IMEDIA BRANDS, INC. Loan Agreement

Exhibit 10.1

Loan Agreement

This Loan Agreement (the “Agreement”) dated as of April 10, 2023 is made and entered into by and among iMedia Brands, Inc., a Minnesota corporation (the “Company”), and each purchaser listed on Schedule I hereto (each, an “Investor”).

Recitals

The Company is seeking to raise financing for its operations. The Investors desire to lend funds to the Company on the terms and conditions set forth in this Agreement.

Terms and Conditions

Accordingly, in consideration of the foregoing, the mutual promises set forth herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.	Promissory Note.

(a)            Subject to the terms and conditions hereof, the Company hereby agrees to issue and sell to each Investor, and each Investor, severally and not jointly, hereby agrees to purchase from the Company, a convertible promissory note (each, a “Note”) in the principal amount set forth beside the Investor’s name on Schedule I (the “Loan Amount”), in substantially the form attached as Exhibit A.

(b)            USe of PRoceeds. The Company will use the proceeds for repayment of debt, general business purposes and working capital.

2.	Closing.

(a)            Closing. The closing of the sale and purchase of the Notes (the “Closing”) will be held on the date hereof or at such other time as the Company and the Investors shall agree, which in no event shall be later than the third business day following the date of this Agreement, subject to the condition set forth in Section 2(c) below.

(b)            Delivery. At the Closing under this Agreement, (i) each Investor purchasing a Note under this Agreement will deliver to the Company a check or wire transfer of funds in the amount of the Investor’s Loan Amount and (ii) the Company will issue and deliver to the Investor a Note in favor of the Investor in the principal amount of the Investor’s Loan Amount.

(c)            Concurrent Events. Prior to or concurrent with the Closing and as a condition to the obligations of the Investors to consummate the Closing (which may be waived in their sole discretion), (i) all conditions precedent to the closing of the transactions contemplated by that certain Purchase and Sale Agreement and Joint Escrow Instructions (Multi-State) dated December 20, 2022 by and between EP Properties, LLC, VVI Fulfillment Center, Inc., and Pontus Net Lease Advisors, LLC, as amended from time to time, have been satisfied other than the Closing and the Company shall close upon the sale of properties as set forth therein concurrent with the Closing, (ii) the Company (and all other applicable parties thereto) shall have entered into the Forbearance Agreement, Tenth Amendment to Loan and Security Agreement and Amendment to Fee Letter by and among the Company, ValueVision Interactive, Inc. ValueVision Retail, Inc., PW Acquisition Company, LLC, FL Acquisition Company, ValueVision Media Acquisitions, Inc., JWH Acquisition Company, sNorwell Television, LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLC, Portal Acquisition Company, VVI Fulfillment Center, Inc., EP Properties, LLC, iMedia&123TV Holding GmbH and Siena Lending Group LLC, in each case, in the final forms provided to the Investors prior to the Closing and (iii) the Company (and all other applicable parties thereto) shall have entered into the Amendment Agreement Relating to Impulse Transaction by and among Emotion Invest GmbH & Co. KG, BE Beteiligungen Fonds GmbH & Co. geschlossene Investmentkommanditgesellschaft, Iris Capital Fund II, iMedia & 123tv Holding GmbH, the Company and ▇-▇-▇.▇▇ GmbH, in the final form provided to the Investors prior to the Closing.

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3.             Representations, Warranties, and Covenants of the Company. To induce the Investors to enter into this Agreement and to purchase the Notes, the Company hereby represents, warrants and covenants, as applicable, to the Investors as follows:

(a)            Organization, Good Standing, Corporate Power and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect. “Material Adverse Effect” means a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, or results of operations of the Company.

(b)           Authorization. All corporate action required to be taken by the Company’s board of directors and shareholders in order to authorize the Company to enter into this Agreement, and to perform its obligations under this Agreement has been taken or will be taken prior to the issuance of those equity securities. All action on the part of the officers of the Company necessary for the execution and delivery of this Agreement, the performance of all obligations of the Company under this Agreement to be performed as of the closing, and the issuance and delivery of the Notes has been taken or will be taken prior to the issuance of these securities. This Agreement and the Notes, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

(c)            Valid Issuance of Securities. The Notes, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement or the applicable securities, applicable state and federal securities laws and liens or encumbrances created by or imposed by an Investor. Assuming the accuracy of the representations of the Investors in this Agreement and subject to the filings described in SECTION 3(d), the Notes will be issued in compliance with all applicable federal and state securities laws. The capital stock of the Company issuable upon conversion of the Notes and upon exercise of the warrants issuable upon conversion of the Notes (the “Warrants”), when issued in compliance with the provisions of this Agreement, the Notes or the Warrants and the Company’s articles of incorporation, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement or the applicable securities, applicable federal and state securities laws and liens or encumbrances created by or imposed by an Investor. The form of Warrant is attached as Exhibit B.

(d)           Government Consents and Filings. Assuming the accuracy of the representations made by the Investors in this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Agreement, except for (i) filings pursuant to Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), and applicable state securities laws, which have been made or will be made in a timely manner, and (ii) the filing of an amendment to the Company’s articles of incorporation to increase the authorized shares of common stock of the Company (“Common Stock”) in accordance with the terms and conditions of the Notes and this Agreement.

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(e)           Compliance with Other Instruments and Laws. The Company is not in violation or default of any provisions of its articles of incorporation or bylaws, or, to its knowledge, of any provision of federal or state statute, rule or regulation applicable to the Company. The execution, delivery and performance of this Agreements and the consummation of the transactions contemplated by this Agreement will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any provision, instrument, judgment, order, writ, decree, contract or agreement of the Company, in each case as would have a material impact on the Company, or (ii) an event which results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company.

(f)            No Finder’s Fees. The Company represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. The Company agrees to indemnify and hold harmless each Investor from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

(g)           Bad Actor Disqualification.

(i)            No Disqualification Events. With respect to Securities (as hereinafter defined) to be offered and sold hereunder in reliance on Rule 506 under the Securities Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the transactions contemplated hereby, any beneficial owner of 20% or more of the Company's outstanding voting equity securities (calculated on the basis of voting power), nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of such sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i)–(viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Investors a copy of any disclosures provided thereunder.

(ii)           Other Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Regulation D Securities.

(iii)          Notice of Disqualification Events. The Company will notify the Investors in writing, prior to any closing hereunder of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.

(h)           SEC Filings. As to each report, form, proxy statement and other document filed by the Company with the Securities and Exchange Commission since January 1, 2022 (the “SEC,” and the documents, the “Company SEC Documents”), the information contained therein as of the respective dates thereof, and as of the date hereof, did not and does not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under which they were made not misleading; provided, that the Company has incurred losses in operating its business subsequent to the date of the Company’s most recent Quarterly Report on Form 10-Q.

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(i)            Shareholder Meeting. The Company shall use reasonable best efforts to hold an annual or special meeting of shareholders as promptly as practicable for the purpose of obtaining approval to increase the Company’s authorized shares of Common Stock in an amount sufficient to permit the issuance of shares of Common Stock upon maximum conversion of the Notes and maximum exercise of the Warrants, with the recommendation of the Company’s board of directors that such proposals are approved, and the Company shall solicit proxies from its shareholders in connection therewith in the same manner as all other management proposals in such proxy statement. Notwithstanding the foregoing, if the Company shareholders do not approve the foregoing proposals at the Company’s next annual or special meeting of the shareholders (which is currently anticipated to be held in May 2023), the Company will continue to use reasonable best efforts to hold a subsequent special meeting of the shareholders as promptly as practicable thereafter to obtain the requisite shareholders approval for such proposals (and the Company will continue to use reasonable efforts to hold such special meetings until such requisite approval is so obtained).

(j)            Authorization of Shares underlying the Notes. As of the date hereof, there is a sufficient number of shares of Common Stock authorized under the Company’s articles of incorporation and otherwise unreserved to permit the Notes to convert into up to 5,680,936 shares of Common Stock in accordance with the terms and conditions thereunder. The Company agrees that such 5,680,936 shares of Common Stock have been reserved exclusively for issuance upon conversion of the Notes and that such shares shall remain so exclusively reserved until such shares have been issued upon conversion of the Notes or until the Notes cease to be convertible.

(k)           Share Reserve. The Company further agrees that all additional shares of Common Stock that become authorized after the date of this Agreement shall first be reserved as shares of Common Stock available exclusively for issuance upon conversion of the Notes and exercise of the Warrants until such time the Company has a sufficient reserve to cover all such conversions and exercises in full, and such reserved shares of Common Stock shall remain reserved until such time as all Notes have been fully converted and all Warrants fully exercised or until they cease to be convertible or exercisable by their respective terms. For the avoidance of doubt, unless the Company is in full compliance with the covenant in the preceding sentence and the last sentence of Section 3(j), the Company shall not reserve any additional shares of Common Stock that become authorized after the date of this Agreement for any other purposes, including as shares underlying equity incentive awards for issuance to any persons.

(l)            Stock Exchange Listing; Listing of Additional Shares. The Company shall use its reasonable best efforts to maintain the listing of the Common Stock on The Nasdaq Stock Market. The Company has filed a Listing of Additional Shares Notification with The Nasdaq Stock Market covering all of the shares of Common Stock issuable upon conversion of the Notes and upon exercise of the Warrants.

(m)          Form S-3 Eligibility. The Company is eligible to register the Shares and the shares issuable upon exercise of the Warrants for resale using Form S-3 promulgated under the Securities Act.

(n)           No Shareholder Approval. The Company has no reason to believe that the issuance of the Notes and the Warrants, and the shares of Common Stock issuable upon conversion of the Notes and upon exercise of the Warrants, will require approval of the Company’s shareholders, including, without limitation, pursuant to the rules and regulations of Nasdaq, except for the requisite shareholder approval of an increase in the number of authorized shares of Common Stock under the Company’s articles of incorporation to permit the maximum conversion of the Notes and maximum exercise of the Warrants in accordance with the terms and conditions thereunder.

4.             Representations of the Investors. To induce the Company to enter into this Agreement and to sell the Notes, each Investor, severally and not jointly (and as to itself only and not any other Investor), hereby represents and warrants to the Company as follows:

(a)           Authorization. The Investor has full power and authority to enter into this Agreement. This Agreement, when executed and delivered by the Investor, will constitute a valid and legally binding obligation of the Investor, enforceable in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

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(b)           Purchase for Own Account. This Agreement is made with the Investor in reliance upon the Investor’s representation to the Company, which by the Investor’s execution of this Agreement, the Investor hereby confirms, that the Notes and the securities issuable upon conversion of the Notes (the Notes (including upon exercise of the Warrants) (the Notes, the shares of Common Stock issuable upon conversion of the Notes, the Warrants and the securities issuable upon exercise of the Warrants, collectively, the “Securities”) to be acquired by the Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Investor has no present intention of selling, granting any participation in, or otherwise distributing the Securities. By executing this Agreement, the Investor further represents that the Investor does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities.

(c)            Disclosure of Information; Sophistication. The Investor 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 Securities that have been requested by the Investor. The Investor and its advisors, if any, have had (i) the opportunity to review this Agreement, the Note and the Warrant form, and the filings made by the Company with the SEC available through the ▇▇▇▇▇ filing system (at ▇▇▇.▇▇▇.▇▇▇), and has been afforded the opportunity to ask such questions of the Company as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment (including the opportunity to view the Company’s facilities); and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other due diligence investigations conducted by the Investor or its advisors, if any, or its representatives, nor any knowledge of the Investor or any such advisors, whether obtained thereby or otherwise, shall modify, amend or affect the Investor’s right to rely on the Company’s representations and warranties contained herein. The Investor understands that its investment in the Securities involves a high degree of risk. The Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby. The Investor did not learn of the investment in the Securities as a result of any general solicitation or general advertising. 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.

(d)           Restricted Securities. The Investor understands that the Securities have not been registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor’s representations as expressed herein. The Investor understands that the Securities are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Investor must hold the Securities indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Investor acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which are outside of the Investor’s control, and which the Company is under no obligation and may not be able to satisfy.

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(e)            Legends. The Investor understands that the Securities and any securities issued in respect of or exchange for the Securities, may bear one or all of the following legends (in substantially the form set forth below):

(i)             “THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.”

(ii)           Any legend required by the securities laws of any state to the extent such laws are applicable to the Securities represented by the certificate so legended.

(f)            Accredited Investor. The Investor is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Investor satisfies the criteria indicated in the accredited investor questionnaire provided to the Company.

(g)           Foreign Investors. If the Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986), the Investor hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. The Investor’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Investor’s jurisdiction.

(h)           No General Solicitation. Neither the Investor, nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including through a broker or finder (i) engaged in any general solicitation, or (ii) published any advertisement in connection with the offer and sale of the Securities.

(i)            Exculpation Among Investors. The Investor acknowledges that it is not relying upon any statement, representation or warranty made by any person, except for statements, representations and warranties contained in this Agreement, in making its investment or decision to invest in the Company. The Investor agrees that neither any Investor nor the respective controlling persons, officers, directors, partners, agents, or employees of any Investor shall be liable to any other Investor for any action heretofore taken or omitted to be taken by any of them in connection with the purchase of the Securities.

(j)             Residence, Investment Decision. The Investor’s residence or principal place of business, and the location where the Investor made the decision to purchase the Notes, is in the state set forth in the Investor’s address provided to the Company.

(k)            No Finder’s Fees. Each Investor represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. Each Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which each Investor or any of its officers, employees, or representatives is responsible.

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

(m)         No Bad Actor Disqualification Event. The Investor represents, after reasonable inquiry, that none of the “Bad Actor” disqualifying events described in Rule 506(d)(l)(i) to (viii) under the Securities Act (a “Disqualification Event”) is applicable to the Investor or any of its Rule 506(d) Related Parties (if any). “Rule 506(d) Related Party” means a person or entity that is a beneficial owner of the Investor’s securities for purposes of Rule 506(d).

(n)           Further Assurances. Each Investor agrees and covenants that at any time and from time to time it will promptly execute and deliver to the Company such further instruments and documents and take such further action as the Company may reasonably require in order to carry out the full intent and purpose of this Agreement and to comply with federal or state securities laws or other regulatory approvals.

Registration Rights.

(a)

Registration. The Company shall:

(i)            file a registration statement with the SEC no later than 45 days after the Closing that registers for resale under the Securities Act the maximum number of shares of Common Stock issuable upon conversion of the Notes and upon exercise of the Warrants (collectively, the “Registrable Shares”) on Form S-1 or Form S-3 under the Securities Act (providing for shelf registration of such Registrable Shares under SEC Rule 415 to the extent possible) (each such registration statement, including any preliminary prospectus, final prospectus, exhibit or amendment included in or relating to such registration statement being the “Resale Registration Statement”);

(ii)           cause such Resale Registration Statement to be declared effective as soon as practicable and in any event within 90 days of the filing thereof;

(iii)          not less than two calendar days prior to the filing of each such Resale Registration Statement or any related prospectus or any amendment or supplement thereto, furnish via email to each Investor copies of all such documents proposed to be filed (other than any document that is incorporated or deemed to be incorporated by reference therein);

(iv)          promptly prepare and file with the SEC such amendments and supplements to each such Resale Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Resale Registration Statement continuously effective and free from any material misstatement or omission to state a material fact therein until termination of such obligation as provided below, subject to the Company’s right to suspend as set forth below;

(v)           furnish to each Investor such number of copies of prospectuses in conformity with the requirements of the Securities Act and such other documents as the Investor may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Registrable Shares by the Investor;

(vi)          file such documents as may be required of the Company for normal securities law clearance for the resale of the Registrable Shares in such states of the United States as may be reasonably requested by an Investor and use its commercially reasonable efforts to maintain such blue sky qualifications during the period the Company is required to maintain effectiveness of each such Resale Registration Statement; provided, however, that the Company shall not be required in connection with this Section to qualify as a foreign corporation or execute a general consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented;

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(vii)         upon notification by the SEC that a Resale Registration Statement will not be reviewed or is not subject to further review by the SEC, the Company shall within two trading days following the date of such notification request acceleration of such Resale Registration Statement (with the requested effectiveness date to be not more than two Trading Days later);

(viii)        upon notification by the SEC that a Resale Registration Statement has been declared effective by the SEC, the Company shall file the final prospectus under Rule 424 of the Securities Act (“Rule 424”) within the applicable time period prescribed by Rule 424 if required;

(ix)           advise each Investor promptly (and in any event within two trading days thereof):

(A)          of the effectiveness of a Resale Registration Statement or any post-effective amendments thereto;

(B)           of any request by the SEC for amendments to a Resale Registration Statement or amendments to the prospectus or for additional information relating thereto;

(C)           of the issuance by the SEC of any stop order suspending the effectiveness of a Resale Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Registrable Shares for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes; and

(D)           of the existence of any fact and the happening of any event that makes any statement of a material fact made in a Resale Registration Statement, the prospectus and amendment or supplement thereto, or any document incorporated by reference therein, untrue, or that requires the making of any additions to or changes in a Resale Registration Statement or the prospectus in order to make the statements therein not misleading;

(x)           cause all Registrable Shares to be listed on each securities exchange, if any, on which equity securities by the Company are then listed;

(xi)         bear all expenses in connection with the procedures in paragraphs (i) through (x) of this Section and the registration of the Registrable Shares on each such Resale Registration Statement and the satisfaction of the blue sky laws of such states; and

(xii)        to the extent any Note or Warrant becomes convertible or exercisable for additional shares of Common Stock that are not covered by the Resale Registration Statement, the Company shall file an additional registration statement with the SEC no later than 45 days after the date of such occurrence registering for resale under the Securities Act all of the additional shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants issuable as of such date (collectively, the “Additional Registrable Shares”) on Form S-1 or Form S-3 under the Securities Act (providing for shelf registration of such Registrable Shares under SEC Rule 415 to the extent possible) and all of the provisions of Section 5 shall apply mutatis muntandis to such Additional Registrable Shares.

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(b)

Registration Rights Indemnification.

(i)             The Company agrees to indemnify and hold harmless each Investor and its respective affiliates, partners, members, officers, directors, agents and representatives, and each person, if any, who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (each, a “Purchaser Party” and collectively the “Purchaser Parties”), to the fullest extent permitted by applicable law, from and against any losses, claims, damages or liabilities (collectively, “Losses”) to which they may become subject (under the Securities Act or otherwise) insofar as such Losses (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in a Resale Registration Statement or any omission or alleged omission to state 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 or arise out of any failure by the Company to fulfill any undertaking included in a Resale Registration Statement and the Company will, as incurred, reimburse the Purchaser Parties for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, however, that the Company shall not be liable in any such case to the extent that such Loss arises out of, or is based upon an untrue statement or omission or alleged untrue statement or omission made in a Resale Registration Statement in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for use in preparation of a Resale Registration Statement; provided further, however, that the Company shall not be liable to any Purchaser Party (or any partner, member, officer, director or controlling person of the Investor) to the extent that any such Loss is caused by an untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus if either (i) (A) the Investor failed to send or deliver a copy of the final prospectus with or prior to, or the Investor failed to confirm that a final prospectus was deemed to be delivered prior to (in accordance with Rule 172 of the Securities Act), the delivery of written confirmation of the sale by the Investor to the person asserting the claim from which such Loss resulted and (B) the final prospectus corrected such untrue statement or omission, or (ii) (X) such untrue statement or omission is corrected in an amendment or supplement to the prospectus and (Y) having previously been furnished by or on behalf of the Company with copies of the prospectus as so amended or supplemented or notified by the Company that such amended or supplemented prospectus has been filed with the SEC, in accordance with Rule 172 of the Securities Act, the Investor thereafter fails to deliver such prospectus as so amended or supplemented, with or prior to or the Investor fails to confirm that the prospectus as so amended or supplemented was deemed to be delivered prior to (in accordance with Rule 172 of the Securities Act), the delivery of written confirmation of the sale by the Investor to the person asserting the claim from which such Loss resulted.

(ii)            Each Investor (severally and not jointly) agrees to indemnify and hold harmless the Company and its officers, directors, affiliates, agents and representatives and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each a “Company Party” and collectively the “Company Parties”), to the fullest extent permitted by applicable law, from and against any Losses to which the Company Parties may become subject (under the Securities Act or otherwise), insofar as such Losses (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in a Resale Registration Statement (or any omission or alleged omission to state 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 in each case, on the effective date thereof), if, and only to the extent, such untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information furnished by or on behalf of the Investor specifically for use in preparation of a Resale Registration Statement, and the Investor will, as incurred, reimburse each Company Party for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, however, that in no event shall any indemnity under this Section 5(b) be greater in amount than the dollar amount of the net proceeds received by the Investor upon its sale of the Registrable Shares included in the Resale Registration Statement giving rise to such indemnification obligation.

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(iii)           Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 5(b), such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, and, subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person and such indemnifying person shall have been notified thereof, such indemnifying person shall be entitled to participate therein, and, to the extent that it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After notice from the indemnifying person to such indemnified person of its election to assume the defense thereof, such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof; provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate in the reasonable judgment of the indemnified person for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person; provided, further, that no indemnifying person shall be responsible for the fees and expense of more than one separate counsel for all indemnified parties. The indemnifying party shall not settle an action without the consent of the indemnified party, which consent shall not be unreasonably withheld.

(iv)          If the indemnification provided for in this Section 5(b) is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other, as well as any other relevant equitable considerations; provided, that in no event shall any contribution by an indemnifying party hereunder be greater in amount than the dollar amount of the proceeds received by such indemnifying party upon the sale of such Registrable Shares.

(c)            Suspensions. Each Investor acknowledges that there may be times when the Company must suspend the use of the prospectus forming a part of a Resale Registration Statement until such time as an amendment to such Resale Registration Statement has been filed by the Company and declared effective by the SEC, or until such time as the Company has filed an appropriate report with the SEC pursuant to the Exchange Act. Each Investor hereby covenants that it will not sell any Registrable Shares pursuant to said prospectus during the period commencing at the time at which the Company gives the Investor notice of the suspension of the use of said prospectus and ending at the time the Company gives the Investor notice that the Investor may thereafter effect sales pursuant to said prospectus; provided, that such suspension periods (“Allowable Grace Periods”) shall in no event exceed 60 days in any 12 month period and that, in the good faith judgment of the Board of Directors, the Company would, in the absence of such delay or suspension hereunder, be required under state or federal securities laws to disclose any corporate development, a potentially significant transaction or event involving the Company, or any negotiations, discussions, or proposals directly relating thereto, in either case the disclosure of which would reasonably be expected to have a Material Adverse Effect.

(d)           Termination of Registration Rights. The obligations of the Company pursuant to Section 5 shall cease and terminate (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) as to each Investor for so long as (a) a Registration Statement with respect to the sale of such Registrable Shares is declared effective by the SEC under the Securities Act and such Registrable Shares have been disposed of by the Investor in accordance with such effective Registration Statement, (b) such Registrable Shares have been previously sold in accordance with Rule 144 promulgated under the Securities Act (or any successor to such rule), or (c) such Registrable Shares become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Company’s Transfer Agent (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any affiliate of the Company).

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(e)           Selling Securityholder Questionnaire. Each Investor (severally and not jointly) agrees to furnish to the Company a completed questionnaire in the form provided by the Company. The Company shall not be required to include the Registrable Shares of an Investor in a Registration Statement and shall not be required to pay any damages hereunder to the Investor if the Investor fails to furnish to the Company a fully completed Selling Holder Questionnaire at least three Business Days prior to the filing of the Registration Statement.

(f)            Facilitation of Sales Pursuant to Rule 144. For as long as any Investor holds Registrable Shares, to the extent it shall be required to do so under the Exchange Act, the Company shall use reasonable best efforts to timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144) and submit all required Interactive Data Files (as defined in Rule 11 of Regulation S- T of the SEC), and shall use reasonable best efforts to take such further necessary action as any holder of Registrable Shares may reasonably request in connection with the removal of any restrictive legend on the Registrable Shares being sold, all to the extent required from time to time to enable such holder to sell the Registrable Shares without registration under the Securities Act within the limitations of the exemption provided by Rule 144.

6.             Lock-Up. For the period from the date hereof until the date that is the six (6) month anniversary of the Closing date, neither the Company nor any subsidiary thereof will sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of its capital stock or any securities convertible into or exercisable or exchangeable for shares of its capital stock, for the primary purpose of capital raising. For the avoidance of doubt, the foregoing shall not prohibit the (i) the issuance of securities pursuant to the Notes or the Warrants, (ii) grants of options, restricted stock units, performance stock units and other awards to purchase or receive shares of the Company’s capital stock under its equity compensation plans, (iii) any shares of the Company’s capital stock issued upon the conversion, exercise or settlement of outstanding warrants, options, restricted stock units performance stock units or other securities, including any purchases pursuant to an employee stock purchase plan or (iv) the issuance of any shares of capital stock or other equity securities in exchange for other securities of the Company.

Miscellaneous.

(a)            Survival of Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Company and the Investors contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the closings under this Agreement and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Investors or the Company.

(b)           Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. The Company will not assign this Agreement (or any Note or Warrant) or any of its rights or obligations hereunder or thereunder without the express prior written consent of the holders of at least a majority of the then-outstanding principal amount of the Notes or securities issued upon conversion of the Notes except in connection with the sale of all or substantially all of its assets or a merger or similar transaction involving the Company (so long as the Company complies with its obligations with respect to the applicable “Fundamental Transaction” (as defined in the Notes and the Warrants) under the Notes and the Warrants). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

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(c)            Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

(d)            Counterparts; Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including.pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

(e)            Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(f)             Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set provided to the Company or to the Company’s corporate headquarters in the case of the Company, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Section. If notice is given to the Company, a copy (which shall not constitute formal notice) shall also be sent to Faegre Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇. ▇^▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.

(g)            Fees and Expenses. Each party shall pay its own expenses in connection with the matters contemplated by this Agreement.

(h)           Attorneys’ Fees. If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of any of this Agreement or the Securities, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

(i)            Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of (i) the Company and (ii) the holders of at least a majority of the then-outstanding principal amount of the Notes or securities issued upon conversion of the Notes. Any amendment or waiver effected in accordance with this Section shall be binding upon the Investors and each transferee of the Securities, each future holder of all such securities, and the Company.

(j)           Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

(k)            Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

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(l)             Entire Agreement. This Agreement (including the exhibits hereto), the Notes, the Warrants and the Board Observation Rights Agreement constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled. The “Board Observation Rights Agreement” means the board observer agreement between the Company and BSMF LLC dated as of the date hereof.

(m)           Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the federal and state courts located within the State of New York for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal and state courts located within the geographic boundaries of the State of New York, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

(n)

Waiver of Conflicts; Other Acknowledgment.

(i)             Faegre Drinker. Each party to this Agreement acknowledges that Faegre Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP (“Faegre Drinker”), counsel for the Company, has in the past performed and may continue to perform legal services for certain of the Investors in matters unrelated to the transactions described in this Agreement, including the representation of such Investors in venture capital financings and other matters. Accordingly, each party to this Agreement hereby (a) acknowledges that they have had an opportunity to ask for information relevant to this disclosure; and (b) gives its informed consent to Faegre Drinker’s representation of certain of the Investors in such unrelated matters and to Faegre Drinker’s representation of the Company in connection with this Agreement and the transactions contemplated hereby.

(ii)           ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. Each Investor has been represented by (or had the opportunity to be represented by) its own counsel in connection with this Agreement and the transactions contemplated hereby. Each party to this Agreement acknowledges that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation represented only Olympus Capital Investments, LLC, an affiliate of OCI-VB, LLC, in connection with this Agreement and the transactions contemplated hereby and not any other Investor.

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