AGREEMENT
1.
Amendment to Merger Agreement
.
a.
Section 7.10
of the Merger Agreement is hereby amended and restated in its entirety to read as follows:
Company Net Working Capital
. The Company Net Working Capital as of the date of the Parent Stockholder Meeting is not
less than -$14,300,000.
b.
Exhibit A
of the Merger Agreement is hereby amended to replace the definition of
Company Valuation
in its entirety to read as follows:
Company Valuation
means
$50,177,799;
provided
, that (a) if the Company Net Working Capital as determined pursuant to
Section 1.9
is less than -$14,800,000, then the Company Valuation shall be reduced by one dollar for each dollar that
the Company Net Working Capital is less than -$14,800,000 and (b) if the Company Net Working Capital as determined pursuant to
Section 1.9
is more than -$13,800,000, then the Company Valuation shall be increased by one
dollar for each dollar that the Company Net Working Capital is more than -$13,800,000. For purposes of this definition, Company Net Working Capital shall be rounded down to the nearest whole dollar.
c.
Exhibit A
of the Merger Agreement is hereby amended to replace the definition of
Company Outstanding
Shares
in its entirety to read as follows:
Company Outstanding Shares
means the total number of
shares of Company Capital Stock outstanding immediately prior to the Effective Time expressed on a fully-diluted and
as-converted
to Company Common Stock basis, assuming, without limitation or duplication,
(i) calculated in the case of clause (i) based on the treasury stock method, the issuance of shares of Company Capital Stock in respect of all Company Options, Company Warrants, Company Convertible Notes and other outstanding options,
restricted stock awards, warrants, convertible notes or rights to receive such shares, in each case, outstanding as of immediately prior to the Effective Time (assuming cashless exercise using a share price of $0.79 for purposes of the treasury
stock method calculation) whether conditional or unconditional and including any outstanding options, warrants or rights triggered by or associated with the consummation of the Merger (but excluding any shares of Company Capital Stock reserved for
issuance other than with respect to outstanding Company Warrants, Company Options or Company Convertible Notes (for the avoidance of doubt including any Company Convertible Notes issued following the date hereof pursuant to the Note Purchase
Agreement up to an aggregate amount of $7.5 million) as of immediately prior to the Effective Time); and (ii) without applying the treasury stock method, (A) the issuance of shares of Parent Common Stock in respect of the Parent Warrants
to be issued in connection with the Concurrent Financing and (B) unless otherwise consented to by Parent or pursuant to the Note Purchase Agreement (up to an aggregate amount of $7.5 million), the issuance of shares of Company Capital Stock or
Parent Common Stock in respect of (1) 75% of any Company Options and (2) any convertible debt, warrants or other equity securities of Company or Parent, in the case of (1) and (2), that the Company, during the
Pre-Closing
Period, issues or commits to issue (which shall, with respect to Company Options, be in accordance with Section 4.2(b) of the Company Disclosure Schedule). The definition of Company
Outstanding Shares and the definition of Parent Outstanding Shares should be read with, and interpreted in a manner consistent with, the schedule attached hereto as Schedule 1B.
d.
Exhibit A
of the Merger Agreement is hereby amended to replace the definition of
Parent Outstanding
Shares
in its entirety to read as follows:
Parent Outstanding Shares
means the total number of
shares of Parent Common Stock outstanding immediately prior to the Effective Time expressed on a fully-diluted basis and using the treasury stock method, but assuming, without limitation or duplication, (i) the issuance of shares of Parent
Common Stock pursuant to that certain Letter Agreement dated
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