series B Preferred Stock will immediately terminate and the number of directors constituting the Board of Directors will be reduced accordingly. For the avoidance of doubt, in no event will the total number of directors elected by holders of Series B Preferred Stock (voting together as a single class with holders of Series C Preferred Stock and all other classes or series of preferred stock we may issue and upon which like voting rights have been conferred and are exercisable) pursuant to these voting rights exceed two. The directors elected by the holders of the Series B Preferred Stock and the holders of the Series C Preferred Stock and all other classes or series of preferred stock upon which like voting rights have been conferred and are exercisable will be elected by a plurality of the votes cast by the holders of the outstanding shares of Series B Preferred Stock when they have the voting rights described in this paragraph, the Series C Preferred Stock and any other classes or series of preferred stock we may issue and upon which like voting rights have been conferred and are exercisable (voting together as a single class) to serve until our next annual meeting of stockholders and until their successors are duly elected and qualified or until such directors’ right to hold the office terminates as described above, whichever occurs earlier.

On each matter on which holders of Series B Preferred Stock are entitled to vote, each share of Series B Preferred Stock will be entitled to one vote, except that when shares of any other class or series of preferred stock we may issue, including the Series C Preferred Stock, have the right to vote with the Series B Preferred Stock as a single class on any matter, the Series B Preferred Stock, the Series C Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of liquidation preference (excluding accumulated dividends). If, at any time when the voting rights conferred upon the Series B Preferred Stock are exercisable, any vacancy in the office of a director elected by the holders of Series C Preferred Stock and any other classes or series of preferred stock upon which like voting rights have been conferred and are exercisable will occur, then such vacancy may be filled only by the remaining such director or by vote of the holders of the outstanding Series B Preferred Stock, Series C Preferred Stock and any other classes or series of preferred stock upon which like voting rights have been conferred and are exercisable.

Any director elected by holders of shares of Series B Preferred Stock, Series C Preferred Stock and any class or series of preferred stock we may issue upon which like voting rights have been conferred and are exercisable may be removed at any time, with or without cause by the vote of, and may not be removed otherwise than by the vote of, the holders of record of a majority of the outstanding shares of Series B Preferred Stock, Series C Preferred Stock and any class or series of preferred stock we may issue when they have the voting rights described above (voting as a single class with all other classes or series of preferred stock we may issue upon which like voting rights have been conferred and are exercisable).

So long as any shares of Series B Preferred Stock remain outstanding, we will not, without the affirmative vote or consent of the holders of at least two-thirds of the shares of Series B Preferred Stock outstanding at the time, voting together as a single class with the Series C Preferred Stock and all classes or series of Parity Stock we may issue and upon which like voting rights have been conferred and are exercisable, (i) authorize, create, or increase the authorized or issued amount of, any class or series of Senior Stock or reclassify any of our authorized stock into such shares, or create or authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares or (ii) amend, alter or repeal the provisions of our articles of incorporation, whether by merger, conversion, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the Series B Preferred Stock (each, an “Event”); provided, however, with respect to the occurrence of any Event set forth in clause (ii) above, so long as the Series B Preferred Stock remains outstanding with the terms thereof materially unchanged or the holders of Series B Preferred Stock receive shares of stock or other equity interests with rights, preferences, privileges and voting powers substantially the same as those of the Series B Preferred Stock, taking into account that upon the occurrence of an Event we may not be the successor entity, the occurrence of any 

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such Event will not be deemed to materially and adversely affect the rights, preferences, privileges or voting power of holders of Series B Preferred Stock; and, provided further, that any increase in the amount of the authorized Series B Preferred Stock or the creation or issuance, or any increase in the amounts authorized of any Parity Stock or Junior Stock will not be deemed to materially and adversely affect the rights, preferences, privileges or voting powers of holders of Series B Preferred Stock. Notwithstanding the foregoing, if any amendment, alteration or repeal of any provision of our articles of incorporation would materially and adversely affect the rights, preferences, privileges or voting rights of the Series B Preferred Stock disproportionately relative to other classes or series of Parity Stock, then the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock (voting as a separate class) shall also be required.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares of Series B Preferred Stock have been redeemed or called for redemption upon proper notice and sufficient funds have been irrevocably set apart to effect such redemption.

Except as expressly stated in the articles of amendment designating the Series B Preferred Stock, the Series B Preferred Stock will not have any relative, participating, optional or other special voting rights or powers and the consent of the holders thereof will not be required for the taking of any corporate action. The holders of Series B Preferred Stock will have exclusive voting rights on any amendment to our articles of incorporation that would alter the contract rights, as expressly set forth in the articles of incorporation, of only the Series B Preferred Stock.

Information Rights

During any period in which we are not subject to Section 13 or 15(d) of the Exchange Act and any shares of Series B Preferred Stock are outstanding, we will use our best efforts to (i) transmit through our website at http://www.arlingtonasset.com (or other permissible means under the Exchange Act) copies of the Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q that we would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject thereto (other than any exhibits that would have been required). We will use our best efforts to provide such reports on our website within 15 days after the respective dates by which we would have been required to file such reports with the SEC if we were subject to Section 13 or 15(d) of the Exchange Act and we were a “non-accelerated filer” within the meaning of the Exchange Act.

Preemptive Rights

No holders of Series B Preferred Stock will, as holders of Series B Preferred Stock, have any preemptive rights to purchase or subscribe for our common stock or any of our other securities.

Listing

The Series C Preferred Stock is listed on the NYSE under the symbol “AI PrB”.

Transfer Agent

The transfer agent for our Series B Preferred Stock is American Stock Transfer & Trust Company, LLC

8.250% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

The terms of the Series C Preferred Stock are substantially similar to the terms of the Series B Preferred Stock, other than as follows:

Maturity

The Series C Preferred Stock has no stated maturity and will not be subject to any sinking fund or mandatory redemption. Shares of the Series C Preferred Stock will remain outstanding indefinitely unless we decide to redeem 

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or otherwise repurchase them or they become convertible and are converted as described below under “—Conversion Rights.” We are not required to set apart for payment the funds to redeem the Series C Preferred Stock.

Dividends

Holders of shares of the Series C Preferred Stock are entitled to receive, when, as and if authorized by our board of directors and declared by us, out of funds legally available for the payment of dividends, cumulative cash dividends. The initial dividend rate for the Series C Preferred Stock from and including the date of original issuance to, but not including, March 30, 2024 (the “Fixed Rate Period”) will be 8.250% of the $25.00 per share liquidation preference per annum (equivalent to $2.0625 per annum per share). On and after March 30, 2024 (the “Floating Rate Period”), dividends on the Series C Preferred Stock will accumulate at a percentage of the $25.00 liquidation preference equal to an annual floating rate of the Three-Month LIBOR Rate plus a spread of 5.664%. Dividends on the Series C Preferred Stock will accumulate daily and be cumulative from, and including, the date of original issue and will be payable quarterly in arrears on the 30th day of each March, June, September and December (each, as may be modified as provided below, a “dividend payment date”). If any dividend payment date is not a business day, as defined in the articles of amendment designating the Series C Preferred Stock, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day with the same force and effect as if paid on such dividend payment date, and no interest, additional dividends or sums in lieu of interest will be payable for the period from and after that dividend payment date to that next succeeding business day. Dividends payable on the Series C Preferred Stock for the Fixed Rate Period, including dividends payable for any partial Dividend Period, will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends payable on the Series C Preferred Stock for the Floating Rate Period, including dividends payable for any partial Dividend Period, will be computed based on the actual number of days in a Dividend Period and a 360-day year. Dividends will be payable to holders of record as they appear on our stock records at the close of business on the applicable record date, which will be no fewer than ten days and no more than 35 days prior to the applicable dividend payment date, as shall be fixed by the Board of Directors (each, a “dividend record date”). The dividends payable on any dividend payment date shall include dividends accumulated to, but not including, such dividend payment date.

For each Dividend Period during the Floating Rate Period, LIBOR (the London interbank offered rate) (“Three-Month LIBOR Rate”) will be determined by us, as of the applicable Dividend Determination Date (as defined below), in accordance with the following provisions:

	
 
	
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LIBOR will be the rate (expressed as a percentage per year) for deposits in U.S. dollars having an index maturity of three months, in amounts of at least $1,000,000, as such rate appears on “Reuters Page LIBOR01” at approximately 11:00 a.m. (London time) on the relevant Dividend Determination Date; or

	
 
	
•
	
if no such rate appears on “Reuters Page LIBOR01” or if the “Reuters Page LIBOR01” is not available at approximately 11:00 a.m. (London time) on the relevant Dividend Determination Date, then we will select four nationally-recognized banks in the London interbank market and request that the principal London offices of those four selected banks provide us with their offered quotation for deposits in U.S. dollars for a period of three months, commencing on the first day of the applicable Dividend Period, to prime banks in the London interbank market at approximately 11:00 a.m. (London time) on that Dividend Determination Date for the applicable Dividend Period. Offered quotations must be based on a principal amount equal to an amount that, in our discretion, is representative of a single transaction in U.S. dollars in the London interbank market at that time. If at least two quotations are provided, the Three-Month LIBOR Rate for such Dividend Period will be the arithmetic mean (rounded upward if necessary, to the nearest 0.00001 of 1%) of those quotations. If fewer than two quotations are provided, the Three-Month LIBOR Rate for such Dividend Period will be the arithmetic mean (rounded upward if necessary, to the nearest 0.00001 of 1%) of the rates quoted at approximately 11:00 a.m. (New York City time) on that Dividend Determination Date for such Dividend Period by three nationally-recognized banks in New York, New York selected by us, for loans in U.S. dollars to nationally-recognized European banks (as selected by us), for a period of three months commencing on the first day of such Dividend Period. The rates quoted must be based on an amount that, in our discretion, is representative of a single transaction in U.S. dollars in that market at that time. If no quotation is provided as described above, then if a Calculation Agent (as defined below) has not been appointed at such time, we will 

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appoint a Calculation Agent who shall, after consulting such sources as it deems comparable to any of the foregoing quotations or display page, or any such source as it deems reasonable from which to estimate LIBOR or any of the foregoing lending rates, shall determine LIBOR for the second London Business Day immediately preceding the first day of such distribution period in its sole discretion. If the Calculation Agent is unable or unwilling to determine LIBOR as provided in the immediately preceding sentence, then LIBOR will be equal to Three-Month LIBOR for the then current Dividend Period, or, in the case of the first Dividend Period in the Floating Rate Period, the most recent dividend rate that would have been determined based on the last available Reuters Page LIBOR01 had the Floating Rate Period been applicable prior to the first Dividend Period in the Floating Rate Period.

Notwithstanding the foregoing, if we determine on the relevant Dividend Determination Date that the LIBOR base rate has been discontinued, then we will appoint a Calculation Agent and the Calculation Agent will consult with an investment bank of national standing to determine whether there is an industry accepted substitute or successor base rate to Three-Month LIBOR Rate. If, after such consultation, the Calculation Agent determines that there is an industry accepted substitute or successor base rate, the Calculation Agent shall use such substitute or successor base rate. In such case, the Calculation Agent in its sole discretion may (without implying a corresponding obligation to do so) also implement changes to the business day convention, the definition of business day, the Dividend Determination Date and any method for obtaining the substitute or successor base rate if such rate is unavailable on the relevant Business Day, in a manner that is consistent with industry accepted practices for such substitute or successor base rate. Unless the Calculation Agent determines that there is an industry accepted substitute or successor base rate as so provided above, the Calculation Agent will, in consultation with us, follow the steps specified in the second bullet point in the immediately preceding paragraph in order to determine Three-Month LIBOR Rate for the applicable Dividend Period.

“Calculation Agent” shall mean a third party independent financial institution of national standing with experience providing such services, which has been selected by us.

“Dividend Determination Date” means the London Business Day (as defined below) immediately preceding the first date of the applicable Dividend Period.

“Dividend Period” means the period from, and including, a dividend payment date to, but excluding, the next succeeding dividend payment date, except for the initial Dividend Period, which will be the period from, and including, the original issue date of the Series C Preferred Stock to, but excluding, June 30, 2019.

“London Business Day” means any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.

“Reuters Page LIBOR01” means the display so designated on the Reuters 3000 Xtra (or such other page as may replace the LIBOR01 page on that service, or such other service as may be nominated by the ICE Benchmark Administration Limited, or ICE, or its successor, or such other entity assuming the responsibility of ICE or its successor in the event ICE or its successor no longer does so, as the successor service, for the purpose of displaying London interbank offered rates for U.S. dollar deposits).

No dividends on shares of Series C Preferred Stock may be authorized by our board of directors or paid or set apart for payment by us at any time when the terms and provisions of any agreement of ours, including any agreement relating to our indebtedness, prohibit the authorization, payment or setting apart for payment thereof or provide that the authorization, payment or setting apart for payment thereof would constitute a breach of the agreement or a default under the agreement, or if the authorization, payment or setting apart for payment is restricted or prohibited by law. You should review the information appearing above under “Risk Factors—We may not be able to pay dividends or other distributions on the Series C Preferred Stock” for more information as to, among other things, other circumstances under which we may be unable to pay dividends on the Series C Preferred Stock.

Notwithstanding the foregoing, dividends on the Series C Preferred Stock will accumulate whether or not (i) the terms and provisions of any laws or agreements referred to in the preceding paragraph at any time prohibit the current payment of dividends, (ii) we have earnings, (iii) there are funds legally available for the payment of those dividends and (iv) those dividends are declared. No interest, or sum in lieu of interest, will be payable in respect of 

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any dividend payment or payments on the Series C Preferred Stock which may be in arrears, and holders of Series C Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends described above. Any dividend payment made on the Series C Preferred Stock will first be credited against the earliest accumulated but unpaid dividend due with respect to those shares.

Future dividends on our common stock and preferred stock, including the Series C Preferred Stock offered pursuant to this prospectus supplement, will be at the discretion of our board of directors and will depend on, among other things, our results of operations, cash flow from operations, financial condition and capital requirements, the annual distribution requirements under the real estate investment trust, or REIT, provisions of the Internal Revenue Code of 1986, applicable law, any debt service requirements and any other factors our board of directors deems relevant. Accordingly, we cannot guarantee that we will be able to make cash distributions on the Series C Preferred Stock or what the actual dividends will be for any future period.

Except as noted below, unless full cumulative dividends on the Series C Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past Dividend Periods, no dividends (other than in shares of our common stock or other Junior Stock we may issue) may be declared or paid or set apart for payment upon our common stock or other Junior Stock or our Series B Preferred Stock or other Parity Stock we may issue and no other distribution may be declared or made upon our common stock or other Junior Stock or our Series B Preferred Stock or other Parity Stock we may issue. In addition, our common stock and other Junior Stock or Parity Stock we may issue may not be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such securities) by us (except by conversion into or exchange for shares of, or options, warrants or rights to purchase or subscribe for, our common stock or other Junior Stock we may issue or pursuant to an exchange offer made on the same terms to all holders of Series C Preferred Stock and all Parity Stock). The foregoing will not, however, prevent the redemption, purchase or acquisition by us of shares of any class or series of stock for the purpose of enforcing restrictions on transfer and ownership of our stock contained in our articles of incorporation, or the redemption, purchase or acquisition by us of shares of our common stock for purposes of and in compliance with any incentive or benefit plan of ours.

When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series B Preferred Stock and any other Parity Stock we may issue, all dividends declared upon the Series B Preferred Stock, Series C Preferred Stock and such other Parity Stock must be declared pro rata so that the amount of dividends declared per share of Series B Preferred Stock, Series C Preferred Stock and such other Parity Stock will in all cases bear to each other the same ratio that accumulated dividends per share on the Series B Preferred Stock, Series C Preferred Stock and such Parity Stock (which will not include any accrual in respect of unpaid dividends for prior Dividend Periods if such other Parity Stock do not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, will be payable in respect of any dividend payment or payments on the Series C Preferred Stock which may be in arrears.

Liquidation Preference

In the event of our voluntary or involuntary liquidation, dissolution or winding up, the holders of Series C Preferred Stock will be entitled to be paid out of the assets we have legally available for distribution to our stockholders, subject to the preferential rights of the holders of any Senior Stock, a liquidation preference of $25.00 per share, plus any accumulated and unpaid dividends thereon (whether or not authorized or declared) to, but excluding, the payment date, before any distribution of assets is made to holders of common stock or other Junior Stock we may issue; and the holders of Series C Preferred Stock will not be entitled to any further payment.

In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series B Preferred Stock, Series C Preferred Stock and any other Parity Stock we may issue, then the holders of Series B Preferred Stock, Series C Preferred Stock and such other Parity Stock will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

Notice of any such liquidation stating the payment date or dates when, and the place or places where, the amounts distributable in each circumstance shall be payable, will be given no fewer than 30 days and no more than 

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60 days prior to the payment date, to each holder of record of Series C Preferred Stock at the address of such holder as it appears on our stock records. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series C Preferred Stock will have no right or claim to any of our remaining assets. The consolidation, conversion or merger of us with or into any other corporation, trust or entity or of any other entity with or into us, the sale, lease, transfer or conveyance of all or substantially all of our property or business or a statutory share exchange, will not be deemed to constitute a liquidation, dissolution or winding up of us (although such events may give rise to the special optional redemption and contingent conversion rights described below).

No distribution (other than as part of our dissolution), by dividend, redemption or other acquisition of shares of stock or otherwise, is permitted under Virginia law with respect to any share of any class or series of our stock, if we would not be able to pay our debts as they become due in the usual course of business, or if our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

Redemption

The Series C Preferred Stock is not redeemable by us prior to March 30, 2024, except under circumstances where it is necessary to preserve our qualification as a REIT for U.S. federal income tax purposes (please see “—Restrictions on Transfer and Ownership” below and except as described below under “—Special Optional Redemption” upon the occurrence of a Change of Control (as defined herein).

Optional Redemption. On and after March 30, 2024, we may, at our option, upon not less than 30 nor more than 60 days’ notice, redeem the Series C Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon (whether or not authorized or declared) to, but excluding, the redemption date, without interest.

Special Optional Redemption. Upon the occurrence of a Change of Control, we may, at our option, upon not less than 30 nor more than 60 days’ notice, redeem the Series C Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon (whether or not authorized or declared) to, but excluding, the redemption date. If, prior to the Change of Control Conversion Date, we have provided notice of our election to redeem some or all of the shares of Series C Preferred Stock (whether pursuant to our optional redemption right described above under “—Optional Redemption” or this special optional redemption right), the holders of Series C Preferred Stock will not have the Change of Control Conversion Right (as defined below) described below under “—Conversion Rights” with respect to the shares called for redemption.

A “Change of Control” is deemed to occur when, after the original issuance of the Series C Preferred Stock, the following have occurred and are continuing:

	
 
	
•
	
the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of our directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

	
 
	
•
	
following the closing of any transaction referred to in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts representing such securities) listed on the NYSE, the NYSE American LLC or the Nasdaq Stock Market, or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American LLC or the Nasdaq Stock Market.

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Redemption Procedures. In the event we elect to redeem Series C Preferred Stock pursuant to our optional redemption right or our special optional redemption right, the notice of redemption will be given to each holder of record of Series C Preferred Stock called for redemption at such holder’s address as it appears on our stock records and will state the following:

	
 
	
•
	
the redemption date;

	
 
	
•
	
the number of shares of Series C Preferred Stock to be redeemed;

	
 
	
•
	
the redemption price;

	
 
	
•
	
the place or places where certificates (if any) for the Series C Preferred Stock are to be surrendered for payment of the redemption price;

	
 
	
•
	
that dividends on the shares to be redeemed will cease to accumulate on the redemption date;

	
 
	
•
	
if applicable, that such redemption is being made in connection with a Change of Control and, in that case, a brief description of the transaction or transactions constituting such Change of Control; and

	
 
	
•
	
if such redemption is being made in connection with a Change of Control, that the holders of the shares of Series C Preferred Stock being so called for redemption will not be able to tender such shares of Series C Preferred Stock for conversion in connection with the Change of Control and that each share of Series C Preferred Stock tendered for conversion that is called, prior to the Change of Control Conversion Date, for redemption will be redeemed on the related date of redemption instead of converted on the Change of Control Conversion Date.

If less than all of the Series C Preferred Stock held by any holder is to be redeemed, the notice given to such holder shall also specify the number of shares of Series C Preferred Stock held by such holder to be redeemed. No failure to give such notice or any defect thereto or in the giving thereof will affect the validity of the proceedings for the redemption of any shares of Series C Preferred Stock, except as to the holder to whom notice was defective or not given.

Holders of shares of Series C Preferred Stock to be redeemed must surrender such shares at the place designated in the notice of redemption and will be entitled to the redemption price and any accumulated and unpaid dividends payable upon the redemption following the surrender. If notice of redemption of any shares of Series C Preferred Stock has been given and if we have irrevocably set apart for payment the funds necessary for redemption (including any accumulated and unpaid dividends) in trust for the benefit of the holders of the shares of Series C Preferred Stock so called for redemption, then from and after the redemption date (unless we default in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends will cease to accumulate on those shares of Series C Preferred Stock, those shares of Series C Preferred Stock will no longer be deemed outstanding and all rights of the holders of those shares will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption. If any redemption date is not a business day, then the redemption price and accumulated and unpaid dividends, if any, payable upon redemption may be paid on the next business day and no interest, additional dividends or other sums will accumulate on the amount payable for the period from and after that redemption date to that next business day. If less than all of the outstanding shares of Series C Preferred Stock are to be redeemed, the shares of Series C Preferred Stock to be redeemed will be selected pro rata (as nearly as may be practicable without creating fractional shares) or by lot. If such redemption is to be by lot and if, as a result of such redemption, any holder of Series C Preferred Stock would own, or be deemed by virtue of certain attribution provisions of the Internal Revenue Code, to own, in excess of 9.9% of the outstanding  shares of the Series C Preferred Stock, or violate any other restriction or limitation of our stock set forth in our articles of incorporation, then, except as otherwise permitted in our articles of incorporation, we will redeem the requisite number of shares of Series C Preferred Stock of that holder such that the holder will not own or be deemed by virtue of certain attribution provisions of the Internal Revenue Code, to own, subsequent to the redemption, in excess of 9.9% of the outstanding shares of the Series C Preferred Stock or violate any other restriction 

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or limitation of our stock set forth in our articles of incorporation. See “—Restrictions on Transfer and Ownership” in this prospectus supplement.

Immediately prior to any redemption of Series C Preferred Stock, we will pay, in cash, any accumulated and unpaid dividends to, but excluding, the redemption date, unless a redemption date falls after a dividend record date and prior to the corresponding dividend payment date, in which case each holder of Series C Preferred Stock at the close of business on such dividend record date will be entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding the redemption of such shares before such dividend payment date. Except as provided above, we will make no payment or allowance for unpaid dividends, whether or not in arrears, on shares of the Series C Preferred Stock to be redeemed.

Unless full cumulative dividends on all shares of Series C Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment for all past Dividend Periods, no shares of Series C Preferred Stock may be redeemed unless all outstanding shares of Series C Preferred Stock are simultaneously redeemed, and we may not purchase or otherwise acquire directly or indirectly any shares of Series C Preferred Stock (except by conversion into or exchange for shares of, or options, warrants or rights to purchase or subscribe for, our common stock or other Junior Stock we may issue or pursuant to a purchase or exchange offer made on the same terms to all holders of Series C Preferred Stock and all Parity Stock); provided, however, that the foregoing will not prevent the redemption, purchase or acquisition by us of shares of Series C Preferred Stock for the purpose of enforcing restrictions on ownership and transfer of our stock contained in our articles of incorporation.

Subject to applicable law, we may purchase shares of Series C Preferred Stock in the open market, by tender or by privately negotiated transactions. Any shares of Series C Preferred Stock that we acquire, by redemption or otherwise, shall be reclassified as authorized but unissued shares of preferred stock, without designation as to class or series, and may thereafter be issued as any class or series of preferred stock.

Conversion Rights

Upon the occurrence of a Change of Control, each holder of Series C Preferred Stock will have the right (unless, prior to the Change of Control Conversion Date, we have provided notice of our election to redeem some or all of the shares of Series C Preferred Stock held by such holder as described above under “—Redemption,” in which case such holder will have the right only with respect to shares of Series C Preferred Stock that are not called for redemption) to convert some or all of the shares of the Series C Preferred Stock held by such holder (the “Change of Control Conversion Right”) on the Change of Control Conversion Date into a number of shares of our Class A common stock per share of Series C Preferred Stock (the “Class A Common Stock Conversion Consideration”) equal to the lesser of:

	
 
	
•
	
the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference per share of Series C Preferred Stock, plus any accumulated and unpaid dividends thereon (whether or not authorized or declared) to, but excluding, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a dividend record date and prior to the corresponding dividend payment date for the Series C Preferred Stock, in which case no additional amount for such accumulated and unpaid dividends to be paid on such dividend payment date will be included in this sum) by (ii) the Class A Common Stock Price, as defined below (such quotient, the “Conversion Rate”); and

	
 
	
•
	
6.0024, or the “Share Cap,” subject to certain adjustments as described below.

Notwithstanding anything in the articles of amendment designating the Series C Preferred Stock to the contrary and except as otherwise required by law, the persons who are the holders of record of shares of Series C Preferred Stock at the close of business on a dividend record date will be entitled to receive the dividend payable on the corresponding dividend payment date notwithstanding the conversion of those shares after such dividend record date and on or prior to such dividend payment date and, in such case, the full amount of such dividend will be paid on such dividend payment date to the persons who were the holders of record at the close of business on such dividend record date. Except as provided above, we will make no allowance for unpaid dividends that are not in arrears on the shares of Series C Preferred Stock to be converted.

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The Share Cap is subject to pro rata adjustments for any share splits (including those effected pursuant to a distribution of our Class A common stock to existing holders of our Class A common stock), subdivisions or combinations (in each case, a “Share Split”) with respect to our Class A common stock as follows: the adjusted Share Cap as the result of a Share Split will be the number of shares of our Class A common stock that is equivalent to the product obtained by multiplying (i) the Share Cap in effect immediately prior to such Share Split by (ii) a fraction, the numerator of which is the number of shares of our Class A common stock outstanding immediately after giving effect to such Share Split and the denominator of which is the number of shares of our Class A common stock outstanding immediately prior to such Share Split.

For the avoidance of doubt, subject to the immediately succeeding sentence, the aggregate number of shares of our Class A common stock (or equivalent Alternative Conversion Consideration, as applicable) issuable or deliverable, as applicable, in connection with the exercise of the Change of Control Conversion Right will not exceed the product of the Share Cap times the aggregate number of shares of the Series C Preferred Stock issued and outstanding at the Change of Control Conversion Date (or equivalent Alternative Conversion Consideration, as applicable) (the “Exchange Cap”). The Exchange Cap is subject to pro rata adjustments for any share splits on the same basis as the corresponding adjustment to the Share Cap.

In the case of a Change of Control pursuant to which our Class A common stock is or will be converted into cash, securities or other property or assets (including any combination thereof) (the “Alternative Form Consideration”), a holder of Series C Preferred Stock will receive upon conversion of such shares of the Series C Preferred Stock the kind and amount of Alternative Form Consideration which such holder would have owned or been entitled to receive upon the Change of Control had such holder held a number of shares of our Class A common stock equal to the Class A Common Stock Conversion Consideration immediately prior to the effective time of the Change of Control (the “Alternative Conversion Consideration”). The Class A Common Stock Conversion Consideration or the Alternative Conversion Consideration, whichever shall be applicable to a Change of Control, is referred to as the “Conversion Consideration.”

If the holders of our Class A common stock have the opportunity to elect the form of consideration to be received in the Change of Control, the Conversion Consideration in respect of such Change of Control will be deemed to be the kind and amount of consideration actually received by holders of a majority of the outstanding shares of our Class A common stock that made or voted for such an election (if electing between two types of consideration) or holders of a plurality of the outstanding shares of our common stock that made or voted for such an election (if electing between more than two types of consideration), as the case may be, and will be subject to any limitations to which all holders of our common stock are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in such Change of Control.

We will not issue fractional shares of our Class A common stock upon the conversion of the Series C Preferred Stock in connection with a Change of Control. Instead, we will make a cash payment equal to the value of such fractional shares based upon the Class A Common Stock Price used in determining the Class A Common Stock Conversion Consideration for such Change of Control.

Within 15 days following the occurrence of a Change of Control, provided that we have not then exercised our right to redeem all shares of Series C Preferred Stock pursuant to the redemption provisions described above, we will provide to holders of Series C Preferred Stock a notice of occurrence of the Change of Control that describes the resulting Change of Control Conversion Right, which notice shall be delivered to the holders of record of the shares of Series C Preferred Stock to their addresses as they appear on our stock records. No failure to give such notice or any defect thereto or in the giving thereof will affect the validity of the proceedings for the conversion of any shares of Series C Preferred Stock except as to the holder to whom notice was defective or not given. This notice will state the following:

	
 
	
•
	
the events constituting the Change of Control;

	
 
	
•
	
the date of the Change of Control;

	
 
	
•
	
the last date on which the holders of Series C Preferred Stock may exercise their Change of Control Conversion Right;

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•
	
the method and period for calculating the Class A Common Stock Price;

	
 
	
•
	
the Change of Control Conversion Date;

	
 
	
•
	
that if, prior to the Change of Control Conversion Date, we have provided notice of our election to redeem all or any shares of Series C Preferred Stock, holders of Series C Preferred Stock that are subject to such notice of redemption will not be able to convert the shares of Series C Preferred Stock called for redemption and such shares will be redeemed on the related redemption date, even if such shares have already been tendered for conversion pursuant to the Change of Control Conversion Right;

	
 
	
•
	
if applicable, the type and amount of Alternative Conversion Consideration entitled to be received per share of Series C Preferred Stock;

	
 
	
•
	
the name and address of the paying agent, transfer agent and conversion agent for the Series C Preferred Stock;

	
 
	
•
	
the procedures that the holders of Series C Preferred Stock must follow to exercise the Change of Control Conversion Right (including procedures for surrendering shares of Series C Preferred Stock for conversion through the facilities of a Depositary (as defined below)), including the form of conversion notice to be delivered by such holders as described below; and

	
 
	
•
	
the last date on which holders of Series C Preferred Stock may withdraw shares of Series C Preferred Stock surrendered for conversion and the procedures that such holders must follow to effect such a withdrawal.

Under such circumstances, we also will issue a press release containing such notice for publication on the Wall Street Journal, Business Wire, PR Newswire or Bloomberg Business News (or, if these organizations are not in existence at the time of issuance of the press release, such other news or press organization as is reasonably calculated to broadly disseminate the relevant information to the public), and post a notice on our website (if any), in any event prior to the opening of business on the first business day following any date on which we provide the notice described above to the holders of Series C Preferred Stock.

To exercise the Change of Control Conversion Right, the holders of Series C Preferred Stock will be required to deliver, on or before the close of business on the Change of Control Conversion Date, the certificates (if any) representing the shares of Series C Preferred Stock to be converted, duly endorsed for transfer (or, in the case of any shares of Series C Preferred Stock held in book-entry form through a Depositary or shares directly registered with the transfer agent, therefor, to deliver, on or before the close of business on the Change of Control Conversion Date, the shares of Series C Preferred Stock to be converted through the facilities of such Depositary or through such transfer agent, respectively), together with a written conversion notice in the form provided by us, duly completed, to our transfer agent. The conversion notice must state:

	
 
	
•
	
the relevant Change of Control Conversion Date;

	
 
	
•
	
the number of shares of Series C Preferred Stock to be converted; and

	
 
	
•
	
that the shares of the Series C Preferred Stock are to be converted pursuant to the applicable provisions of the articles of amendment designating the Series C Preferred Stock.

The “Change of Control Conversion Date” is the date the Series C Preferred Stock is to be converted, which will be a business day selected by us that is no fewer than 20 days nor more than 35 days after the date on which we provide the notice described above to the holders of Series C Preferred Stock.

The “Class A Common Stock Price” is (i) if the consideration to be received in the Change of Control by the holders of our Class A common stock is solely cash, the amount of cash consideration per share of our Class A common stock or (ii) if the consideration to be received in the Change of Control by holders of our Class A common 

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stock is other than solely cash (x) the average of the closing sale prices per share of our Class A common stock (or, if no closing sale price is reported, the average of the closing bid and ask prices per share or, if more than one in either case, the average of the average closing bid and the average closing ask prices per share) for the ten consecutive trading days immediately preceding, but not including, the date on which such Change of Control occurred as reported on the principal U.S. securities exchange on which our Class A common stock is then traded, or (y) if our Class A common stock is not then listed for trading on a U.S. securities exchange, the average of the last quoted bid prices for our Class A common stock in the over-the-counter market as reported by OTC Markets Group or similar organization for the ten consecutive trading days immediately preceding, but not including, the date on which such Change of Control occurred.

Holders of Series C Preferred Stock may withdraw any notice of exercise of a Change of Control Conversion Right (in whole or in part) by a written notice of withdrawal delivered to our transfer agent prior to the close of business on the business day prior to the Change of Control Conversion Date. The notice of withdrawal delivered by any holder must state:

	
 
	
•
	
the number of withdrawn shares of Series C Preferred Stock;

	
 
	
•
	
if certificated shares of Series C Preferred Stock have been surrendered for conversion, the certificate numbers of the withdrawn shares of Series C Preferred Stock; and

	
 
	
•
	
the number of shares of Series C Preferred Stock, if any, which remain subject to the holder’s conversion notice.

Notwithstanding the foregoing, if any shares of Series C Preferred Stock are held in book-entry form through The Depository Trust Company (“DTC”) or a similar depositary (each, a “Depositary”), the conversion notice and/or the notice of withdrawal, as applicable, must comply with applicable procedures, if any, of the applicable Depositary.

Shares of Series C Preferred Stock as to which the Change of Control Conversion Right has been properly exercised and for which the conversion notice has not been properly withdrawn will be converted into the applicable Conversion Consideration in accordance with the Change of Control Conversion Right on the Change of Control Conversion Date, unless prior to the Change of Control Conversion Date we have provided notice of our election to redeem some or all of the shares of Series C Preferred Stock, as described above under “—Redemption,” in which case only the shares of Series C Preferred Stock properly surrendered for conversion and not properly withdrawn that are not called for redemption will be converted as aforesaid. If we elect to redeem shares of Series C Preferred Stock that would otherwise be converted into the applicable Conversion Consideration on a Change of Control Conversion Date, such shares of Series C Preferred Stock will not be so converted and the holders of such shares will be entitled to receive on the applicable redemption date the redemption price described above under “—Redemption—Optional Redemption” or “—Redemption—Special Optional Redemption,” as applicable.

We will deliver all securities, cash and any other property owing upon conversion no later than the third business day following the Change of Control Conversion Date. Notwithstanding the foregoing, the persons entitled to receive any shares of our Class A common stock or other securities delivered on conversion will be deemed to have become the holders of record thereof as of the Change of Control Conversion Date.

In connection with the exercise of any Change of Control Conversion Right, we will comply with all applicable federal and state securities laws and stock exchange rules in connection with any conversion of shares of the Series C Preferred Stock into shares of our Class A common stock or other property. Notwithstanding any other provision of the Series C Preferred Stock, no holder of Series C Preferred Stock will be entitled to convert such shares of the Series C Preferred Stock into shares of our Class A common stock to the extent that receipt of such shares of Class A common stock would cause such holder (or any other person) to violate any applicable restrictions on transfer and ownership of our stock contained in our articles of incorporation, unless we provide an exemption from this limitation to such holder. Please see the section entitled “—Restrictions on Transfer and Ownership” below.

The Change of Control conversion feature may make it more difficult for a third party to acquire us or discourage a party from acquiring us. If exercisable, the change of control conversion rights described in this 

17

 

prospectus supplement may not adequately compensate you. These change of control conversion rights may also make it more difficult for a party to acquire us or discourage a party from acquiring us.”

Except as provided above in connection with a Change of Control, the Series C Preferred Stock is not convertible into or exchangeable for any other securities or property.

Listing

The Series C Preferred Stock is listed on the NYSE under the symbol “AI PrC”.

Rights to Purchase Series A Junior Preferred Stock

The articles of amendment designating our Series A junior preferred stock and the Rights Agreement are filed as exhibits to the Annual Report on Form 10-K of which this Exhibit 4.15 is a part and are incorporated herein by reference. The foregoing description of the Rights is qualified in its entirety by reference to the Rights Agreement.

On June 1, 2009, the Board of Directors the Company adopted a rights agreement and declared a dividend, payable to shareholders of record as of the close of business on June 5, 2009, of one preferred share purchase right (“Right”) for each outstanding share of the Company’s Class A common stock and Class B common stock, par value $0.01 per share (“Class B common stock”), with such Rights originally to expire on June 4, 2019. The description and terms of the Rights are set forth in a Rights Agreement, dated June 5, 2009 (the “Original Rights Plan”), by and between the Company and American Stock Transfer & Trust Company, LLC, as Rights Agent. On April 9, 2018, Board of Directors approved and on April 13, 2018 the Company adopted a First Amendment to the Original Rights Plan (the Original Rights Plan as amended by the First Amendment, the “Rights Plan”). The First Amendment extends the expiration date of the Rights until June 4, 2022. The Company’s shareholders approved the First Amendment at its annual meeting of shareholders on June 14, 2018.

The Board of Directors adopted the Rights Plan in an effort to protect against a possible limitation on the Company’s ability to use its net operating loss carryforwards (“NOLs”), net capital loss carryforwards (“NCLs”) and built-in losses under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which may be used to reduce potential future federal income tax obligations. The Company’s ability to use its NOLs, NCLs and built-in losses would be limited if there were an “ownership change” under Section 382 of the Code. An “ownership change” would occur if shareholders owning (or deemed under Section 382 to own) 5% or more of the Company’s stock increase their collective ownership of the aggregate amount of outstanding shares of the Company by more than 50 percentage points over a defined period of time. The Rights Plan was adopted to reduce the likelihood of an “ownership change” occurring as defined by Section 382.

The Rights Plan is intended to act as a deterrent to any person or group acquiring 4.9% or more of the Company’s outstanding Class A common stock (an “Acquiring Person”) without the approval of the Board of Directors. Shareholders who own 4.9% or more of the Company’s outstanding Class A common stock as of the close of business on June 5, 2009 will not trigger the Rights Plan so long as they do not (i) acquire any additional shares of Class A common stock or (ii) fall under 4.9% ownership of Class A common stock and then re-acquire additional shares so that they own 4.9% or more of the Class A common stock. The Rights Plan does not exempt any future acquisitions of Class A common stock by such persons. Any Rights held by an Acquiring Person are void and may not be exercised. No Person shall be an Acquiring Person unless the Board of Directors shall have affirmatively determined, in its sole and absolute discretion, within ten (10) business days (or such later time as the Board of Directors may determine) after such person has otherwise met the requirements of becoming an Acquiring Person, that such person shall be an Acquiring Person.

The Rights. The Board of Directors authorized the issuance of one Right per each outstanding share of the Company’s Class A common stock and Class B common stock payable to shareholders of record as of the close of business on June 5, 2009. Subject to the terms, provisions and conditions of the Rights Plan, if the Rights become exercisable, each Right would initially represent the right to purchase from the Company one ten-thousandth of a share of Series A Junior Preferred Stock for a purchase price of $70.00, subject to adjustment in accordance with the terms of the Rights Plan (the “Purchase Price”). If issued, each fractional share of preferred stock would give the shareholder approximately the same dividend, voting and liquidation rights as does one share of the Company’s 

18

 

Class A common stock. However, prior to exercise, a Right does not give its holder any rights as a shareholder of the Company, including, without limitation, any dividend, voting or liquidation rights.

Exercisability. The Rights will generally not be exercisable until the earlier of (i) 10 business days after a public announcement by the Company that a person or group has become an Acquiring Person and (ii) 10 business days after the commencement of a tender or exchange offer by a person or group for 4.9% or more of the Class A common stock.

The date that the Rights may first become exercisable is referred to as the “Distribution Date.” Any transfer of shares of Class A common stock and/or Class B common stock prior to the Distribution Date will constitute a transfer of the associated Rights. After the Distribution Date, the Rights may be transferred other than in connection with the transfer of the underlying shares of Class A common stock or Class B common stock.

After the Distribution Date and following a determination by the Board of Directors that a person is an Acquiring Person, each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the Purchase Price, that number of shares of Class A common stock or Class B common stock, as the case may be, having a market value of two times the Purchase Price.

Exchange. After the Distribution Date and following a determination by the Board of Directors that a person is an Acquiring Person, the Board of Directors may exchange the Rights (other than Rights owned by such person or group which will have become void), in whole or in part, at an exchange ratio of one share of Class A common stock or Class B common stock, as the case may be, or a fractional share of Series A Preferred Stock (or of a share of a similar class or series of the Company’s preferred stock having similar Rights, preferences and privileges) of equivalent value, per Right (subject to adjustment).

Expiration. The Rights and the Rights Plan will expire on the earliest of (i) June 4, 2022, (ii) the time at which the Rights are redeemed pursuant to the Rights Plan, (iii) the time at which the Rights are exchanged pursuant to the Rights Plan, (iv) the repeal of Sections 382 and 383 of the Code or any successor statute if the Board of Directors determines that the Rights Plan is no longer necessary for the preservation of the applicable tax benefits, (v) the beginning of a taxable year of the Company to which the Board of Directors determines that no applicable tax benefits may be carried forward and (vi) the close of business on June 4, 2019 if approval of the First Amendment by the Company’s shareholders has not been obtained.

Redemption. At any time prior to the time an Acquiring Person becomes such, the Board of Directors may redeem the Rights in whole, but not in part, at a price of $0.01 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.

Anti-Dilution Provisions. The Board of Directors may adjust the Purchase Price of the preferred shares, the number of preferred shares issuable and the number of outstanding Rights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a forward or reverse stock split or a reclassification of the preferred shares or Class A common stock or Class B common stock. No adjustments to the Purchase Price of less than 1% will be made.

Anti-Takeover Effects. While this was not the intent of the Board of Directors when adopting the Rights Plan, the Rights will have certain anti-takeover effects. The Rights will cause substantial dilution to any person or group that attempts to acquire the Company without the approval of the Board of Directors. As a result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire the Company even if such acquisition may be favorable to the interests of the Company’s shareholders. Because the Board of Directors can redeem the Rights, the Rights should not interfere with a merger or other business combination approved by the Board of Directors.

Amendments. Before the Distribution Date, the Board of Directors may amend or supplement the Rights Plan without the consent of the holders of the Rights. After the Distribution Date, the Board of Directors may amend or 

19

 

supplement the Rights Plan only to cure an ambiguity, to alter time period provisions, to correct inconsistent provisions, or to make any additional changes to the Rights Plan, but only to the extent that those changes do not impair or adversely affect, in any material respect, any Rights holder and do not result in the Rights again becoming redeemable, and no such amendment may cause the Rights again to become redeemable or cause this Rights Plan again to become amendable other than in accordance with the applicable timing of the Rights Plan.

 

Description of Notes

The following descriptions of the 6.625% Notes and the 6.75% Notes are a summary and do not purport to be complete. They are subject to and qualified in their entirety by reference to the indenture, dated as of May 1, 2013, between the Company and Wells Fargo Bank, National Association, as trustee, as supplemented and modified by the first supplemental indenture, dated as of May 1, 2013, under which the 6.625% Notes were issued, and the second supplemental indenture dated as of March 18, 2015, between the Company, Wells Fargo Bank, National Association, and The Bank of New York Mellon, under which the 6.75% Notes were issued.

6.625% Senior Notes due 2023

General

References to the Trustee in this section refer to Wells Fargo Bank, National Association.

We have issued $25.0 million in principal amount of the 6.625% Notes. The 6.625% Notes will mature on May 1, 2023. The principal payable at maturity will be 100.0% of the aggregate principal amount. The interest rate of the 6.625% Notes is 6.625% per year and will be paid every February 1, May 1, August 1 and November 1 of each year, commencing on August 1, 2013, and the regular record dates for interest payments will be the 15th calendar day before each interest payment date. The interest periods will be the periods from and including an interest payment date to, but excluding, the next interest payment date or the stated maturity date, as the case may be.

The 6.625% Notes were issued in denominations of $25 and integral multiples of $25 in excess thereof. The 6.625% Notes will not be subject to any sinking fund and holders of the 6.625% Notes will not have the option to have the 625% Notes repaid prior to the stated maturity date.

Optional Redemption

The 6.625% Notes may be redeemed in whole or in part at any time or from time to time at our option on or after May 1, 2016 upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to the date fixed for redemption.

You may be prevented from exchanging or transferring the 6.625% Notes when they are subject to redemption. In case any 6.625% Notes are to be redeemed in part only, the redemption notice will provide that, upon surrender of such 6.625% Note, you will receive, without a charge, a new 6.625% Note or 6.625% Notes of authorized denominations representing the principal amount of your remaining unredeemed 6.625% Notes. Any exercise of our option to redeem the 6.625% Notes will be done in compliance with the indenture.

If we redeem only some of the 6.625% Notes, the Trustee will determine the method for selection of the particular 6.625% Notes to be redeemed in accordance with the indenture and in accordance with the rules of any national securities exchange or quotation system on which the 6.625% Notes are listed. Unless we default in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the 6.625% Notes called for redemption.

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Events of Default

You will have rights if an Event of Default occurs with respect to the 6.625% Notes and the Event of Default is not cured, as described later in this subsection.

The term “Event of Default” with respect to the 6.625% Notes means any of the following:

	
 
	
•
	
We do not pay the principal of any 6.625% Note on its due date.

	
 
	
•
	
We do not pay interest on any 6.625% Note when due, and such default is not cured within 30 days.

	
 
	
•
	
We remain in breach of any other covenant with respect to the 6.625% Notes for 60 days after we receive a written notice of default stating we are in breach. The notice must be sent by either the Trustee or holders of at least 25% of the principal amount of the 6.625% Notes.

	
 
	
•
	
Certain events involving our bankruptcy, insolvency or reorganization.

An Event of Default for a particular series of debt securities does not necessarily constitute an Event of Default for any other series of debt securities issued under the same or any other indenture. The Trustee may withhold notice to the holders of the 6.625% Notes of any default, except in the payment of principal, premium or interest, if it considers the withholding of notice to be in the best interests of the holders.

Remedies if an Event of Default Occurs

If an Event of Default has occurred and has not been cured, the Trustee or the holders of at least 25% in principal amount of the 6.625% Notes may declare the entire principal amount of all the 6.625% Notes to be due and immediately payable. In the case of an Event of Default involving our bankruptcy, insolvency or reorganization with respect to us, the principal of, and accrued and unpaid interest on, all notes will automatically become immediately due and payable. This is called a declaration of acceleration of maturity. In certain circumstances, a declaration of acceleration of maturity may be canceled by the holders of a majority in principal amount of the 6.625% Notes.

The Trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the Trustee protection satisfactory to it from expenses and liability (called an “indemnity”). If indemnity satisfactory to the Trustee is provided, the holders of a majority in principal amount of the 6.625% Notes may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the Trustee. The Trustee may refuse to follow those directions in certain circumstances. No delay or omission in exercising any right or remedy will be treated as a waiver of that right, remedy or any Event of Default.

Before you are allowed to bypass the Trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to the 6.625% Notes, the following must occur:

	
 
	
•
	
You must give the Trustee written notice that an Event of Default has occurred with respect to the 6.625% Notes and remains uncured.

	
 
	
•
	
The holders of at least 25% in principal amount of all the 6.625% Notes must make a written request that the Trustee take action because of the default and must offer indemnity to the Trustee against the cost and other liabilities of taking that action.

	
 
	
•
	
The Trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity.

	
 
	
•
	
The holders of a majority in principal amount of the 6.625% Notes must not have given the Trustee a direction inconsistent with the above notice during that 60 day period.

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However, you are entitled at any time to bring a lawsuit for the payment of money due on your notes on or after the due date of that payment.

Holders of a majority in principal amount of the 6.625% Notes may waive any past defaults other than a default:

	
 
	
•
	
in the payment of principal, any premium or interest; or

	
 
	
•
	
in respect of any provision of the 6.625% Notes or the indenture that cannot be modified or amended without the consent of each holder of the 6.625% Notes.

Holders should consult their banks or brokers for information on how to give notice or direction to or make a request of the Trustee and how to declare or cancel an acceleration of maturity.

Each year, we will furnish to the Trustee a written statement of certain of our officers certifying that to their knowledge we are in compliance with the indenture and the 6.625% Notes, or else specifying any default.

Merger or Consolidation

Under the terms of the indenture, we are generally permitted to consolidate or merge with another entity. We are also permitted to sell all or substantially all of our assets to another entity. However, we may not take any of these actions unless all the following conditions are met:

	
 
	
•
	
Where we merge out of existence or sell our assets, the resulting entity must agree to be legally responsible for our obligations under the 6.625% Notes and the indenture.

	
 
	
•
	
The merger or sale of assets must not cause a default on the 6.625% Notes and we must not already be in default (unless the merger or sale would cure the default). For purposes of this no-default test, a default would include an Event of Default that has occurred and has not been cured, as described under “Events of Default” above. A default for this purpose would also include any event that would be an Event of Default if the requirements for giving us notice of default or our default having to exist for a specified period of time were disregarded.

	
 
	
•
	
We must deliver certain certificates and documents to the Trustee.

Modification or Waiver

There are three types of changes we can make to the indenture and the 6.625% Notes issued thereunder.

Changes Requiring Your Approval

First, there are changes that we cannot make to the 6.625% Notes without approval from each affected holder. The following is a list of those types of changes:

	
 
	
•
	
change the stated maturity of the principal of or interest on the 6.625% Notes;

	
 
	
•
	
reduce any amounts due on the 6.625% Notes;

	
 
	
•
	
reduce the amount of principal payable upon acceleration of the maturity of a security following a default;

	
 
	
•
	
change the place or currency of payment on the 6.625% Notes or the redemption provisions applicable to the 6.625% Notes;

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•
	
impair your right to institute suit for the enforcement of any payment of principal of or interest on the 6.625% Notes;

	
 
	
•
	
reduce the percentage of holders of 6.625% Notes whose consent is needed to modify or amend the indenture or the 6.625% Notes;

	
 
	
•
	
reduce the percentage of holders of 6.625% Notes whose consent is needed to waive compliance with certain provisions of the indenture or the 6.625% Notes or to waive certain defaults; and

	
 
	
•
	
modify any other material aspect of the provisions of the indenture or the 6.625% Notes dealing with supplemental indentures, modification and waiver of past defaults, changes to the quorum or voting requirements or the waiver of certain covenants.

Changes Not Requiring Approval

The second type of change does not require any vote by the holders of the 6.625% Notes. This type is limited to clarifications and certain other changes that would not adversely affect holders of the 6.625% Notes in any material respect.

Changes Requiring Majority Approval

Any other change to the indenture and the 6.625% Notes would require the following approval:

	
 
	
•
	
If the change affects only the 6.625% Notes, it must be approved by the holders of a majority in principal amount of the 6.625% Notes (including any additional 6.625% Notes).

	
 
	
•
	
If the change affects more than one series of debt securities issued under the same indenture, it must be approved by the holders of a majority in principal amount of all of the series affected by the change, with all affected series voting together as one class for this purpose.

The holders of a majority in principal amount of a series of debt securities issued under the indenture may waive our compliance with some of our covenants applicable to that series. However, we cannot obtain a waiver of a payment default or of any of the matters covered by the bullet points included above under “—Changes Requiring Your Approval”.

Further Details Concerning Voting

When taking a vote, we will use the principal amount that would be due and payable on the voting date if the maturity of the 6.625% Notes were accelerated to that date because of a default, to decide how much principal to attribute to the 6.625% Notes.

The 6.625% Notes will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in trust money for their payment or redemption. The 6.625% Notes will also not be eligible to vote if they have been fully defeased as described later under “Defeasance—Full Defeasance”.

We will generally be entitled to set any day as a record date for the purpose of determining the holders of the 6.625% Notes that are entitled to vote or take other action under the indenture. If we set a record date for a vote or other action to be taken by holders of the 6.625% Notes, that vote or action may be taken only by persons who are holders of the 6.625% Notes on the record date and must be taken within eleven months following the record date.

Holders should consult their banks or brokers for information on how approval may be granted or denied if we seek to change the indenture or the 6.625% Notes or request a waiver.

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Defeasance

The following provisions will be applicable to the 6.625% Notes.

Covenant Defeasance

Under applicable law, we can make the deposit described below and be released from some of the restrictive covenants and Events of Default in the indenture under which the 6.625% Notes were issued. This is called “covenant defeasance.” In that event, you would lose the protection of those restrictive covenants and Events of Default but would gain the protection of having money and government securities set aside in trust to repay your 6.625% Notes. In order to achieve covenant defeasance, the following conditions must be satisfied:

	
 
	
•
	
Since the 6.625% Notes are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of the 6.625% Notes a combination of money and U.S. government or U.S. government agency notes or bonds that in the opinion of a nationally recognized firm of independent public accountants will generate enough cash to make interest, principal and any other payments on the 6.625% Notes on their due dates.

	
 
	
•
	
We must deliver to the Trustee a legal opinion of our counsel confirming that, under current U.S. federal income tax law, we may make the above deposit without causing you to be taxed on the 6.625% Notes any differently than if we did not make the deposit and just repaid the 6.625% Notes ourselves at maturity.

	
 
	
•
	
Defeasance must not result in a breach or violation of, or result in a default under, the indenture or any of our other material agreements or instruments.

	
 
	
•
	
No default or event of default, or event which with notice or lapse of time would become an event of default, with respect to the 6.625% Notes shall have occurred and be continuing and no defaults or events of default related to bankruptcy, insolvency or reorganization shall occur during the next 90 days.

	
 
	
•
	
We must deliver to the Trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the 1940 Act and a legal opinion and officers’ certificate stating that all conditions precedent to covenant defeasance have been complied with.

	
 
	
•
	
If the 6.625% Notes are to be redeemed before their maturity, notice of redemption must have been given.

If we accomplish covenant defeasance, you can still look to us for repayment of the 6.625% Notes if there were a shortfall in the trust deposit or the Trustee is prevented from making payment.

Full Defeasance

If there is a change in U.S. federal tax law, as described below, we can legally release ourselves from all payment and other obligations on the 6.625% Notes of a particular series (called “full defeasance”) if the following conditions are satisfied in order for you to be repaid:

	
 
	
•
	
Since the 6.625% Notes are in U.S. dollars, we must deposit in trust for the benefit of all holders of the 6.625% Notes a combination of money and U.S. government or U.S. government agency notes or bonds that in the opinion of a nationally recognized firm of independent public accountants will generate enough cash to make interest, principal and any other payments on the 6.625% Notes on their various due dates.

	
 
	
•
	
We must deliver to the Trustee a legal opinion confirming that there has been a change in current U.S. federal tax law or an Internal Revenue Service (“IRS”) ruling that allows us to make the above deposit 

24

 

	
 
		
without causing you to be taxed on the 6.625% Notes any differently than if we did not make the deposit and just repaid the 6.625% Notes ourselves at maturity. Under current U.S. federal tax law, the deposit and our legal release from the 6.625% Notes would be treated as though we paid you your share of the cash and notes or bonds at the time the cash and notes or bonds were deposited in trust in exchange for the 6.625% Notes and you would recognize gain or loss on the 6.625% Notes at the time of the deposit.

	
 
	
•
	
Defeasance must not result in a breach or violation of, or constitute a default under, the indenture or any of our other material agreements or instruments.

	
 
	
•
	
No default or event of default, or event which with notice or lapse of time would become an event of default, with respect to the 6.625% Notes shall have occurred and be continuing and no defaults or events of default related to bankruptcy, insolvency or reorganization shall occur during the next 90 days.

	
 
	
•
	
We must deliver to the Trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the 1940 Act and a legal opinion and officers’ certificate stating that all conditions precedent to defeasance have been complied with.

	
 
	
•
	
If the 6.625% Notes are to be redeemed before their maturity, notice of redemption must have been given.

If we ever did accomplish full defeasance, as described above, you would have to rely solely on the trust deposit for repayment of the 6.625% Notes. You could not look to us for repayment in the unlikely event of any shortfall. Conversely, the trust deposit would most likely be protected from claims of our lenders and other creditors if we ever became bankrupt or insolvent.

Other Covenants

In addition to any other covenants described in this prospectus supplement or the accompanying prospectus, we have also agreed that if, at any time, we are not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic reports with the SEC, we agree to file with the SEC, to the extent permitted under the Exchange Act, the annual reports, quarterly reports and other documents which we would have been required to file with the SEC if we were so subject, on or before the filings dates which we would have been required file such documents if we were so subject.

Resignation of Trustee

The Trustee may resign or be removed with respect to the 6.625% Notes provided that a successor trustee is appointed to act with respect to the 6.625% Notes. In the event that two or more persons are acting as trustee with respect to different series of indenture securities under the indenture, each of the trustees will be a trustee of a trust separate and apart from the trust administered by any other trustee.

Indenture Provisions—Subordination and Senior Indebtedness

The 6.625% Notes will be our direct unsecured obligations and will rank:

	
 
	
•
	
pari passu with our future senior unsecured indebtedness;

	
 
	
•
	
senior to our existing long-term debentures and any of our future indebtedness that expressly provides it is subordinated to the 6.625% Notes; and

	
 
	
•
	
effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness, including our borrowings under repurchase agreements; and

25

 

	
 
	
•
	
structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries.

Listing

The 6.25% Notes are listed on the NYSE under the symbol “AIW”.

Sinking Fund

The 6.625% Notes are not entitled to any sinking fund payments.

6.75% Senior Notes Due 2025

The terms of the 6.75% Notes are substantially similar to the terms of the 6.625% Notes, other than as follows:

General

References to the Trustee in this section refer to The Bank of New York Mellon.

We have issued $35.3 million in principal amount of the 6.75% Notes. The 6.75% Notes will mature on March 15, 2025. The principal payable at maturity will be 100.0% of the aggregate principal amount. The interest rate on the 6.75% Notes is 6.75% per year and will be paid every March 15, June 15, September 15 and December 15 of each year, commencing on June 15, 2015, and the regular record dates for interest payments will be the 15th calendar day (whether or not a business day) before each interest payment date. Interest periods will be the periods from and including an interest payment date to, but excluding, the next interest payment date or the stated maturity date, as the case may be.

Optional Redemption

The 6.75% Notes may be redeemed in whole or in part at any time or from time to time at our option on or after March 15, 2018 upon not less than 30 days nor more than 60 days written notice by mail (or, in case of 6.75% Notes represented by one or more global securities, transmitted in accordance with the depositary’s procedures) prior to the date fixed for redemption thereof, at a redemption price equal to 100% of the outstanding principal amount of 6.75% Notes being redeemed plus accrued and unpaid interest to, but excluding, the date fixed for redemption.

If we redeem only some of the 6.75% Notes, the Trustee will determine the method for selection of the particular 6.75% Notes to be redeemed in accordance with the indenture; provided, that if the Notes are represented by one or more global securities, beneficial interests in the 6.75% Notes will be selected for redemption by the depositary in accordance with its standard procedures therefor. Unless we default in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the 6.75% Notes called for redemption.

Ranking

The 6.75% Notes will be our direct unsecured obligations and will:

	
 
	
•
	
rank senior in right of payment to our existing subordinated unsecured long-term debentures and all of our other existing and future indebtedness that is expressly subordinated in right of payment to the 6.75% Notes;

	
 
	
•
	
rank equal in right of payment with our 6.625% Notes and all of our other existing and future liabilities that are not expressly subordinated in right of payment to the 6.75% Notes;

	
 
	
•
	
are effectively subordinated to all of our existing and future secured indebtedness (including all indebtedness under repurchase agreements), to the extent of the value of the assets securing such indebtedness; and

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•
	
structurally subordinated to all existing and future indebtedness (including trade payables) and preferred equity of our subsidiaries, financing vehicles or similar facilities. See “Risk Factors — Risks Related to this Offering — The 6.75% Notes will be unsecured and therefore will be effectively subordinated to any secured indebtedness that we currently have or that we may incur in the future, including all repurchase agreements.”

Listing

The 6.75% Notes are listed on the NYSE under the symbol “AIC”.

Restrictions on Ownership and Transfer

The following restrictions on ownership and transfer apply to our common stock and Series C Preferred stock.

In order for us to qualify as a REIT, our stock must be beneficially owned by 100 or more persons for at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of our stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain exempt entities) during the last half of a taxable year.

Our charter provides that, subject to certain exceptions, no stockholder or “group” (as defined in Section 13(d)(3) of the Exchange Act) may own, or be deemed to own by virtue of the attribution provisions of the Internal Revenue Code, in excess of (i) 9.9% of the number of the outstanding shares of our common stock, (ii) 9.9% in number of the outstanding shares of any class or series of our preferred stock, and (iii) 9.9% of the aggregate value of the outstanding shares of our equity stock (or the Ownership Limit). Our board may waive the Ownership Limit if it is presented with evidence satisfactory to it that the waiver will not jeopardize our qualification as a REIT. As a condition to any such waiver, our board may require opinions of counsel satisfactory to it and must receive an undertaking from the applicant with respect to preserving our REIT qualification. The Ownership Limit will not apply if our board determines that it is no longer in our best interests to continue to qualify as a REIT.

If shares of common stock and/or preferred stock (i) in excess of the Ownership Limit, (ii) which would cause us to be beneficially owned by fewer than 100 persons, (iii) that cause us to become “closely held” under Section 856(h) of the Internal Revenue Code, (iv) that are a violation of the restriction relating to causing the Company to constructively own 10% or more of the ownership interests in a tenant of our real property or (v) that are a violation of the restriction relating to the Company’s stock being beneficially owned by a disqualified organization are issued or transferred to any person, the issuance or transfer shall be void as to the number of shares in violation of such restrictions and the intended transferee will acquire no rights to such shares of common stock and/or preferred stock. Shares issued or transferred that would cause any stockholder (or a Prohibited Owner) to own more than the Ownership Limit or cause us to become “closely held” under Section 856(h) of the Internal Revenue Code will automatically be transferred, without action by the Prohibited Owner, to a trust for the exclusive benefit of one or more charitable beneficiaries that we select, and the Prohibited Owner will not acquire any rights in the shares of excess stock. Such automatic transfer shall be deemed to be effective as of the close of business on the day prior to the date of the transfer causing a violation. The trustee of the trust shall be appointed by us and must be independent of us and the Prohibited Owner. The Prohibited Owner shall have no right to receive dividends or other distributions with respect to, or be entitled to vote, any shares of stock held in the trust. Any dividend or other distribution paid prior to the discovery by us that stock has been transferred to the trust must be paid by the recipient of the dividend or distribution to the trustee upon demand for the benefit of the charitable beneficiary, and any dividend or other distribution authorized but unpaid shall be paid when due to the trust. The trust shall have all dividend and voting rights with respect to the shares of stock held in the trust, which rights shall be exercised for the exclusive benefit of the charitable beneficiary. Any dividend or distribution so paid to the trust shall be held in trust for the charitable beneficiary.

Shares of our stock transferred to a trustee are deemed to be offered for sale to us, or our designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in such transfer to the trust or, if the prohibited owner did not give value for the shares in connection with the event causing the shares to be held in trust (e.g., in the case of a gift, devise or other such transaction), the market price at the time of such event, and (ii) 

27

 

the market price on the date we or our designee accepts such offer. We have the right to accept such offer period of ninety days after the later of (i) the date of the event causing the shares to be held in trust that resulted in such shares if our stock transferred to the trust and (ii) the date we determine in good faith that a purported transfer of shares of our stock or other event or change of circumstances that would violate any of the restrictions described in this proposal our charter occurred, if the trustee sells the shares of our stock held in the trust.

If we do not buy the shares, a trustee must, in an orderly fashion so as not to materially adversely affect the market price of the shares, sell the shares to a person or entity who could own the shares without violating the restrictions described in our charter. Upon such sale, the interest of the beneficiary in the shares sold will terminate, and the trustee of the trust will distribute the net proceeds of the sale to the prohibited owner and to the beneficiary of the trust as follows:

	
 
	
•
	
The Prohibited Owner will receive the lesser of (i) the price paid by the Prohibited Owner for the shares or, if the prohibited owner did not give value for the shares in connection with the event causing the shares to be held in charitable trust (e.g., in the case of a gift, devise or other such transaction), the market price of the shares on the day of the event causing the shares to be held in the trust, and (ii) the sales proceeds received by the trustee for the shares; and

	
 
	
•
	
Any net sales proceeds and any dividends or other distributions (whether ordinary or extraordinary) in excess of the amount payable to the Prohibited Owner, less the costs, expenses and compensation of the charitable trustee and us, shall be promptly distributed to the beneficiary.

A trustee may reduce the amount that is payable to the Prohibited Owner by the amount of any dividends or other distributions (whether ordinary or extraordinary) that we paid to the prohibited owner before the discovery by us that the shares had been transferred to the trust and that is owed by the prohibited owner to the trustee.

The Ownership Limit provision will not be automatically removed even if the REIT provisions of the Internal Revenue Code are changed so as to no longer contain any ownership concentration limitation or if the ownership concentration is increased. Any change in the Ownership Limit would require an amendment to our charter. Such an amendment will require the affirmative vote of the holders of a majority of the outstanding shares of common stock and any other class of capital stock with such voting rights. In addition to preserving our qualification as a REIT, the Ownership Limit may have the effect of precluding an acquisition of control of our company without the approval of our board.

To the extent our shares of stock are certificated, all certificates representing shares of our common stock or preferred stock will refer to the restrictions described above.

Any person who acquires or attempts or intends to acquire shares of our stock in violation of any of the foregoing restrictions on transferability and ownership will be required to give written notice immediately to us and provide us with such other information as we may request in order to determine the effect of such transfer on our qualification as a REIT.

All persons who own, directly or by virtue of the attribution provisions of the Internal Revenue Code, 5% or more of our outstanding shares of stock (or such other percentage at the time prescribed by the Internal Revenue Code or the regulations promulgated thereunder) must file a written statement with us containing the information specified in our charter within 30 days after January 1 of each year. In addition, each stockholder must upon demand disclose to us such information as we deem necessary in order to determine our qualification as a REIT and to ensure compliance with the Ownership Limit.

Number of Directors; Removal; Filling Vacancies

Our articles of incorporation and bylaws provide that there shall be six directors. By amendment of our bylaws, the Board of Directors or the shareholders may increase or decrease the number of Directors in accordance with applicable law. A decrease in the number of Directors shall not shorten the term of any incumbent director. Directors hold office until their death, resignation or removal or until their successor is elected.

28

 

Our bylaws provide that vacancies on the Board of Directors, including a vacancy resulting from death, resignation, disqualification or removal or an increase in the number of directors, shall be filled by the Board of Directors, the shareholders or the affirmative vote of a majority of the remaining Directors where less than a quorum of the Board of Directors remains. Where a resignation will become effective at a specified later date, it may be filled before the vacancy occurs, but the new Director may not take office until the vacancy occurs. A director elected by the Board of Directors to fill a vacancy shall be elected to hold office until the next annual meeting of shareholders or until his or her successor is elected.

Shareholder Action

Our articles of incorporation and bylaws provide that special meetings of the shareholders may only be called by the Board of Directors or by the Chairman, Chief Executive Officer, or President pursuant to a notice of meeting stating the purpose or purposes thereof approved by a majority of the Directors, the chairman, vice-chairman, chief executive officer or the president of the company. Only the business falling within the purpose or purposes described in the notice shall be conducted at a special meeting.

Advance Notice for Shareholder Proposals or Nominations at Meetings

Our bylaws establish advance notice procedures for shareholder proposals regarding business or nominations to be brought before any annual or special meeting of shareholders. Except for the election of directors by the unanimous written consent of shareholders or the filling of vacancies on the Board of Directors by the Board of Directors, only persons nominated in accordance with the notice procedures set forth in our bylaws shall be eligible to serve as a director. Similarly, other business shall not be conducted at a meeting of shareholders unless it is brought before the meeting in accordance with the procedures set forth in our bylaws. Except as otherwise dictated by law, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was properly made or proposed, as the case may be. If any nomination or business is defectively made or proposed, it shall be disregarded.

Annual Meetings

Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the shareholders may be made at the annual meeting of shareholders in the following ways. Such nominations or proposals may be made pursuant to a notice of the meeting, by or at the direction of the Board of Directors or by a shareholder of our company who is a shareholder of record of a class of shares entitled to vote on the business such shareholder is proposing, both on the record date for the annual meeting and at the giving of the shareholder’s notice, and who complies with the notice procedures provided for in our bylaws.

To properly bring nominations or other business before an annual meeting of the shareholders, a shareholder must give timely, written notice thereof in proper form and timely updates and supplements thereof as of the record date for the shareholder meeting and as of the date that is ten business days prior to the meeting, and the proposed business must be proper for shareholder consideration. To be timely, the notice must be delivered to the secretary of our company at our company’s principal executive officers not later than the close of business on the 90th day nor earlier that the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting. However, if the annual meeting is more than 30 days before or more than 60 days after such anniversary, the shareholder’s notice must be delivered to the secretary of our company at our company’s principal executive offices not earlier that the close of business on the 120th day prior to the annual meeting and not later than the close of business on the later of the 90th day prior to the annual meeting or the tenth day following the date on which we first make public announcement of the date of our annual meeting.

The shareholder’s notice must contain certain information. As to each person the shareholder proposes to nominate for election or re-election to the Board of Directors, the notice must contain all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act and Rule 14a-8 thereunder and a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the 

29

 

one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant. With respect to each person whom the shareholder proposes to nominate for election or reelection to the Board of Directors, a shareholder’s notice must also include a completed and signed questionnaire, representation and agreement required by the bylaws. In addition to the information explicitly required in the bylaws, a shareholder proposing a director nominee may be required to furnish other information as we may reasonably require to determine the eligibility of the proposed nominee to serve as director.

As to any other business that the shareholder proposes to bring before the meeting, the notice must contain a brief description of the proposed business and any material interest in such business of the shareholder and the beneficial owner, if any, on whose behalf the proposal is made. The shareholder notice must also provide the name and address of the shareholder and the beneficial owner, if any, on whose behalf the proposal is made as they appear on the books of the corporation as well as the class and number of shares that are owned beneficially and of record by such shareholder and such beneficial owner, as the case may be any information concerning derivative ownership and hedging transactions, and any affiliates, associates or others acting in concert with such shareholder.

If the number of Directors to be elected to the Board of Directors is increased and there is no public announcement by us naming all of the nominees for Director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a shareholder’s notice will be considered timely, but only with respect to nominees for any new positions created by the increase, if it is delivered to the secretary of the company at our principal executive offices not later than the close of business on the tenth day following the date on which we first make such public announcement.

Special Meetings

Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders at which Directors are to be elected pursuant to the notice of meeting in two ways. Such nominations may be made by or at the direction of the Board of Directors. Additionally, a nomination may be made by any shareholder who was a shareholder of record at the time notice of the meeting was given, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in our bylaws. Any shareholder so qualified may nominate a person or persons for election to the position or positions specified in the notice of meeting if the shareholder provides timely, written notice thereof to the secretary of the company at our principal executive offices. To be timely, such notice must be provided not earlier that the close of business on the 120th day prior to the special meeting and not later than the close of business on the later of the 90th day prior to the special meeting or the tenth day following the day on which public announcement of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting is first made.

Amendment of the Bylaws

Our bylaws may be amended or repealed, and new bylaws may be made, at any regular or special meeting of the Board of Directors or the shareholders. Bylaws made by the Board of Directors may be repealed or changed and new bylaws may be made by the shareholders, and the shareholders may prescribe that any bylaw made by them shall not be altered, amended, repealed or reinstated by the Board of Directors. The affirmative vote of at least 80% of the voting power of the outstanding shares of our capital stock entitled to vote is required for the shareholders to adopt, alter or repeal any bylaw that requires or would require the company to hold, or sets forth procedures for the holding of, a special meeting of shareholders or that governs or would govern the nomination of persons for election to the Board of Directors or the proposal of business to be considered at an annual or special meeting of shareholders.

Amendment of the Articles of Incorporation

For every voting group entitled to vote on a proposed amendment to our articles of incorporation, the vote required for approval shall be either the vote specifically required by our articles of incorporation or, if no voting requirement is specified, a majority of the votes entitled to be cast.

30

 

Except for amendments to our articles of incorporation adopted by the Board of Directors that establish any series of preferred stock, the affirmative vote of at least 80% of the voting power of the outstanding shares of the company is required to amend our articles of incorporation to include two types of provisions. The provisions that require such a vote are those that would require the company to hold, or set forth procedures for the holding of, a special meeting of shareholders or that would govern the nomination of persons for election to the Board of Directors of the proposal of business to be considered at an annual or special meeting of shareholders. The affirmative vote of at least 80% of the voting power of the outstanding shares of the company is also required to alter, amend or adopt any provision inconsistent with or repealing the Article VIII of our articles of incorporation, which addresses certain voting matters, including the amendment of our bylaws and articles of incorporation.

Virginia Law

The Virginia Stock Corporation Act contains provisions that may have the effect of impeding the acquisition of control of a Virginia corporation by means of a tender offer, proxy contest, open market purchases or otherwise in a transaction not approved by the corporation’s Board of Directors. These provisions are designed to reduce the corporation’s vulnerability to coercive takeover practices and inadequate takeover bids.

Affiliated Transactions Statute

Pursuant to a provision in our articles of incorporation, we have opted out of the affiliated transactions provisions contained in the VSCA. In general, these provisions prohibit a Virginia corporation from engaging in affiliated transactions with the beneficial owner of more than 10% of any class of its outstanding voting shares (an “interested shareholder”) for a period of three years following the date that such person became an interested shareholder unless:

	
 
	
•
	
a majority (but not less than two) of the disinterested directors of the corporation and the holders of two-thirds of the voting shares, other than the shares beneficially owned by the interested shareholder, approve the affiliated transaction; or

	
 
	
•
	
Before or contemporaneously with the date the person became an interested shareholder, a majority of disinterested directors approved the transaction that resulted in the shareholder becoming an interested shareholder.

Affiliated transactions subject to this approval requirement include mergers, share exchanges, certain dispositions of corporate assets not in the ordinary course of business, any dissolution of the corporation proposed by or on behalf of an interested shareholder or any reclassification, including reverse stock splits, recapitalizations or mergers of the corporation with its subsidiaries, which increases the percentage of voting shares owned beneficially by an interested shareholder by more than 5%.

Control Share Acquisitions Statute

Pursuant to our bylaws, the provisions of Article 14.1 of the Virginia Stock Corporation Act relating to “control share acquisitions” shall not apply to the company.

Shareholder Rights Agreement

See “Rights to Purchase Series A Junior Preferred Stock” above. 

 

054521.0000096 EMF_US 79085831v2

 
 
31Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of February 20, 2020, by and among Avadel Pharmaceuticals plc, an Irish
public limited company (the “Company”), and each purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

A.       The
Company and each Purchaser is executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506
of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the
 “Commission”) under the Securities Act.

 

B.       Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated
in this Agreement, (1) such aggregate number of ordinary shares, nominal value U.S. $0.01 per share (the “Ordinary Shares”)
of the Company, in the form of American Depositary Shares (the “ADSs”) and, at the option of each Purchaser,
(2) such aggregate number of Series A Non-Voting Convertible Preferred Shares, nominal value $0.01 per share (the “Series
A Preferred Shares”) of the Company, as set forth below such Purchaser’s name on the signature page of this Agreement
(which aggregate amount for all Purchasers together shall be 8,680,225 ADSs and 487,614 Series A Preferred Shares, and shall be
collectively referred to herein as the “Shares”).

 

C.       The
ADSs will be issued pursuant to the Deposit Agreement dated as of January 3, 2017 (as so amended and supplemented, the “Deposit
Agreement”) by and among the Company, The Bank of New York Mellon, as Depositary, and holders from time to time of ADSs
issued thereunder.

 

D.       The
Company has engaged Jefferies LLC, Piper Sandler Companies, Stifel, Nicolaus & Company, Incorporated, Ladenburg Thalmann and
LifeSci Capital LLC as its exclusive Placement Agents (the “Placement Agents”) for the offering of the Shares
on a “best efforts” basis.

 

E.       At Closing
(as defined below), the parties intend to execute a Registration Rights Agreement, substantially in the form attached hereto as
Exhibit B (the “Registration Rights Agreement”), pursuant to which, among other things, the Company will
agree to provide certain registration rights with respect to the Shares under the Securities Act and the rules and regulations
promulgated thereunder and applicable state securities laws.

 

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

 

ARTICLE I.

DEFINITIONS

 

1.1          Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the
following terms shall have the meanings indicated in this Section 1.1:

 

“Acquiring Person”
has the meaning set forth in Section 4.5.

 

“Action”
means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or
investigation pending or, to the Company’s Knowledge, threatened in writing against the Company, any subsidiary or any
of their respective properties or any officer, director or employee of the Company or any subsidiary acting in his or her
capacity as an officer, director or employee before or by any U.S. federal, state, county, local or non-U.S. court,
arbitrator, governmental or administrative agency, regulatory authority, stock market, stock exchange or trading
facility.

 

     

     

    

 

“ADS Equivalents”
means any securities of the Company or any subsidiary which would entitle the holder thereof to acquire at any time ADSs, including,
without limitation, any debt, preferred shares, rights, options, warrants or other instrument that is at any time convertible into
or exchangeable for, or otherwise entitles the holder thereof to receive, ADSs or other securities that entitle the holder to receive,
directly or indirectly, ADSs.

 

“ADS Subscription
Amount” means, with respect to each Purchaser, the aggregate amount to be paid for the ADSs purchased hereunder as indicated
on such Purchaser’s signature page to this Agreement next to the heading “Aggregate ADS Purchase Price (ADS Subscription
Amount)” in United States dollars and in immediately available funds.

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls,
is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the
Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

 

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

 

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

 

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

 

“Closing”
means the closing of the purchase and sale of the Shares pursuant to this Agreement.

 

“Closing Date”
means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto,
and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived,
as the case may be, or such other date as the parties may agree.

 

“Commission”
has the meaning set forth in the Recitals.

 

“Company”
has the meaning set forth in the Preamble.

 

“Company U.S.
Counsel” means Goodwin Procter LLP, with offices at 100 Northern Ave, Boston, MA 02210.

 

“Company Irish
Counsel” means Arthur Cox, with offices at Ten Earlsfort Terrace, Dublin 2, D02 T380, Ireland.

 

“Company Deliverables”
has the meaning set forth in Section 2.2(a).

 

“Company’s
Knowledge” means with respect to any statement made to the Company’s Knowledge, that the statement is based upon
the actual knowledge of the executive officers of the Company having responsibility for the matter or matters that are the subject
of the statement.

 

    2

     

    

 

“Control”
(including the terms “controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Depositary”
has the meaning set forth in the Recitals.

 

“DTC”
has the meaning set forth in Section 4.1(c).

 

“Effective Date”
means the date on which the initial Registration Statement required by Section 2(a) of the Registration Rights Agreement is first
declared effective by the Commission.

 

“Environmental
Laws” has the meaning set forth in Section 3.1(cc).

 

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

 

“Intellectual
Property Rights” has the meaning set forth in Section 3.1(o).

 

“Irrevocable
Transfer Agent Instructions” means, with respect to the Company, the Irrevocable Transfer Agent Instructions, in substantially
the form of Exhibit D, executed by the Company and delivered to and acknowledged in writing by the Transfer Agent.

 

“Legend Removal
Date” has the meaning set forth in Section 4.1(c).

 

“Lien”
means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of
any kind.

 

“Material Adverse
Change” has the meaning set forth in Section 3.1(j).

 

“Material Adverse
Effect” means any event, occurrence, fact, circumstance, condition, change or development, individually or together with
other events, occurrences, facts, circumstances, conditions, changes or developments, that has had, has, or would reasonably be
expected to have a material adverse effect on (i) the results of operations, assets, prospects, business or financial condition
of the Company and the subsidiaries, taken as a whole, or (ii) the ability of the Company to consummate the transactions contemplated
by this Agreement and other Transaction Agreements and to timely perform its material obligations hereunder and thereunder.

 

“Material Contract”
means any contract of the Company that has been filed or was required to have been filed as an exhibit to the SEC Reports pursuant
to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“New York Courts”
means the state and federal courts sitting in the City of New York, Borough of Manhattan.

 

“Ordinary Shares”
has the meaning set forth in the Recitals, and also includes any other class of securities into which the Ordinary Shares may hereafter
be reclassified or changed into.

 

“Outside Date”
means the thirtieth day following the date of this Agreement.

 

“Person”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.

 

    3

     

    

 

“Placement Agents”
has the meaning set forth in the Recitals.

 

“Preferred Subscription
Amount” means, with respect to each Purchaser, the aggregate amount to be paid for the Series A Preferred Shares purchased
hereunder as indicated on such Purchaser’s signature page to this Agreement next to the heading “Aggregate Series A
Preferred Purchase Price (Preferred Subscription Amount)” in United States dollars and in immediately available funds.

 

“Press Release”
has the meaning set forth in Section 4.4.

 

“Principal Trading
Market” means the Trading Market on which the ADSs is primarily listed on and quoted for trading, which, as of the date
of this Agreement and the Closing Date, shall be the Nasdaq Global Market.

 

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

 

“Purchase Price”
means $7.09 per Share.

 

“Purchaser”
or “Purchasers” has the meaning set forth in the Recitals.

 

“Purchaser Deliverables”
has the meaning set forth in Section 2.2(b).

 

“Registration
Rights Agreement” has the meaning set forth in the Recitals.

 

“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 Registrable Securities (as defined in the Registration Rights Agreement).

 

“Regulation
D” has the meaning set forth in the Recitals.

 

“Required Approvals”
has the meaning set forth 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 from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Reports”
has the meaning set forth in Section 3.1(h).

 

“Secretary’s
Certificate” has the meaning set forth in Section 2.2(a)(iv).

 

“Securities
Act” has the meaning set forth in the Recitals.

 

“Series A Preferred
Shares” has the meaning set forth in the Recitals, and also includes any other class of securities into which the Series
A Preferred Shares may hereafter be reclassified or changed into.

 

“Series
A Transfer Agent” means the Company.

 

“Shares”
has the meaning set forth in the Recitals.

 

“Short
Sales” include, without limitation, (i) all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all types of direct and indirect stock pledges,
forward sale contracts, options, puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total return basis), and (ii) sales and other
transactions through non-U.S. broker dealers or non-U.S. regulated brokers (but shall not be
deemed to include the location and/or reservation of borrowable ADSs).

 

    4

     

    

 

“Subscription
Amount” means, with respect to each Purchaser, the aggregate amount to be paid for the Shares purchased hereunder as
indicated on Exhibit A opposite such Purchaser’s name, in United States dollars and in immediately available funds.

 

“subsidiary”
means any subsidiary of the Company, and shall, where applicable, include any subsidiary of the Company formed or acquired after
the date hereof.

 

“Substantial
Acquisition Rules” means the Irish Takeover Panel Act, 1997, Substantial Acquisition Rules, 2007.

 

“Takeover
Rules” means the Irish Takeover Panel Act, 1997, Takeover Rules, 2013.

 

“Trading Affiliates”
has the meaning set forth in Section 3.2(h).

 

“Trading Day”
means any day on which the ADSs are traded on the Principal Trading Market; provided that “Trading Day” shall not include
any day on which the ADSs are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the ADSs are
suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate
in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

 

“Trading Market”
means whichever of the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market
or the OTC Bulletin Board on which the ADSs is listed or quoted for trading on the date in question.

 

“Transaction
Documents” means this Agreement, the schedules and exhibits attached hereto, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions and any other documents or agreements explicitly contemplated hereunder.

 

“Transfer Agent”
means Computershare Ireland, the current transfer agent of the Company, or any successor transfer agent for the Company.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1         
Closing.

 

(a)      Share
Amounts. Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell
to each Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, (i) the number of ADSs equal
to the quotient resulting from dividing (A) the ADS Subscription Amount for such Purchaser by (B) the Purchase Price, rounded
down to the nearest whole Share and, at the option of each Purchaser, (ii) the number of Series A Preferred Shares equal to the
quotient resulting from dividing (A) the Series A Subscription Amount for such Purchaser by (B) the Purchase Price, rounded down
to the nearest whole Share. The foregoing amounts are set forth on Exhibit A hereto.

 

(b)      Series
A Preferred Shares. The Series A Preferred Shares shall have the rights, preferences, privileges and restrictions set forth
in the resolutions establishing the terms of the Series A Preferred Shares as approved by the Company’s Board of Directors
pursuant to the authority conveyed on the Board of Directors under the constitution of the Company (the “Constitution”)
with the rights, preferences, privileges and restrictions set forth therein and substantially in the form attached hereto as Exhibit
I (the “Series A Preferred Share Terms”). Each one (1) Series A Preferred Share shall be convertible into
one (1) Ordinary Share (represented by ADSs); as described in the Series A Preferred Share Terms.

 

    5

     

    

 

(c)      Closing.
The Closing of the purchase and sale of the Shares shall take place at the offices of Goodwin Procter LLP, 100 Northern Avenue,
Boston, Massachusetts 02210 on the Closing Date or at such other locations or remotely by facsimile transmission or other electronic
means as the parties may mutually agree.

 

(d)      Payment. At the Closing, each Purchaser will pay to the Company the aggregate Subscription
Amount set forth opposite its name on Exhibit A hereto by wire transfer of immediately available funds in accordance
with wire instructions provided by the Company to the Purchasers prior to the Closing. On the Closing Date, the Company will, against
delivery of the aggregate Purchase Price (i) instruct the Depositary to register and deliver to each Purchaser the number of ADSs
such Purchaser is purchasing as set forth on Exhibit A hereto and, if appropriate, (ii) instruct the Series A Transfer Agent
to issue and deliver one or more share certificates evidencing the number of Series A Preferred Shares such Purchaser is purchasing
as set forth on Exhibit A hereto.

 

2.2          Closing
Deliverables.   (a)      On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to
each Purchaser the following (the “Company Deliverables”):

 

(i)             
this Agreement, duly executed by the Company;

 

(ii)             legal opinions of Company Counsel and Company Irish Counsel, dated as of the Closing Date
and in form and substance reasonably satisfactory to the Purchasers, executed by such counsel and addressed to the Purchasers;

 

(iii)           
the Registration Rights Agreement, duly executed by the Company; 

 

(iv)            a
certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as of the Closing
Date, (a) certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated
by this Agreement and the other Transaction Documents and the issuance of the Shares, (b) certifying the current versions of the
memorandum and articles of association of the Company and (c) certifying as to the signatures and authority of persons signing
the Transaction Documents and related documents on behalf of the Company, in substantially the form attached hereto as Exhibit
E;

 

(v)             the
Compliance Certificate referred to in Section 5.1(h); 

 

(vi)            a
Lock-Up Agreement, substantially in the form of Exhibit G hereto (the “Lock-Up Agreement”) executed
by each person listed on Exhibit H hereto, and each such Lock-Up Agreement shall be in full force and effect on the Closing
Date;

 

(b)           On
or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following (the “Purchaser
Deliverables”):

 

(i)              this Agreement, duly executed by such Purchaser;

 

(ii)             its
Subscription Amount, in United States dollars and in immediately available funds, in the amount set forth in the “Aggregate
Purchase Price (Subscription Amount)” column opposite each Purchaser’s name in the table set forth on Exhibit A
by wire transfer to the Company; 

 

    6

     

    

 

(iii)           
the Registration Rights Agreement, duly executed by such Purchaser; 

 

(iv)            a
fully completed and duly executed Selling Shareholder Questionnaire in the form attached as Annex B to the Registration Rights
Agreement; and

 

(v)             a
fully completed and duly executed Accredited Investor Questionnaire, satisfactory to the Company, and Share Certificate Questionnaire
in the forms attached hereto as Exhibits C-1 and C-2, respectively.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1          Representations and Warranties of the Company. Except as disclosed in the SEC Reports, the Company hereby represents
and warrants the following as of the date hereof and the Closing Date (except for the representations and warranties that speak
as of a specific date, which shall be made as of such date), to each of the Purchasers and to the Placement Agents:

 

(a)      Subsidiaries. The Company has no direct or indirect subsidiaries other than those listed
in the SEC Reports. Except as disclosed in the SEC Reports, the Company owns, directly or indirectly, all of the share capital,
capital stock or comparable equity interests of each subsidiary free and clear of any and all Liens, and all the issued and outstanding
shares, capital stock or comparable equity interest of each subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase securities. 

 

(b)      Incorporation
and Good Standing of the Company. The Company has been duly incorporated and is validly existing as a public limited
company under the laws of Ireland and is in good standing (or such equivalent concept to the extent it exists in Ireland) and
has the corporate power and authority to own, lease and operate its properties and to conduct its business as currently conducted
and to enter into and perform its obligations under this Agreement. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction (or such equivalent concept to the extent it exists under
the law of such jurisdiction) in which such qualification is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to so qualify or to be in good standing would not result in a Material Adverse
Change.

 

(c)      Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder
and thereunder. The Company’s execution and delivery of each of the Transaction Documents to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of
the Shares) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions
of the Constitution, charter or by-laws of the Company or any subsidiary, and no further corporate action is required by the Company,
its Board of Directors or its shareholders in connection therewith other than in connection with the Required Approvals. Each
of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly executed by the Company and
is, or when delivered in accordance with the terms hereof, will constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy,
examinership, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or by other equitable principles of general application, (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. 

 

    7

     

    

 

(d)      Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. Neither the Company nor any of its subsidiaries
is in violation of its Constitution, charter or by-laws, partnership agreement or operating agreement or similar organizational
documents, as applicable, or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”)
under any indenture, loan, credit agreement, note, lease, license agreement, contract, franchise or other instrument (including,
without limitation, any pledge agreement, security agreement, mortgage or other instrument or agreement evidencing, guaranteeing,
securing or relating to indebtedness) to which the Company or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any of their respective properties or assets are subject (each, an “Existing Instrument”),
except for such Defaults as would not be expected, individually or in the aggregate, to result in a Material Adverse Change. The
Company’s execution, delivery and performance of the Transaction Documents, consummation of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Shares) (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the provisions of the Constitution, charter or by-laws, partnership
agreement or operating agreement or similar organizational documents, as applicable, of the Company (ii) will not conflict
with or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under, or result in the creation
or imposition of any Lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant
to, or require the consent of any other party to, any Existing Instrument and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to the Company. As used herein, a “Debt Repayment
Triggering Event” means any event or condition which gives, or with the giving of notice or lapse of time would give,
the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right
to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.

 

(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 U.S. 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 (including the issuance
of the Shares), other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements
of the Registration Rights Agreement, (ii) filings required by applicable U.S. state securities laws, (iii) the filing of a Notice
of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) the filing of any requisite
notices and/or application(s) to the Principal Trading Market for the issuance and sale of the Shares and the listing of the Shares
for trading or quotation, as the case may be, thereon in the time and manner required thereby, (v) the filings required in accordance
with Section 4.4 of this Agreement, (vi) the filings with the Irish Companies Registration Office in relation to transactions
contemplated hereunder, including the issuance of the Shares and (vii) those that have been made or obtained prior to the date
of this Agreement (collectively, the “Required Approvals”). 

 

(f)       Issuance
of the Shares. The Shares have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction
Documents including the payment obligations thereunder, will be duly and validly issued, fully paid and nonassessable and free
and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable
Company and securities laws, will be free of any restriction upon the voting thereof pursuant to applicable U.S. federal and state
securities laws or the Constitution of the Company or any agreement or other instrument to which the Company is a party and shall
not be subject to preemptive or similar rights. Assuming the accuracy of the representations and warranties of the Purchasers
in this Agreement, the Shares will be issued in compliance with all applicable U.S. federal and state securities laws. 

 

(g)      Capitalization
and Other Share Capital Matters. The authorized, issued and outstanding share capital of the Company as of September 30, 2019
is as set forth in the SEC Reports (other than for subsequent issuances, if any, pursuant to employee benefit plans described
in the SEC Reports or upon the exercise of outstanding options or warrants, in each case described in the SEC Reports).
The Ordinary Shares conform in all material respects to the description thereof contained in the SEC Reports and such description
conforms in all material respects to the rights set forth in the Constitution. All of the outstanding share capital of the Company
has been duly authorized and validly issued, are fully paid and not subject to any calls for additional payments (nonassessable)
and has been issued in compliance with all U.S. federal and state securities laws. None of the outstanding shares of the Company
were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal
or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any share capital
of the Company or any of its subsidiaries other than those described in the SEC Reports. The descriptions of the Company’s
stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth
in the SEC Reports, accurately and fairly presents the information required to be shown with respect to such plans, arrangements,
options and rights.

 

    8

     

    

 

(h)      SEC Reports. The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it under 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 where the failure to file on a timely basis
would not have or reasonably be expected to result in a Material Adverse Effect (including, for this purpose only, any failure
to qualify to register the Shares for resale on Form S-3 or which would prevent any Purchaser from using Rule 144 to resell
any Shares). As of their respective filing dates, or to the extent corrected by a subsequent restatement, the SEC Reports complied
in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in 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. Each of the Material Contracts to which the Company or any subsidiary is a party or to which the property or
assets of the Company or any of its subsidiaries are subject has been filed as an exhibit to the SEC Reports.

 

(i)       Financial
Statements. The financial statements of the Company included in the SEC Reports present fairly, in all material respects,
the consolidated financial position of the Company and its subsidiaries as of the dates indicated and the results of their operations,
shareholders’ equity and cash flows for the periods specified. Such financial statements and supporting schedules have been
prepared in conformity with generally accepted accounting principles as applied in the United States applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the related notes thereto. To the Company’s Knowledge,
no person who has been suspended or barred from being associated with a registered public accounting firm, or who has failed to
comply with any sanction pursuant to Rule 5300 promulgated by the PCAOB, has participated in or otherwise aided the preparation
of, or audited, the financial statements, supporting schedules or other financial data filed with the Commission as a part of
the SEC Reports. 

 

(j)       Independent
Accountants. Deloitte & Touche LLP, who have certified certain financial statements of the Company and delivered their
report with respect to the audited financial statements included in the SEC Reports, are independent public accountants with respect
to the Company within the meaning of the Securities Act and the applicable published rules and regulations thereunder.

 

(k)      No
Material Adverse Change. Since the date of the last 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 material
adverse change in (A) the condition, financial or otherwise, or in the earnings, business, properties, operations,
operating results, assets, liabilities or prospects, whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, considered as one entity or (B) the ability of the Company to consummate the
transactions contemplated by this Agreement or perform its obligations hereunder (any such change being referred to herein as
a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity, have
not incurred any material liability or obligation, indirect, direct or contingent, including without limitation any losses or
interference with their business from fire, explosion, flood, earthquakes, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute or court or governmental action, order or decree, that are material,
individually or in the aggregate, to the Company and its subsidiaries, considered as one entity, and have not entered into
any transactions not in the ordinary course of business; and (iii) there has not been any material decrease in the share
capital, or any material increase in any short-term or long-term indebtedness of the Company or its subsidiaries and there
has been no dividend or distribution of any kind declared, paid or made by the Company or, except for dividends paid to the
Company or other subsidiaries, by any of the Company’s subsidiaries on any class of capital stock or share capital, as
applicable, or any repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock or share
capital, as applicable.

 

    9

     

    

 

(l)       No Material Actions or Proceedings. There is no action, suit, proceeding, inquiry or
investigation brought by or before any legal or governmental entity now pending or, to the Company’s Knowledge, threatened,
against or affecting the Company or any of its subsidiaries, which could be expected, individually or in the aggregate, to result
in a Material Adverse Change. No material labor dispute with the employees of the Company or any of its subsidiaries, or with the
employees of any principal supplier, manufacturer, customer or contractor of the Company, exists or, to the Company’s Knowledge,
is threatened or imminent.

 

(m)     Compliance.
Neither the Company nor any of its subsidiaries (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 of its subsidiaries
under), nor has the Company or any of its subsidiaries received written notice of a claim that it is in default under or that
it is in violation of, any Material Contract (whether or not such default or violation has been waived), (ii) is in violation
of any order of any court, arbitrator or governmental body having jurisdiction over the Company or its properties or assets, or
(iii) is in violation of, or in receipt of written notice that it is in violation of, any statute, rule or regulation of any governmental
authority applicable to the Company, except in each case as would not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect.

 

(n)      All
Necessary Permits, etc. The Company and each subsidiary possess such valid and current certificates, authorizations or permits
required by U.S. state, federal or non-U.S. regulatory agencies or bodies to conduct their respective businesses as currently
conducted (“Permits”), except where the failure to obtain such Permits would not, singly or in the aggregate,
result in a Material Adverse Change. Neither the Company nor any of its subsidiaries is in violation of, or in default under,
any of the Permits or has received any notice of proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit.

 

(o)      Title to Properties. The Company and its subsidiaries has good and marketable title
to all of the real and personal property and other assets reflected as owned in the financial statements referred to in Section
3.1(i) above, in each case free and clear of any security interests, mortgages, Liens, encumbrances, equities, adverse claims and
other defects. The real property, improvements, equipment and personal property held under lease by the Company or of its subsidiary
are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the
use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary.

 

    10

     

    

 

 

(p)              
Intellectual Property Rights. Except as otherwise disclosed in the SEC Reports, the
Company and its subsidiaries own, or have obtained valid and enforceable licenses for, the inventions, patent applications, patents,
trademarks, trade names, service names, copyrights, trade secrets and other intellectual property described in the SEC Reports
as being owned or licensed by them or which are necessary for the conduct of their respective businesses as currently conducted
or as currently proposed to be conducted (collectively, “Intellectual Property”) and the conduct of their respective
businesses does not and will not infringe, misappropriate or otherwise conflict in any material respect with any such rights of
others. The Intellectual Property of the Company has not been adjudged by a court of competent jurisdiction to be invalid or unenforceable,
in whole or in part, and the Company is unaware of any facts which would form a reasonable basis for any such adjudication. To
the Company's Knowledge: (i) there are no third parties who have rights to any Intellectual Property, except for customary reversionary
rights of third-party licensors with respect to Intellectual Property that is described in the SEC Reports as licensed to the Company
or one or more of its subsidiaries; and (ii) there is no infringement by third parties of any Intellectual Property. Except as
otherwise disclosed in the SEC Reports and any related claims, assertions or challenges, there is no pending or, to the Company’s
Knowledge, threatened action, suit, proceeding or claim by others: (A) challenging the Company’s rights in or to any
Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding
or claim; (B) challenging the validity, enforceability or scope of any Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such action, suit, proceeding or claim; or (C) asserting that the Company or
any of its subsidiaries infringes or otherwise violates, or would, upon the commercialization of any product or service described
in the SEC Reports as under development, infringe or violate, any patent, trademark, trade name, service name, copyright, trade
secret or other proprietary rights of others, and the Company is unaware of any facts which would form a reasonable basis for any
such action, suit, proceeding or claim. The Company and its subsidiaries have complied with the terms of each agreement pursuant
to which Intellectual Property has been licensed to the Company or any subsidiary, and all such agreements are in full force and
effect. To the Company’s Knowledge, there are no material defects in any of the patents or patent applications included in
the Intellectual Property. The Company and its subsidiaries have taken all reasonable steps to protect, maintain and safeguard
their Intellectual Property, including the execution of appropriate nondisclosure, confidentiality agreements and invention assignment
agreements and invention assignments with their employees, and no employee of the Company is in or has been in violation of any
term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement, or any restrictive covenant to or with a former employer where the basis of such violation
relates to such employee’s employment with the Company. The duty of candor and good faith as required by the United States
Patent and Trademark Office during the prosecution of the United States patents and patent applications included in the Intellectual
Property have been complied with; and in all non-U.S. offices having similar requirements, all such requirements have been complied
with. None of the Company owned Intellectual Property or technology (including information technology and outsourced arrangements)
employed by the Company or its subsidiaries has been obtained or is being used by the Company or its subsidiary in violation of
any contractual obligation binding on the Company or its subsidiaries or any of their respective officers, directors or employees
or otherwise in violation of the rights of any persons. The product candidates described in the SEC Reports as under development
by the Company or any subsidiary fall within the scope of the claims of one or more patents owned by, or exclusively licensed to,
the Company or any subsidiary. 

 

(q)               Insurance.
Each of the Company and its subsidiaries are insured by recognized, financially sound and reputable institutions with
policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for
their businesses including, but not limited to, policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, acts of vandalism and earthquakes and policies covering the Company
and its subsidiaries for product liability claims and clinical trial liability claims. The Company has no reason to believe
that it or any of its subsidiaries will not be able to (i)  renew its existing insurance coverage as and when such
policies expire or (ii)  obtain comparable coverage from similar institutions as may be necessary or appropriate to
conduct its business as now conducted and at a cost that could not be expected to result in a Material Adverse Change.
Neither the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it
has applied.

 

    11

     

    

 

(r)               
Transactions with Affiliates and Employees. Except as set forth in the SEC Reports,
none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company is
presently a party to any transaction with the Company or any subsidiary (other than for services as employees, officers and directors),
that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.

 

(s)               
Company’s Accounting System. The Company and each of its subsidiaries make and
keep accurate books and records and 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 authorization; (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
as applied in the United States and to maintain accountability for assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive data in
eXtensible Business Reporting Language included or incorporated by reference in the SEC Reports fairly presents the information
called for in all material respects and is prepared in accordance with the Commission's rules and guidelines applicable thereto.

 

(t)                
Sarbanes-Oxley. The Company is in compliance, in all material respects, with all applicable
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder.

 

(u)              
Certain Fees. No person or entity will have, as a result of the transactions contemplated
by this Agreement, any valid right, interest or claim against or upon the Company or a Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, other than the
Placement Agents with respect to the offer and sale of the Shares (which placement agent fees are being paid by the Company). 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 paragraph (u) that may be due in connection with the transactions contemplated by the Transaction
Documents. The Company shall indemnify, pay, and hold each Purchaser harmless against, any liability, loss or expense (including,
without limitation, attorneys’ fees and out-of-pocket expenses) arising in connection with any such right, interest or claim.

 

(v)              
Private Placement. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2 of this Agreement and the accuracy of the information disclosed in the Accredited Investor
Questionnaires provided by the Purchasers, no registration under the Securities Act is required for the offer and sale of the Shares
by the Company to the Purchasers under the Transaction Documents. The issuance and sale of the Shares hereunder does not contravene
the rules and regulations of the Trading Market.

 

(w)            
Company Not an “Investment Company.” The Company is not, and will not be,
immediately after receipt of payment for the Shares, required to register as an “investment company” under the Investment
Company Act of 1940, as amended (the “Investment Company Act”).

 

(x)               Registration
Rights. Other than each of the Purchasers or as set forth in the SEC Reports, no Person has any right to cause the
Company to effect the registration under the Securities Act of any securities of the Company other than those securities
which are currently registered on an effective registration statement on file with the Commission.

 

    12

     

    

 

(y)              
Stock Exchange Listing. The ADSs are registered pursuant to Section 12(b) or 12(g)
of the Exchange Act and are listed on the Principal Trading Market, and the Company has taken no action designed to, or likely
to have the effect of, terminating the registration of the ADSs under the Exchange Act or delisting the ADSs from the Principal
Trading Market, nor has the Company received any notification that the Commission or the Principal Trading Market is contemplating
terminating such registration or listing. To the Company’s Knowledge, it is in compliance with all applicable listing requirements
of the Principal Trading Market.

 

(z)               
Disclosure. The Company confirms that it has not provided, and to the Company’s
Knowledge, none of its officers or directors nor any other Person acting on its or their behalf has provided, and it has not authorized
the Placement Agents to provide, any Purchaser or its respective agents or counsel with any information that it believes constitutes
material, non-public information except insofar as the existence, provisions and terms of the Transaction Documents and the proposed
transactions hereunder may constitute such information, all of which will be disclosed by the Company in the Press Release as contemplated
by Section 4.4 hereof. The Company understands and confirms that the Purchasers will rely on the foregoing representations
in effecting transactions in securities of the Company. 

 

(aa)             
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2, none of the Company, its subsidiaries nor, to the Company’s Knowledge, any
of its Affiliates or any Person acting on its behalf has, directly or indirectly, at any time within the past six (6) months, made
any offers or sales of any Company security or solicited any offers to buy any security under circumstances that would (i) eliminate
the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and
sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to the Transaction Documents
to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or shareholder approval provisions,
including, without limitation, under the rules and regulations of any Trading Market on which any of the securities of the Company
are listed or designated.

 

(bb)            
Tax Law Compliance. The Company and its subsidiaries have filed all necessary U.S.
federal, state and non-U.S. income and franchise tax returns or have properly requested extensions thereof and have paid all taxes
required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any
of them except as may be being contested in good faith and by appropriate proceedings except to the extent that the failure to
file any such tax returns would not be expected to result in a Material Adverse Change. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in Section 3.1(i) above in respect of all U.S. federal,
state and non-U.S. income and franchise taxes for all periods as to which the tax liability of the Company or any of its subsidiaries
has not been finally determined. Neither the Company nor any of its subsidiaries has received a material confirmation (or material
tax ruling) concerning the tax treatment of a transaction to which the Company or any of its subsidiaries is party to from
any European tax authority.

 

(cc)              Compliance
with Environmental Laws. Except as could not be reasonably expected, individually or in the aggregate, to result in a
Material Adverse Effect; (i) neither the Company nor any of its subsidiaries is in violation of any U.S. federal, state,
local or non-U.S. statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to
the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively,
 “Environmental Laws”), (ii) the Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (iii) there
are no pending or, or the Company’s Knowledge, threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, Liens, notices of noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (iv) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.

 

    13

     

    

 

(dd)             
No General Solicitation. Neither the Company nor, to the Company’s Knowledge,
any person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general
advertising. 

 

(ee)             
Anti-Corruption and Anti-Bribery Laws. Neither the Company nor any of its subsidiaries
nor any director, officer, or employee of the Company or any of its subsidiaries, nor to the Company’s Knowledge, any agent,
Affiliate or other person acting on behalf of the Company or any of its subsidiaries has, in the course of its actions for, or
on behalf of, the Company or any of its subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (ii) made or taken any act in furtherance of an offer, promise, or authorization
of any direct or indirect unlawful payment or benefit to any non-U.S. or domestic government official or employee, including of
any government-owned or controlled entity or public international organization, or any political party, party official, or candidate
for political office; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977,
as amended (the “FCPA”), the UK Bribery Act 2010, or any other applicable anti-bribery or anti-corruption law;
or (iv) made, offered, authorized, requested, or taken an act in furtherance of any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment or benefit. The Company and its subsidiaries and, to the Company’s Knowledge,
the Company’s Affiliates have conducted their respective businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(ff)            
 Money Laundering Laws. The operations of the Company and its subsidiaries are
and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the USA
Patriot Act, the Bank Secrecy Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(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 or non-governmental authority involving the Company or its subsidiaries with respect
to the Money Laundering Laws is pending or, to the Company’s Knowledge, threatened.

 

(gg)            
OFAC. Neither the Company nor its subsidiaries nor any of their respective affiliates,
directors, officers, nor to the Company’s Knowledge, any agent or employee of the Company or its subsidiaries is subject
to any sanctions administered or enforced by the Office of Foreign Assets Control (“OFAC”) of the United States
Treasury Department, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s
Treasury or any other relevant sanctions authority; and the Company will not directly or indirectly use the proceeds of the offering
of the Shares contemplated hereby, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity for the purpose of financing the activities of any person that is the target of sanctions administered
or enforced by such authorities or in connection with any country or territory that is the target of country- or territory-wide
OFAC sanctions (currently, Iran, Syria, Cuba, North Korea, and the Crimea Region of Ukraine).

 

    14

     

    

 

(hh)           
Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship
between the Company (or any subsidiary) and an unconsolidated or other off balance sheet entity that is required to be disclosed
by the Company in SEC Reports and is not so disclosed and would have or reasonably be expected to result in a Material Adverse
Effect.

 

(ii)               
Acknowledgment Regarding Purchasers’ Purchase of Shares.  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 hereby and 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 Shares. 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. 

 

(jj)               
No Price Stabilization or Manipulation; Compliance with Regulation M. Neither the Company
nor any of its subsidiaries has taken, directly or indirectly, any action designed to or that might cause or result in stabilization
or manipulation of the price of the ADSs or of any “reference security” (as defined in Rule 100 of Regulation M under
the Exchange Act (“Regulation M”)) with respect to the ADSs, whether to facilitate the sale or resale of the
Shares or otherwise, and has taken no action which would directly or indirectly violate Regulation M. 

 

(kk)             
Passive Foreign Investment Company. The Company was not a “passive foreign investment
company” (a “PFIC”), as such term is defined in the Internal Revenue Code of 1986, as amended (the “Code”),
for the last completed fiscal year for which audited financial statements of the Company have been filed with the Commission. To
the Company’s Knowledge, based on the expected value of its assets, including any goodwill, and the expected nature and composition
of its income and assets, the Company will not be treated as a PFIC for the current taxable year. Neither
the Company nor any subsidiary of the Company is, and, after giving effect to the issuance and sale of the Shares and the application
of the proceeds thereof, neither of them will be, a “controlled foreign corporation” as defined by the Code.

 

(ll)               
Clinical Data and Regulatory Compliance. The preclinical tests and clinical
trials, and other studies (collectively, “studies”) that are described in, or the results of which are referred to
in, the SEC Reports were and, if still pending, are being conducted in all material respects in accordance with the protocols,
procedures and controls designed and approved for such studies and with standard medical and scientific research procedures; each
description of the results of such studies is accurate and complete in all material respects and fairly presents the data derived
from such studies, and the Company and its subsidiaries have no knowledge of any other studies the results of which are inconsistent
with, or otherwise call into question, the results described or referred to in the SEC Reports; the Company and its subsidiaries
have made all such filings and obtained all such approvals as may be required by the Food and Drug Administration of the U.S. Department
of Health and Human Services or any committee thereof or from any other U.S. or non-U.S. government or drug or medical device regulatory
agency, or health care facility Institutional Review Board (collectively, the “Regulatory Agencies”); neither
the Company nor any of its subsidiaries has received any notice of, or correspondence from, any Regulatory Agency requiring the
termination, suspension or modification of any clinical trials that are described or referred to in the SEC Reports; and the Company
and its subsidiaries have each operated and currently are in compliance in all material respects with all applicable rules, regulations
and policies of the Regulatory Agencies.

 

    15

     

    

 

(mm)           
No Additional Agreements. The Company does not have any agreement or understanding
with any Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction
Documents.

 

(nn)            
Use of Form S-3. The Company meets the registration and transaction requirements for
use of Form S-3 for the registration of the Shares for resale by the Purchasers.

 

(oo)            
No Disqualification Events. No “bad actor” disqualifying event described
in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is applicable to the Company
or, to the Company’s Knowledge, any Company Covered Person (as defined below), except for a Disqualification Event as to
which Rule 506(d)(2)(ii–iv) or (d)(3), is applicable. “Company Covered Person” means, with respect to
the Company as an “issuer” for purposes of Rule 506 promulgated under the Securities Act, any person listed in the
first paragraph of Rule 506(d)(1). Other than the Placement Agents, the Company is not aware of any Person (other than any Company
Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection
with the sale of the Shares pursuant to this Agreement. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has furnished to the Placement Agents a copy of any disclosures provided thereunder.

 

3.2           
Representations and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser, represents
and warrants as of the date hereof and as of the Closing Date to the Company and the Placement Agents as follows:

 

(a)              
Organization; Authority. Such Purchaser is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and
authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by such Purchaser and performance
by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if
such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, 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 as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.

 

(b)              
No Conflicts. The execution, delivery and performance by such Purchaser of this Agreement
and the Registration Rights Agreement and the consummation by such Purchaser of the transactions contemplated hereby and thereby
will not (i) result in a violation of the organizational documents of such Purchaser, (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree (including U.S. federal and state securities laws)
applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations
which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such
Purchaser to perform its obligations hereunder.

 

(c)                Investment
Intent. Such Purchaser understands that the Shares are “restricted securities” and have not been registered
under the Securities Act or any applicable U.S. state securities law and is acquiring the Shares as principal for its own
account and not with a view to, or for distributing or reselling such Shares or any part thereof in violation of the
Securities Act or any applicable U.S. state or other securities laws, provided, however, that by making the
representations herein, such Purchaser does not agree to hold any of the Shares for any minimum period of time and reserves
the right, subject to the provisions of this Agreement and the Registration Rights Agreement, at all times to sell or
otherwise dispose of all or any part of such Shares pursuant to an effective registration statement under the Securities Act
or under an exemption from such registration and in compliance with applicable U.S. federal, state and other securities laws.
Such Purchaser is acquiring the Shares hereunder in the ordinary course of its business. Such Purchaser does not presently
have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution
of any of the Shares (or any securities which are derivatives thereof) to or through any person or entity; such Purchaser is
not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it
to be so registered as a broker-dealer.

 

    16

     

    

 

(d)              
Purchaser Status. At the time such Purchaser was offered the Shares, it was, and at
the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act. 

 

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

 

(f)               
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 Shares, 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 Shares and, at the present time, is able to afford a complete loss of
such investment.

 

(g)              
Access to Information. Such Purchaser acknowledges that it has had the opportunity
to review the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the
merits and risks of investing in the Shares; (ii) access to information about the Company and the subsidiaries and their respective
financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither
such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall
modify, amend or affect such Purchaser's right to rely on the truth, accuracy and completeness of the SEC Reports and the Company's
representations and warranties contained in the Transaction Documents. Such Purchaser has sought such accounting, legal and tax
advice as it has considered necessary to make an informed decision with respect to its acquisition of the Shares.

 

(h)
               Certain
Trading Activities. Other than with respect to the transactions contemplated herein, since the time that such Purchaser
was first contacted by the Company, the Placement Agents or any other Person regarding the transactions contemplated hereby,
neither the Purchaser nor any Affiliate of such Purchaser which (x) had knowledge of the transactions contemplated hereby,
(y) has or shares discretion relating to such Purchaser’s investments or trading or information concerning such
Purchaser’s investments, including in respect of the Shares, and (z) is subject to such Purchaser’s review or
input concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser or
Trading Affiliate, effected or agreed to effect any purchases or sales of the securities of the Company (including, without
limitation, any Short Sales involving the Company’s securities). Notwithstanding the foregoing, in the case of a
Purchaser and/or Trading Affiliate that is, individually or collectively, a multi-managed investment bank or vehicle whereby
separate portfolio managers manage separate portions of such Purchaser's or Trading Affiliate’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 or Trading Affiliate’s assets, the representation set forth above shall apply only with
respect to the portion of assets managed by the portfolio manager that have knowledge about the financing transaction
contemplated 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 actions, 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.

 

    17

     

    

 

(i)                
Brokers and Finders. Other than the Placement Agents, no Person will have, as a result
of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or any Purchaser
for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf
of the Purchaser. No Purchaser shall have any obligation with respect to any fees, or with respect to any claims made by or on
behalf of other Persons for fees, in each case of the type contemplated by this Section 3.2(i) that may be due in connection with
the transactions contemplated by this Agreement or the Transaction Documents.

 

(j)                
Independent Investment Decision. Such Purchaser has independently evaluated the merits
of its decision to purchase Shares pursuant to the Transaction Documents, and such Purchaser confirms that it has not relied on
the advice of any other Purchaser’s business and/or legal counsel in making such decision. Such Purchaser understands that
nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the
purchase of the Shares constitutes legal, tax or investment advice. Such Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Shares. Such
Purchaser understands that the Placement Agents has acted solely as the agent of the Company in this placement of the Shares and
such Purchaser has not relied on the business or legal advice of the Placement Agents or any of its agents, counsel or Affiliates
in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties
to such Purchaser in connection with the transactions contemplated by the Transaction Documents.

 

(k)              
Reliance on Exemptions. Such Purchaser understands that the Shares being offered and
sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and such Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgements and understandings of such Purchaser set forth herein in order to determine the availability
of such exemptions and the eligibility of such Purchaser to acquire the Shares.

 

(l)                
No Governmental Review. Such Purchaser understands that no United States federal or
state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares
or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of
the offering of the Shares.

 

(m)             
Regulation M.Such Purchaser is aware that the anti-manipulation rules of Regulation
M under the Exchange Act may apply to sales of ADSs and other activities with respect to the ADSs by the Purchasers.

 

(n)               Beneficial
Ownership.The purchase by such Purchaser of the Shares issuable to it at the Closing will not result in such
Purchaser (individually or together with any other Person with whom such Purchaser has identified, or will have identified,
itself as part of a “group” in a public filing made with the Commission involving the Company’s securities)
acquiring, or obtaining the right to acquire, in excess of 19.999% of the outstanding Ordinary Shares or the voting power of
the Company on a post transaction basis that assumes that such Closing shall have occurred. Such Purchaser does not presently
intend to, alone or together with others, make a public filing with the Commission to disclose that it has (or that it
together with such other Persons have) acquired, or obtained the right to acquire, as a result of such Closing (when added to
any other securities of the Company that it or they then own or have the right to acquire), in excess of 19.999% of the
outstanding Ordinary Shares or the voting power of the Company on a post transaction basis that assumes that each Closing
shall have occurred.

 

    18

     

    

 

(o)              
Residency. Such Purchaser’s residence (if an individual) or offices in which
its investment decision with respect to the Shares was made (if an entity) are located at the address immediately below such Purchaser’s
name on its signature page hereto.

 

(p)              
Irish Takeover Law. Such Purchaser is not, for the purposes of the Takeover Rules and
the Substantial Acquisition Rules, acting in concert with any other Purchaser in connection with the acquisition of the Shares
and such acquisition does not give rise to any notification obligations or any breach of the Takeover Rules and/or the Substantial
Acquisition Rules.

 

The Company and each
of the Purchasers acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with
respect to the transactions contemplated hereby other than those specifically set forth in this Article III and the Transaction
Documents.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1           
Transfer Restrictions.

 

(a)               
Compliance with Laws. Notwithstanding any other provision of this Article IV,
each Purchaser covenants that the Shares may be disposed of only pursuant to an effective registration statement under, and in
compliance with the requirements of, 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 compliance with any applicable U.S. state and federal securities
laws. In connection with any transfer of the Shares other than (i) pursuant to an effective registration statement, (ii) to the
Company, (iii) pursuant to Rule 144 (provided that the Purchaser provides the Company with reasonable assurances (in the
form of seller and, if applicable, broker representation letters) that the securities may be sold pursuant to such rule) or (iv)
in connection with a bona fide 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 Shares 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 of a Purchaser under this
Agreement and the Registration Rights Agreement with respect to such transferred Shares. 

 

(b)                Legends.
The ADSs shall be subject to, and Certificates evidencing the Shares shall bear, any legend as required by the “blue sky”
laws of any state and a restrictive legend in substantially the following form, until such time as they are not required under
Section 4.1(c):

 

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE TO WHICH THIS CONFIRMATION RELATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE COMPANY [AND THE DEPOSITARY] SHALL BE ENTITLED TO REQUIRE AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND THE DEPOSITARY THAT SUCH REGISTRATION IS NOT REQUIRED. 

 

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The Company acknowledges
and agrees that a Purchaser may from time to time pledge, and/or grant a security interest in, some or all of the legended Shares
in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan.
Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection
with a subsequent transfer or foreclosure following default by the Purchaser transferee of the pledge. No notice shall be required
of such pledge, but Purchaser’s transferee shall promptly notify the Company of any such subsequent transfer or foreclosure.
Each Purchaser acknowledges that the Company shall not be responsible for any pledges relating to, or the grant of any security
interest in, any of the Shares or for any agreement, understanding or arrangement between any Purchaser and its pledgee or secured
party. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee
or secured party of Shares may reasonably request in connection with a pledge or transfer of the Shares, including the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the
Securities Act to appropriately amend the list of selling shareholders thereunder. Each Purchaser acknowledges and agrees that,
except as otherwise provided in Section 4.1(c), any Shares subject to a pledge or security interest as contemplated by this
Section 4.1(b) shall continue to bear the legend set forth in this Section 4.1(b) and be subject to the restrictions
on transfer set forth in Section 4.1(a).

 

(c)               Removal
of Legends. Where ADSs have been issued, whether at the Closing or upon the exchange of Ordinary Shares issued pursuant to
conversion of Series A Preferred Shares, the legend set forth in Section 4.1(b) above shall be removed and the Company
shall cause the Depositary to issue such ADSs without legends to the holders thereof by electronic delivery at the applicable
balance account at the DTC, if (i) such ADSs are registered for resale under the Securities Act (provided that, if
the Purchaser is selling pursuant to the effective registration statement registering the ADSs for
resale, the Purchaser agrees to only sell such ADSs during such time that such
registration statement is effective and not withdrawn or suspended, and only as permitted by such registration statement),
(ii) such ADSs are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company), or (iii) such
ADSs 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 securities and without volume or manner-of-sale restrictions. Upon the Effective
Date, the Company shall, or shall cause Company U.S. Counsel to, issue to the Depositary a legal letter confirming that the registration
statement is effective and shall use its reasonable best efforts to cause the Depositary to issue ADSs without legends upon request
of any Purchaser following a sale pursuant to the effective shelf registration statement. Following Rule 144 becoming available
for the resale of ADSs, without the requirement for the Company to be in compliance with the current public information required
under Rule 144 as to such securities and without volume or manner-of-sale restrictions, the Company shall cause Company U.S. Counsel
to issue to the Depositary a legal letter regarding the legend removal in a form satisfactory to the Depositary. Any fees (with
respect to the Transfer Agent, Depositary, Company U.S. Counsel or otherwise) associated with the issuance of such opinion or
the removal of such legend shall be borne by the Company. The Company may not make any notation on its records or give instructions
to the Transfer Agent or the Depositary that enlarge the restrictions on transfer set forth in this Section 4.1(c).

 

    20

     

    

 

(d)       Irrevocable
Transfer Agent Instructions.  The Company shall issue the Irrevocable Transfer Agent Instructions to its Transfer
Agent, and any subsequent Transfer Agent, in the form of Exhibit D attached hereto. The Company represents and
warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 4.1(d)
(or instructions that are consistent therewith) will be given by the Company to its Transfer Agent in connection with this
Agreement, and that the Shares shall otherwise be freely transferable on the books and records of the Company as and to the
extent provided in this Agreement and the other Transaction Documents and applicable law. The Company acknowledges that a
breach by it of its obligations under this Section 4.1(d) will cause irreparable harm to a Purchaser. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations under this Section 4.1(d) may be
inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section
4.1(d), that a Purchaser shall be entitled, in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required.

 

(e)       Acknowledgement.
Each Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise
transfer the Shares or any interest therein without complying with the requirements of the Securities Act. While the Registration
Statement remains effective, each Purchaser hereunder may sell the ADSs in accordance with the plan of distribution contained in
the Registration Statement and if it does so it will comply therewith and with the related prospectus delivery requirements unless
an exemption therefrom is available. Each Purchaser, severally and not jointly with the other Purchasers, agrees that if it is
notified by the Company in writing at any time that the Registration Statement registering the resale of the ADSs is not effective
or that the prospectus included in such Registration Statement is no longer compliant with the requirements of Section 10 of the
Securities Act, the Purchaser will refrain from selling such Shares until such time as the Purchaser is notified by the Company
that such Registration Statement is effective or such prospectus is compliant with Section 10 of the Securities Act, unless such
Purchaser is able to, and does, sell such Shares pursuant to an available exemption from the registration requirements of Section
5 of the Securities Act. Both the Company and its Transfer Agent, and their respective directors, officers, employees and agents,
may rely on this Section 4.1(e) and each Purchaser hereunder will indemnify and hold harmless each of such persons from
any breaches or violations of this Section 4.1(e).

 

4.2  
         Furnishing of Information. In order to enable the Purchasers to sell the Shares under Rule 144, for a period
of twelve (12) months from the Closing, the Company shall use its commercially reasonable efforts 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. During such twelve (12) month period, if the Company is not required to file reports pursuant
to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such
information as is required for the Purchasers to sell the Shares under Rule 144.

 

4.3           
Integration. The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate
of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares to the Purchasers, or that will be integrated with the offer
or sale of the Shares 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.

 

    21

     

    

 

4.4            Securities
Laws Disclosure; Publicity. By 9:00 A.M., New York City time, on the Trading Day immediately following the date hereof,
the Company shall issue a press release (the “Press Release”) reasonably acceptable to the Placement
Agents disclosing all material terms of the transactions contemplated hereby. On or before 9:00 A.M., New York City time, on
the second (2nd) Trading Day immediately following the execution of this Agreement, the Company will file a
Current Report on Form 8-K with the Commission describing the terms of the Transaction Documents (and including as exhibits
to such Current Report on Form 8-K the material Transaction Documents (including, without limitation, this Agreement and the
Registration Rights Agreement)). Notwithstanding the foregoing, the Company shall not publicly disclose the name of any
Purchaser or an Affiliate of any Purchaser, or include the name of any Purchaser or an Affiliate of any Purchaser in any
press release or filing with the Commission (other than the Registration Statement) or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as required by U.S. federal securities law in
connection with (A) any registration statement contemplated by the Registration Rights Agreement or (B) the filing of final
Transaction Documents (including signature pages thereto) with the Commission and (ii) to the extent such disclosure is
required by law, request of the Commission’s staff or Trading Market regulations, in which case the Company shall
provide the Purchasers with prior written notice of such disclosure permitted under this subclause (ii). From and after the
issuance of the Press Release, no Purchaser shall be in possession of any material, non-public information received from the
Company, any subsidiary or any of their respective officers, directors, employees or agents, that is not disclosed in the
Press Release. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are required to be publicly disclosed by the Company as described in this Section
4.4, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction).

 

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, in either
case solely by virtue of receiving Shares under the Transaction Documents; provided, however, that no such Purchaser owns any equity
in the Company prior to its purchase of the Shares hereunder.

 

4.6           
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, including this Agreement, or as expressly required by any applicable securities law, 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 regarding the Company that the Company believes constitutes material non-public information without the express
written consent of such Purchaser, unless prior thereto such Purchaser shall have executed a written agreement 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.

 

4.7           
Use of Proceeds. The Company shall use the net proceeds from the sale of the Shares hereunder for working capital
and general corporate purposes.

 

4.8           
Form D; Blue Sky. The Company agrees to timely file a Form D with respect to the Shares as required under
Regulation D and to provide a copy thereof, promptly upon the written request of any Purchaser. The Company, on or before
the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption
for or to qualify the Shares for sale to the Purchasers under applicable securities or “Blue Sky” laws of the states
of the United States (or to obtain an exemption from such qualification) and shall provide evidence of such actions promptly upon
the written request of any Purchaser.

 

4.9           
Delivery of Shares After Closing. The Company shall deliver, or cause to be delivered, the respective Series A Preferred
shares purchased by each Purchaser to such Purchaser within three (3) Trading Days of the Closing Date. The Company shall deliver
to the Transfer Agent a written delivery order instructing the Transfer Agent to deliver the respective Ordinary Shares purchased
by each Purchaser to the Depositary on the Closing Date. The Company shall also deliver Depositary a written delivery order
instructing the Depositary to issue the respective ADSs purchased by each Purchaser on the Closing Date. The Company will use
its reasonable best efforts to ensure that the Transfer Agent will deliver the Ordinary Shares and the Depositary will deliver
the ADSs as soon as practicable following receipt of the respective delivery orders from the Company and confirmation from the
Company that the conditions of delivery of the Ordinary Shares and ADSs, as applicable, have been satisfied.

 

    22

     

    

 

4.10         
Short Sales and Confidentiality After The Date Hereof. Such Purchaser shall
not, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in any transactions in the Company’s
securities (including, without limitation, any Short Sales involving the Company’s securities) during the period from the
date hereof until the earlier of such time as (i) the transactions contemplated by this Agreement are first publicly announced
as required by and described in Section 4.4 or (ii) this Agreement is terminated in full pursuant to Section 6.18.
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 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. Notwithstanding the foregoing,
no Purchaser makes any representation, warranty or covenant hereby that it will not engage in Short Sales in the securities of
the Company after the time that the transactions contemplated by this Agreement are first publicly announced as described in Section
4.4; provided, however, each Purchaser agrees, severally and not jointly with any Purchasers, that they will not enter
into any Net Short Sales (as hereinafter defined) from the period commencing on the Closing Date and ending on the earliest of
(x) the Effective Date of the initial Registration Statement, (y) the twenty-four (24) month anniversary of the Closing Date or
(z) the date that such Purchaser no longer holds any Shares. For purposes of this Section 4.12, a “Net Short Sale”
by any Purchaser shall mean a sale of ADSs by such Purchaser that is marked as a short sale and that is made at a time when there
is no equivalent offsetting long position in ADSs held by such Purchaser. Notwithstanding the foregoing, in the event that a Purchaser
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 apply only with respect to the portion of assets managed by
the portfolio manager that have knowledge about the financing transaction contemplated by this Agreement. Moreover, notwithstanding
the foregoing, in the event that a Purchaser has sold Shares pursuant to Rule 144 prior to the Effective Date of the initial Registration
Statement and the Company has failed to deliver certificates without legends prior to the settlement date for such sale (assuming
that such certificates meet the requirements set forth in Section 4.1(c) for the removal of legends), the provisions of
this Section 4.12 shall not prohibit the Purchaser from entering into Net Short Sales for the purpose of delivering ADSs
in settlement of such sale. Each Purchaser understands and acknowledges, severally and not
jointly with any other Purchaser, that the Commission currently takes the position that covering a short position established prior
to effectiveness of a resale registration statement with shares included in such registration statement would be a violation of
Section 5 of the Securities Act, as set forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available Telephone
Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of Corporation Finance.

 

4.11          Subsequent
Equity Sales. For thirty (30) days from the date hereof, neither the Company nor any subsidiary shall issue ADSs or ADS
Equivalents. Notwithstanding the foregoing, the Company shall not be prohibited from (a) granting or issuing Ordinary Shares
or ADSs pursuant to any current or future equity incentive plan of the Company, (b) issuing and/or selling Ordinary Shares or
ADSs upon conversion, exercise or exchange of any outstanding Ordinary Shares or Related Securities of the Company, (c)
issuing and selling up to $5 million in ADSs pursuant to the Company At-the-Market program; and (d) publicly announcing the
intention to do any of the foregoing. For purposes of the foregoing, “Related Securities” shall mean any options
or warrants or other rights to acquire Ordinary Shares or ADSs or any securities exchangeable or exercisable for or
convertible into Ordinary Shares or ADSs, or to acquire other securities or rights ultimately exchangeable or exercisable
for, or convertible into, Ordinary Shares or ADSs.

 

    23

     

    

 

4.12          
Beneficial Ownership Limitation. Notwithstanding anything to the contrary set forth in the Series A Preferred Share
Terms, the Company shall not effect any redesignation of the Series A Preferred Shares, and the Purchaser shall not have the right
to redesignate any portion of its Series A Preferred Shares, to the extent that, after giving effect to an attempted redesignation
set forth on an applicable Notice of Conversion (as defined in the Series A Preferred Share Terms) with respect to the Series A
Preferred Shares, such Purchaser (together with such Purchaser’s Affiliates, and any other Person whose beneficial ownership
of Ordinary Shares would be aggregated with the Purchaser’s for purposes of Section 13(d) or Section 16 of the Exchange Act
and the applicable rules and regulations of the Commission, including any “group” of which the Purchaser is a member)
would beneficially own a number of Ordinary Shares in excess of the Beneficial Ownership Limitation (as defined below). For purposes
of the foregoing sentence, the aggregate number of Ordinary Shares beneficially owned by such Purchaser and its Affiliates shall
include the number of Ordinary Shares created by the consolidation and redesignation of the Series A Preferred Shares subject to
the Notice of Conversion with respect to which the determination of such sentence is being made, but shall exclude the number of
Ordinary Shares which are creatable or issuable upon (i) redesignation of the remaining, unconverted Series A Preferred Shares
beneficially owned by such Holder or any of its Affiliates, and (ii) exercise or conversion of the unexercised or unconverted portion
of any other securities of the Company beneficially owned by such Purchaser or any of its Affiliates (including, without limitation,
any convertible notes, convertible stock or warrants) that are subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding sentence, for purposes of this Section 4.14, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable rules and regulations of the Commission.
In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable
rules and regulations of the Commission. For purposes of this Section 4.14, in determining the number of outstanding Ordinary Shares,
a Purchaser may rely on the number of outstanding Ordinary Shares as reflected in (i) the Company’s most recent Form 10-K,
Form 10-Q, Current Report on Form 8-K or other public filing with the Commission, as the case may be, (ii) a more recent public
announcement by the Company or (iii) a more recent notice by the Company setting forth the number of Ordinary Shares then outstanding.
For any reason at any time, upon the written or oral request of a Purchaser (which may be by email), the Company shall, within
two (2) Business Days of such request, confirm orally and in writing to such Purchaser (which may be by email) the number of Ordinary
Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to any
actual conversion or exercise of securities of the Company, including Series A Preferred Shares, by such Purchaser or its Affiliates
since the date as of which such number of outstanding Ordinary Shares was last publicly reported or confirmed to the Holder. The
 “Beneficial Ownership Limitation” shall initially be 9.99% of the number of the Ordinary Shares outstanding immediately
after giving effect to the creation or issuance of Ordinary Shares pursuant to such Notice of Conversion (to the extent permitted
pursuant to this Section 4.14). The Company shall be entitled to rely on representations made to it by the Purchaser in any Notice
of Conversion regarding its Beneficial Ownership Limitation. By written notice to the Company, a Purchaser may from time to time
increase or decrease the Beneficial Ownership Limitation to any other percentage not in excess of 19.9% specified in such notice;
provided that (i) any such increase will not be effective until the sixty-first (61st) day after such notice is delivered to the
Company. The provisions of this Section 4.14 shall be construed, corrected and implemented in a manner so as to effectuate the
intended Beneficial Ownership Limitation herein contained and the Ordinary Shares underlying the Shares in excess of the Beneficial
Ownership Limitation shall not be deemed to be beneficially owned by the Purchaser for any purpose including for purposes of Section
13(d) or Rule 16a-1(a)(1) of the Exchange Act.

 

4.13           Subsequent
Acquisitions of Securities. Such Purchaser shall not, acting either individually or together with its concert parties, or
by acting in concert together with such other Purchasers, acquire securities or a right to acquire securities in the Company
which would result in such Purchaser holding securities conferring 30% of the voting power of the Company without the prior
written consent of the Company.

 

    24

     

    

 

ARTICLE V. 

CONDITIONS PRECEDENT TO
CLOSING

 

5.1           
Conditions Precedent to the Obligations of the Purchasers to Purchase Shares. The obligation of each Purchaser to
acquire Shares at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the Closing
Date, of each of the following conditions, any of which may be waived by such Purchaser (as to itself only):

 

(a)              
Representations and Warranties. The representations and warranties of the Company contained
herein shall be true and correct in all material respects (except for those representations and warranties which are qualified
as to materiality, in which case such representations and warranties shall be true and correct in all respects) as of the date
when made and as of the Closing Date, as though made on and as of such date, except for such representations and warranties that
speak as of a specific date. 

 

(b)              
Performance. The Company shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing.

 

(c)              
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

(d)              
Consents. The Company shall have obtained in a timely fashion any and all consents,
permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Shares (including all
Required Approvals), all of which shall be and remain so long as necessary in full force and effect.

 

(e)              
Adverse Changes. Since the date of execution of this Agreement, no event or series
of events shall have occurred that has had or would reasonably be expected to have a Material Adverse Effect.

 

(f)               
No Suspensions of Trading in ADSs. The ADSs shall not have been suspended, as of the
Closing Date, by the Commission or the Principal Trading Market from trading on the Principal Trading Market nor shall suspension
by the Commission or the Principal Trading Market have been threatened, as of the Closing Date, either (A) in writing by the Commission
or the Principal Trading Market or (B) by falling below the minimum listing maintenance requirements of the Principal Trading Market.

 

(g)              
Company Deliverables. The Company shall have delivered the Company Deliverables in
accordance with Section 2.2(a). 

 

(h)              
Compliance Certificate. The Company shall have delivered to each Purchaser a certificate,
dated as of the Closing Date and signed by its Chief Executive Officer, its Chief Financial Officer or its Secretary, dated as
of the Closing Date, certifying to the fulfillment of the conditions specified in Sections 5.1(a) and (b) in the
form attached hereto as Exhibit F.

 

(i)                
Termination. This Agreement shall not have been terminated as to such Purchaser in
accordance with Section 6.18 herein.

 

    25

     

    

 

5.2           
Conditions Precedent to the Obligations of the Company to issue Shares. The Company's obligation to issue the Shares
at the Closing to the Purchasers is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date
of the following conditions, any of which may be waived by the Company:

 

(a)              
Representations and Warranties. The representations and warranties made by the Purchasers
in Section 3.2 hereof shall be true and correct in all material respects (except for those representations and warranties
which are qualified as to materiality, in which case such representations and warranties shall be true and correct in all respects)
as of the date when made, and as of the Closing Date as though made on and as of such date, except for representations and warranties
that speak as of a specific date.

 

(b)              
Performance. Such Purchaser shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied
with by such Purchaser at or prior to the Closing Date.

 

(c)              
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

(d)              
Purchasers Deliverables. Such Purchaser shall have delivered its Purchaser Deliverables
in accordance with Section 2.2(b).

 

(e)              
Termination.This Agreement shall not have been terminated as to such Purchaser
in accordance with Section 6.18 herein.

 

ARTICLE VI.

MISCELLANEOUS

 

6.1           
Fees and Expenses. The Company and the Purchasers shall each pay the fees and expenses of their respective advisers,
counsel, accountants and other experts, if any, and all other expenses incurred by such party in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement, except that the Company shall reimburse Ropes & Gray LLP
and Cooley LLP for their reasonable fees and expenses incurred in connection with their representation of Vivo Capital related
to this Agreement and the transactions contemplated hereby in an aggregate amount not to exceed $100,000. The Company shall pay
all Transfer Agent and Depositary fees, stamp taxes and other taxes and duties levied in connection with the issuance and sale
of the ADSs to the Purchasers.

 

6.2           
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions
and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules. At or after the Closing, and without further consideration, the Company and the Purchasers will execute
and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention
of the parties under the Transaction Documents.

 

6.3            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 electronic mail at the e-mail address specified in this Section 6.3 prior to 5:00 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 electronic mail at the e-mail address or facsimile number specified in this Section 6.3 on a day that is not a
Trading Day or later than 5:00 P.M., New York City time, on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual
receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as
follows:

 

    26

     

    

 

	If to the Company:	Avadel Pharmaceuticals plc
	 	10 Earlsfort Terrace
	 	Dublin 2, Ireland
	 	Telephone No.: (+353) 1 9520 1026
	 	Attention: Jerad Seuer, Esq.
	 	E-mail: jseuer@avadel.com
	 	 
	With a copy to:	Goodwin Procter LLP
	 	100 Northern Avenue
	 	Boston, MA 02210
	 	Telephone No.: (617) 570-1000
	 	Attention: Robert E. Puopolo
	 	E-mail: RPuopolo@goodwinlaw.com
		 
	If to a Purchaser:	To the address set forth under such Purchaser’s name on the signature page hereof;

 

or such other address as
may be designated in writing hereafter, in the same manner, by such Person.

 

6.4           
Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers of at least a
majority in interest of the Shares still held by Purchasers or, in the case of a waiver, by the party against whom enforcement
of any such waiver 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 either party to exercise any right hereunder in any manner
impair the exercise of any such right. No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver
or modification of any provision of any Transaction Document unless the same consideration is also offered to all Purchasers who
then hold Shares.

 

6.5           
Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall
not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This
Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

6.6           
Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the parties
and their successors and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the
Company without the prior written consent of each Purchaser. Any Purchaser may assign its rights hereunder in whole or in part
to any Person to whom such Purchaser assigns or transfers any Shares in compliance with the Transaction Documents and applicable
law, provided such transferee shall agree in writing to be bound, with respect to the transferred Shares, by the terms and conditions
of this Agreement that apply to the “Purchasers”.

 

6.7            No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except the Placement Agents are an intended third party beneficiary of Article III and Article IV hereof.

 

    27

     

    

 

6.8           
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to
the principles of conflicts of law thereof. Each party agrees that all 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, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served
in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

6.9           
Survival. Subject to applicable statute of limitations, the representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery of the Shares.

 

6.10         
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, 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 signature page were an original thereof.

 

6.11         
Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby
and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this Agreement.

 

6.12         
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any
similar provisions of) the 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.

 

6.13          Replacement
of Shares. If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company
may issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company and the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost
certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company and the Transfer Agent for any
losses in connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the
Transfer Agent. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Shares. If a replacement certificate or instrument
evidencing any Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a replacement.

 

    28

     

    

 

6.14         
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
described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other
than in connection with any action for a temporary restraining order) the defense that a remedy at law would be adequate.

 

6.15         
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.

 

6.16         
Adjustments in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable
in Ordinary Shares or change in the number of Ordinary Shares represented by one ADS, combination or other similar recapitalization
or event occurring after the date hereof and prior to the Closing, each reference in any Transaction Document to a number of shares
or ADSs or a price per share or ADS shall be deemed to be amended to appropriately account for such event.

 

6.17          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 of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to
purchase Shares pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser
and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets,
properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any
subsidiary which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and
no Purchaser and any of its agents or employees shall have any liability to any other Purchaser (or any other Person)
relating to or arising from any such information, materials, statement or opinions. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant 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 acknowledges that no other Purchaser has acted as agent for such Purchaser in
connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection
with monitoring its investment in the Shares or enforcing its rights under 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, Purchasers and their
respective counsels have chosen to communicate with the Company through Cooley LLP, counsel to the Placement Agents. Each
Purchaser acknowledges that Cooley LLP has rendered legal advice to the Placement Agents and not to such Purchaser in
connection with the transactions contemplated hereby, and that each such Purchaser has relied for such matters on the advice
of its own respective counsel. 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 Purchaser.

 

    29

     

    

 

6.18         
Termination. This Agreement may be terminated and the sale and purchase of the Shares abandoned at any time prior
to the Closing by either the Company or any Purchaser (with respect to itself only) upon written notice to the other, if the Closing
has not been consummated on or prior to 5:00 P.M., New York City time, on the Outside Date; provided, however, that the
right to terminate this Agreement under this Section 6.18 shall not be available to any Person whose failure to comply with
its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such
time. Nothing in this Section 6.18 shall be deemed to release any party from any liability for any breach by such party
of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement or the other Transaction Documents. In the event
of a termination pursuant to this Section 6.18, the Company shall promptly notify all non-terminating Purchasers. Upon a
termination in accordance with this Section 6.18, the Company and the terminating Purchaser(s) shall not have any further
obligation or liability (including arising from such termination) to the other, and no Purchaser will have any liability to any
other Purchaser under the Transaction Documents as a result therefrom.

 

6.19         
Exculpation of the Placement Agents. Each party acknowledges that it has read the notices attached hereto as Exhibit
J-1 and Exhibit J-2 and hereto agrees for the express benefit of each of the Placements Agents, their affiliates and
their representatives that:

 

(a)              
Neither the Placement Agents nor any of their affiliates or any of their representatives (1) has any duties or obligations
other than those specifically set forth herein or in the engagement letter, dated as of February 20, 2020, between the Company
and Jefferies LLC, and in the letter, dated as of February 20, 2020, between the Company, Piper Sandler & Co., Stifel, Nicolaus
 & Company, Incorporated, LifeSci Capital LLC and Ladenburg Thalmann & Co. (together, the “Engagement Letters”);
(2) shall be liable for any improper payment made in accordance with the information provided by the Company; (3) makes any representation
or warranty, or has any responsibilities as to the validity, accuracy, value or genuineness of any information, certificates or
documentation delivered by or on behalf of the Company pursuant to this Agreement or the Transaction Documents or in connection
with any of the transactions contemplated hereby and thereby; or (4) shall be liable (x) for any action taken, suffered or omitted
by any of them in good faith and reasonably believed to be authorized or within the discretion or rights or powers conferred upon
it by this Agreement or any Transaction Document or (y) for anything which any of them may do or refrain from doing in connection
with this Agreement or any Transaction Document, except for such party’s own gross negligence, willful misconduct or bad
faith.

 

    30

     

    

 

(b)               The
Placement Agents, their affiliates and their representatives shall be entitled to (1) rely on, and shall be protected in
acting upon, any certificate, instrument, notice, letter or any other document or security delivered to any of them by or on
behalf of the Company, including the representations made by the Company and the Investors herein, and (2) be indemnified by
the Company for acting as the Placement Agents hereunder pursuant the indemnification provisions set forth in the Engagement
Letters.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    31

     

    

 

 

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.

 

	 	AVADEL PHARMACEUTICALS PLC
	 	 
	 	By:	/s/ Gregory J. Divis
	 	 	Name: Gregory J. Divis
	 	 	Title: Chief Executive Officer
	 	  

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

     

     

    

 

	 	NAME OF PURCHASER: Vivo Opportunity Fund, L.P.
	 	 
	 	By:	Vivo Opportunity, LLC, General Partner                                  
	 	 
	 	By:	/s/ Albert Cha
	 	Name: 	Albert Cha
	 	Title:	Managing Member
	 	 
	 	Aggregate ADS Purchase Price (ADS Subscription Amount): $20,439,222.16
	 	 
	 	Number of ADSs to be Acquired: 2,882,824         
	 	 
	 	Aggregate Series A Preferred Shares Purchase Price (Preferred Subscription Amount):
    $_____________
	 	 
	 	Number of Series A Preferred Shares to be Acquired: ______________________
	 	 
	 	Tax ID No.: ____________________
	 	 
	 	Address for Notice:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	Telephone No.: _______________________
	 	 
	 	Facsimile No.: ________________________
	 	 
	 	E-mail Address: ________________________
	 	 
	 	Attention: _______________________
	 	 

	Delivery Instructions:
	(if different than above)
	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________

 

     

     

    

 

	 	NAME OF PURCHASER: Vivo Capital Fund IX, L.P. 
	 	 
	 	By:	 Vivo Capital IX, LLC, General Partner                             
	 	 
	 	By:	/s/ Albert Cha
	 	Name: 	Albert Cha
	 	Title:	Managing Member
	 	 
	 	Aggregate ADS Purchase Price (ADS Subscription Amount): $4,560,777.21
	 	 
	 	Number of ADSs to be Acquired: 643,269
	 	 
	 	Aggregate Series A Preferred Shares Purchase Price (Preferred Subscription Amount):
    $_____________
	 	 
	 	Number of Series A Preferred Shares to be Acquired: ______________________
	 	 
	 	Tax ID No.: ____________________
	 	 
	 	Address for Notice:
	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 
	 	Telephone No.: _______________________
	 	 
	 	Facsimile No.: ________________________
	 	 
	 	E-mail Address: ________________________
	 	 
	 	Attention: _______________________
	 	 

	Delivery Instructions:
	(if different than above)
	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________

 

     

     

    

 

  

	 	NAME
                                         OF PURCHASER: 	KVP
Capital, LP

 

	 	By:	/s/
    Caley Castelein
	 	Name:	Caley
    Castelein
	 	Title:	Managing
    Director
	 	  
	 	Aggregate
    ADS Purchase Price (ADS Subscription Amount): $2,499,997.81         
	 	 
	 	Number
    of ADSs to be Acquired: 352,609           
	 	 
	 	Aggregate
    Series A Preferred Shares Purchase Price (Preferred Subscription Amount): $______0_______
	 	 
	 	Number
    of Series A Preferred Shares to be Acquired: ________0______________
	 	 
	 	Tax
    ID No.: ____________________
	 	 
	 	Address for Notice:
	 	 
	 	 	 
	 	 	 
	 	 	 
	 	
	 	Telephone No.: _______________________
	 	 
	 	Facsimile No.: ________________________
	 	 
	 	E-mail Address: ________________________
	 	 
	 	Attention: _______________________

 

	Delivery Instructions:
	(if different than above)
	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________
	 
	

     

     

    

 

	 	NAME OF PURCHASER: Venrock
    Healthcare Capital Partners III, L.P.
	 	 
	 	By:	VHCP Management III, LLC                                  
	 	Its:	General Partner
	 	  
	 	By:	/s/ David L. Stepp
	 	Name: 	David L. Stepp
	 	Title:	Authorized Signatory
	 	  
	 	Aggregate ADS Purchase Price
(ADS Subscription Amount): $6,818,176.49
	 	 
	 	Number of ADSs to be Acquired:
    961,661          
	 	 
	 	Aggregate Series A Preferred
    Shares Purchase Price (Preferred Subscription Amount): $_____________
	 	 
	 	Number of Series A Preferred
    Shares to be Acquired: ______________________
	 	 
	 	Tax ID No.: ____________________
	 	 
	 	Address for Notice:
	 	 	 
	 	 	 
	 	 	 
	 	 
	 	Telephone No.: _______________________
	 	 
	 	Facsimile No.: ________________________
	 	 
	 	E-mail Address: ________________________
	 	 
	 	Attention: _______________________
	 	 

	Delivery Instructions:
	(if different than above)
	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________
	 

     

     

    

 

	 	NAME OF PURCHASER: VHCP Co-Investment
    Holdings III, LLC
	 	 
	 	By:	VHCP Management
    III, LLC                                                                 
	 	Its:	Manager
	 	 
	 	By:	/s/ David
    L. Stepp
	 	Name: 	David L. Stepp
	 	Title:	Authorized Signatory
	 	  
	 	Aggregate ADS Purchase Price
(ADS Subscription Amount): $681,816.94
	 	 
	 	Number of ADSs to be Acquired:
    96,166           
	 	 
	 	Aggregate Series A Preferred
    Shares Purchase Price (Preferred Subscription Amount): $_____________
	 	 
	 	Number of Series A Preferred
    Shares to be Acquired: ______________________
	 	 
	 	Tax ID No.: ____________________
	 	 
	 	Address for Notice:
	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 
	 	Telephone No.: _______________________
	 	 
	 	Facsimile No.: ________________________
	 	
	 	E-mail Address: ________________________
	 	 
	 	Attention: _______________________
	 	 

	Delivery Instructions:
	(if different than above)
	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________
	 

 

     

     

    

 

	 	NAME OF PURCHASER: Avoro Life Sciences Fund
	 
	 	By:	  /s/ Behzad Aghazadeh
		Name: Behzad Aghazadeh
	 	Title: Managing Partner

 

	 	Aggregate ADS Purchase Price (ADS Subscription Amount):
	 	$ 14,999,993.95                     
	 	 	                                                                                                                  
	 	Number of ADSs to be Acquired: 2,115,655                              
	 
	 	Aggregate Series A Preferred Shares Purchase Price (Preferred

    Subscription Amount): $                                    
	 
	 	Number of Series A Preferred Shares to be Acquired: 

______________________
	 
		Tax ID No.: ____________________
	 
	 	Address for Notice:
		 
	 	__________________________________
	 	__________________________________
	 	__________________________________
	 
	 	Telephone No.:  ____________________
	 	 
	 	Facsimile No.: ____________________
	 	 
	 	E-mail Address: ____________________
	 
	 	Attention: ____________________
	 

 

	 
	Delivery Instructions:	 
	(if different than above)	 

	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________
		

 

     

     

    

 

	 	NAME OF PURCHASER: RTW Master Fund, Ltd.

 

	 	By:	    /s/ Roderick Wong                                      
	 	Name: Roderick Wong
	 	Title: Director
	 	 
	 	Aggregate ADS Purchase Price (ADS
Subscription Amount): 

$4,698,961.31                      
	 	 
	 	Number of ADSs to be Acquired: 662,759                              
	 	 
	 	Aggregate Series A Preferred Shares
Purchase Price (Preferred 

Subscription Amount): $ 2,502,266.61       
	 	 
	 	Number of Series A Preferred Shares
to be Acquired: 352,929        
	 	 
	 	Tax ID No.: ____________________
	 	 
	 	Address for
Notice:
	 	 
	 	__________________________________
	 	__________________________________
	 	__________________________________
	 	 
	 	Telephone No.: _______________________
	 	 
	 	Facsimile No.: ________________________
	 	 
	 	E-mail Address: ________________________
	 	 
	 	Attention: _______________________

 

	 
	Delivery Instructions:	 
	(if different than above)	 

	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________
		

 

     

     

    

 

	 	NAME OF PURCHASER: RTW Innovation Master Fund, Ltd.

 

	 	By:	    /s/ Roderick Wong                                   
	 	Name: Roderick Wong
	 	Title: Director
	 	 
	 	Aggregate ADS Purchase Price (ADS Subscription Amount): 

    $1,576,879.81          
	 	 
	 	Number of ADSs to be Acquired: 222,409         
	 	 
	 	Aggregate Series A Preferred Shares
Purchase Price (Preferred 

Subscription Amount): $ 838,371.23        
	 	 
	 	Number of Series A Preferred Shares
to be Acquired: 118,247       
	 	 
	 	Tax ID No.: ____________________
	 	 
	 	Address for
Notice:
	 	 
	 	__________________________________
	 	__________________________________
	 	__________________________________
	 	 
	 	Telephone No.: _______________________
	 	 
	 	Facsimile No.: ________________________
	 	 
	 	E-mail Address: ________________________
	 	 
	 	Attention: _______________________

 

	 
	Delivery Instructions:	 
	(if different than above)	 

	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________
		

 

     

     

    

 

	 	NAME OF PURCHASER: RTW Venture Fund Limited

 

	 	By:	    /s/ Roderick Wong                                  
	 	Name: Roderick Wong
	 	Title: Managing Member of
the General Partner of the Investment Manager
	 	 
	 	Aggregate ADS Purchase Price (ADS Subscription Amount): 

$266,973.95          
	 	 
	 	Number of ADSs to be Acquired: 37,655         
	 	 
	 	Aggregate Series A Preferred Shares Purchase Price (Preferred

 Subscription Amount): $ 116,545.42        
	 	 
	 	Number of Series A Preferred Shares to be Acquired: 16,438       
	 	 
	 	Tax ID No.: ____________________
	 	 
	 	Address for Notice:
	 	 
	 	__________________________________
	 	__________________________________
	 	__________________________________
	 	 
	 	Telephone No.: _______________________
	 	 
	 	Facsimile No.: ________________________
	 	 
	 	E-mail Address: ________________________
	 	 
	 	Attention: _______________________

 

	 
	Delivery Instructions:	 
	(if different than above)	 

	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________
		

 

     

     

    

 

	 	NAME OF PURCHASER: Acuta Opportunity Fund, LP

 

	 	By:	   /s/ Manfred
    Yu                                                
	 	Name:  Manfred Yu
	 	Title:  Chief Operating Officer
of the General Partner
	 	 
	 	Aggregate ADS Purchase Price (ADS Subscription Amount): 

    $ 949,996.19                      
	 	 
	 	Number of ADSs to be Acquired: 133,991                              
	 	 
	 	Aggregate Series A Preferred Shares Purchase Price (Preferred
    

    Subscription Amount): $ N/A             
	 	 
	 	Number of Series A Preferred Shares
to be Acquired: N/A           
	 	 
	 	Tax ID No.: ____________________
	 	 
	 	Address for
Notice:
	 	 
	 	__________________________________
	 	__________________________________
	 	__________________________________
	 	 
	 	Telephone No.: _______________________
	 	 
	 	Facsimile No.: ________________________
	 	 
	 	E-mail Address: ________________________
	 	 
	 	Attention: _______________________

 

	 
	Delivery Instructions:	 
	(if different than above)	 

	 
	c/o _______________________________
	 
	Street: ____________________________
	 
	City/State/Zip: ______________________
	 
	Attention: __________________________
	 
	Telephone No.: ____________________________

                                                                      

		

     

     

    

 

	 	NAME OF PURCHASER: Acuta Capital Fund, LP

 

	 	By:	/s/ Manfred Yu                                                                  
	 	Name: Manfred Yu
	 	Title:   Chief Operating Officer of the General Partner
	 
	 	Aggregate ADS Purchase Price (ADS Subscription Amount):
	 	$4,049,999.43      
	 	 
	 	Number of ADSs to be Acquired: 571,227      
	 
	 	Aggregate Series A Preferred Shares Purchase Price (Preferred
    Subscription Amount): $ N/A    
	 	Number of Series A Preferred Shares to be Acquired: N/A    
	 	 
	 	Tax ID No.:                                                 
	 
	 	Address for Notice:
	 	 
	 	                                                                                         
	 	                                                                                         
	 	                                                                                         
	 	 
	 	Telephone No.:                                     
	 
	 	Facsimile No.:                                     
	 
	 	E-mail Address:                                          
	 
	 	Attention:                                     

 

	Delivery Instructions:
	(if different than above)
	 
	
	c/o                                                                                           
	 
	
	Street:                                                                                      
	 
	
	City/State/Zip:                                                                      
	 
	
	Attention:                                                                             
	 
	
	Telephone No.:                                                                         

 

     

     

    

 

EXHIBITS:

 

	A:	Schedule of Purchasers
	B:	Form of Registration Rights Agreement
	C-1:	Accredited Investor Questionnaire
	C-2:	Share Certificate Questionnaire
	D:	Form of Irrevocable Transfer Agent Instructions
	E:	Form of Secretary’s Certificate
	F:	Form of Officer’s Certificate
	G:	Form of Lock-Up Agreement
	H:	List of Directors and Executive Officers Executing Lock-Up Agreements
	I:	Series A Preferred Share Terms
	J-1:	Stifel Required Disclosure
	J-2:	Jefferies Required Disclosure

 

     

     

    

 

Exhibit
A

 

SCHEDULE
OF PURCHASERS

 

	Purchaser	 	American
 Depositary 
 Shares	 	 	Series A Non-
 Voting
 Convertible 
 Preferred Shares	 	 	Aggregate
 Purchase Price (Subscription 
 Amount)	 
	Vivo Opportunity Fund LP	 	 	2,882,824	 	 	 	-	 	 	$	20,439,222.16	 
	Vivo Capital Fund IX LP	 	 	643,269	 	 	 	-	 	 	$	4,560,777.21	 
	KVP Capital, LP	 	 	352,609	 	 	 	-	 	 	$	2,499,997.81	 
	Venrock Healthcare Capital Partners III, L.P.	 	 	961,661	 	 	 	-	 	 	$	6,818,176.49	 
	VHCP Co-Investment Holdings III, LLC	 	 	96,166	 	 	 	-	 	 	$	681,816.94	 
	Avoro Life Sciences Fund	 	 	2,115,655	 	 	 	-	 	 	$	14,999,993.95	 
	RTW Master Fund, Ltd.	 	 	662,759	 	 	 	352,929	 	 	$	7,201,227.92	 
	RTW Innovation Master Fund, Ltd.	 	 	222,409	 	 	 	118,247	 	 	$	2,415,251.04	 
	RTW Venture Fund Limited	 	 	37,655	 	 	 	16,438	 	 	$	383,519.37	 
	Acuta Opportunity Fund, LP	 	 	133,991	 	 	 	-	 	 	$	949,996.19	 
	Acuta Capital Fund, LP	 	 	571,227	 	 	 	-	 	 	$	4,049,999.43	 

 

     

     

    

 

Exhibit
B

 

Form
of Registration Rights Agreement

 

     

     

    

 

EXHIBIT C-1

 

Accredited
Investor Questionnaire

 

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

 

To:       Avadel Pharmaceutical plc

 

This Investor Questionnaire (“Questionnaire”)
must be completed by each potential investor in connection with the offer and sale of the American Depository Shares, par value
$0.01 per share, and Series A Preferred Shares, par value $0.01 per share (collectively, the “Securities”),
of Avadel Pharmaceuticals plc, an Irish public limited company (the “Company”). The Securities are being offered
and sold by the Company without registration under the Securities Act of 1933, as amended (the “Act”), and the
securities laws of certain states, in reliance on the exemptions contained in Section 4(a)(2) of the Act and on Regulation
D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The Company must determine that a potential
investor meets certain suitability requirements before offering or selling Securities to such investor. The purpose of this Questionnaire
is to assure the Company that each investor will meet the applicable suitability requirements. The information supplied by you
will be used in determining whether you meet such criteria, and reliance upon the private offering exemptions from registration
is based in part on the information herein supplied.

 

This Questionnaire does not constitute
an offer to sell or a solicitation of an offer to buy any security. Your answers will be kept strictly confidential. However, by
signing this Questionnaire, you will be authorizing the Company to provide a completed copy of this Questionnaire to such parties
as the Company deems appropriate in order to ensure that the offer and sale of the Securities will not result in a violation of
the Act or the securities laws of any U.S. state and that you otherwise satisfy the suitability standards applicable to purchasers
of the Securities. All potential investors must answer all applicable questions and complete, date and sign this Questionnaire.
Please print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item.

 

PART A.            BACKGROUND INFORMATION

 

	Name of Beneficial Owner of the Securities:	 

 

	Business Address:	 

	 	(Number and Street)

	 	 

	(City)	(State)	(Zip Code)

 

	Telephone Number: (___)	 

 

If a corporation, partnership, limited
liability company, trust or other entity:

	Type of entity:	 

	State of formation:	 	 	Approximate Date of formation:	 

 

Were you formed
for the purpose of investing in the securities being offered?

 

Yes ____           No ____

 

     

     

    

 

If an individual:

 

	Residence Address:	 

	 	(Number and Street)

 

	(City)	(State)	(Country)	(Zip Code)

 

	Telephone Number: (___)	 

 

Age: __________              Citizenship: ____________            Where
registered to vote: _______________

 

Set forth in the space provided below the
state(s), if any, in the United States in which you maintained your residence during the past two years and the dates during which
you resided in each state:

 

Are you a director
or executive officer of the Company?

 

Yes ____           No ____

 

	U.S. Social Security or U.S. Taxpayer Identification No.	 

 

 

PART B.             ACCREDITED INVESTOR QUESTIONNAIRE

 

 

In order for the Company
to offer and sell the Securities in conformance with U.S. state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable to you as a Purchaser of Securities of
the Company.

 

	_____ (1)	 	A natural person with a net worth (assets minus liabilities), or joint net worth with the Prospective Subscriber’s spouse, in excess of $1 million at the time of the investment. In calculating net worth of the Prospective Subscriber, (a) the value of the primary residence of the Prospective Subscriber shall be excluded as an asset, (b) the outstanding indebtedness secured by the primary residence of the Prospective Subscriber up to the fair market value of such primary residence at the time of investment shall be excluded as a liability, provided, however, that if the amount of such outstanding indebtedness at the time of investment exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability, and (c) the outstanding indebtedness secured by the primary residence in excess of the fair market value of such primary residence at the time of investment shall be included as a liability;
	 	 	 
	_____ (2)	 	A natural person with net income (without including any net income of the Prospective Subscriber’s spouse) in excess of $200,000, or joint income with the Prospective Subscriber’s spouse, in excess of $300,000, in each of the two most recent years, and the Prospective Subscriber reasonably expects to reach the same income level in the current year.
	 	 	 
	_____ (3)	 	A bank as defined in the Securities Act, a savings and loan association, or other institution described in Section 3(a)(5)(A) of the Securities Act acting in either its individual or fiduciary capacity. This includes a trust for which a bank acts as trustee.
	 	 	 
	_____ (4)	 	A director, executive officer or general partner of the Company.

 

     

     

    

 

	_____ (5)	 	A trust not formed for the specific purpose of acquiring Securities with total assets in excess of $5,000,000 and directed by a person who has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of investing in the Company.
	 	 	 
	_____ (6)	 	A revocable trust (including a revocable trust formed for the specific purpose of acquiring Securities) and the grantor or settlor of such trust is an “accredited investor.”
	 	 	 
	_____ (7)	 	An entity in which each equity owner is an “accredited investor.”
	 	 	 
	_____ (8)	 	A tax-exempt organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or similar business trust, a partnership or a limited liability company not formed for the specific purpose of acquiring Securities that has total assets in excess of $5,000,000.
	 	 	 
	_____ (9)	 	A plan for the benefit of employees, established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions, having total assets in excess of $5,000,000.
	 	 	 
	_____ (10)	 	An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, (a) for which the investment decision to acquire Securities is being made by a plan fiduciary that is a bank, savings and loan association, insurance company, or registered investment adviser, (b) which has total assets in excess of $5,000,000, or (c) which is self-directed with the investment decisions made solely by persons who are “accredited investors.”
	 	 	 
	_____ (11)	 	A broker or dealer registered under the Securities Exchange Act of 1934, as amended.
	 	 	 
	_____ (12)	 	An insurance company as defined in the Securities Act.
	 	 	 
	_____ (13)	 	An investment company registered under, or a business development company as defined in, the Investment Company Act of 1940, as amended.
	 	 	 
	_____ (14)	 	A Small Business Investment Company licensed by the U.S. Small Business Administration
	 	 	 
	_____ (15)	 	A private business development company as defined in the Investment Advisers Act of 1940, as amended.

 

A.       FOR
EXECUTION BY AN INDIVIDUAL:

 

	 	 	 	 
	 	 	By	 	 
	Date	 	 	 

	 	 	Print Name:	 	 

 

B.       FOR
EXECUTION BY AN ENTITY:

 

	 	Entity Name:	 	 

 

	 	 	 	 
	 	 	By	 	 
	Date	 	 	 

	 	 	Print Name:	 	 
	 	 	Title:	 	 

 

     

     

    

 

		C.	ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):

 

	 	Entity Name:	 	 

 

	 	 	 	 
	 	 	By	 	 
	Date	 	 	 

	 	 	Print Name:	 	 

	 	 	Title:	 	 

 

	 	Entity Name:	 	 

 

	 	 	 	 
	 	 	By	 	 
	Date	 	 	 

	 	 	Print Name:	 	 

	 	 	Title:	 	 

 

    	 

    	 

    

 

 

 

 

Exhibit
C-2

 

Share
Certificate Questionnaire

 

Pursuant to Section 2.2(b) of the
Agreement, please provide us with the following information:

 

	1.	The exact name that the Shares are to be registered in (this is the name that will appear on the share certificate(s)).  You may use a nominee name if appropriate:	 	 
	2.	The relationship between the Purchaser of the Shares and the Registered Holder listed in response to Item 1 above:	 	 
	3.	The mailing address, telephone and telecopy number of the Registered Holder listed in response to Item 1 above:	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	4.	The U.S. Tax Identification Number (or, if an individual, the U.S. Social Security Number) of the Registered Holder listed in response to Item 1 above:	 	 

 

    

     

    

 

EXHIBIT
D

 

Form
of Irrevocable Transfer Agent Instructions

 

As of _________, ____

 

[Insert Name of Transfer Agent]

[Address]

[Address]

Attn: _________________

 

Ladies and Gentlemen:

 

Reference
is made to that certain Securities Purchase Agreement, dated as of _____________, ___ (the “Agreement”), by
and among Avadel Pharmaceuticals plc, an Irish public limited company (the “Company”), and the purchasers named
on the signature pages thereto (collectively, and including permitted transferees, the “Holders”), pursuant
to which the Company is issuing to the Holders ordinary shares (the “Shares”) of [______] of the Company, par
value $0.01 per share (the “ADSs”).

 

This
letter shall serve as our irrevocable authorization and direction to you (provided that you are the transfer agent of the Company
at such time and the conditions set forth in this letter are satisfied), subject to any stop transfer instructions that we may
issue to you from time to time, if any, to issue certificates representing Ordinary Shares upon transfer or resale of the Shares.

 

You acknowledge and
agree that so long as you have received (a) written confirmation from the Company’s legal counsel that either (1) a
registration statement covering resales of the Shares has been declared effective by the Securities and Exchange Commission (the
 “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), or (2) the
Shares have been sold in conformity with Rule 144 under the Securities Act (“Rule 144”) or 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 securities and without volume or manner-of-sale restrictions and (b) if applicable, a copy of such
registration statement, then, unless otherwise required by law, within three (3) Trading Days of your receipt of a notice
of transfer or Shares, you shall issue the certificates representing the Shares registered in the names of such Holders or transferees,
as the case may be, and such certificates shall not bear any legend restricting transfer of the Shares thereby and should not be
subject to any stop-transfer restriction; provided, however, that if such Shares are not registered for resale under the
Securities Act or able to 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 securities and without volume or manner-of-sale restrictions, then the certificates
for such Shares shall bear the following legend:

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) 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 OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.

 

    

     

    

 

A
form of written confirmation from the Company’s outside legal counsel that a registration statement covering resales of the
Shares has been declared effective by the Commission under the Securities Act is attached hereto as Annex I.

 

Please
be advised that the Holders are relying upon this letter as an inducement to enter into the Agreement and, accordingly, each Holder
is a third party beneficiary to these instructions.

 

Please
execute this letter in the space indicated to acknowledge your agreement to act in accordance with these instructions.

 

	 	Very truly yours,
	 	 
	 	[INSERT NAME OF COMPANY]
	 	 
	 	By:	                    
	 	Name: 	 
	 	Title:	 

 

	Acknowledged and Agreed:	 
	 	 
	[INSERT NAME OF TRANSFER AGENT]	 
	 	 
	By:	  	 
	Name: 	  	 
	Title:	  	 
	 	 
	Date:	 _________________, ______	 

 

    

     

    

 

Annex I

 

FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION
STATEMENT

 

	
        [Insert Name of Transfer Agent]

        [Address]

        [Address]

        Attn: _________________

         

	 	 	Re: [Insert Name of Company]

 

Ladies and Gentlemen:

 

We
are counsel to Avadel Pharmaceuticals plc, an Irish public limited company (the “Company”), and have represented
the Company in connection with that certain Securities Purchase Agreement, dated as of _____________, ___, entered into by and
among the Company and the purchasers named therein (collectively, the “Purchasers”) pursuant to which the Company
issued to the Purchasers Ordinary Shares of the Company, $0.01 par value per share (the “Ordinary Shares”).
Pursuant to that certain Registration Rights Agreement of even date, the Company agreed to register the resale of the Ordinary
Shares (collectively, the “Registrable Securities”), under the Securities Act of 1933, as amended (the “Securities
Act”). In connection with the Company’s obligations under the Registration Rights Agreement, on                     ,
____, the Company filed a Registration Statement on Form S-3 (File No. 333-                    )
(the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”)
relating to the Registrable Securities which names each of the Purchasers as a selling shareholder thereunder.

 

In connection with
the foregoing, we advise you that a member of the Commission’s staff has advised us by telephone that the Commission has
entered an order declaring the Registration Statement effective under the Securities Act at ____ [a.m.][p.m.] on __________, ____,
and we have no knowledge, after reviewing the Commission’s “Stop Orders” web page (http://sec.gov/litigation/stoporders.shtml),
that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before,
or threatened by, the Commission and the Registrable Securities are available for resale under the Securities Act pursuant to
the Registration Statement.

 

This
letter shall serve as our standing notice to you that the Ordinary Shares may be freely transferred by the Purchasers pursuant
to the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance
of Ordinary Shares to the Purchasers or the transferees of the Purchasers, as the case may be, as contemplated by the Company’s
Irrevocable Transfer Agent Instructions dated __________, ____, provided at the time of such reissuance, the Company has not otherwise
notified you that the Registration Statement is unavailable for the resale of the Registrable Securities. This letter shall serve
as our standing instructions with regard to this matter.

 

	 	Very truly yours,
	 	 
	 	[INSERT NAME OF COMPANY U.S. COUNSEL]
	 	 	 
	 	By:	        

 

    

     

    

 

EXHIBIT E

 

Form
of Secretary’s Certificate

 

The undersigned hereby certifies that
[●] is the duly elected, qualified and acting Secretary of Avadel Pharmaceuticals plc, an Irish public limited company
(the “Company”), and that as such he is authorized to execute and deliver this certificate in the name and
on behalf of the Company and in connection with the Securities Purchase Agreement, dated as of ____________, ______, by and
among the Company and the investors party thereto (the “Securities Purchase Agreement”), and further
certifies in his official capacity, in the name and on behalf of the Company, the items set forth below. Capitalized terms
used but not otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement.

 

		1.	Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions duly
adopted by the Board of Directors of the Company at a meeting held on ___________. Such resolutions have not in any way been amended,
modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof and are
now in full force and effect.

 

		2.	The certificate of incorporation, the certificate of incorporation
on re-registration as a public limited company and the certificate of incorporation on change of name, together with the memorandum
and articles of association of the Company attached hereto as Exhibit B, incorporate all amendments thereto up to and including
the date hereof and are true, complete and accurate in all respects and the authority of the board of directors of the Company
(the “Board”), or any appropriate committee appointed thereby, to allot and issue the securities of the Company on
a non-pre-emptive basis has not been altered, amended or rescinded and is in full force and effect.

 

		3.	Each person listed below has been duly elected or appointed to the position(s) indicated opposite
his name and is duly authorized to sign the Securities Purchase Agreement and each of the Transaction Documents on behalf of the
Company, and the signature appearing opposite such person’s name below is such person’s genuine signature.

 

	Name	Position	
        Signature

         

	[                                ]	Chief Executive Officer	 
	[                                ]	Chief Financial Officer	 
	 	 	 	 

IN WITNESS WHEREOF, the undersigned has
hereunto set his hand as of this ____ day of ________, ___.

 

	 	 
		Secretary

 

 

I, [Insert Name], Chief Executive Officer,
hereby certify that [Insert Name] is the duly elected, qualified and acting Secretary of the Company and that the signature set
forth above is his true signature.

 

	 	 

 

    

     

    

 

Chief
Executive Officer

 

    

     

    

 

EXHIBIT
A

 

Resolutions

 

    

     

    

 

EXHIBIT B

 

Memorandum and Articles of Association

 

    

     

    

 

EXHIBIT F

 

Form
of Officer’s Certificate

 

The undersigned, the Chief Executive Officer
of Avadel Pharmaceuticals plc, an Irish public limited company (the “Company”), pursuant to Section 5.1(i) of
the Securities Purchase Agreement, dated as of ____________, by and among the Company and the investors signatory thereto (the
 “Securities Purchase Agreement”), hereby represents, warrants and certifies as follows (capitalized terms used
but not otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement):

 

		1.	The representations and warranties of the Company contained in the Securities Purchase Agreement
are true and correct in all material respects (except for those representations and warranties which are qualified as to materiality,
in which case, such representations and warranties shall be true and correct in all respects) as of the date when made and as of
the date hereof, as though made on and as of such date, except for such representations and warranties that speak as of a specific
date.

 

		2.	The Company has performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to
the date hereof.

 

 

IN WITNESS WHEREOF, the undersigned has
executed this certificate this ___ day of __________, _____.

 

	 	 
	 	Chief Executive Officer

 

    

     

    

 

 

EXHIBIT G

 

FORM OF LOCK-UP AGREEMENT

 

_____________, _____

 

	Jefferies LLC
	520 Madison Avenue
	New York, New York 10022
	 
	Piper Sandler & Co.
	1251 Avenue of the Americas
	New York, New York 10020
	 
	Stifel, Nicolaus & Company, Incorporated
	787 7th Avenue
	New York, New York 10019
	 
	Ladenburg Thalmann & Co.
	277 Park Avenue, 26th Floor
	New York, New York 10172
	 
	LifeSci Capital LLC
	250 W. 55th Street
	Suite 3401
	New York, New York 10019
	 
	Re:	Private Placement of Shares

 

Ladies and Gentlemen:

 

The undersigned understands
that Jefferies LLC, Piper Sandler & Co., Stifel, Nicolaus & Company, Incorporated, Ladenburg Thalmann & Co. and LifeSci
Capital LLC proposes to act as the exclusive Placement Agents (the “Placement Agents”), for Avadel Pharmaceuticals
plc, an Irish public limited company (the “Company”), in connection with a proposed private placement (the “Offering”)
(the “Shares”) of Ordinary Shares, par value $0.01 per share (the “Ordinary Shares”).

 

In order to
induce the Placement Agents to continue its efforts in connection with the Offering, the undersigned hereby agrees that for a
period (the “Lock-Up Period”) of thirty (30) days following the date of effectiveness of the registration
statement registering the resale of the Shares filed by the Company with the Securities and Exchange Commission in connection
with such Offering, the undersigned will not, without the prior written consent of the Placement Agents, directly or
indirectly, (1) offer, sell, contract to sell, pledge, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of any Ordinary
Shares, or any securities convertible into or exercisable or exchangeable for the Ordinary Shares (including, without
limitation, Ordinary Shares or any such securities which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations promulgated under the Securities Act of 1933, as the same may be amended or
supplemented from time to time (such shares or securities, the “Beneficially Owned Shares”));
(2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Beneficially Owned Shares, Ordinary Shares, or any securities convertible into or
exchangeable for the Ordinary Shares, regardless of whether any such transaction described herein is to be settled by
delivery of the Ordinary Shares or such other securities, or by delivery of cash or otherwise; (3) make any demand for,
or exercise any right with respect to, the registration of any Beneficially Owned Shares, Shares, Ordinary Shares or any
security convertible into or exercisable of exchangeable for the Ordinary Shares; or (4) publicly announce any intention
to do any of the foregoing; provided, however, that the obligations under this letter agreement (the “Lock-Up
Agreement”) shall not apply to any Shares acquired in connection with the Offering.

 

     

     

    

 

Notwithstanding the
foregoing, the restrictions set forth in clause (1) and (2) above shall not apply to (a) transfers (i) as a
bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein,
(ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided
that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any
such transfer shall not involve a disposition for value, (iii) with the prior written consent of the Placement Agents or (iv) effected
pursuant to any exchange of “underwater” options with the Company, (b) the acquisition or exercise of an option
or warrant to purchase Ordinary Shares (or any securities convertible into or exercisable or exchangeable for Ordinary Shares),
including the sale of a portion of shares to be issued in connection with such exercise to finance a “cashless” exercise,
provided that any such shares issued upon exercise of such option or warrant (or any securities convertible into or exercisable
or exchangeable for Ordinary Shares) shall continue to be subject to the applicable provisions of this Lock-Up Agreement, (c) the
purchase or sale of the Company’s securities pursuant to a plan, contract or instruction that satisfies all of the requirements
of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date hereof, or (d) the disposition of Ordinary Shares to
satisfy any tax withholding obligations upon the vesting of restricted Ordinary Shares held by the undersigned.  For purposes
of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more
remote than first cousin.  None of the restrictions set forth in this Lock-Up Agreement shall apply to Ordinary Shares acquired
in open market transactions. In addition, if the undersigned is a partnership, limited liability company, trust, corporation or
similar entity, it may distribute the Ordinary Shares or Beneficially Owned Shares to its partners, members or shareholders; provided,
however, that in each such case, prior to any such transfer, each transferee shall execute a duplicate form of this Lock-Up Agreement
or execute an agreement, reasonably satisfactory to the Placement Agents, pursuant to which each transferee shall agree to receive
and hold such Ordinary Shares or Beneficially Owned Shares subject to the provisions hereof, and there shall be no further transfer
except in accordance with the provisions hereof.

 

The foregoing restrictions
are expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or reasonably
expected to lead to or result in a sale or disposition of the Beneficially Owned Shares or Ordinary Shares even if such Beneficially
Owned Shares or Ordinary Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions
would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put
option or put equivalent position or call option or call equivalent position) with respect to any of the Beneficially Owned Shares
or Ordinary Shares or with respect to any security that includes, relates to, or derives any significant part of its value from
such Beneficially Owned Shares or Ordinary Shares.

 

The undersigned hereby
agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent against the transfer of
securities of the Company held by the undersigned during the Lock-Up Period (as may have been extended pursuant hereto), except
in compliance with this Lock-Up Agreement.

 

The undersigned understands
that, if the Securities Purchase Agreement executed by Purchases in connection with the Offering does not become effective, or
if the Offering shall terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder, or if
the Purchase Agreement has not been executed within thirty (30) days of the date hereof, this Lock-Up Agreement shall be terminated
and the undersigned shall be released from all obligations under this Lock-Up Agreement.

 

     

     

    

 

The undersigned hereby
represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. This Lock-Up Agreement
is irrevocable and all authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned
and any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the
undersigned. The undersigned agrees that Purchasers of the Shares in the Offering shall be intended third-party beneficiaries of
the undersigned’s obligations under this Lock-Up Agreement.

 

This Lock-Up Agreement
shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws
principles thereof.

 

	 	Very truly yours,

                                                                                        

                                                                                Print Name: __________________________

                                                                                 

                                                                                Print Title: ___________________________

                                                                                 

                                                                                Signature: ____________________________

 

     

     

    

 

EXHIBIT H

 

List
of Directors and Executive Officers

Executing Lock-Up Agreements

 

Gregory J. Divis

Thomas McHugh

Phillandas Thompson

Geoffrey Glass

Peter Thornton

Linda S. Palczuk

Eric Ende

Mark McCamish

 

     

     

    

 

EXHIBIT I

 

Series A Preferred Share Terms

 

     

     

    

 

EXHIBIT J-1

 

Stifel Required Disclosure

 

On December 6, 2016, a final judgment (the
 “Judgment”) was entered against Stifel, Nicolaus & Company, Incorporated (“Stifel”) by the United States
District Court for the Eastern District of Wisconsin (Civil Action No. 2:11-cv-00755) resolving a civil lawsuit filed by the U.S.
Securities & Exchange Commission (the “SEC”) in 2011 involving violations of several antifraud provisions of the
U.S. federal securities laws in connection with the sale of synthetic collateralized debt obligations to five Wisconsin school
districts in 2006.  As a result of the Judgment: (i) Stifel is required to cease and desist from committing or causing any
violations and any future violations of Section 17(a)(2) and 17(a)(3) of the Securities Act; and (ii) Stifel and a former employee
were jointly liable to pay disgorgement and prejudgment interest of $2.5 million. Stifel was also required to pay a civil penalty
of $22.0 million, of which disgorgement and civil penalty Stifel was required to pay $12.5 million to the school districts involved
in this matter.

 

Simultaneously with the entry of the Judgment,
the SEC issued an Order granting Stifel a waiver from, among other things, the application of the disqualification provisions of
Rule 506(d)(1)(iv) of Regulation D under the Securities Act.

 

A copy of the Judgment is available
on the SEC’s website at:https://www.sec.gov/litigation/litreleases/2016/lr23700-final-judgment.pdf.

 

     

     

    

 

EXHIBIT J-2

 

Jefferies Required Disclosure

 

On February 2, 2016, pursuant to an offer
of settlement by Jefferies LLC, the SEC entered an administrative order, pursuant to its Municipalities Continuing Disclosure Cooperation
(“MCDC”) initiative, finding that Jefferies LLC, in connection with its underwriting of certain municipal securities
offerings, willfully violated Section 17(a)(2) of the Securities Act of 1933. The administrative order requires Jefferies LLC to
cease and desist from committing or causing any violations or any future violations of Section 17(a)(2), to pay a civil penalty,
and to complete certain undertakings. Jefferies LLC received waivers from the SEC of any disqualifications under Regulations A
(Rule 262), D (Rule 505 and 506), and E arising from the settlement, effective as of February 2, 2016. The SEC Order is available
at https://www.sec.gov/rules/other/2016/33-10030.pdf.

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