Document:

U.S. Geothermal Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

Execution Copy

PURCHASE AGREEMENT

 PURCHASE AGREEMENT (the “Agreement”), dated as of May 21, 2012, by and between U.S. GEOTHERMAL INC., a Delaware corporation, (the “Company”), and LINCOLN PARK CAPITAL FUND, LLC, an Illinois
limited liability company (the “Investor”).

WHEREAS:

 Subject to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Investor, in its sole and absolute discretion, and the Investor wishes to buy from the Company, up to Ten Million Seven Hundred Fifty Thousand
Dollars ($10,750,000) of shares of the Company’s common stock, $.001 par value per share (the “Common Stock”). The shares of Common Stock to be purchased hereunder (including, without limitation, the Initial Purchase
Shares (as defined herein)) are referred to herein as the “Purchase Shares”.

 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 Investor hereby agree as follows:

1. CERTAIN DEFINITIONS.

For purposes of this Agreement, the following terms shall have the following meanings:

(a) “Accelerated Purchase Notice” shall mean an irrevocable written notice from the Company to the Investor directing the Investor to buy such Accelerated Purchase Amount in Purchase Shares as specified by the Company therein in
accordance with Section 2 hereof. 

(b) “Available Amount” means initially Ten Million Seven Hundred Fifty Thousand Dollars ($10,750,000) in the aggregate, which amount shall be reduced by the Purchase Amount and Accelerated Purchase Amount actually purchased by
the Investor each time the Investor purchases shares of Common Stock pursuant to Section 2 hereof. 

 (c) “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors. 

(d) “Base Prospectus” means the Company’s final base prospectus, dated December 1, 2010, a preliminary form of which is included in the Registration Statement, including the documents incorporated by reference therein. 

(e) “Business Day” means any day on which the Principal Market is open for trading, including any day on which the Principal Market is open for trading for a period of time less than the customary time. 

(f) “Closing Sale Price” means, for any security as of any date, the last closing sale price for such security on the Principal Market as reported by the Principal Market, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing sale price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by the Principal Market.

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 (g) “Confidential Information” means any information disclosed by either party to the other party, either directly or indirectly, in writing, orally or by inspection of tangible objects (including, without limitation, documents,
prototypes, samples, plant and equipment), which is designated as "Confidential," "Proprietary" or some similar designation. Information communicated orally shall be considered Confidential Information if such information is confirmed in writing as
being Confidential Information within ten (10) Business Days after the initial disclosure. Confidential Information may also include information disclosed to a disclosing party by third parties. Confidential Information shall not, however, include
any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party
to the receiving party through no action or inaction of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party as shown by the receiving party’s files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach of such third party’s obligations of confidentiality; (v) is independently developed by the receiving party without use of
or reference to the disclosing party’s Confidential Information, as shown by documents and other competent evidence in the receiving party’s possession; or (vi) is required by law to be disclosed by the receiving party, provided that the
receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information from public disclosure.

 (h) “Common Stock Equivalents” means any securities of the Company or its Subsidiaries which entitle the holder thereof to acquire at any time shares of Common Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares of Common Stock. 

(i) “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

(j) “DTC” means The Depository Trust Company, or any successor performing substantially the same function for the Company. 

(k) “DWAC Shares” means shares of Common Stock that are (i) issued in electronic form, (ii) within the United States of America, freely tradable and transferable and without restriction on resale and (iii) timely credited by the
Company to the Investor’s or its designee’s specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast Automated Securities Transfer (FAST) Program or any similar program hereafter adopted by DTC performing
substantially the same function.

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

(m) “Floor Price” means Twenty Five Cents ($0.25) (which shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction). 

(n) “Initial Prospectus Supplement” means the prospectus supplement to the Base Prospectus complying with Rule 424(b) under the Securities Act that is filed with the SEC and delivered by the Company to the Investor upon the
execution and delivery of this Agreement in accordance with Section 5(a), including the documents incorporated by reference therein. 

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(o) “Material Adverse Effect” means any material adverse effect on (i) the enforceability of any Transaction Document, (ii) the results of operations, assets, business or financial condition of the Company and its Subsidiaries,
taken as a whole, or (iii) the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document to be performed as of the date of determination, other than any such change, effect, event or
circumstance that resulted exclusively from (A) any change in the United States or foreign economies or securities or financial markets in general that does not have a disproportionate effect on the Company and its Subsidiaries, taken as a whole,
(B) any change that generally affects the industry in which the Company and its Subsidiaries operate that does not have a disproportionate effect on the Company and its Subsidiaries, taken as a whole, (C) any change arising in connection with
earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing as of the date hereof, (D) any action
taken by the Investor, its affiliates or its or their successors and assigns with respect to the transactions contemplated by this Agreement, (E) the effect of any change in applicable laws or accounting rules that does not have a disproportionate
effect on the Company and its Subsidiaries, taken as a whole, or (F) any change resulting from compliance with terms of this Agreement or the consummation of the transactions contemplated by this Agreement. 

(p) “Maturity Date” means the date that is 720 Business Days (36 Monthly Periods) from the Commencement Date.

(q) “Monthly Period” means each successive 20 Business Day period commencing with the Commencement Date.

(r) “Person” means an individual or entity, including, but not limited to, any limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or
agency thereof.

(s) “Principal Market” means the NYSE MKT; provided however, that in the event the Company’s Common Stock is ever listed or traded on The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market or
the New York Stock Exchange, then the “Principal Market” shall mean such other market or exchange on which the Company’s Common Stock is then listed or traded (it being hereby acknowledged and agreed that the term “Principal
Market” for all purposes of this Agreement and the transactions contemplated hereby shall not include the Toronto Stock Exchange (the “TSX”)).

(t) “Prospectus” means the Base Prospectus, as supplemented by any Prospectus Supplement (including the Initial Prospectus Supplement), including the documents incorporated by reference therein. 

(u) “Prospectus Supplement” means any prospectus supplement to the Base Prospectus (including the Initial Prospectus Supplement) filed with the SEC pursuant to Rule 424(b) under the Securities Act in connection with the
transactions contemplated by this Agreement, including the documents incorporated by reference therein. 

(v) “Purchase Amount” means, with respect to any particular Regular Purchase made hereunder, the portion of the Available Amount to be purchased by the Investor pursuant to a Purchase Notice in accordance with Section 2 hereof.

(w) “Purchase Date” means, with respect to any particular purchase made hereunder, either (i) the Business Day on which the Investor receives a valid Purchase Notice or Accelerated Purchase
Notice that the Investor is to buy Purchase Shares pursuant to Section 2 hereof, if such Purchase Notice or Accelerated Purchase Notice is received by the Investor between 4:01 p.m. Eastern time and 6:00 p.m. Eastern time of such Business Day, or
(ii) the Business Day immediately prior to the Business Day on which the Investor receives a valid Purchase Notice or Accelerated Purchase Notice that the Investor is to buy Purchase Shares pursuant to Section 2 hereof, if such Purchase Notice or
Accelerated Purchase Notice is received by the Investor between 8:00 a.m. Eastern time and 9:00 a.m. Eastern time of such Business Day.

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(x)  “Purchase Notice” means an irrevocable written notice from the Company to the Investor directing the Investor to buy such Purchase Amount in Purchase Shares as specified by the Company therein in accordance with Section 2
hereof.

(y) “Purchase Price” means a price per Purchase Share equal to the lower of (i) the lowest Sale Price of the Common Stock on the applicable Purchase Date and (ii) the arithmetic average of the three (3) lowest Closing Sale Prices
of the Common Stock during the twelve (12) consecutive Business Days ending on the Business Day immediately preceding such Purchase Date (in each case, to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock
split or other similar transaction that occurs on or after the date of this Agreement).

(z) “Registration Statement” means the effective registration statement on Form S-3 (Commission File No. 333-170202) filed by the Company with the SEC pursuant to the Securities Act for the registration of shares of its Common
Stock, including the Securities, and certain other securities, as such Registration Statement has been or may be amended and supplemented from time to time, including all documents filed as part thereof or incorporated by reference therein, and
including all information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430B of the Securities Act, including any comparable successor registration statement filed by the Company with the SEC pursuant to the Securities
Act for the registration of shares of its Common Stock, including the Securities. 

(aa) “Sale Price” means any sale price for the shares of Common Stock on the Principal Market as reported by the Principal Market.

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

(cc) “Securities” means, collectively, the Purchase Shares and the Commitment Shares. 

(dd) “Securities Act” means the Securities Act of 1933, as amended, and the rules and

regulations promulgated thereunder.

(ee) “Subsidiary” means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting stock or similar voting interest, in each case that would be disclosable
pursuant to Item 601(b)(21) of Regulation S-K promulgated under the Securities Act. 

(ff) “Transaction Documents” means, collectively, this Agreement and the exhibits hereto, and each of the other agreements, documents, certificates and instruments entered into or furnished by the parties hereto in connection with
the transactions contemplated hereby and thereby. 

(gg) “Transfer Agent” means Computershare Trust Company, N.A., or such other Person who is then serving as the transfer agent for the Company in respect of the Common Stock. 

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2. PURCHASE AND SALE OF COMMON STOCK.

Subject to the terms and conditions set forth in this Agreement, the Company has the right, but not the obligation, to sell to the Investor, in its sole and absolute discretion, and the Investor has the obligation to purchase from the Company,
Purchase Shares as follows:

 (a) Commencement of Sales of Common Stock.  Following the satisfaction of the conditions (the “Commencement”) as set forth in Sections 7 and 8 below (the date of satisfaction of such conditions, the “Commencement
Date”), the Investor shall purchase $750,000 worth of Purchase Shares (such purchase the “Initial Purchase” and such Purchase Shares are referred herein as “Initial Purchase Shares”) at a price
equal to $0.38 per share. Beginning five (5) Business Days following the Commencement Date, the Company shall have the right, but not the obligation, in its sole and absolute discretion, to deliver to the Investor from time to time a Purchase
Notice directing the Investor to buy Purchase Shares (each such purchase a “Regular Purchase”) in any amount up to two hundred fifty thousand (250,000) Purchase Shares per Purchase Notice at the applicable Purchase Price. The
Company may deliver a Purchase Notice only between 4:01 p.m. Eastern time and 6:00 p.m. Eastern time on the applicable Purchase Date or between 8:00 a.m. Eastern time and 9:00 a.m. Eastern time on the Business Day next following the applicable
Purchase Date. The Company may deliver multiple Purchase Notices to the Investor so long as at least one (1) Business Day has passed since the most recent Regular Purchase was completed. 

 (b) Accelerated Purchases. At any time after the Commencement Date, the Company shall also have the right, but not the obligation, in its sole and absolute discretion, to deliver to the Investor from time to time an Accelerated Purchase
Notice directing the Investor to buy, in addition to any Regular Purchase, up to One Hundred Thousand Dollars ($100,000) worth of Purchase Shares (each such purchase an “Accelerated Purchase” and the amount so purchased the
“Accelerated Purchase Amount”) per Accelerated Purchase Notice at the applicable Accelerated Purchase Price (as defined below), provided that the Closing Sale Price of the Common Stock must not be below $0.50 (subject to
equitable adjustment for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction) on the applicable Purchase Date (the “Accelerated Purchase Threshold Price”). The Accelerated Purchase
Amount may be increased to up to Two Hundred Thousand Dollars ($200,000.00) per Accelerated Purchase Notice if the Closing Sale Price of the Common Stock is not below $0.80 (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction) on the applicable Purchase Date.  The Accelerated Purchase Amount may be increased to up to Three Hundred Thousand Dollars ($300,000.00) per Accelerated Purchase
Notice if the Closing Sale Price of the Common Stock is not below $1.10 (subject to equitable adjustment for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction) on the applicable Purchase Date. The
Accelerated Purchase Amount may be increased to up to Four Hundred Thousand Dollars ($400,000.00) per Accelerated Purchase Notice if the Closing Sale Price of the Common Stock is not below $1.50 (subject to equitable adjustment for any
reorganization, recapitalization, non-cash dividend, stock split or other similar transaction) on the applicable Purchase Date.  The Accelerated Purchase Amount may be increased to up to Five Hundred Thousand Dollars ($500,000.00) per
Accelerated Purchase Notice if the Closing Sale Price of the Common Stock is not below $2.00 (subject to equitable adjustment for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction) on the
applicable Purchase Date.  As used herein, the term “Accelerated Purchase Price” shall mean a price per Purchase Share equal to the lesser of (i) the lowest Sale Price of the Common Stock on the applicable Purchase Date for such
Accelerated Purchase or (ii) the lowest Purchase Price during the five (5) Business Days immediately prior to the applicable Purchase Date for such Accelerated Purchase (assuming for purposes of this Section 2(b) that the Company had delivered a
Purchase Notice on each of such five Business Days, whether or not such Purchase Notice is
actually delivered). However, if on any Purchase Date the Closing Sale Price of the Common Stock is below the Accelerated Purchase Threshold Price, such Accelerated Purchase shall be void and the Investor’s obligations to buy Purchase Shares
in respect of that Accelerated Purchase Notice shall be terminated. Thereafter, the Company shall again have the right to submit an Accelerated Purchase Notice as set forth herein by delivery of a new Accelerated Purchase Notice only if the Closing
Sale Price of the Common Stock is at or above the Accelerated Purchase Threshold Price on the applicable Purchase Date. The Company may deliver an Accelerated Purchase Notice only between 4:01 p.m. Eastern time and 6:00 p.m. Eastern time on the
applicable Purchase Date or between 8:00 a.m. Eastern time and 9:00 a.m. Eastern time on the Business Day next following the applicable Purchase Date. The Company may deliver multiple Accelerated Purchase Notices to the Investor so long as at least
one (1) Business Day has passed since the most recent Accelerated Purchase was completed. 

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 (c)  Payment for Purchase Shares. The Investor shall pay to the Company an amount equal to the Purchase Amount or Accelerated Purchase Amount (as applicable) as full payment for the Purchase Shares specified in the Purchase Notice or the
Accelerated Purchase Notice (as applicable), in each case calculated in accordance with Sections 2(a) or 2(b) (as applicable), via wire transfer of immediately available funds to such account as the Company may from time to time designate by written
notice in accordance with this Agreement, on the same Business Day that the Investor receives such Purchase Shares, if they are received by the Investor before 1:00 p.m. Eastern time, or if received by the Investor after 1:00 p.m. Eastern time, on
the next Business Day. The Company shall, or shall cause the Transfer Agent to, electronically transfer such Purchase Shares as DWAC Shares to an account or accounts specified in writing by the Investor to the Company against payment therefor. The
Company shall not issue any fraction of a share of Common Stock in connection with any Regular Purchase or Accelerated Purchase, and, if the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such
fraction of a share of Common Stock up or down to the nearest whole share. All payments made under this Agreement shall be made in lawful money of the United States of America via wire transfer of immediately available funds to such account as the
Company may from time to time designate by written notice in accordance with the provisions of this Agreement. Whenever any amount expressed to be due by the terms of this Agreement is due on any day that is not a Business Day, the same shall
instead be due on the next succeeding day that is a Business Day.

 (d) Purchase Price Floor; No Sales on TSX. Notwithstanding anything to the contrary contained in this Agreement, the Company and the Investor shall not effect any purchases under this Agreement if the Purchase Price or Accelerated Purchase
Price would be less than the Floor Price. The Company and the Investor acknowledge and agree that no Securities that may be issued pursuant to this Agreement will be offered for sale or sold on the TSX. 

 (e) Compliance with Registration Statement Eligibility Requirements and Rules of Principal Market and TSX.

  (i) Maximum Share Cap. The Company shall not issue or sell any shares of Common Stock pursuant to this Agreement, and the Investor shall not purchase or acquire any shares of Common Stock pursuant to this Agreement, to the extent that after
giving effect thereto, the aggregate number of shares of Common Stock that would be issued pursuant to this Agreement and the transactions contemplated hereby would exceed the lesser of: (A) subject to Section 2(e)(ii) below, 17,007,580
shares of Common Stock (which number of shares shall be reduced, on a share-for-share basis, by the number of shares of Common Stock issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the
transactions contemplated by this Agreement under applicable rules of the NYSE MKT or any other Principal Market on which the Common Stock may be listed or quoted) (the “Exchange Cap”), unless and until the Company elects to
solicit stockholder approval of the transactions
contemplated by this Agreement and the stockholders of the Company have in fact approved the transactions contemplated by this Agreement in accordance with the applicable rules and regulations of the NYSE MKT, any other Principal Market on which the
Common Stock may be listed or quoted, and the Certificate of Incorporation and Bylaws of the Company; and (B) for so long as the Company is subject to the limitations set forth in General Instruction I.B.6. of Form S-3, the maximum number of shares
of Common Stock that the Company may issue pursuant to this Agreement and the transactions contemplated hereby without exceeding the limitations set forth in General Instruction I.B.6. of Form S-3 (the “Registration Statement Eligibility
Cap”). For all purposes of this Agreement, the term “Maximum Share Cap” shall mean the lesser of (i) the Exchange Cap, to the extent applicable to the transactions contemplated by this Agreement, and (ii) the
Registration Statement Eligibility Cap, to the extent applicable to the transactions contemplated by this Agreement. For the avoidance of doubt, the Company may, but shall be under no obligation to, request its stockholders to approve the
transactions contemplated by this Agreement; provided, that if stockholder approval is not obtained in accordance with this Section 2(e)(i), the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated
hereby at all times during the term of this Agreement (except as set forth in Section 2(e)(ii) below). 

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  (ii) At-Market Transaction.  Notwithstanding Section 2(e)(i) above and subject to the prior approval of the NYSE MKT or any other Principal Market on which the Common Stock may be listed or quoted (to the extent required), the Exchange Cap
shall not be applicable for any purposes of this Agreement and the transactions contemplated hereby, solely to the extent that the issuances and sales of Common Stock pursuant to this Agreement are deemed to be at a price equal to or in excess of
the greater of book or market value of the Common Stock as calculated in accordance with the applicable rules of the NYSE MKT or any other Principal Market on which the Common Stock may be listed or quoted (it being hereby acknowledged and agreed
that the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated hereby at all other times during the term of this Agreement, unless the stockholder approval referred to in Section 2(e)(i) is obtained).

  (iii) General.  The Company shall not issue any shares of Common Stock pursuant to this Agreement and the transactions contemplated hereby if such issuance would reasonably be expected to result in (A) a violation of the Securities Act or
non-compliance with General Instruction I.B.6. of Form S-3 or (B) a breach of the rules and regulations of the NYSE MKT or any other Principal Market on which the Common Stock may be listed or quoted, or the rules and regulations of the TSX. The
provisions of this Section 2(e) shall be implemented in a manner otherwise than in strict conformity with the terms hereof only if necessary to ensure compliance with the Securities Act, General Instruction I.B.6. of Form S-3, and the rules
and regulations of the NYSE MKT or any other Principal Market on which the Common Stock may be listed or quoted, or the rules and regulations of the TSX. 

 (f) Beneficial Ownership Limitation.  Notwithstanding anything to the contrary contained in this Agreement, the Company shall not issue or sell and the Investor shall not purchase or acquire any shares of Common Stock under this Agreement
which, when aggregated with all other shares of Common Stock then beneficially owned by the Investor and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the
beneficial ownership by the Investor and its affiliates of more than 9.99% of the then issued and outstanding shares of Common Stock (the “Beneficial Ownership Limitation”). Upon the written or oral request of the Investor, the
Company shall promptly (but not later than 24 hours) confirm orally or in writing to the Investor the number of shares of Common Stock then outstanding. The Investor and the Company shall each cooperate in good faith in the determinations required
hereby and the application hereof. The Investor’s written certification to the Company of the applicability of the Beneficial
Ownership Limitation, and the resulting effect thereof hereunder at any time, shall be conclusive with respect to the applicability thereof and such result absent manifest error. 

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3. INVESTOR'S REPRESENTATIONS AND WARRANTIES.

The Investor represents and warrants to the Company that as of the date hereof and as of the Commencement Date:

(a) Accredited Investor Status.  The Investor is an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation D promulgated under the Securities Act. 

(b) Information. The Investor (i) is able to bear the economic risk of an investment in the Securities including a total loss thereof, (ii) has such knowledge and experience in financial and business matters that it is capable of evaluating
the merits and risks of the proposed investment in the Securities and (iii) has had an opportunity to ask questions of and receive answers from the officers of the Company concerning the financial condition and business of the Company and others
matters related to an investment in the Securities. Neither such inquiries nor any other due diligence investigations conducted by the Investor or its representatives shall modify, amend or affect the Investor's right to rely on the Company's
representations and warranties contained in Section 4 below. The Investor has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities. 

(c) No Governmental Review. The Investor understands that no U.S. federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability
of an investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities. 

(d) Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and is a valid and binding agreement of the Investor enforceable against the Investor in accordance with its
terms, subject as to enforceability to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.

(e) Residency. The Investor is a resident of the State of Illinois. 

(f) No Prior Short Selling. The Investor represents and warrants to the Company that at no

time prior to the date of this Agreement has any of the Investor, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is defined in Rule
200 of Regulation SHO of the Exchange Act) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock. 

4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

Except as set forth in the SEC Documents (as defined below), the Company represents and warrants to the Investor that as of the date hereof and as of the Commencement Date: 

(a) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization,
with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or
in good standing, as the case may be, would not have or reasonably be expected to result in a Material Adverse Effect, and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification, except where the revocation, limitation or curtailment would not reasonably be expected to result in a Material Adverse Effect. The Company has no Subsidiaries except as set forth in the SEC
Documents. 

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(b) Authorization; Enforcement; Validity.  (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and each of the other Transaction Documents to which it is a party, and
to issue the Securities in accordance with the terms hereof and thereof, (ii) the execution and delivery of the Transaction Documents by the Company to which it is a party and the consummation by it of the transactions contemplated hereby and
thereby, including without limitation, the issuance of the Commitment Shares and the reservation for issuance and the issuance of the Purchase Shares, issuable pursuant to this Agreement, have been duly authorized by the Company's Board of Directors
(the “Board of Directors”) and the Pricing Committee of the Board of Directors (the “Pricing Committee”) and no further consent or authorization is required by the Company, the Board of Directors, the Pricing
Committee or the Company’s stockholders, (iii) this Agreement has been, and each other Transaction Document shall be on the Commencement Date, duly executed and delivered by the Company and (iv) this Agreement constitutes, and each other
Transaction Document upon its execution by the Company, shall constitute, the valid and binding obligations of the Company enforceable against the Company in accordance with its terms, except (A) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (B) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (C) insofar as indemnification and contribution provisions may be limited by applicable law. The Board of Directors and the Pricing Committee have approved the respective resolutions (the “Signing
Resolutions”) substantially in the form as set forth as Exhibit B attached hereto to authorize this Agreement and the transactions contemplated hereby. The Signing Resolutions are valid, in full force and effect and have not
been modified or supplemented in any respect. The Company has delivered to the Investor a true and correct copy of a unanimous written consent adopting the Signing Resolutions executed by all of the members of the Board of Directors and the Pricing
Committee, as applicable.  No other approvals or consents of the Board of Directors, the Pricing Committee or the Company’s stockholders is necessary under applicable laws and the Company’s Certificate of Incorporation or Bylaws to
authorize the execution and delivery of this Agreement or any of the transactions contemplated hereby, including, but not limited to, the issuance of the Commitment Shares and the issuance of the Purchase Shares. 

(c) Capitalization. The capitalization of the Company is as described in the Company’s most recently filed Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as applicable, (i) no shares of the Company's capital stock are
subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company, (ii) there are no outstanding debt securities of the Company, (iii) there are no outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its Subsidiaries, (iv) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their respective
securities under the Securities Act, (v) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries, (vi) there are no securities or instruments containing anti-dilution or similar provisions that will
be triggered by the issuance of the Securities as described in this Agreement and (vii) the Company does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement. The Company has furnished or
made available to the Investor true and correct copies of the Company's Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company's Bylaws, as amended and as
in effect on the date hereof (the "Bylaws"), and summaries of the terms of all securities convertible into or exercisable for Common Stock, if any, and copies of any documents containing the material rights of the holders thereof in respect
thereto. 

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(d) Issuance of Securities. Upon issuance and payment therefor in accordance with the terms and conditions of this Agreement, the Purchase Shares shall be validly issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. 43,000,000 shares of Common Stock have been duly authorized and reserved for issuance under this Agreement as Purchase Shares.
Upon issuance in accordance with the terms and conditions of this Agreement, the Commitment Shares, shall be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common Stock. The Securities are being issued pursuant to the Registration Statement and the issuance of the Securities has been registered by the Company pursuant to the
Securities Act. Upon receipt of the Purchase Shares and the Commitment Shares, the Investor will have good and marketable title to such Securities and such Securities will be immediately freely tradable on the Principal Market. 

(e) No Conflicts; Compliance. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Commitment Shares and the reservation for issuance and issuance of the Purchase Shares) will not (i) result in a violation of the Certificate of Incorporation or the Bylaws or (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 the Company or any of its Subsidiaries
is a party, or (iii) subject to the Required Approvals (as defined below), result in a violation of any law, rule, regulation, order, judgment or decree (including U.S. federal and state and foreign securities laws and regulations and the rules and
regulations of the Principal Market and the TSX applicable to the Company or any of its Subsidiaries) or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations which would not reasonably be expected to result in a Material Adverse Effect. Except as disclosed in the SEC Documents, neither the Company
nor any of its Subsidiaries is in violation of its Certificate of Incorporation or Bylaws (or other similar organizational documents), or is in violation of any term of, or is in default under, any contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its Subsidiaries, except for such conflicts, defaults, terminations or amendments which could not reasonably be expected to have a
Material Adverse Effect. The business of the Company and its Subsidiaries is not being conducted, and shall not be conducted, in knowing violation of any law, ordinance or regulation of any governmental
entity, except for such violations the sanctions for which would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

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(f) Filings and Authorizations. Except as disclosed in the SEC Documents and except where the failure to obtain any such consent, authorization or order or make any such filing or registration would not reasonably be expected to result in a
Material Adverse Effect, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any federal, state, local or foreign court or governmental agency or any federal, state, local or foreign
regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents in accordance with the terms hereof or thereof, other than (i) as specifically contemplated
by this Agreement, (ii) as required under the Securities Act and applicable state securities or “Blue Sky” laws, and (iii) as required under the rules and regulations of the Principal Market and the TSX in connection with the
transactions contemplated hereby (collectively, the “Required Approvals”), each of which has been, or (if not required to have been obtained or made on or prior to the date of this Agreement), shall be, timely obtained or made
prior to the Commencement Date. Since one year prior to the date hereof, the Company has not received nor delivered any notices or correspondence from or to the Principal Market or the TSX relating to any violation of the listing requirements of the
Principal Market or the TSX. Neither the Principal Market nor the TSX has commenced any delisting proceedings against the Company. 

(g) SEC Documents; Financial Statements; Reporting Obligations In Canada. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two (2) 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 Documents”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Documents
prior to the expiration of any such extension. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Documents, when
filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Documents comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise
specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The Company has made
available to the Investor true and complete copies of all comment letters and substantive correspondence received by the Company from the SEC during the 12 months immediately preceding the date hereof, together with all written responses of the
Company thereto in the form such responses were filed with the SEC. There are no outstanding or unresolved comments in such comment letters received by the Company from the SEC. The SEC has not commenced any enforcement proceedings against the
Company or any of its Subsidiaries. The Company is a reporting issuer or an equivalent thereof in each of the Provinces of British Columbia, Alberta and Ontario and is not noted as being in default on any list of reporting issuers or reporting
issuers in default maintained by the securities commission in each such Province. 

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(h) Absence of Certain Changes. Except as disclosed in the SEC Documents and except as contemplated by this Agreement, since the date of the latest audited financial statements included within the SEC Documents, there has been no material
adverse change in the business, properties, operations, financial condition or results of operations of the Company or its Subsidiaries. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection
pursuant to any Bankruptcy Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings.  The Company is financially solvent
and is generally able to pay its debts as they become due.

(i) Absence of Litigation. Except as disclosed in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to
the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any of the Company’s or its Subsidiaries’ officers or directors in their capacities as such, which would, if there were an unfavorable
decision, reasonably be expected to result in a Material Adverse Effect. 

(j) Acknowledgment Regarding Investor's Status. The Company acknowledges and agrees that the Investor is acting solely in the capacity of arm's length purchaser with respect to the Transaction Documents and the transactions contemplated
hereby and thereby. The Company further acknowledges that the Investor is not 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 hereby
and thereby and any advice given by the Investor or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investor's purchase of the
Securities. The Company further represents to the Investor that the Company's decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives and advisors. 

(k) No Integrated Offering. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company in a manner that would require stockholder approval pursuant to the rules of the Principal Market on which any of the securities of
the Company are listed or designated or the TSX. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Principal Market or the TSX. 

 (l) Intellectual Property Rights. The Company and each Subsidiary have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar
intellectual property rights currently employed by them in connection with the business currently operated by them that are necessary for use in the conduct of their respective businesses as described in the SEC Documents and which the failure to so
have would not reasonably be expected to have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property Rights of the Company or any Subsidiary. Except as set forth in the SEC Documents, there are no actions, suits or judicial proceedings pending, or to the Company’s
knowledge threatened, relating to patents or proprietary information to which the Company or any of its Subsidiaries is a party or of which any property of the Company or any of its Subsidiaries is subject, and neither the Company nor any of its
Subsidiaries has received any written notice or is otherwise aware of any infringement of or conflict with asserted rights of any other Person with respect to any Intellectual Property Rights or of any facts or
circumstances which could render any Intellectual Property Rights invalid or inadequate to protect the interest of the Company and its Subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. 

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(m) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except in the case of clauses (i), (ii) and (iii) above, where the failure to so comply or to obtain such permits, licenses or
approvals would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. 

(n) Title. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company
and the Subsidiaries, in each case free and clear of all liens, encumbrances and defects (collectively, “Liens”), except for Liens that do not materially affect the value of such property and do not materially interfere with the
use made and proposed to be made of such property by the Company and its Subsidiaries, and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties, and Liens relating to project
financing which has been disclosed in the SEC Documents. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance (with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries). 

(o) Insurance.  The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged.  Neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. 

(p) Regulatory Permits. The Company and its Subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses
(collectively, “Material Permits”), and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. 

(q) Tax Status. The Company and each of its Subsidiaries has made or filed (or requested valid extensions of) all federal, state and foreign income and all other material tax returns, reports and declarations required by any jurisdiction to
which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith.  There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. 

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(r) Transactions With Affiliates. Except as set forth in the SEC Documents, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors) that is required to be disclosed and is not disclosed, including any contract, agreement or other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $120,000, other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on
behalf of the Company and (iii) other employee benefits, including stock option agreements under any equity incentive plan of the Company. 

(s) Application of Takeover Protections. The Company and its board of directors have taken or will take prior to the Commencement Date all necessary action, if any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation or the laws of the state of its incorporation which is or could become applicable to the
Investor as a result of the transactions contemplated by this Agreement, including, without limitation, the Company's issuance of the Securities and the Investor's ownership of the Securities. 

(t)  Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents that will be, and to the extent that they actually are, timely publicly disclosed by the Company, the
Company confirms that neither it nor any other Person acting on its behalf has provided the Investor or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information which is not
otherwise disclosed in the Registration Statement or the SEC Documents. The Company understands and confirms that the Investor will rely on the foregoing representation in effecting acquisitions and sales of securities of the Company. All of the
disclosure furnished by or on behalf of the Company to the Investor regarding the Company, its business and the transactions contemplated hereby, including the SEC Documents and disclosure schedules to this Agreement, is true and correct in all
material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The
press releases disseminated by the Company during the twelve months preceding the date of this Agreement and the SEC Documents taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that the Investor neither makes nor has made any
representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3 hereof. 

(u) Foreign Corrupt Practices.    Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. 

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(v) Registration Statement. The Company has prepared and filed with the SEC in accordance with the provisions of the Securities Act the Registration Statement. The Registration Statement was declared effective by order of the SEC on December
1, 2010. The Registration Statement is effective pursuant to the Securities Act and available for the issuance of the Securities thereunder, and the Company has not received any written notice that the SEC has issued or intends to issue a stop order
or other similar order with respect to the Registration Statement or the Prospectus or that the SEC otherwise has (i) suspended or withdrawn the effectiveness of the Registration Statement or (ii) issued any order preventing or suspending the use of
the Prospectus or any Prospectus Supplement, in either case, either temporarily or permanently or intends or has threatened in writing to do so. The “Plan of Distribution” section of the Prospectus permits the issuance of the Securities
hereunder. At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at each deemed effective date thereof pursuant to Rule 430B(f)(2) of the Securities Act, the Registration Statement and
any amendments thereto complied and will comply in all material respects with the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and the Base Prospectus and any Prospectus Supplement thereto, at the time such Base Prospectus or such Prospectus Supplement thereto was issued and on the Commencement Date,
complied and will comply in all material respects with the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading; provided that this representation and warranty does not apply to statements in or omissions from any Prospectus Supplement made in reliance upon and in conformity with
information relating to the Investor furnished to the Company in writing by or on behalf of the Investor expressly for use therein. The Company meets all of the requirements for the use of a registration statement on Form S-3 pursuant to the
Securities Act for the offering and sale of the Securities contemplated by this Agreement, including, to the extent applicable to the transactions contemplated by this Agreement, those set forth in General Instruction I.B.6. of Form S-3, and the SEC
has not notified the Company of any objection to the use of the form of the Registration Statement pursuant to Rule 401(g)(1) of the Securities Act. The Company hereby confirms that, for so long as the Company is subject to General Instruction
I.B.6. of Form S-3, the Company shall not issue any shares of Common Stock pursuant to this Agreement if such issuance would reasonably be expected to result in non-compliance with General Instruction I.B.6. of Form S-3. The Registration Statement,
as of its effective date, meets the requirements set forth in Rule 415(a)(1)(x) pursuant to the Securities Act. At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2) of the Securities Act) relating to any of the Securities, the Company was not and is not an Ineligible Issuer (as defined in Rule 405 of the Securities Act). The Company has not distributed any offering
material in connection with the offering and sale of any of the Securities, and, until the Investor does not hold any of the Securities, shall not distribute any offering material in connection with the offering and sale of any of the Securities, to
or by the Investor, in each case, other than the Registration Statement or any amendment thereto, the Prospectus or any Prospectus Supplement required pursuant to applicable law or the Transaction Documents. The Company has not made, and agrees that
unless it obtains the prior written consent of the Investor it will not make, an offer relating to the Securities that would constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act. The Company shall comply
with the requirements of Rules 164 and 433 under the Securities Act applicable to any such free writing prospectus consented to by the Investor, including in respect of timely filing with the SEC, legending and record keeping. 

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 (w) DTC Eligibility. The Company, through the Transfer Agent, currently participates in the DTC Fast Automated Securities Transfer (FAST) Program and the Common Stock can be transferred electronically to third parties via the DTC Fast
Automated Securities Transfer (FAST) Program. 

(x) Sarbanes-Oxley. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002, as amended, which are applicable to it as of the date hereof.

(y) Certain Fees. Except as disclosed on Schedule 4(y), no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. Except as disclosed on Schedule 4(y), the Investor shall have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section 4(y) that may be due in connection with the transactions contemplated by the Transaction Documents.

(z) Investment Company. The Company is not, and immediately after receipt of payment for the Securities will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(aa) Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating
the registration of the Common Stock pursuant to the Exchange Act nor has the Company received any notification that the SEC is currently contemplating terminating such registration. The Common Stock is currently listed on (i) the Principal Market
under the trading symbol “HTM” and (ii) the TSX under the trading symbol “GTH”. The Company has not, in the 12 months preceding the date hereof, received any notice from any Person to the effect that the Company is not in
compliance with the listing or maintenance requirements of the Principal Market or the TSX. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance
requirements.

(bb) Accountants. The Company’s accountants are set forth in the SEC Documents and, to the knowledge of the Company, such accountants are an independent registered public accounting firm as required by the Securities Act. 

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

(dd) Shell Company Status. The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

(ee) No Other At-The-Market Agreements. The Company has heretofore properly terminated all other existing agreements with any agent or underwriter for any “at-the-market” offering of its equity securities or other continuous
equity transaction and has disclosed each such termination in a report on Form 8-K heretofore filed with the SEC. Except for this Agreement and the transactions contemplated hereby, the Company is not a party to any agreement with an agent or
underwriter for any “at-the-market” offering of its equity securities or other continuous equity transaction. 

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5. COVENANTS.

(a) Filing of Current Report, Initial Prospectus Supplement and Initial Press Release. The Company agrees that it shall, (i) within the time required under the Exchange Act, file with the SEC a report on Form 8-K relating to the transactions
contemplated by, and describing the material terms and conditions of, the Transaction Documents (the “Current Report”) and (ii) within the time required under the applicable rules of the TSX, issue a press release relating to the
transactions contemplated by the Transaction Documents (the “Initial Press Release”), which Initial Press Release shall be filed as an exhibit to the Current Report. The Company further agrees that it shall, within the time
required under Rule 424(b) under the Securities Act, file with the SEC the Initial Prospectus Supplement pursuant to Rule 424(b) under the Securities Act specifically relating to the transactions contemplated by, and describing the material terms
and conditions of, the Transaction Documents, containing information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rule 430B under the Securities Act, and disclosing all information relating to the
transactions contemplated hereby required to be disclosed in the Registration Statement and the Prospectus as of the date of the Initial Prospectus Supplement, including, without limitation, information required to be disclosed in the section
captioned “Plan of Distribution” in the Prospectus. The Company shall permit the Investor to review and comment upon (A) the Current Report and the Initial Prospectus Supplement at least two (2) Business Days prior to their filing with
the SEC and (B) the Initial Press Release at least one (1) Business Day prior to its issuance by the Company, the Company shall give due consideration to all such comments, and the Company shall not file the Current Report or the Initial Prospectus
Supplement with the SEC or issue the Initial Press Release, in each case in a form to which the Investor reasonably objects. The Investor shall use its reasonable best efforts to comment upon the Current Report, the Initial Press Release and the
Initial Prospectus Supplement within one (1) Business Day from the date the Investor receives the final version thereof from the Company. The Investor shall furnish to the Company such information regarding itself, the Securities held by it and the
intended method of distribution thereof as shall be reasonably requested by the Company in connection with the preparation and filing of the Current Report, the Initial Press Release and the Initial Prospectus Supplement, and shall otherwise
cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Current Report and the Initial Prospectus Supplement with the SEC and the issuance of the Initial Press Release. 

(b) Blue Sky. The Company shall take all such action, if any, as is reasonably necessary in order to obtain an exemption for or to qualify (i) the issuance of the Commitment Shares and the sale of the Purchase Shares to the Investor under
this Agreement and (ii) any subsequent resale of the Commitment Shares and any Purchase Shares by the Investor, in each case, under applicable securities or “Blue Sky” laws of the states of the United States in such states as is
reasonably requested by the Investor from time to time, and shall provide evidence of any such action so taken to the Investor. 

(c) Listing/DTC.  The Company shall promptly secure the listing of all of the Purchase Shares and Commitment Shares to be issued to the Investor hereunder on the Principal Market and the TSX (subject to official notice of issuance) and upon
each other national securities exchange or automated quotation system, if any, upon which the Common Stock is then listed, and shall maintain, so long as any shares of Common Stock shall be so listed, such listing of all such Securities from time to
time issuable hereunder. The Company shall use commercially reasonable efforts to maintain the listing of the Common Stock on the Principal Market and shall comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules and regulations of the Principal Market and, for so long as the Common Stock shall be listed on the TSX, shall comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or
rules and regulations of the TSX. Neither the Company nor any of its Subsidiaries shall take any action that would reasonably be expected
to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall promptly, and in no event later than the following Business Day, provide to the Investor copies of any notices it receives from any Person
regarding the continued eligibility of the Common Stock for listing on the Principal Market or the TSX. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section. The Company shall take all action
necessary to ensure that its Common Stock can be transferred electronically as DWAC Shares. 

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(d) Limitation on Short Sales and Hedging Transactions. The Investor agrees that, beginning on the date of this Agreement and ending on the date of termination of this Agreement as provided in Section 11, the Investor and its agents,
representatives and affiliates shall not in any manner whatsoever enter into or effect, directly or indirectly, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock or (ii)
hedging transaction, which establishes a net short position with respect to the Common Stock.

(e) Issuance of Commitment Shares.  In consideration for the Investor’s execution and delivery of this Agreement, the Company shall cause the Transfer Agent to issue, on the date of this Agreement, 651,819 shares of Common Stock (the
“Commitment Shares”) directly to the Investor electronically as DWAC Shares and shall deliver to the Transfer Agent the Irrevocable Transfer Agent Instructions (as defined below) with respect to the issuance of the Commitment
Shares.  For the avoidance of doubt, all of the Commitment Shares shall be fully earned as of the date of this Agreement, whether or not the Commencement shall occur or any Purchase Shares are purchased by the Investor under this Agreement and
irrespective of any termination of this Agreement.

(f) Due Diligence; Non-Public Information. During the term of this Agreement, the Investor shall have the right, from time to time, to perform reasonable due diligence on the Company during the Company’s normal business hours.  The
Company and its officers and employees shall provide information and reasonably cooperate with the Investor in connection with any reasonable request by the Investor related to the Investor's due diligence of the Company. Each party hereto agrees
not to disclose any Confidential Information of the other party to any third party and shall not use the Confidential Information for any purpose other than in connection with, or in furtherance of, the transactions contemplated hereby. Each party
hereto acknowledges that the Confidential Information shall remain the property of the disclosing party and agrees that it shall take all reasonable measures to protect the secrecy of any Confidential Information disclosed by the other party. From
and after the date of this Agreement, the Company covenants and agrees that neither it nor any other Person acting on its behalf will provide the Investor or its agents or counsel with any information that the Company believes constitutes material
non-public information, unless a simultaneous public announcement thereof is made by the Company in the manner contemplated by Regulation FD under the Exchange Act. In the event of a breach of the foregoing covenant by the Company or any Person
acting on its behalf (as determined in the reasonable good faith judgment of the Investor), in addition to any other remedy provided herein or in the other Transaction Documents, the Investor shall have the right to make a public disclosure, in the
form of a press release, public advertisement or otherwise, of such material, non-public information without the prior approval by the Company; provided that the Company shall have failed to publicly disclose such material, non-public information
prior to such disclosure by the Investor. The Investor shall not have any liability to the Company, any of its Subsidiaries, or any of their respective directors, officers, employees, stockholders or agents, for any such disclosure. The Company
understands and confirms that the Investor shall be relying on the foregoing covenants in effecting transactions in securities of the Company. 

 (g) Purchase Records. The Investor and the Company shall each maintain records showing the remaining Available Amount at any given time and the Purchase Dates, and the Purchase Amounts
and Accelerated Purchase Amounts for each respective Regular Purchase and Accelerated Purchase, or shall use such other method, reasonably satisfactory to the Investor and the Company.

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(h) Taxes. The Company shall pay any and all transfer, stamp or similar taxes that may bepayable with respect to the issuance and delivery of any shares of Common Stock to the Investor made under this Agreement.

(i)  No Variable Rate Transactions. From the date hereof until the earlier of (x) the Maturity Date and (y) 180 Business Days following the termination of this Agreement in accordance with Section 11 hereof, the Company shall be prohibited
from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration (or a combination of units thereof) involving a Variable Rate
Transaction other than in connection with an Exempt Issuance. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or
equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock (including, without limitation any “full ratchet” or
“weighted average” anti-dilution provisions, but excluding any adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or similar transaction) or (ii) enters into any agreement, including,
but not limited to, an equity line of credit or at-the-market offering, whereby the Company may sell securities at a future determined price. “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers, directors or vendors of the Company pursuant to any stock or option plan duly adopted for such purpose, by the Board of Directors or a majority of the members of a committee of directors established for such purpose, (b)
securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, and (c) securities issued
pursuant to acquisitions or strategic transactions approved by the Board of Directors or a majority of the members of a committee of directors established for such purpose, which acquisitions or strategic transactions can have a Variable Rate
Transaction component, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an asset in a business synergistic with the business of the
Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities. For twelve (12) Monthly Periods beginning on the date hereof, the Company agrees that, prior to entering into each and any definitive agreement for the sale directly or indirectly of any debt, Common
Stock or Common Stock Equivalents other than in connection with an Exempt Issuance (a “Subsequent Transaction”), the Company shall provide notice to the Investor (“Offering Notice”) not less than three (3)
Business Days nor more than five (5) Business Days prior to entering into any such Subsequent Transaction, including the relevant terms and conditions of such Subsequent Transaction, and the Investor shall have the right to participate on equivalent
terms and conditions in up to 10% of such Subsequent Transaction (the “Right of Participation”) by delivering notice to the Company not later than two (2) Business Days after receipt of the Offering Notice, which notice from
Investor shall indicate Investor’s intention to participate in the Subsequent Transaction and the amount of its participation. In the event that the Investor does not
provide notice within the two (2) Business Day period and the Company does not enter into such Subsequent Transaction within five (5) Business Days from the Offering Notice, the Company shall again be required to provide an Offering Notice as set
forth herein. The Company shall deliver an Offering Notice for each and any Subsequent Transaction and agrees that it shall not execute any definitive documentation for any Subsequent Transaction whatsoever, unless it has first complied with this
Section 5(i).  Notwithstanding anything to the contrary in this Section 5(i) and unless otherwise agreed to by Investor, the Company shall either confirm in writing to Investor that the transaction with respect to the Subsequent Transaction has been
abandoned or shall publicly disclose its intention to enter into the Subsequent Transaction, in either case in such a manner such that Investor will not be in possession of any material, non-public information, by the fifth (5th) Business Day
following delivery of the Offering Notice. If by such fifth (5th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent Transaction has been made, and no notice regarding the abandonment of such transaction has
been received by Investor, such transaction shall be deemed to have been abandoned and Investor shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. If the Investor is in
possession of any information that is reasonably deemed to be material, non-public information concerning the Company or any of its Subsidiaries during such five (5) Business Day period, the Investor agrees to keep such information confidential and
shall not engage in transactions with respect to the Company’s securities, and the Company agrees not to deliver any Purchase Notice to the Investor, in each case during such five (5) Business Day (or shorter) period that the Investor may be
reasonably deemed to be in possession of material, non-public information concerning the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Subsequent Transaction, the Company shall provide
Investor with another Offering Notice in accordance with, and subject to, the terms of this Section 5(i) and Investor will again have the Right of Participation set forth in this Section 5(i).

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(j) Effective Registration Statement; Current Prospectus; Securities Law Compliance. The Company shall use its reasonable best efforts to keep the Registration Statement effective pursuant to Rule 415 promulgated under the Securities Act, and
to keep the Registration Statement and the Prospectus current and available for issuances and sales of all of the Securities by the Company to the Investor, and for the resale by the Investor, at all times until the earlier of (i) the date on which
the Investor shall have sold all the Securities and no Available Amount remains under this Agreement and (ii) the earlier of (A) 90 days following the Maturity Date and (B) 180 Business Days following the termination of this Agreement in accordance
with Section 11 hereof (the "Registration Period"). Without limiting the generality of the foregoing, during the Registration Period, the Company shall (a) take all action necessary to cause the Common Stock to continue to be registered as a
class of securities under Sections 12(b) or 12(g) of the Exchange Act, shall comply with its reporting and filing obligations under the Exchange Act, and shall not take any action or file any document (whether or not permitted by the Exchange Act)
to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act, and (b) prepare and file with the SEC, at the Company’s expense, such amendments (including, without limitation,
post-effective amendments) to the Registration Statement and such Prospectus Supplements pursuant to Rule 424(b) under the Securities Act, in each case, as may be necessary to keep the Registration Statement effective pursuant to Rule 415
promulgated under the Securities Act, and to keep the Registration Statement and the Prospectus current and available for issuances and sales of all of the Securities by the Company to the Investor, and for the resale of all of the Securities by the
Investor, at all times during the Registration Period (it being hereby acknowledged and agreed that the Company shall prepare and file with the SEC, at the Company’s expense, immediately prior to the third anniversary of the initial effective
date of the Registration Statement (the “Renewal Date”), a new Registration Statement relating to the Securities, in a form satisfactory to the Investor and its counsel, and, if such Registration Statement is not an automatic
shelf registration statement on Form S-3ASR, use its reasonable best efforts to cause such Registration Statement to be declared effective within
180 days after the Renewal Date). The Investor shall furnish to the Company such information regarding itself, the Securities held by it and the intended method of distribution thereof as shall be reasonably requested by the Company in connection
with the preparation and filing of any such amendment to the Registration Statement (or new Registration Statement) or any such Prospectus Supplement, and shall otherwise cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any such amendment to the Registration Statement (or new Registration Statement) or any such Prospectus Supplement. The Company shall comply with all applicable federal, state and foreign securities laws
in connection with the offer, issuance and sale of the Securities contemplated by the Transaction Documents. Without limiting the generality of the foregoing, neither the Company nor any of its officers, directors or affiliates will take, directly
or indirectly, any action designed or intended to stabilize or manipulate the price of any security of the Company, or which would reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the
Company.

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(k) Stop Orders. The Company shall advise the Investor promptly (but in no event later than 24 hours) and shall confirm such advice in writing: (i) of the Company’s receipt of notice of any request by the SEC for amendment of or a
supplement to the Registration Statement, the Prospectus, any Prospectus Supplement or for any additional information; (ii) of the Company’s receipt of notice of the issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or prohibiting or suspending the use of the Prospectus or any Prospectus Supplement, or of the Company’s receipt of any notification of the suspension of qualification of the Securities for offering or sale in any
jurisdiction or the initiation or contemplated initiation of any proceeding for such purpose; and (iii) of the Company becoming aware of the happening of any event, which makes any statement of a material fact made in the Registration Statement, the
Prospectus or any Prospectus Supplement untrue or which requires the making of any additions to or changes to the statements then made in the Registration Statement, the Prospectus or any Prospectus Supplement in order to state a material fact
required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading,
or of the necessity to amend the Registration Statement or supplement the Prospectus or any Prospectus Supplement to comply with the Securities Act or any other law. The Company shall not be required to disclose to the Investor the substance or
specific reasons of any of the events set forth in clauses (i) through (iii) of the immediately preceding sentence, but rather, shall only be required to disclose that the event has occurred. The Company shall not deliver to the Investor any
Purchase Notice, and the Investor shall not be obligated to purchase any shares of Common Stock under this Agreement and agrees not to resell any Securities covered by the Registration Statement and the Prospectus through the Registration Statement
and the Prospectus, during the continuation or pendency of any of the events set forth in clauses (i) through (iii) above in this Section 5(k). If at any time the SEC shall issue any stop order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus or any Prospectus Supplement, the Company shall use its reasonable best efforts to obtain the withdrawal of such order at the earliest possible time. The Company shall make available
to the Investor, without charge, a copy of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to the Registration Statement or the Prospectus, as the case may be. 

(l) Amendments to Registration Statement; Prospectus Supplements. Except as provided in this Agreement and other than periodic and current reports required to be filed pursuant to the Exchange Act, the Company shall not file with the SEC any
amendment to the Registration Statement or any supplement to the Base Prospectus that refers to the Investor, the Transaction Documents or the transactions contemplated thereby (including, without limitation, any Prospectus Supplement filed in
connection with the transactions contemplated by the Transaction Documents), in each case with respect
to which (a) the Investor shall not previously have been advised and afforded the opportunity to review and comment thereon at least two (2) Business Days prior to filing with the SEC, as the case may be, (b) the Company shall not have given due
consideration to any comments thereon received from the Investor or its counsel, or (c) the Investor shall reasonably object, unless the Company reasonably has determined that it is necessary to amend the Registration Statement or make any
supplement to the Prospectus to comply with the Securities Act or any other applicable law or regulation, in which case the Company shall promptly (but in no event later than 24 hours) so inform the Investor, the Investor shall be provided with a
reasonable opportunity to review and comment upon any disclosure referring to the Investor, the Transaction Documents or the transactions contemplated thereby, as applicable, and the Company shall expeditiously furnish to the Investor a copy
thereof. In addition, for so long as, in the reasonable opinion of counsel for the Investor, the Prospectus is required to be delivered in connection with any acquisition or sale of Securities by the Investor, the Company shall not file any
Prospectus Supplement with respect to the Securities without furnishing to the Investor as many copies of such Prospectus Supplement, together with the Prospectus, as the Investor may reasonably request. 

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(m) Prospectus Delivery. The Company consents to the use of the Prospectus (and of each Prospectus Supplement thereto) in accordance with the provisions of the Securities Act and with the securities or “blue sky” laws of the
jurisdictions in which the Securities may be sold by the Investor, in connection with the offering and sale of the Securities and for such period of time thereafter as the Prospectus is required by the Securities Act to be delivered in connection
with sales of the Securities. The Company will make available to the Investor upon reasonable request, and thereafter from time to time will furnish to the Investor, as many copies of the Prospectus (and each Prospectus Supplement thereto) as the
Investor may reasonably request for the purposes contemplated by the Securities Act within the time during which the Prospectus is required by the Securities Act to be delivered in connection with sales of the Securities. If during such period of
time any event shall occur that in the reasonable judgment of the Company and its counsel, or in the reasonable judgment of the Investor and its counsel, is required to be set forth in the Registration Statement, the Prospectus or any Prospectus
Supplement or should be set forth therein in order to make the statements made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading, or if in the reasonable
judgment of the Company and its counsel, or in the reasonable judgment of the Investor and its counsel, it is otherwise necessary to amend the Registration Statement or supplement the Prospectus or any Prospectus Supplement to comply with the
Securities Act or any other applicable law or regulation, the Company shall forthwith prepare and, subject to Section 5(l) above, file with the SEC an appropriate amendment to the Registration Statement or an appropriate Prospectus Supplement and in
each case shall expeditiously furnish to the Investor, at the Company’s expense, such amendment to the Registration Statement or such Prospectus Supplement, as applicable, as may be necessary to reflect any such change or to effect such
compliance. The Company shall have no obligation to separately advise the Investor of, or deliver copies to the Investor of, the SEC Documents, all of which the Investor shall be deemed to have notice of. 

(n) Integration. From and after the date of this Agreement, the Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) of the Company
that would be integrated with the offer or sale of the Securities such that the rules or regulations of the Principal Market or the TSX would require stockholder approval of this transaction prior to the closing of such other transaction unless
stockholder approval is obtained before the closing of such subsequent transaction. 

(o) No Canadian Offers or Sales by Investor. The Investor covenants and agrees that it shall: (i) offer or sell any Securities that may be issued pursuant to this Agreement only (A) in transactions executed on the Principal Market through a
registered broker-dealer located in the United States or (B)
directly to third Persons, none of whom, to the Investor’s knowledge following reasonable inquiry, is a Person resident in Canada; (ii) not offer or sell any Securities that may be issued pursuant to this Agreement on the TSX or directly to
any third Person whom, to the Investor’s knowledge following reasonable inquiry, is a Person resident in Canada; (iii) deliver to the Company, promptly after the issuance of Securities pursuant to this Agreement, a certificate stating that
with respect to any resales of such Securities by the Investor, the Investor shall comply with clauses (i) and (ii) of this Section 5(o); and (iv) with respect to any resale of such Securities by the Investor in any transaction referred to in clause
(i)(B) of this Section 5(o), the Investor shall include in each confirmation slip delivered by the Investor to the purchaser of such Securities a statement that it is the Investor’s understanding that such purchaser is not a Person resident in
Canada. 

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(p) Use of Proceeds. The Company will use the net proceeds from the offering as described in the Prospectus. 

(q) Other Transactions. During the term of this Agreement, the Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement or transaction in or of which the terms thereof would restrict, materially
delay, conflict with or impair the ability or right of the Company to perform its obligations under the Transaction Documents, including, without limitation, the obligation of the Company to deliver the Purchase Shares and the Commitment Shares to
the Investor in accordance with the terms of the Transaction Documents. 

(r) Required Filings Relating to Regular Purchases and Accelerated Purchases.  To the extent required under the Securities Act or under interpretations by the SEC thereof, as promptly as practicable after the close of each of the
Company’s fiscal quarters (or on such other dates as required under the Securities Act or under interpretations by the SEC thereof), the Company shall prepare a prospectus supplement, which will set forth the number of Purchase Shares sold to
the Investor during such quarterly period (or other relevant period), the purchase price for such Purchase Shares and the net proceeds received by the Company from such sales, and shall file such prospectus supplement with the SEC pursuant to Rule
424(b) under the Securities Act (and within the time periods required by Rule 424(b) and Rule 430B under the Securities Act). If any such prospectus supplement is not required to be filed under the Securities Act or under interpretations by the SEC
thereof, the Company shall disclose the information referenced in the immediately preceding sentence in its annual report on Form 10-K or its quarterly report on Form 10-Q (as applicable) in respect of the quarterly period that ended immediately
before the filing of such report in which sales of Purchase Shares were made to the Investor under this Agreement, and file such report with the SEC within the applicable time period required by the Exchange Act. The Company shall not file any such
prospectus supplement or report containing disclosure relating to such sales of Purchase Shares unless a copy of such disclosure has been submitted to the Investor a reasonable period of time before the filing and the Investor has not reasonably
objected thereto (it being acknowledged and agreed that the Company need not submit any portion of any Form 10-K or Form 10-Q other than the specific disclosure relating to any sales of Purchase Shares). The Company shall also furnish copies of all
such prospectus supplements to each exchange or market in the United States on which sales of the Purchase Shares may be made as may be required by the rules or regulations of such exchange or market, if applicable. For so long as the Common Stock
is listed on the TSX, within 10 calendar days after the end of each month during the term of this Agreement, the Company will, in addition to filing a Form 1 with the TSX, separately e-mail to the TSX a schedule indicating the aggregate number and
price of Purchase Shares sold on a daily basis during such month or as the TSX may otherwise direct, and will provide, upon the request of the TSX, additional monthly reports of daily sales of the Purchase Shares, which schedules and reports shall
be submitted to the TSX on a confidential, non-public basis. 

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6. TRANSFER AGENT INSTRUCTIONS.

On the date of this Agreement, the Company shall issue irrevocable instructions to the Transfer Agent, and any subsequent transfer agent, to issue the Purchase Shares and the Commitment Shares in accordance with the terms of this Agreement (the
“Irrevocable Transfer Agent Instructions”). All Securities to be issued to or for the benefit of the Investor pursuant to this Agreement shall be issued as DWAC Shares. The Company warrants to the Investor that no instruction
other than the Irrevocable Transfer Agent Instructions referred to in this Section 6 will be given by the Company to the Transfer Agent with respect to the Securities, and the Securities shall otherwise be freely transferable on the books and
records of the Company. 

7. CONDITIONS TO THE COMPANY'S RIGHT TO COMMENCE SALES OF SHARES OF COMMON STOCK. 

The right of the Company hereunder to commence sales of the Purchase Shares on the Commencement Date is subject to the satisfaction or, where legally permissible, the waiver of each of the following conditions: 

(a) The Investor shall have executed each of the Transaction Documents and delivered the same to the Company; 

(b) No stop order with respect to the Registration Statement shall be pending or threatened by the SEC; 

(c) All federal, state, local and foreign governmental laws, rules and regulations applicable to the transactions contemplated by the Transaction Documents and necessary for the execution, delivery and performance of the Transaction Documents and
the consummation of the transactions contemplated thereby in accordance with the terms thereof shall have been complied with, and all consents, authorizations and orders of, and all filings and registrations with, all federal, state, local and
foreign courts or governmental agencies and all federal, state, local and foreign regulatory or self-regulatory agencies necessary for the execution, delivery and performance of the Transaction Documents and the consummation of the transactions
contemplated thereby in accordance with the terms thereof shall have been obtained or made, including, without limitation, in each case those required under the Securities Act, the Exchange Act, applicable state securities or “Blue Sky”
laws or applicable rules and regulations of the Principal Market and the TSX or otherwise required by the SEC, the Principal Market, the TSX or any

U.S. state or Canadian provincial securities regulators; 

(d) No statute, regulation, order, decree, writ, ruling or injunction shall have been enacted,

entered, promulgated, threatened or endorsed by any federal, state or local court or governmental authority of competent jurisdiction which prohibits the consummation of or which would materially modify or delay any of the transactions contemplated
by the Transaction Documents; 

(e) All Securities to be issued by the Company to the Investor under the Transaction Documents shall have been approved for listing on the Principal Market and the TSX in accordance with the applicable rules and regulations of the Principal Market
and the TSX, as applicable, subject only to official notice of issuance; and 

(f) The representations and warranties of the Investor contained in this Agreement shall be true and correct in all material respects as of the date hereof and as of the Commencement Date. 

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8. CONDITIONS TO THE INVESTOR'S OBLIGATION TO PURCHASE SHARES OF COMMON STOCK.

The obligation of the Investor to buy Purchase Shares under this Agreement is subject to the satisfaction or, where legally permissible, the waiver of each of the following conditions on or prior to the Commencement Date and, once such conditions
have been initially satisfied, there shall not be any ongoing obligation to satisfy such conditions after the Commencement Date: 

(a) The Company shall have executed each of the Transaction Documents and delivered the same to the Investor; 

(b) The Common Stock shall be listed on the Principal Market, trading in the Common Stock shall not have been within the last 365 days suspended by the SEC or the Principal Market, and all Securities to be issued by the Company to the Investor
pursuant to this Agreement shall have been approved for listing on the Principal Market and the TSX in accordance with the applicable rules and regulations of the Principal Market and the TSX, as applicable, subject only to official notice of
issuance; 

(c) The Investor shall have received a written opinion of the Company's United States legal counsel, dated as of the Commencement Date and in form and substance reasonably satisfactory to the Investor; 

(d) The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects (except to the extent that any such representations and warranties are qualified as to materiality, in which case,
such representations and warranties shall be true and correct as so qualified) as of the date hereof and as of the Commencement Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall
be true and correct in all material respects as of such date), and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Commencement Date.  The Investor shall have received a certificate, executed by the CEO, President or CFO of the Company, dated as of the Commencement Date, to the foregoing effect in the
form attached hereto as Exhibit A; 

(e) The Board of Directors and the Pricing Committee of the Company shall have adopted resolutions substantially in the form attached hereto as Exhibit B which shall be in full force and effect without any amendment or supplement
thereto as of the Commencement Date;

(f) As of the Commencement Date, the Company shall have reserved out of its authorized and unissued Common Stock, solely for the purpose of effecting purchases of Purchase Shares hereunder, 43,000,000 shares of Common Stock; 

(g) The Irrevocable Transfer Agent Instructions shall have been delivered to the Company’s Transfer Agent and acknowledged in writing by the Company and the Company's Transfer Agent, and the Commitment Shares shall have been issued directly to
the Investor electronically as DWAC Shares; 

(h) The Company shall have delivered to the Investor a certificate evidencing the incorporation and good standing of the Company in the State of Delaware issued by the Secretary of State of the State of Delaware as of a date within ten (10) Business
Days of the Commencement Date; 

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NY 241,957,499v9 5-15-12

(i) The Company shall have delivered to the Investor a certified copy of the Certificate of Incorporation as certified by the Secretary of State of the State of Delaware within ten (10) Business Days of the Commencement Date; 

(j) The Company shall have delivered to the Investor a secretary's certificate executed by the Secretary of the Company, dated as of the Commencement Date, in the form attached hereto as Exhibit C; 

(k) The Registration Statement shall continue to be effective and no stop order with respect to the Registration Statement shall be pending or threatened by the SEC. The Company shall have a maximum dollar amount certain of Common Stock registered
under the Registration Statement which is sufficient to issue to the Investor not less than (i) the full Available Amount worth of Purchase Shares plus (ii) all of the Commitment Shares. The Current Report and the Initial Prospectus Supplement each
shall have been filed with the SEC and the Initial Press Release shall have been issued, in each case as required pursuant to Section 5(a), and copies of the Prospectus shall have been delivered to the Investor in accordance with Section 5(m)
hereof. The Prospectus shall be current and available for issuances and sales of all of the Securities by the Company to the Investor, and for the resale of all of the Securities by the Investor. Any other Prospectus Supplements required to have
been filed by the Company with the SEC under the Securities Act at or prior to the Commencement Date shall have been filed with the SEC within the applicable time periods prescribed for such filings under the Securities Act. All reports, schedules,
registrations, forms, statements, information and other documents required to have been filed by the Company with the SEC at or prior to the Commencement Date pursuant to the reporting requirements of the Exchange Act shall have been filed with the
SEC within the applicable time periods prescribed for such filings under the Exchange Act; 

(l) No Event of Default has occurred, or any event which, after notice and/or lapse of time, would become an Event of Default has occurred;

(m) All federal, state, local and foreign governmental laws, rules and regulations applicable to the transactions contemplated by the Transaction Documents and necessary for the execution, delivery and performance of the Transaction Documents and
the consummation of the transactions contemplated thereby in accordance with the terms thereof shall have been complied with, and all consents, authorizations and orders of, and all filings and registrations with, all federal, state, local and
foreign courts or governmental agencies and all federal, state, local and foreign regulatory or self-regulatory agencies necessary for the execution, delivery and performance of the Transaction Documents and the consummation of the transactions
contemplated thereby in accordance with the terms thereof shall have been obtained or made, including, without limitation, in each case those required under the Securities Act, the Exchange Act, applicable state securities or “Blue Sky”
laws or applicable rules and regulations of the Principal Market and the TSX, or otherwise required by the SEC, the Principal Market, the TSX or anyU.S. state or Canadian provincial securities regulators;

(n) No statute, regulation, order, decree, writ, ruling or injunction shall have been enacted,entered, promulgated, threatened or endorsed by any federal, state, local or foreign court or governmental authority of competent jurisdiction which prohibits the consummation of or which would materially modify or delay any of the transactions
contemplated by the Transaction Documents; 

(o) No action, suit or proceeding before any federal, state, local or foreign arbitrator or any court or governmental authority of competent jurisdiction shall have been commenced or threatened, and no inquiry or investigation by any federal, state,
local or foreign governmental authority of competent jurisdiction shall have been commenced or threatened, against the Company, or any of the officers,
directors or affiliates of the Company, seeking to restrain, prevent or change the transactions contemplated by the Transaction Documents, or seeking material damages in connection with such transactions; 

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NY 241,957,499v9 5-15-12

(p) On or prior to the Commencement Date, the Company shall take all necessary action, if any, and such actions as reasonably requested by the Investor, in order to render inapplicable any control share acquisition, business combination, stockholder
rights plan or poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation or the laws of the state of its incorporation which is or could become applicable to the
Investor as a result of the transactions contemplated by this Agreement, including, without limitation, the Company's issuance of the Securities and the Investor's ownership of the Securities; and 

(q) The Company shall have provided the Investor with the information requested by the Investor in connection with its due diligence requests made prior to, or in connection with, the Commencement, in accordance with the terms of Section 5(f)
hereof. 

9. INDEMNIFICATION.

In consideration of the Investor's execution and delivery of the Transaction Documents and acquiring the Securities hereunder and in addition to all of the Company's other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless the Investor and all of its affiliates, stockholders, officers, directors, employees and direct or indirect investors and any of the foregoing person's agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to: (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated
hereby or thereby, (c) any cause of action, suit or claim brought or made against such Indemnitee and arising out of or resulting from the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby, (d) any violation of the Securities Act, the Exchange Act, U.S. state securities or “Blue Sky” laws or Canadian securities laws, or the rules and regulations of the Principal Market
or the TSX in connection with the transactions contemplated by the Transaction Documents by the Company or any of its Subsidiaries, affiliates, officers, directors or employees, (e) any untrue statement or alleged untrue statement of a material fact
contained, or incorporated by reference, in the Registration Statement or any amendment thereto or any omission or alleged omission to state therein, or in any document incorporated by reference therein, a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (f) any untrue statement or alleged untrue statement of a material fact contained, or incorporated by reference, in the Prospectus, or any omission or alleged omission to state therein,
or in any document incorporated by reference therein, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that (I)
the indemnity contained in clause (c) of this Section 9 shall not apply to any Indemnified Liabilities which directly and primarily result from the gross negligence or willful misconduct of the Indemnitee, (II) the indemnity contained in clauses
(d), (e) and (f) of this Section 9 shall not apply to any Indemnified Liabilities to the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor expressly for use in any Prospectus Supplement (it being
hereby acknowledged and agreed that the written information set forth on Exhibit D attached hereto is the only written information furnished to the Company by or on behalf of the Investor expressly for use in the Initial Prospectus
Supplement), if the Prospectus was timely made available by the Company to the Investor pursuant to Section 5(l), (III) the indemnity contained in clauses (d), (e) and (f) of this Section 9 shall not inure to the benefit of the Investor to the
extent such Indemnified Liabilities are based on a failure of the Investor to deliver or to cause to be delivered the Prospectus made available by the Company, if such Prospectus was timely made available by the Company pursuant to Section 5(l), and
if delivery of the Prospectus would have cured the defect giving rise to such Indemnified Liabilities, and (IV) the indemnity in this Section 9 shall not apply to amounts paid in settlement of any claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.  Payment under this indemnification shall be made within thirty (30) days from the date Investor makes written request for
it. A certificate containing reasonable detail as to the amount of such indemnification submitted to the Company by Investor shall be conclusive evidence, absent manifest error, of the amount due from the Company to Investor. If any action shall be
brought against any Indemnitee in respect of which indemnity may be sought pursuant to this Agreement, such Indemnitee shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of
its own choosing reasonably acceptable to the Indemnitee. Any Indemnitee shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnitee, except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in
such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such Indemnitee, in which case the Company shall be responsible for the
reasonable fees and expenses of no more than one such separate counsel.

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NY 241,957,499v9 5-15-12

10. EVENTS OF DEFAULT.

An “Event of Default” shall be deemed to have occurred at any time as any of the following events occurs: 

(a) the effectiveness of the Registration Statement registering the Securities lapses for any reason (including, without limitation, the issuance of a stop order or similar order), or the Prospectus is unavailable for the sale by the Company to the
Investor (or the resale by the Investor) of any or all of the Securities to be issued to the Investor under the Transaction Documents, and such lapse or unavailability continues for a period of ten (10) consecutive Business Days or for more than an
aggregate of thirty (30) Business Days in any 365-day period; 

(b) the suspension of the Common Stock from trading on the Principal Market for a period of ten (10) consecutive Business Days, provided that the Company may not direct the Investor to purchase shares of Common Stock during any such suspension; 

(c) the delisting of the Common Stock from the Principal Market, provided, however, that the Common Stock is not immediately thereafter trading on the New York Stock Exchange, The
NASDAQ Capital Market, The NASDAQ Global Market or The NASDAQ Global Select Market (or nationally recognized successor thereto); 

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NY 241,957,499v9 5-15-12

(d) the failure for any reason by the Transfer Agent to issue Purchase Shares to the Investor within five (5) Business Days after the applicable Purchase Date; 

(e) the Company breaches any representation, warranty, covenant or other term or condition under any Transaction Document if such breach could have a Material Adverse Effect and except, in the case of a breach of a covenant which is reasonably
curable, only if such breach continues for a period of at least five (5) Business Days after the Company obtains notice of such breach; 

(f) if any Person commences a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law;

(g) if the Company pursuant to or within the meaning of any Bankruptcy Law; (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or (iv) makes a general assignment for the benefit of its creditors or is generally unable to pay its debts as the same become due;

(h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company or for all or substantially all of its property, or
(iii) orders the liquidation of the Company or any Subsidiary; 

 (i) a material adverse change occurs in the Company, its business, financial condition, operations or prospects; or 

 (j) if at any time after the Commencement Date, the Maximum Share Cap is reached (to the extent such Maximum Share Cap is applicable pursuant to Section 2(e) hereof). 

In addition to any other rights and remedies under applicable law and this Agreement, including the Investor termination rights set forth in Section 11 hereof, so long as an Event of Default has occurred and is continuing, or if any event which,
after notice and/or lapse of time, would become an Event of Default, has occurred and is continuing, or so long as the Purchase Price is below the Floor Price, the Company shall not deliver to the Investor any Purchase Notice, and the Investor shall
not purchase any shares of Common Stock under this Agreement. 

11. TERMINATION 

This Agreement may be terminated only as follows:

(a) If pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its
property, or the Company makes a general assignment for the benefit of its creditors (any of which would be an Event of Default as described in Sections 10(f), 10(g) and 10(h) hereof), this Agreement shall automatically terminate without any
liability or payment to the Company (except as set forth below) without further action or notice by any Person.

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NY 241,957,499v9 5-15-12

(b) In the event that the Commencement shall not have occurred on or before May 31, 2012, due to the failure to satisfy the conditions set forth in Sections 7 and 8 above with respect to the Commencement, either the Company or the Investor shall
have the option to terminate this Agreement at the close of business on such date or thereafter without liability of any party to any other party (except as set forth below); provided, however, that the right to terminate this Agreement under this
Section 11(b) shall not be available to any party if such party is then in breach of any covenant or agreement contained in this Agreement or any representation or warranty of such party contained in this Agreement fails to be true and correct such
that the conditions set forth in Section 7(f) or Section 8(d), as applicable, could not then be satisfied.

(c)  At any time after the Commencement Date, the Company shall have the option to terminate this Agreement for any reason or for no reason by delivering notice (a “Company Termination Notice”) to the Investor electing to
terminate this Agreement without any liability whatsoever of any party to any other party under this Agreement (except as set forth below). The Company Termination Notice shall not be effective until one (1) Business Day after it has been received
by the Investor.

(d) This Agreement shall automatically terminate on the date that the Company sells and the Investor purchases the full Available Amount as provided herein, without any action or notice on the part of any party and without any liability whatsoever
of any party to any other party under this Agreement (except as set forth below). 

(e) If, for any reason or for no reason, the full Available Amount has not been purchased in accordance with Section 2 of this Agreement by the Maturity Date, this Agreement shall automatically terminate on the Maturity Date, without any action or
notice on the part of any party and without any liability whatsoever of any party to any other party under this Agreement (except as set forth below). 

Except as set forth in Sections 11(a) (in respect of an Event of Default under Sections 10(f), 10(g) and 10(h)), 11(d) and 11(e), any termination of this Agreement pursuant to this Section 11 shall be effected by written notice from the Company to
the Investor, or the Investor to the Company, as the case may be, setting forth the basis for the termination hereof. The representations and warranties and covenants of the Company and the Investor contained in Sections 3, 4, 5, and 6 hereof, the
indemnification provisions set forth in Section 9 hereof and the agreements and covenants set forth in Sections 10, 11 and 12, shall survive the Commencement and any termination of this Agreement. No termination of this Agreement shall (i)
affect the Company's or the Investor's rights or obligations under this Agreement with respect to pending Regular Purchases and Accelerated Purchases, and the Company and the Investor shall complete their respective obligations with respect to any
pending Regular Purchases and Accelerated Purchases under this Agreement or (ii) be deemed to release the Company or the Investor from any liability for intentional misrepresentation or willful breach of any of the Transaction Documents. 

12. MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial. The corporate laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction Documents shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of Chicago, for the adjudication of any dispute hereunder or under the other Transaction Documents or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such 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 HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 

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NY 241,957,499v9 5-15-12

(b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which 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; provided that a facsimile signature or signature delivered by e-mail in a “.pdf” format data file shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the
signature were an original signature. 

(c) Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 

(d) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. 

(e) Entire Agreement; Amendment.  The Transaction Documents supersede all other prior oral or written agreements between the Investor, the Company, their affiliates and Persons acting on their behalf with respect to the subject matter
thereof, and this Agreement, the other Transaction Documents and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. The Company acknowledges and agrees that is has not relied on, in any manner whatsoever, any representations or
statements, written or oral, other than as expressly set forth in the Transaction Documents. No provision of this Agreement may be amended other than by a written instrument signed by both parties hereto. 

(f) Notices.  Any notices, consents or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt when delivered personally; (ii)
upon receipt when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 

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NY 241,957,499v9 5-15-12

If to the Company: 
                   U.S. Geothermal Inc. 
                   1505 Tyrell
Lane 
                   Boise, ID 83706 
                   Telephone: (208) 424-1027 
                   Facsimile: (208)
424-1030 
                   Attention: Kerry Hawkley 

With a copy to: 
                   Dorsey & Whitney LLP 
                   701 Fifth
Avenue, Suite 6100 
                   Seattle, WA 98104 
                   Telephone: (206) 903-8803

                   Facsimile: (206) 260-8917
                   Attention: Kimberly R. Anderson, Esq.

If to the Investor: 
                   Lincoln Park Capital Fund, LLC 
                   440
North Wells, Suite 620 
                   Chicago, IL 60654 
                   Telephone: (312) 822-9300

                   Facsimile: (312) 822-9301 
                   Attention: Josh Scheinfeld/Jonathan Cope

With a copy to: 
                   Greenberg Traurig, LLP
                   The MetLife
Building 
                   200 Park Avenue 
                   New York, NY 10166 
                  
Telephone: (212) 801-9200 
                   Facsimile: (212) 801-6400
                   Attention: Anthony J. Marsico,
Esq.

If to the Transfer Agent: 
                   Computershare Trust Company, N.A.

                   350 Indiana Street, Suite 750 
                   Golden, CO 80401 
                   Telephone: (303)
262-0714 
                   Facsimile: (303) 262-0633 
                   Attention: Kathy Kinard 

or at such other address and/or facsimile number and/or to the
attention of such other person as the recipient party has specified by written
notice given to each other party three (3) Business Days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, and recipient facsimile number or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively. 

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NY 241,957,499v9 5-15-12

(g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Investor, including by merger or consolidation. The Investor may not assign its rights or obligations under this Agreement. 

(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other
Person. 

(i) Publicity. The Investor shall have the right to approve before issuance any press release, SEC filing or any other public disclosure made by or on behalf of the Company whatsoever with respect to, in any manner, the Investor, its
purchases hereunder or any aspect of the Transaction Documents or the transactions contemplated thereby; provided, however, that the Company shall be entitled, without the prior approval of the Investor, to make any press release or other public
disclosure (including any filings with the SEC) with respect to such transactions as is required by applicable law and regulations (including the regulations of the Principal Market or the TSX), so long as prior to making any such press release or
other public disclosure the Company and its counsel shall have provided the Investor and its counsel with a reasonable opportunity to review and comment upon, and shall have consulted with the Investor and its counsel on the form and substance of,
such press release or other public disclosure. The Company agrees and acknowledges that its failure to fully comply with this provision constitutes a Material Adverse Effect. The Company shall have the right to approve before issuance any press
release or any other public disclosure made by or on behalf of the Investor whatsoever with respect to, in any manner, the Company or any aspect of the Transaction Documents or the transactions contemplated thereby; provided, however, that the
Investor shall be entitled, without the prior approval of the Company, to make any press release or other public disclosure with respect to such transactions as is required by applicable law and regulations, so long as prior to making any such press
release or other public disclosure the Investor and its counsel shall have provided the Company and its counsel with a reasonable opportunity to review and comment upon, and shall have consulted with the Company and its counsel on the form and
substance of, such press release or other public disclosure. 

(j) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party
may reasonably request in order to consummate and make effective, as soon as reasonably possible, the Commencement, and to carry out the intent and accomplish the purposes of this Agreement and the consummation of the other transactions contemplated
hereby. 

(k) No Financial Advisor, Placement Agent, Broker or Finder. The Company represents and warrants to the Investor that, except as disclosed in Schedule 4(y), it has not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby. The Investor represents and warrants to the Company that, as of the date of this Agreement, it has not engaged any financial advisor, placement agent, broker or finder in connection with the
transactions contemplated hereby. The Company shall not be responsible for the payment of any fees or commissions, if any, of any broker-dealer engaged by the Investor after the date of this Agreement in connection with any resale of the Securities
by the Investor. The Company shall be responsible for the payment of any fees or commissions, if any, of any financial advisor, placement agent, broker or finder relating to or arising out of the transactions contemplated hereby; provided, however,
that the Company shall not be responsible for the payment of any fees or commissions, if any, of any financial advisor, placement agent, broker or finder engaged by the Investor in connection with the transactions contemplated hereby, including,
without limitation, any broker-dealer engaged by the Investor after the date of this Agreement in connection with any resale of the Securities by the Investor. The Company shall pay, and hold the
Investor harmless against, any liability, loss or expense (including, without limitation, attorneys' fees and out of pocket expenses) arising in connection with any claim for fees or commissions of any financial advisor, placement agent, broker or
finder engaged by the Company in connection with the transactions contemplated hereby. 

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NY 241,957,499v9 5-15-12

(l) No Strict Construction. 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. 

(m) Remedies, Other Obligations, Breaches and Injunctive Relief.  The parties’ remedies provided in this Agreement, including, without limitation, the Investor’s remedies provided in Section 9, shall be cumulative and in addition
to all other remedies available to the parties under this Agreement, at law or in equity (including a decree of specific performance and/or other injunctive relief), no remedy of any party contained herein shall be deemed a waiver of compliance with
the provisions giving rise to such remedy and nothing herein shall limit any party’s right to pursue actual damages for any failure by the other party to comply with the terms of this Agreement. The parties acknowledge that a breach by any
party of its obligations hereunder will cause irreparable harm to the non-breaching party and that the remedy at law for any such breach may be inadequate. The parties therefore agree that, in the event of any such breach or threatened breach, the
non-breaching party shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. 

 (n) Enforcement Costs. If: (i) this Agreement is placed by the Investor in the hands of an attorney for enforcement or is enforced by the Investor through any legal proceeding; or (ii) an attorney is retained to represent the Investor in any
bankruptcy, reorganization, receivership or other proceedings affecting creditors' rights and involving a claim under this Agreement; or (iii) an attorney is retained to represent the Investor in any other proceedings whatsoever in connection with
this Agreement, then the Company shall pay to the Investor, as incurred by the Investor, all reasonable costs and expenses including attorneys' fees incurred in connection therewith, in addition to all other amounts due hereunder. 

 (o) Waivers.  No provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. 

* * * * *

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NY 241,957,499v9 5-15-12

IN WITNESS WHEREOF, the Investor and the Company have
caused this Agreement to be duly executed as of the date first written above.

THE COMPANY:

U.S. GEOTHERMAL INC. 
By:__/s/ Daniel
Kunz_______
Name: Daniel Kunz 
Title: Chief Executive Officer

INVESTOR:

LINCOLN PARK CAPITAL FUND, LLC

BY: LINCOLN PARK CAPITAL, LLC 
BY: ROCKLEDGE CAPITAL
CORPORATION
By:__/s/ Josh Scheinfeld____ 
Name: Josh Scheinfeld

Title: President 

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NY 241,957,499v9 5-15-12

	 EXHIBITS 
	  	  
	Exhibit A 	Form of Officer’s Certificate
    
	Exhibit B 	Form of Resolutions of Board of Directors and
      the Pricing Committee of the Company 
	Exhibit C 	Form of Secretary’s Certificate
    
	Exhibit D 	Information About Investor Furnished to the
      Company 

NY 241,957,499v9 5-15-12

EXHIBIT A

FORM OF OFFICER’S CERTIFICATE

This Officer’s Certificate (“Certificate”) is being delivered pursuant to Section 8(d) of that certain Purchase Agreement dated as of May 21, 2012, (the “Purchase Agreement”), by and betweenU.S. GEOTHERMAL INC., a Delaware corporation (the “Company”), and LINCOLN PARK CAPITAL FUND, LLC (the “Investor”). Terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Purchase Agreement. 

The undersigned, _____________, _________________of the Company, hereby certifies asfollows:

1. I am the ____________________of the Company and make the statements contained in this Certificate; 

2. The representations and warranties of the Company contained in the Purchase Agreement are true and correct in all material respects (except to the extent that any of such representations and warranties are qualified as to materiality, in which
case, such representations and warranties are true and correct as so qualified) as of the date of the Purchase Agreement and as of the Commencement Date as though made at that time (except for representations and warranties that speak as of a
specific date, in which case such representations and warranties are true and correct in all material respects as of such date); 

3. The Company has performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the
Commencement Date. 

 4. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors
intend to initiate involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as they become due. 

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of [___________],2012.

______________________

Name:

Title:

The undersigned as Secretary of U.S. GEOTHERMAL INC., a Delaware corporation, hereby certifies that _________________is the duly elected, appointed, qualified and acting _______________of the Company and that the signature
appearing above is his genuine signature. 

___________________________________

Secretary 

NY 241,957,499v9 5-15-12

EXHIBIT B

FORM OF COMPANY RESOLUTIONS

FOR SIGNING PURCHASE AGREEMENT

NY 241,957,499v9 5-15-12

UNANIMOUS WRITTEN CONSENT OF

THE BOARD OF DIRECTORS OF 

U.S. GEOTHERMAL INC. 
_________

In accordance with the corporate laws of the state of Delaware,
the undersigned, being all of the directors of U.S. GEOTHERMAL INC., a
Delaware corporation (the “Corporation”) do hereby consent to and adopt the
following resolutions as the action of the Board of Directors (the “Board”) for
and on behalf of the Corporation and hereby direct that this Consent be filed
with the minutes of the proceedings of the Board: 

WHEREAS, in connection with the At Market Issuance Sales
Agreement, dated September 30, 2011, by and between the Corporation and
McNicoll, Lewis & Vlak LLC, the Board established a pricing committee (the
“Pricing Committee”) consisting of three directors, and appointed Douglas
Glaspey, Daniel Kunz and John Walker to serve on the Pricing Committee until
their successors, if any, shall be duly appointed or, if earlier, their
resignation, removal or disqualification from serving as members of the Pricing
Committee or as directors of the Corporation; 

WHEREAS, the Pricing Committee is currently comprised of
Messrs. Glaspey, Kunz and Walker;

WHEREAS, there has been presented to the Board a draft of the
Purchase Agreement (the “Purchase Agreement”) by and between the Corporation and
Lincoln Park Capital Fund, LLC (“Lincoln Park”), providing for the purchase by
Lincoln Park of up to Ten Million Seven Hundred Fifty Thousand Dollars
($10,750,000) (the “Available Amount”) of the Corporation’s common stock, $.001
par value per share (the “Common Stock”), pursuant to the Corporation’s
registration statement on Form S-3 (Commission File No. 333-170202) (the
“Registration Statement”) covering the public offer and sale, from time to time,
of the Corporation’s equity capital, as may be designated and issued by the
Corporation from time to time, and a prospectus supplement to that certain base
prospectus included in the Registration Statement (the “Supplement”); and 

WHEREAS, after careful consideration and review of the Purchase
Agreement, the documents attached thereto and other factors deemed relevant by
the Board, the Board has determined that it is advisable and in the best
interests of the Corporation to engage in the transactions contemplated by the
Purchase Agreement, including, but not limited to the issuance and sale of
shares of Common Stock to Lincoln Park up to the Available Amount under the
Purchase Agreement (“Purchase Shares”). 

Transaction Documents 

NOW, THEREFORE, BE IT RESOLVED, that the Purchase Agreement and
the transactions described therein are hereby approved and the Chief Executive
Officer, President and Chief Operating Officer, Chief Financial Officer and
Treasurer and Executive Vice President of the Corporation (each such person, an
“Authorized Officer”) are severally authorized to execute and deliver the
Purchase Agreement, and any other agreements or documents contemplated thereby
in accordance with the resolutions contained herein, with such amendments,
changes, additions and deletions as any Authorized Officer may deem to be
appropriate and approve on behalf of, the Corporation, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

FURTHER RESOLVED, that the Pricing Committee shall be
authorized to exercise the authority of the Board in approving the terms and
conditions of any issuance and sale of Purchase Shares to Lincoln Park from time to time in accordance with the Purchase
Agreement (including, without limitation, the number of Purchase Shares or
amount in Purchase Shares that Lincoln Park shall be directed to purchase from
the Corporation in any Purchase Notice (as defined in the Purchase Agreement, a
“Purchase Notice”) or Accelerated Purchase Notice (as defined in the Purchase
Agreement, an “Accelerated Purchase Notice”)) and to authorize any Authorized
Officer to complete, execute and deliver a Purchase Notice or Accelerated
Purchase Notice from time to time in accordance with such terms and conditions,
as the Pricing Committee may deem necessary or desirable from time to time, the
completion, execution and delivery of such Purchase Notice or Accelerated
Purchase Notice by such Authorized Officer to be conclusive evidence that the
Pricing Committee deems such terms and conditions to be necessary or
desirable;

FURTHER RESOLVED, that any two members of the Pricing Committee
shall be authorized to approve the terms and conditions of any issuance and sale
of Purchase Shares to Lincoln Park from time to time in accordance with the
Purchase Agreement, and that the Pricing Committee shall be authorized to agree
upon such terms and conditions, such agreement to be binding on the Corporation
to the same extent as if adopted by resolutions of the Board; and 

FURTHER RESOLVED, that the terms and provisions of the
Engagement Agreement dated March 29, 2012 between the Corporation and Kuhns
Brothers Securities Corporation (“KBSC”), and acknowledgment letter dated April
18, 2012 from KBSC to the Corporation relating thereto (collectively, the
“Engagement Agreement”) are hereby approved, and the execution and delivery of
the Engagement Agreement by an officer of the Corporation prior to the adoption
of these resolutions are hereby approved, authorized, ratified and confirmed;
and 

FURTHER RESOLVED, that the form of certificate (the “KBSC
Warrant Certificate”) representing the warrants (the “KBSC Warrants”) issuable
to KBSC in connection with the issuance and sale of Purchase Shares, as further
described in the Engagement Agreement, and the terms and provisions thereof, are
hereby approved and the Authorized Officers are, each of them hereby is,
authorized to execute and deliver the KBSC Warrant Certificate, with such
amendments, changes, additions and deletions as any Authorized Officer may deem
to be appropriate and approve on behalf of, the Corporation, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

FURTHER RESOLVED, that the terms and provisions of the Form of
Transfer Agent Instructions (the “Instructions”) are hereby approved and any
Authorized Officer is authorized to execute and deliver the Instructions
(pursuant to the terms of the Purchase Agreement), with such amendments,
changes, additions and deletions as an Authorized Officer may deem appropriate
and approve on behalf of, the Corporation, such approval to be conclusively
evidenced by the signature of an Authorized Officer thereon; and 

Issuance of Common Stock and Warrants 

FURTHER RESOLVED, that the Corporation is hereby authorized to
issue shares of Common Stock upon the purchase of Purchase Shares up to the
Available Amount under the Purchase Agreement in accordance with the terms of
the Purchase Agreement and that, upon issuance, receipt of payment of the
purchase price, and delivery of Purchase Shares pursuant to the Purchase
Agreement, such Purchase Shares will be duly authorized, validly issued, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof; and 

FURTHER RESOLVED, that the Corporation shall initially reserve
43,000,000 shares of Common Stock for issuance as Purchase Shares under the
Purchase Agreement; and 

- 2 - 

FURTHER RESOLVED, that the Corporation is hereby authorized to
issue 651,819 shares of Common Stock (subject to equitable adjustment for any
reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction) (the “Commitment Shares”) in accordance with the terms of
the Purchase Agreement and that, upon issuance and delivery of the Commitment
Shares pursuant to the Purchase Agreement, the Commitment Shares will be duly
authorized, validly issued, fully paid and nonassessable with no personal
liability attaching to the ownership thereof; and 

FURTHER RESOLVED, that the Corporation shall initially reserve
651,819 shares of Common Stock for issuance as the Commitment Shares under the
Purchase Agreement; and 

FURTHER RESOLVED, that the Corporation is hereby
authorized to issue the KBSC Warrants in accordance with the Engagement
Agreement, and upon issuance of the KBSC Warrants pursuant to the Engagement
Agreement, the KBSC Warrants will be duly authorized and validly issued, and the
Corporation shall be bound accordingly; and 

FURTHER RESOLVED, that the Corporation is hereby authorized to
issue shares of Common Stock (the “KBSC Warrant Shares”) upon the exercise of
the KBSC Warrants in accordance with the terms of the KBSC Warrant Certificate
and that, upon issuance, receipt of payment of the exercise price, and delivery
in accordance with the KBSC Warrant Certificate, the KBSC Warrant Shares will be
duly authorized, validly issued, fully paid and nonassessable with no personal
liability attaching to the ownership thereof; and 

FURTHER RESOLVED, that the Corporation shall initially reserve
1,223,478 shares of Common Stock for issuance as the KBSC Warrant Shares; and

Regulatory and Exchange Filings 

FURTHER RESOLVED, that the officers of the Corporation are, and
each of them hereby is, authorized and directed to prepare and file with the
Securities and Exchange Commission the Supplement to that certain base
prospectus included in the Registration Statement; and 

FURTHER RESOLVED, that the officers of the Corporation are, and
each of them hereby is, authorized and directed, in connection with the Purchase
Agreement, the Engagement Agreement and the transactions contemplated by these
resolutions, to take such actions and to make such filings with the NYSE Amex
LLC (the “Amex”), the Financial Industry Regulatory Authority, Inc. (“FINRA”)
and the Toronto Stock Exchange (the “TSX”) as such officers deem necessary or
appropriate upon advice of counsel to the Corporation to comply with the
guidelines, rules and regulations of the Amex, FINRA and the TSX; and 

FURTHER RESOLVED, that any resolutions required by the Amex,
FINRA and the TSX to be adopted in connection with the Purchase Agreement, the
Engagement Agreement and the transactions contemplated by these resolutions are
hereby adopted and approved, and the Secretary of the Corporation is hereby
instructed to file such resolutions with the minutes of the Corporation, and all
of such resolutions are hereby incorporated and adopted by reference to the same
extent as if set forth in full herein; and 

FURTHER RESOLVED, that any resolutions required to be adopted
by the Corporation by the various states in which exemptions, qualifications or
registrations may be sought in connection with the Purchase Agreement, the
Engagement Agreement and the transactions contemplated by these resolutions are
hereby adopted and approved, and the Secretary of the Corporation is hereby
instructed to file such resolutions with the minutes of the Corporation, and all
of such resolutions are hereby incorporated and adopted by reference to the same
extent as if set forth in full herein; and 

- 3 - 

FURTHER RESOLVED, that the officers of the Corporation are, and
each of them hereby is, authorized and directed, in connection with the Purchase
Agreement and transactions contemplated by these resolutions, to take such
actions and to make such filings with federal and state securities commissions
or agencies as such officers deem necessary or appropriate upon advice of
counsel to the Corporation to comply with federal and state securities laws; and

Approval of Actions 

FURTHER RESOLVED, that the authority of the transfer agent and
registrar for the Common Stock shall extend to and include Purchase Shares, the
Commitment Shares, the KBSC Warrants and the KBSC Warrant Shares authorized by
these resolutions and that such transfer agent and registrar is hereby
authorized to record and countersign, as transfer agent, and to deliver to the
officers of the Corporation, or pursuant to the directions thereof, the
certificates (or evidence of issuance in book entry form, if so requested by
such officer) evidencing the numbers of such Purchase Shares, Commitment Shares,
KBSC Warrants and KBSC Warrant Shares issued in the name(s) as directed by such
officer in writing, and such transfer agent and registrar is hereby authorized
and directed to register, as registrar, certificates (or a statement of issuance
in book entry form, if so requested by such officer) for the number of such
Purchase Shares, Commitment Shares, KBSC Warrants and KBSC Warrant Shares as
directed by such officer; and 

FURTHER RESOLVED, that, without limiting the foregoing, the
Authorized Officers are, and each of them hereby is, authorized and directed to
proceed on behalf of the Corporation and to take all such steps as deemed
necessary or appropriate, with the advice and assistance of counsel, to cause
the Corporation to consummate the agreements referred to herein and to perform
its obligations under such agreements; and 

FURTHER RESOLVED, that the Authorized Officers be, and each of
them hereby is, authorized, empowered and directed on behalf of and in the name
of the Corporation, to take or cause to be taken all such further actions and to
execute and deliver or cause to be executed and delivered all such further
agreements, amendments, documents, certificates, reports, schedules,
applications, notices, letters and undertakings and to incur and pay all such
fees and expenses as in their judgment shall be necessary, proper or desirable
to carry into effect the purpose and intent of any and all of the foregoing
resolutions, and that all actions heretofore taken by any officer or director of
the Corporation in connection with the transactions contemplated by the
agreements described herein are hereby approved, ratified and confirmed in all
respects. 

(signature page follows) 

- 4 - 

IN WITNESS WHEREOF, the Board has executed and delivered this
Consent effective as of _____________________, 2012. 

___________________________
Dennis J. Gilles 

___________________________
Douglas J. Glaspey 

___________________________
Daniel J. Kunz 

___________________________
Paul A. Larkin 

___________________________
Leland L. Mink 

___________________________
John H. Walker

being all of the directors of U.S. GEOTHERMAL INC. 

- 5 - 

UNANIMOUS WRITTEN CONSENT OF 

THE PRICING COMMITTEE OF 

THE BOARD OF DIRECTORS OF 

U.S. GEOTHERMAL INC. 

________ 

The undersigned, being all of the members of the Pricing
Committee (the “Pricing Committee”) of the Board of Directors (the “Board”) of
U.S. Geothermal Inc., a Delaware corporation (the “Corporation”), acting by
written consent without a meeting pursuant to Section 141(f) of the Delaware
General Corporation Law, do hereby consent to the adoption of the following
resolutions and the taking of the actions contemplated thereby, and direct that
this consent be filed with the minutes of the proceedings of the Pricing
Committee: 

WHEREAS, the Board has approved the Purchase Agreement (the
“Purchase Agreement”) by and between the Corporation and Lincoln Park Capital
Fund, LLC (“Lincoln Park”), providing for the purchase by Lincoln Park of up to
Ten Million Seven Hundred Fifty Thousand Dollars ($10,750,000) (the “Available
Amount”) of the Corporation’s common stock, $.001 par value per share (the
“Common Stock”), pursuant to the Corporation’s registration statement on Form
S-3 (Commission File No. 333-170202) (the “Registration Statement”) covering the
public offer and sale, from time to time, of the Corporation’s equity capital,
as may be designated and issued by the Corporation from time to time, and a
prospectus supplement to that certain base prospectus included in the
Registration Statement; and 

WHEREAS, the Board has authorized the Pricing Committee
to exercise the authority of the Board in approving the terms and conditions of
any issuance and sale of shares of Common Stock (“Purchase Shares”) to Lincoln
Park from time to time in accordance with the Purchase Agreement (including,
without limitation, the number of Purchase Shares or amount in Purchase Shares
that Lincoln Park shall be directed to purchase from the Corporation in any
Purchase Notice (as defined in the Purchase Agreement, a “Purchase Notice”) or
Accelerated Purchase Notice (as defined in the Purchase Agreement, an
“Accelerated Purchase Notice”)) and to authorize the Chief Executive Officer,
President and Chief Operating Officer, Chief Financial Officer and Treasurer and
Executive Vice President of the Corporation (each such person, an “Authorized
Officer”) to complete, execute and deliver a Purchase Notice or Accelerated
Purchase Notice from time to time in accordance with such terms and conditions,
as the Pricing Committee may deem necessary or desirable from time to time, the
completion, execution and delivery of such Purchase Notice or Accelerated
Purchase Notice by such Authorized Officer to be conclusive evidence that the
Pricing Committee deems such terms and conditions to be necessary or desirable.

NOW, THEREFORE, LET IT BE: 

RESOLVED, that any Authorized Officer shall be authorized to
exercise the authority of the Pricing Committee in approving the terms and
conditions of any issuance and sale of Purchase Shares to Lincoln Park from time
to time in accordance with the Purchase Agreement (including, without
limitation, the number of Purchase Shares or amount in Purchase Shares that
Lincoln Park shall be directed to purchase from the Corporation in any Purchase
Notice or Accelerated Purchase Notice), and any Authorized Officer shall be
authorized to complete, execute and deliver a Purchase Notice or Accelerated
Purchase Notice from time to time in accordance with such terms and conditions,
as such Authorized Officer may deem necessary or desirable from time to time,
the completion, execution and delivery of such Purchase Notice or Accelerated Purchase Notice
by such Authorized Officer to be conclusive evidence that the Pricing Committee
deems such terms and conditions to be necessary or desirable; provided, however,
that any sale of Purchase Shares under the Purchase Agreement (excluding the
Initial Sale (as defined in the Purchase Agreement, the “Initial Sale”) shall be
subject to the terms and conditions set forth in the table below: 

		Price per Purchase Share 	Aggregate gross sales proceeds under
      Purchase Agreement 
	(1) 	
      If the Purchase Price (as defined in the Purchase
      Agreement, the “Purchase Price”) or Accelerated Purchase Price (as defined
      in the Purchase Agreement, the “Accelerated Purchase Price”) is less than
      $0.60 per share 
	
      Aggregate gross sales proceeds under the Purchase
      Agreement (excluding any proceeds from the Initial Purchase) shall not
      exceed $2,000,000 

	(2) 	
      If the Purchase Price or Accelerated Purchase Price is
      less than $0.80 per share 
	
      Aggregate gross sales proceeds under the Purchase
      Agreement (excluding any proceeds from the Initial Purchase) shall not
      exceed $4,000,000; provided, however, that such amount shall include any
      sales of Common Stock under row (1) above at a price of less than $0.60
      per share 

	(3) 	
      If the Purchase Price or Accelerated Purchase Price is
      equal to or greater than $0.80 per share 
	
      Aggregate gross sales proceeds under the Purchase
      Agreement (excluding any proceeds from the Initial Purchase) shall not
      exceed $10,000,000; provided, however, that such amount shall include any
      sales of Common Stock under rows (1) and (2) above at a price of less than
      $0.60 per share and at a price of less than $0.80 per share, respectively
      

FURTHER RESOLVED, that the Authorized Officers be, and
each of them hereby is, authorized, empowered and directed on behalf of and in
the name of the Corporation, to take or cause to be taken all such further
actions and to execute and deliver or cause to be executed and delivered all
such further agreements, amendments, documents, certificates, reports,
schedules, applications, notices, letters and undertakings and to incur and pay
all such fees and expenses as in their judgment shall be necessary, proper or
desirable to carry into effect the purpose and intent of any and all of the
foregoing resolutions, and that all actions heretofore taken by any officer or
director of the Corporation in connection with the transactions contemplated by
the agreements described herein are hereby approved, ratified and confirmed in
all respects. 

(signature page follows)

- 2 - 

This Unanimous Written Consent may be executed in several
counterparts, each of which when so executed shall be deemed to be an original
and such counterparts, taken together, shall constitute one and the same
instrument. A signed counterpart of this Unanimous Written Consent provided by
way of facsimile or other electronic transmission shall be as binding upon the
parties as an originally signed counterpart. 

IN WITNESS WHEREOF, the undersigned members of the Pricing
Committee have duly executed this Unanimous Written Consent. 

	_________________________	May ____, 2012 
	Daniel J. Kunz 	 
	  	 
	  	 
	_________________________	May ____, 2012 
	Douglas J. Glaspey 	 
	  	 
	  	 
	_________________________	May ____, 2012 
	John H. Walker 	 

EXHIBIT C

FORM OF SECRETARY’S CERTIFICATE

 This Secretary’s Certificate (“Certificate”) is being delivered pursuant to Section 8(j) of that certain Purchase Agreement dated as of May 21, 2012, (the “Purchase Agreement”), by and between U. S. GEOTHERMAL
INC., a Delaware corporation (the “Company”) and LINCOLN PARK CAPITAL FUND, LLC (the “Investor”).  Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement.

The undersigned, ___________, Secretary of the Company, hereby certifies as follows: 

1. I am the Secretary of the Company and make the statements contained in this Certificate. 

2. Attached hereto as Exhibit A and Exhibit B are true, correct and complete copies of the Company’s Bylaws, as amended to date (“Bylaws”), and Certificate of Incorporation, as amended to date (“Certificate of
Incorporation”), respectively, in each case, as amended through the date hereof, and no action has been taken by the Company, its directors, officers or stockholders, in contemplation of any further amendment relating to or affecting the
Bylaws or Certificate of Incorporation. 

3. Attached hereto as Exhibit C are true, correct and complete copies of the resolutions duly adopted by the Board of Directors of the Company (the “Board”) on [_____________], 2012 and the Pricing Committee of the Board
in compliance with the Bylaws, Certificate of Incorporation and the Delaware General Corporation Law. Such resolutions have not been amended, modified or rescinded and remain in full force and effect and such resolutions are the only resolutions
adopted by the Board, or any committee thereof, or the stockholders of the Company relating to or affecting (i) the entering into and performance of the Purchase Agreement, or the issuance, offering and sale of the Purchase Shares and the Commitment
Shares and (ii) and the performance of the Company of its obligation under the Transaction Documents as contemplated therein. 

  4. As of the date hereof, the authorized, issued and reserved capital stock of the Company is as set forth on Exhibit D hereto. 

 IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of [____________], 2012. 

_________________________

 Secretary

The undersigned as _______________of the Company, hereby certifies that_________________is the duly elected, appointed, qualified and acting Secretary of the Company, and that the signature appearing above is his genuine signature. 

___________________________________
       Chief Executive Officer 

NY 241,957,499v9 5-15-12

EXHIBIT D

Information About The Investor Furnished To The Company By The Investor Expressly For Use In Connection With The Initial Prospectus Supplement 

Information With Respect to Lincoln Capital

As of the date of the Purchase Agreement, Lincoln Park Capital Fund, LLC, beneficially owned [__________] shares of our common stock. Josh Scheinfeld and Jonathan Cope, the Managing Members of Lincoln Park Capital, LLC, the manager of
Lincoln Park Capital Fund, LLC, are deemed to be beneficial owners of all of the shares of common stock owned by Lincoln Park Capital Fund, LLC. Messrs. Cope and Scheinfeld have shared voting and investment power over the shares being offered under
the prospectus supplement filed with the SEC in connection with the transactions contemplated under the Purchase Agreement. Lincoln Park Capital, LLC is not a licensed broker dealer or an affiliate of a licensed broker dealer. 

NY 241,957,499v9 5-15-12f8k051512ex10i_patientsafe.htm

Exhibit 10.1

 

 

COMMON STOCK PURCHASE AGREEMENT

 

COMMON STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of May 15, 2012, by and among Patient Safety Technologies, Inc., a Delaware corporation (the “Company”), and each buyer identified on the signature pages hereto (each, including its successors and assigns, a “Buyer” and collectively, the “Buyers”).

 

WHEREAS:

 

A.           The Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”).

 

B.           The Buyers wish to subscribe for, and the Company wishes to issue to the Buyers, certain shares of the Company’s authorized but unissued common stock, par value $0.33 per share (the “Common Stock”).

 

C.           Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights with respect to the Registrable Shares (as defined in the Registration Rights Agreement) under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

 

NOW, THEREFORE, in consideration for the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Company and each Buyer hereby agree as follows:

 

ARTICLE I

 

PURCHASE AND SALE OF COMMON SHARES

 

1.1            Purchase of Shares.   Subject to the terms and conditions of this Agreement, each Buyer agrees to purchase at the Closing and the Company agrees to sell and issue to each Buyer, severally and not jointly, at the Closing that number of shares of Common Stock, set forth opposite each Buyer’s name on Schedule A hereto, at a purchase price of $1.40 per share (the aggregate purchase price for a particular Buyer being the “Purchase Price”).  The shares of Common Stock issued to the Buyers pursuant to this Agreement shall be referred to in this Agreement as the “Shares.”  There is no minimum number of Shares that the Company must sell in order to sell Shares to any one or more Buyer, nor any maximum number that the Company may issue to any one or more Buyer.

 

1.2            Closing; Delivery; Conditions.

 

(a)            The purchase and sale of the Shares shall take place remotely via the exchange of documents and signatures, at 10:00 a.m., Los Angeles time, on Monday, May 21, 2012, or at such earlier time and place as the Company and Buyers collectively agree upon, orally or in writing (which time and place are designated as the “Closing”, and the date on which the Closing occurs being the “Closing Date”).

 

  

1

  

 

(b)            At the Closing, (i) the Buyer shall pay its Purchase Price to the Company for the Shares to be issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions, and (ii) upon confirmation of receipt of such wire, unless otherwise requested by the Buyer and agreed to by the Company, the Shares purchased by the Buyer will be (A) delivered by electronic book-entry at The Depository Trust Company (“DTC”), registered in the Buyer’s name and address, and pursuant to the Company’s irrevocable delivery instructions to the transfer agent, as set forth on the Buyer’s signature page hereto and (B) released by the Company’s transfer agent (the “Transfer Agent”), to the Buyer. After the execution of this Agreement by the Buyer, the Buyer shall direct the broker-dealer at which the account or accounts to be credited with the Shares are maintained to set up a deposit/withdrawal at custodian instructing the Transfer Agent to credit such account or accounts with the Shares. The Shares shall bear a restrictive securities legend as provided herein.

 

(c)            The Company may reject any subscription for any reason (regardless of whether any check or wire transfer relating to such subscription is deposited in a bank or trust account), and will promptly return the funds delivered herewith, without interest, and without deduction of any expenses, in the event this subscription is rejected.  The Company will send to the Buyer a copy of this Agreement, countersigned, if the Buyer’s subscription is accepted.  The Company has no obligation to issue any of the Shares to any person who is a resident of a jurisdiction in which the issuance of the Shares would constitute a violation of the securities laws.  This Agreement is and shall be irrevocable (subject, however, to the conditions to Closing), except that the Buyer shall have no obligations hereunder to the extent that this Agreement is rejected by the Company prior to the execution of this Agreement by the Company.

 

(d)            At the Closing, the Company shall deliver or cause to be delivered to each Buyer the following:

 

(i)            a legal opinion of Company Counsel, in substantially the form of Exhibit B, executed by such counsel and delivered to the Buyers;

(ii)           a certificate of the Secretary of the Company, 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 Securities, (b) certifying the current versions of the certificate of incorporation, as amended and by-laws 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;

(iii)           the Shares purchased by such Buyer, as provided in Section 1.2(b); and

 

(iv)           an executed copy of the Registration Rights Agreement.

 

  

2

  

 

 

(e)            At the Closing, each Buyer shall deliver or cause to be delivered to the Company (i) the purchase price set forth on such Buyer’s signature page to this Agreement in United States dollars and in immediately available funds, by wire transfer to an account designated in writing to such Buyer by the Company for such purpose and (ii) an executed copy of the Registration Rights Agreement.

 

(f)            The obligations of the Company hereunder to sell and issue Shares to a Buyer at the Closing are subject to only the following conditions being met:

 

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

 

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

 

(iii)           the delivery by such Buyer of the items set forth in Section 1.2(e) of this Agreement.

 

(g)            The respective obligations of each Buyers hereunder to purchase Shares at the Closing are subject to only the following conditions being met:

 

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

 

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

 

(iii)           the delivery by the Company of the items set forth in Section 1.2(d) of this Agreement; and

 

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

 

ARTICLE II

 

BUYER’S REPRESENTATIONS AND WARRANTIES

 

Each Buyer, severally and not jointly, represents and warrants to the Company with respect to itself only that:

 

2.1           Distribution.  Such Buyer is acquiring the Shares for investment purposes for its own account and not with any current view towards a distribution of the Shares, provided, however, that by making the representations herein, such Buyer does not agree to hold any of the Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

 

  

3

  

 

2.2            Accredited Investor Status.  At the time such Buyer was offered the Shares, it was, and as of the date hereof, it is, an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

2.3            Reliance on Exemptions; No General Solicitation.  Such Buyer understands that the Shares are 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 Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Shares.  The Buyer has not received any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Shares.

 

2.4            Information.  Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Shares that have been requested by such Buyer and that such Buyer deems necessary and appropriate to enable Buyer to evaluate the financial risk inherent in making the investment in the Shares.  Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management.  Such Buyer has reviewed the SEC Documents (as defined in Section 3.8 below), including without limitation, the risk factor disclosure contained therein, and understands that its investment in the Shares involves a high degree of risk and is, at the present time, able to afford a complete loss of such investment.  Subject to the truth and accuracy of the representations and warranties made by the Company hereunder, such Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Shares.  The Buyer understands that no federal or state agency has made any finding or determination as to the fairness of this offering for investment, or any recommendation or endorsement of the Shares.  Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s representations and warranties contained herein.

 

2.5            Transfer or Resale.  Such Buyer understands that except as provided in the Registration Rights Agreement:

 

(a)            the Shares have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (i) subsequently registered thereunder or (ii) such Shares are sold, assigned or transferred pursuant to an exemption from such registration under the 1933 Act, including without limitation pursuant to Rule 144 promulgated under the 1933 Act, as amended, (or a successor rule thereto) (“Rule 144”);

 

(b)            any sale of the Shares made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Shares under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act and the rules and regulations of the SEC thereunder.  “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof; and

 

  

4

  

 

(c)            neither the Company nor any other Person is under any obligation to register the Shares under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

2.6            Legends.  Such Buyer agrees that all certificates or other instruments representing 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 (and a stop-transfer order may be placed against transfer of such stock certificates):

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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 OF 1933, AS AMENDED, OR (B) AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER SAID ACT, INCLUDING PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN LOAN OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Shares upon which it is stamped, if, unless otherwise required by state securities laws, (i) the resale of such Shares is covered by an effective registration statement under the 1933 Act (whether pursuant to the Registration Rights Agreement or otherwise), (ii) the Shares are eligible for resale without restriction under Rule 144, or (iii) in connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of a law firm reasonably acceptable to the Company and its transfer agent, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Shares may be made without registration under the applicable requirements of the 1933 Act.

 

If within three trading days after receipt by the Company or its transfer agent of a legended certificate and the other documents as specified in and complying with (or required to comply with) the immediately preceding paragraph, the Company shall fail to cause to be issued and delivered to such Buyer a certificate representing such Shares that is free from the legends set forth above, and if on or after such trading day the Buyer purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Buyer of shares of Common Stock that the Buyer anticipated receiving from the Company without any restrictive legend (the “Covering Shares”), then the Company shall, within three trading days after the Buyer’s request, pay cash to the Buyer in an amount equal to the excess (if any) of the Buyer’s total purchase price (including brokerage commissions, if any) for the Covering Shares, over the product of (A) the number of Covering Shares, times (B) the closing bid price on the date of delivery of such certificate and the other documents as specified in and complying with the paragraph immediately above.

 

  

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2.7           Validity; Enforcement.  This Agreement and the Registration Rights Agreement, and the consummation by such Buyer of the transactions contemplated hereby and thereby, have been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

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

 

2.9           Short Sales and Confidentiality Prior To The Date Hereof.  Other than consummating the transactions contemplated hereunder, such Buyer has not, nor has any Person acting on behalf of or pursuant to any understanding with such Buyer, directly or indirectly executed any purchases or sales, including short sales, of the securities of the Company during the period commencing from the time that such Buyer first received a term sheet or term summary (in either case, written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder until the date hereof.  Notwithstanding the foregoing, in the case of a Buyer that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Buyer’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Buyer’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.  Except as otherwise explicitly set forth in this Agreement, the Company acknowledges and agrees that the representations contained in this Article II shall not modify, amend or affect such Buyer’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby or thereby.

 

  

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ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the Disclosure Schedule (which Disclosure Schedule sets forth items the disclosure of which is necessary or appropriate as an exception to one or more representations or warranties contained in this Article III; provided, however, that the disclosure in any Section of the Disclosure Schedule shall apply only to the indicated Section of this Agreement except to the extent that it is reasonably apparent that such disclosure is relevant to another Section of this Agreement), the Company represents and warrants (which representations and warranties shall be deemed to apply, where appropriate, to each Subsidiary of the Company) to each of the Buyers that:

 

3.1            Organization and Qualification.  The Company and its “Subsidiary” (which for purposes of this Agreement means any entity in which the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest) are entities duly organized and validly existing and, to the extent legally applicable, in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted.  Each of the Company and its Subsidiary is duly qualified as a foreign entity to do business and, to the extent legally applicable, is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.  As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiary, taken as a whole, or on the transactions contemplated hereby and the other Transaction Documents or by the agreements and instruments to be entered into in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under the Transaction Documents.  The Company has no Subsidiaries except as set forth on Schedule 3.1.  The Company has furnished to the Buyers true, correct and complete copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”).  The Company owns 100% of the capital stock of its Subsidiary.

 

3.2            Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, the Registration Rights Agreement and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the Shares in accordance with the terms hereof.  The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Shares, have been duly authorized by the Company’s Board of Directors and no approval by the Company’s stockholders is required, and other than as set forth in Section 3.5, no further filing, consent or authorization is required by the Company, its Board of Directors or its stockholders in connection herewith or therewith.  This Agreement and the other Transaction Documents have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

  

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3.3            Issuance of Shares.  The issuance of the Shares is duly authorized and, when issued and paid for in accordance with this Agreement, the Shares will be validly issued, fully paid and nonassessable and free from all preemptive rights or similar rights (other than as set forth on Section 3.3 of the Disclosure Schedule), taxes, liens and charges with respect to the issue thereof.  Assuming the accuracy of each of the representations and warranties of each Buyer set forth in Article II of this Agreement, the offer and issuance by the Company of the Shares is exempt from registration under the 1933 Act.

 

3.4            No Piggyback on Registrations.  Except as set forth on Section 3.4 of the Disclosure Schedule or in the Registration Rights Agreement, neither the Company nor any of its security holders (other than the Buyers in such capacity pursuant hereto) may include securities of the Company in the Registration Statement other than the Registrable Securities.

 

3.5            No Conflicts.  The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares) will not (i) result in a violation of any certificate of incorporation, articles of incorporation, or any certificate of designations of the Company or its Subsidiary, or bylaws of the Company or its Subsidiary or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or its Subsidiary is a party or by which any property or asset of the Company or its Subsidiary is bound or affected, or (iii) other than as set forth in Section 3.5 of the Disclosure Schedule, result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations) of any court or governmental authority applicable to the Company or its Subsidiary; except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

3.6            Compliance.  Except as would not, individually or in the aggregate, reasonably be expected to have or result in a Material Adverse Effect, (i)  neither the Company nor any Subsidiary is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (unless such default or violation has been duly waived), (ii) neither the Company nor any Subsidiary is in violation of any order of any court, arbitrator or governmental body, or (iii)  neither the Company nor any Subsidiary is or has been in violation of any statute, rule or regulation of any governmental authority.

 

  

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3.7            Consents.  Neither the Company nor its Subsidiary is required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof, except for the following consents, authorizations, orders, filings and registrations (none of which is required to be filed or obtained before the Closing):  (i) the filing with the Securities and Exchange Commission (the “SEC”) of a current report on Form 8-K disclosing the material terms of the transactions contemplated hereby and thereby and attaching the Transaction Documents as exhibits thereto, (ii) the filing of a Form D with the SEC and such filings as are required to be made under applicable state securities laws, and (iii) the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement.

 

3.8            No General Solicitation; Placement Agent.  Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Shares.  Neither the Company nor its Subsidiary has engaged any placement agent, financial advisor, broker or other agent in connection with the transactions contemplated by the Transaction Documents, including, without limitation, the sale of the Shares.  The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney's fees and out-of-pocket expenses) arising in connection with any claim for such fees arising out of the issuance of the Shares pursuant to this Agreement.

 

3.9            No Integrated Offering.  None of the Company, its Subsidiary, any of their affiliates, and any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed, quoted or designated.  None of the Company, its Subsidiary, any of their affiliates, and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of the issuance of any of the Shares under the 1933 Act or cause the offering of the Shares to be integrated with other offerings for purposes of any such applicable stockholder approval provisions.

 

3.10          SEC Documents; Financial Statements.  During the one (1) year prior to the date hereof, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements, schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”).  As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto in effect at the time of filing.  Such financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude notes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

 

  

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3.11          Capitalization.  As of the date hereof, (i) 100,000,000 shares of Common Stock are authorized, of which 34,023,255 are issued and outstanding, (ii) 6,490,377 shares of Common Stock are subject to issuance pursuant to currently outstanding stock options (whether or not under equity plans), (iii) 4,360,645 shares of Common Stock are subject to issuance pursuant to currently outstanding warrants (whether or not in the money), (iv) 1,000,000 shares of Preferred Stock are authorized, of which 10,950 are shares of Series A Preferred Stock that are currently outstanding and 68,108 are shares of Series B Convertible Preferred Stock that are currently outstanding, and the Series B Convertible Preferred Stock is convertible into 9,081,067 shares of Common Stock, and the Series A Preferred Stock is no longer convertible.  All of such outstanding shares have been validly issued and are fully paid and nonassessable.  Except as disclosed in this Section 3.11 or Schedule 3.11:  (i) none of the Company’s capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company; and (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock or other securities of the Company or its Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or its Subsidiary is or may become bound to issue additional capital stock of the Company or its Subsidiary or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock or other securities of the Company or its Subsidiary.

 

3.12          Absence of Litigation.  Except as disclosed in the SEC Documents, there is no action, suit, claim, or Proceeding (defined as an action, claim, suit, investigation or proceeding (including, without limitation, a partial proceeding, such as a deposition), whether commenced or threatened in writing), or, to the Company's knowledge, inquiry or investigation, before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary that could, individually or in the aggregate, to have a Material Adverse Effect.

 

  

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3.13          Material Changes; Undisclosed Events, Liabilities or Developments.   Since the date of the latest audited financial statements included within the SEC Documents, except as disclosed in the SEC Documents or in Schedule 3.13 hereto, (i) there has been no event, occurrence or development that, individually or in the aggregate, has had or that would result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or required to be disclosed in filings made with the SEC,  (iii) the Company has not altered its method of accounting or changed its auditors, except as disclosed in its SEC Documents, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders, in their capacities as such, or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock (other than pursuant to the terms of the Company’s outstanding Series A Preferred Stock and Series B Preferred Stock), and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock-based plans or non-plan grants approved by the Board.

 

3.14          Investment Company.  The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Shares, will not be or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

3.15          Manipulation of Price.  The Company has not, and to the Knowledge of the Company, no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company.

 

3.16          Insolvency.  The Company is not as of the date hereof, and immediately following the Closing and after giving effect to the transactions contemplated by this Agreement and the other Transaction Documents, the Company will not (i) be insolvent (either because its financial condition is such that the sum of its debts, including contingent and unliquidated debts, is greater than its assets, at a fair valuation, or because the present fair saleable value of its assets is less than the amount required to pay its probable liability on its existing debts, including contingent and unliquidated debts, as they become absolute and matured), (ii) have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted, or (iii) have incurred debts beyond its ability to pay them as they become due.

 

3.17          Patents and Trademarks.  The Company and/or each Subsidiary owns, or possesses adequate rights or licenses to use, all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights (“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted.  Except as set forth on Section 3.17 of the Disclosure Schedule, none of the Company’s or any Subsidiary’s Intellectual Property Rights consisting of registered intellectual property have expired or terminated, or are expected to expire or terminate within three years from the date of this Agreement.  Except as set forth on Section 3.17 of the Disclosure Schedule, the Company does not have any knowledge of any infringement by the Company or any Subsidiary of Intellectual Property Rights of others.  Except as disclosed in the SEC Documents, there is no claim, action or proceeding being made or brought, or to the knowledge of the Company, being threatened, against the Company or any Subsidiary regarding its Intellectual Property Rights.

 

  

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3.18         Insurance.  To the Company’s Knowledge: the Company and each Subsidiary is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses and locations in which the Company and each Subsidiary is engaged.

 

3.19         Regulatory Permits.  The Company and each Subsidiary possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as presently conducted and described in the SEC Documents (“Material Permits”), except where the failure to possess such permits does not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation or modification of any Material Permit.

 

3.20         Internal Accounting Controls.  Except as disclosed in the SEC Documents, the Company and each Subsidiary maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

3.21         Labor Matters. The Company and each Subsidiary is in compliance in all material respects with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

3.22         Environmental Laws.  The Company and each Subsidiary (i) is in compliance in all material respects with any and all Environmental Laws (as hereinafter defined), (ii) has received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) is in compliance in all material respects with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.  The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

  

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3.23         Tax Status.  The Company and each Subsidiary (i) has made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) to the extent required by GAAP, has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction.

 

3.24         Section 203 of the DGCL.  The restrictions contained in Section 203 of the Delaware General Corporation Law (the “DGCL”) do not and have not at any time since March 1, 2011, applied to the Company on account of, without limiting other bases for non-application of such restrictions, paragraph (4) of Section 203(b) of the DGCL.

 

ARTICLE IV

 

COVENANTS

 

4.1           Form D and Blue Sky.  The Company agrees to file a Form D with respect to the Shares as required under Regulation D and to provide a copy thereof to each Buyer promptly after such filing.  The Company shall make all filings and reports relating to the offer and sale of the Shares required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date and shall provide evidence of any such action so taken to the Buyers.

 

4.2           Use of Proceeds.  The Company will use the proceeds from the sale of the Shares for general corporate purposes.

 

4.3           Fees.  The Company and each Buyer shall bear all of its own respective fees and expenses incurred in connection with the transaction contemplated by the Transaction Documents and the negotiations related thereto (including all reasonable legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated by the Transaction Documents and due diligence in connection therewith).

 

  

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4.4           Disclosure of Transactions and Other Material Information.  The Company shall, by 9:00 a.m. (New York City time) on or before the second Business Day immediately following the date hereof, issue a press release, disclosing the material terms of the transactions contemplated hereby.  The Buyer shall not issue any press release or make any other public announcement relating to this Agreement unless the content thereof is mutually agreed to by the Company and the Buyer. The Buyer will timely make all required filings and disclosures relating to the Buyer purchase of the Shares as may be required under the 1934 Act, if any.  The Buyer agrees that Company will file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the Transaction Documents (including, without limitation, this Agreement and the form of the Registration Rights Agreement) as exhibits to such filing.  For purposes of this Agreement, “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.  Except as herein provided, neither the Company nor any Subsidiary shall publicly disclose the name of any Buyer, or include the name of any Buyer in any press release without the prior written consent of such Buyer (which consent shall not be unreasonably withheld or delayed), unless otherwise required by law, regulatory authority or trading market (it being understood that the Form 8-K may include such information to the extent required by such Form).

 

4.5           Integration.  The Company shall not, and shall use its commercially reasonable efforts to ensure that no affiliate of the Company thereof shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the sale of the Shares to the Buyers or that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any trading market.

 

ARTICLE V 

 

MISCELLANEOUS

 

5.1           Governing Law; Jurisdiction.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof.  Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of Los Angeles (the “Los Angeles Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Los Angeles 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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Los Angeles Courts, or such Los Angeles Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law.  Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.  If any party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

  

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5.2           Counterparts.  This Agreement may be executed in two or more identical counterparts, all of which 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; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

 

5.3           Headings.  The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

 

5.4           Severability.  If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

 

5.5           Entire Agreement; Amendments.  This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.  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 party against whom enforcement of any such waived or amended provision is sought.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

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

 

  

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5.7           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Buyer (other than by merger, sale of substantially all assets or other transaction, as reasonably determined by the Company, having substantially similar effect).  Any Buyer may assign any or all of its rights under this Agreement to any Person to whom such Buyer assigns or transfers any Shares in accordance with the terms of this Agreement, provided that such transferee agrees in writing to be bound, with respect to the transferred Shares, by the provisions of the Transaction Documents that apply to the “Buyers.”

 

5.8           No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

5.9           Survival.  All representations, warranties, covenants and agreements made by the Company and the Buyers in this Agreement or in any certificate or other instrument delivered pursuant hereto shall survive the Closing and the delivery of the Shares and any investigation and discovery by the Company or by the Buyers, as the case may be, made at any time with respect thereto.  Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder.

 

5.10         Further Assurances.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

5.11         No Strict Construction.  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.

 

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

 

  

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5.13          Independent Nature of Buyers’ Obligations and Rights.  The obligations of each Buyer under any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way acting in concert or as a group, and the Company will not assert any such claim with respect to such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges that the Buyers are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  The Company acknowledges and each Buyer confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors.  Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.

 

5.14          Knowledge of the Company.  The phrase “Knowledge of the Company” shall mean the actual knowledge of all executive officers and directors of the Company.

 

5.15          Certain Waivers. Each Buyer, on behalf of itself and all of its Affiliates, hereby waives any and all of the following rights that it held prior to the date hereof, whether under contract, the terms of securities or otherwise: (i) notice rights, (ii) preemptive or participation rights, (iii) veto or consent rights, (iv) anti-dilution rights, (v) rights of first refusal, (vi) piggy back rights and (vii) any other rights that is inconsistent with the Transaction Documents.

 

5.16          Waiver of Conflicts.  Each party to this Agreement acknowledges that Manatt, Phelps & Phillips, LLP, counsel for the Company, may in the past performed and may continue to perform legal services for certain of the Buyers in matters unrelated to the transactions described in this Agreement, including the representation of such Buyers in venture capital financings and other matters, including in connection with the June 24, 2010 transactions.  Accordingly, each party to this Agreement hereby (a) acknowledges that they have had an opportunity to ask for information relevant to this disclosure; (b) gives its informed consent to Manatt, Phelps & Phillips’s representation of certain of the Buyers in such unrelated matters and to such counsel’s representation of the Company in connection with this Agreement and the transactions contemplated hereby; and (c) if requested will provide a separate written confirmation requested by Manatt in the form of its standard waiver letter.

 

5.17          Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Buyer exercises a right, election, demand or option owed to such Buyer by the Company under a Transaction Document and the Company does not timely perform, in all material respects, its related obligations within the periods (and any permitted cure periods) therein provided, then, prior to the performance by the Company of the Company's related obligation, such Buyer 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.

 

5.18          Adjustments in Share Numbers and Prices.  In the event of any stock split, subdivision, dividend or distribution payable in shares of Common Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares of Common Stock), combination or other similar recapitalization or event occurring after the date hereof, each reference in any Transaction Document to a number of shares or a price per share shall be amended to appropriately account for such event.

 

  

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5.19.         Survival and Indemnification.

(a)            Survival.  The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement.

(b)           Indemnification.  The Company agrees to indemnify and hold harmless each Buyer and its affiliates and their respective directors, officers, trustees, members, managers, employees and agents, and their respective successors and assigns, from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under this Agreement or the Registration Rights Agreement, and will reimburse any such Person for all such amounts as they are incurred by such Person.

(c)           Make-Whole.  Without limiting the foregoing, the Company agrees that, in the event that any of the representations and warranties in Section 3.2, 3.3, 3.5, 3.7 or 3.11 are not true and correct in all respects, notwithstanding anything set forth in the Disclosure Schedule relating to such representations and warranties, and as a result the Company pays any monetary damages or issues any additional securities to any party to a prior agreement with the Company or whose consent is otherwise required for the Company to enter into and perform this Agreement and the Registration Rights Agreement, then the Losses to which a Buyer is subject shall be grossed-up so as to preserve the economic substance of this Agreement (as of the Closing) as if such monetary damages or issuances of additional securities had not occurred, including by the Company shall taking appropriate action to ensure that a Buyer has not been diluted, directly or indirectly, by any issuance of additional securities contemplated by this subsection (c), and ensuring that a Buyer does not bear the portion of such monetary damages that corresponds to its ownership percentage as of the Closing.

 

  

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(d)           Conduct of Indemnificaton Proceedings.  Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation.  It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties.  No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of judgment with respect to any pending or threatened action or any claim whatsoever, in respect of which indemnification or contribution could be sought under this Section 5.19 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party in form and substance reasonably satisfactory to such indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.  No indemnifying party shall be liable for settlement of any pending or threatened action or any claim whatsoever that is effected without its written consent (which consent shall not be unreasonably withheld or delayed), but if settled with its written consent, if its consent has been unreasonably withheld or delayed or if there be a judgment for the plaintiff in any such matter, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.

 

 

 [Signature Pages Follows]

 

 

  

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IN WITNESS WHEREOF, each Buyer, severally and not jointly, and the Company, have caused their respective signature page to this Common Stock Purchase Agreement to be duly executed as of the date first written above.

 

	 	
COMPANY:

 

PATIENT SAFETY TECHNOLOGIES, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES FOR BUYERS TO FOLLOW]

 

 

  

20

  

 

[BUYER SIGNATURE PAGE TO COMMON STOCK

 

PURCHASE AGREEMENT]

 

Name of Buyer:                                                                                                                                                                                                         

 

Signature of Authorized Signatory of Buyer:                                                                                                                                                    

 

Name of Authorized Signatory:                                                                                                                                                                            

 

Title of Authorized Signatory:                                                                                                                                                                               

 

Number of Shares of Common Stock Subscribed For: See Schedule A opposite name of Buyer

 

Delivery and Notice Information:  See below.

 

	
1.

	  	
The exact name that your Shares are to be registered in. You may use a nominee if appropriate:

	  	  	  
	
2.

	  	
The relationship between the Buyer and the registered holder listed in response to item 1 above (if not the same person):

	  	  	  
	
3.

	  	
The mailing address of the registered holder listed in response to item 1 above:

	  	  	
 Mailing:

	  	  	
 Fax:

	  	  	
 Email:

	 	 	 
	
4.

	  	
The Social Security Number or Tax Identification Number of the registered holder listed in response to item 1 above:

	  	  	  
	  	  	  
	
5.

	  	
Name of DTC Participant (broker-dealer at which the account or accounts to be credited with the Shares are maintained); please include the name and telephone number of the contact person at the broker-dealer:

	  	  	  
	  	  	  
	
6.

	  	
DTC Participant Number:

	  	  	  
	  	  	  
	
7.

	  	
Name of Account at DTC Participant being credited with the Shares:

	  	  	  
	  	  	  

 

 

  

21

  

 

SCHEDULE A

 

SCHEDULE OF BUYERS

 

 

 

 

 

 

 

 

 

 

  

 

  

EXHIBIT A

FORM OF REGISTRATION RIGHTS AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

  

 

 

 

EXHIBIT B

FORM OF LEGAL OPINION

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