Exhibit 10.36

EXECUTION COPY

SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT

THIS SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of August 24, 2007, by and among Communication Intelligence
Corporation, a Delaware corporation with headquarters located at 275 Shoreline
Drive, Suite 500, Redwood Shores, California 94065 (the “Company”), and the
investors listed on the Schedule of Investors attached hereto as Exhibit A
(individually, an “Investor” and collectively, the “Investors”).

BACKGROUND

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

B.            Each Investor wishes to purchase, and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, the aggregate number of
shares of the Common Stock, par value $0.01 per share, of the Company (the
“Common Stock”), set forth opposite such Investor’s name in column two (2) on
the Schedule of Investors in Exhibit A (which aggregate amount for all Investors
together shall be 21,500,000 shares of Common Stock and shall collectively be
referred to herein as the “Common Shares” or the “Securities”) for a an
aggregate purchase price of $3,000,000.

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 Investors agree
as follows:

ARTICLE I
DEFINITIONS

1.1   DEFINITIONS.  IN ADDITION TO THE TERMS DEFINED ELSEWHERE IN THIS
AGREEMENT, THE FOLLOWING TERMS HAVE THE MEANINGS INDICATED:

“Advisory Fee” means the sum of $250,000 payable by the Company to Phoenix out
of the proceeds of the offering immediately following Closing.

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the
Securities Act.

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

 

 

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“Best Efforts” means the reasonable efforts that a prudent person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as practical; provided, however, that an obligation
to use Best Efforts under this Agreement does not require the Company to dispose
of or make any change to its business or expend any material funds.

“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.

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

“Closing Date” means the date and time of the Closing.

“Closing Market Price” has the meaning set forth in Section 6.1(e).

“Closing Price” means, for any date, the closing price per share of the Common
Stock for such date (or the nearest preceding date) on the primary Eligible
Market or exchange or quotation system on which the Common Stock is then listed
or quoted.

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

“Company Counsel” means Davis Wright Tremaine LLP, counsel to the Company.

“Common Shares” means an aggregate of 21,500,000 shares of Common Stock.

“Common Stock” means the common stock of the Company, par value $0.01 per share.

“Contingent Obligation” has the meaning set forth in Section 3.1(z).

“Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for Common Stock.

“Disclosure Materials” has the meaning set forth in Section 3.1(g).

“Effective Date” means the date that the Registration Statement is first
declared effective by the SEC.

“Effectiveness Period” has the meaning set forth in Section 6.1(c).

“8-K Filing” has the meaning set forth in Section 4.5.

“Eligible Market” means any of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ
Capital Market or OTC Bulletin Board.

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

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“Event” has the meaning set forth in Section 6.1(e).

“Event Payments” has the meaning set forth in Section 6.1(e).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Events” has the meaning set forth in Section 6.1(e)(ii).

“Excluded Investors” means Phoenix and its Affiliates, including Phoenix Venture
Fund LLC and Phoenix Enterprises LLC.

“Executive Management Position” means any of the following: Chairman of the
Board, Chief Executive Officer, Chief Financial Officer, Chief Legal Officer,
Chief Technology Officer, President, Secretary, and Vice President, Product
Development.

“Filing Date” means 60 days after the Closing Date.

“GAAP” has the meaning set forth in Section 3.1(g).

“Hazardous Materials” has the meaning set forth in Section 3.1(cc).

“Indebtedness” has the meaning set forth in Section 3.1(z).

“Indemnified Party” has the meaning set forth in Section 6.4(b).

“Indemnifying Party” has the meaning set forth in Section 6.4(b).

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

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

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

“Legal Counsel” has the meaning set forth in Section 6.1(c).

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

“Losses” means any and all losses, claims, damages, liabilities, settlement
costs and expenses, including, without limitation, reasonable attorneys’ fees.

“Major Subsidiary” means any direct or indirect subsidiary of the Company
through which the Company conducts a material portion of its operations, which
holds a material portion of assets, or which is the obligor on any material
amount of Indebtedness.

“Material Adverse Effect” means (i) a material adverse effect on the results of
operations, assets, business, financial condition or prospects of the Company
and the Subsidiaries, taken as a

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whole on a consolidated basis, or (ii) material and adverse impairment of the
Company’s ability to perform its obligations under any of the Transaction
Documents, provided, that none of the following alone shall be deemed to
constitute a Material Adverse Effect:  (i) changes in general business or
economic conditions, including such conditions related to the Company’s
business, other than those conditions affecting the Company and its Subsidiaries
differently than or disproportionately compared with other companies operating
in the same or similar business, (ii) changes in law, rules, regulations,
orders, or other binding directives issued by any governmental entity and not
specifically directed at the Company or its industry, or (iii) any existing fact
with respect to which the Investor has knowledge as of the date hereof.

“Material Permits” has the meaning set forth in Section 3.1(u).

“Options” means any outstanding rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.

“Person” means any individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, or
joint stock company.

“Phoenix” means SG Phoenix Ventures LLC, the managing member of Phoenix Venture
Fund LLC.

“Phoenix Entity” has the meaning set forth in Section 6.2(o).

“Phoenix Underwriter Registration Statement” has the meaning set forth in
Section 6.2(o).

“Phoenix Venture” has the meaning set forth in Section 6.2(o).

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

“Prospectus” means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.

“Registrable Securities” means the Common Shares issued or issuable pursuant to
the Transaction Documents, together with any securities issued or issuable upon
any stock split, dividend or other distribution, recapitalization or similar
event with respect to the foregoing.

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“Registration Statement” means each registration statement required to be filed
under Article VI, including (in each case) the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.

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

“Required Effectiveness Date” means one hundred eighty (180) days after the
Closing Date.

“Required Holders” means the holders of at least a majority of the outstanding
Registrable Securities.

“Rule 144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424,
respectively, promulgated by the SEC pursuant to the Securities Act, as such
Rules may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect as such Rule.

“SEC” has the meaning set forth in the recitals.

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

“Securities” has the meaning set forth in the recitals.

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

“Shares” means shares of the Company’s Common Stock.

“Subsidiary” means any direct or indirect subsidiary of the Company.

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading
Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed on a Trading Market (other than the OTC Bulletin Board), a day on which
the Common Stock is traded in the over-the-counter market, as reported by the
OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading
Market, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.

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

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“Transaction Documents” means this Agreement, the schedules and exhibits
attached hereto and the Transfer Agent Instructions.

“Transfer Agent” means American Stock Transfer and Trust Company, or any
successor transfer agent for the Company.

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

ARTICLE II
PURCHASE AND SALE

2.1   CLOSING.  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT,
THE COMPANY SHALL ISSUE AND SELL TO EACH INVESTOR, AND EACH INVESTOR SHALL
PURCHASE FROM THE COMPANY SUCH NUMBER OF COMMON SHARES FOR THE AGGREGATE PRICE
SET FORTH OPPOSITE SUCH INVESTOR’S NAME ON EXHIBIT A HERETO UNDER THE HEADINGS
“COMMON SHARES” AND “PURCHASE PRICE”, RESPECTIVELY.  THE DATE AND TIME OF THE
CLOSING AND SHALL BE 11:00 A.M., NEW YORK CITY TIME, ON THE CLOSING DATE, WHICH
SHALL BE A DATE DETERMINED BY MUTUAL AGREEMENT OF THE COMPANY AND PHOENIX, BUT
IN NO EVENT LESS THAN FIVE (5) BUSINESS DAYS OR MORE THAN TWENTY (20) BUSINESS
DAYS SUBSEQUENT TO THE DATE OF THIS AGREEMENT.  THE CLOSING SHALL TAKE PLACE AT
THE OFFICES OF COUNSEL TO THE INVESTORS.

2.2   CLOSING DELIVERIES.

(A)   AT THE CLOSING, THE COMPANY SHALL DELIVER OR CAUSE TO BE DELIVERED TO EACH
INVESTOR THE FOLLOWING:

(I)    A CERTIFICATE EXECUTED BY THE COMPANY’S CHIEF EXECUTIVE OFFICER AND CHIEF
FINANCIAL OFFICER, CONFIRMING THE CONTINUED TRUTH AND CORRECTNESS IN ALL
MATERIAL RESPECTS (EXCEPT AS TO THOSE REPRESENTATIONS AND WARRANTIES QUALIFIED
BY MATERIALITY, AS TO WHICH THE CONFIRMATION SHALL BE AS TO THEIR CONTINUED
TRUTH AND CORRECTNESS) AS OF THE CLOSING DATE OF THE COMPANY’S REPRESENTATIONS
AND WARRANTIES MADE IN ARTICLE III HEREOF;

(II)   A CERTIFICATE OF THE SECRETARY OF THE COMPANY, ATTACHING A RECENT COPY OF
THE CERTIFICATE OF INCORPORATION, AS AMENDED, CERTIFIED BY THE SECRETARY OF
STATE OF THE STATE OF DELAWARE AND A GOOD STANDING CERTIFICATE DATED AUGUST 17,
2007, COPIES OF THE BY-LAWS OF THE COMPANY AND RESOLUTIONS OF THE BOARD OF
DIRECTORS, WHICH THE SECRETARY OF THE COMPANY HAS CERTIFIED AS TRUE AND CORRECT
COPIES IN FULL FORCE AND EFFECT AS OF THE CLOSING;

(III)  ONE OR MORE STOCK CERTIFICATES (OR COPIES THEREOF PROVIDED BY THE
TRANSFER AGENT), FREE AND CLEAR OF ALL RESTRICTIVE AND OTHER LEGENDS (EXCEPT AS
EXPRESSLY PROVIDED IN SECTION 4.1(B) HEREOF), EVIDENCING SUCH NUMBER OF COMMON
SHARES SET FORTH OPPOSITE SUCH INVESTOR’S NAME ON EXHIBIT A HERETO UNDER THE
HEADING “COMMON SHARES,” REGISTERED IN THE NAME OF SUCH INVESTOR;

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(IV)  A LEGAL OPINION OF COMPANY COUNSEL, IN THE FORM OF EXHIBIT C, EXECUTED BY
SUCH COUNSEL AND DELIVERED TO THE INVESTORS;

(V)   DULY EXECUTED TRANSFER AGENT INSTRUCTIONS ACKNOWLEDGED BY THE COMPANY’S
TRANSFER AGENT;

(VI)  APPROVAL BY EACH APPLICABLE TRADING MARKET OF AN ADDITIONAL SHARES LISTING
APPLICATION COVERING ALL OF THE REGISTRABLE SECURITIES, IF REQUIRED BY SUCH
TRADING MARKET (AND, IF APPLICABLE, EVIDENCE OF CONDITIONAL LISTING APPROVAL);
AND

(VII) ANY CONSENTS OR APPROVALS OF ANY PERSON LISTED ON SCHEDULE 3.1(Z) OR ANY
OTHER THIRD-PARTY REQUIRED TO EFFECT THE TERMS AND CONDITIONS OF THIS AGREEMENT.

(B)   AT THE CLOSING, EACH INVESTOR SHALL DELIVER OR CAUSE TO BE DELIVERED TO
THE COMPANY THE PURCHASE PRICE (LESS EACH INVESTOR’S PROPORTIONATE SHARE OF THE
INVESTORS’ FEES AND EXPENSES DESCRIBED IN SECTION 7.2, WHICH SHALL BE PAID BY
DEDUCTION TO THE PROCEEDS PAYABLE AS DIRECTED BY EACH INVESTOR) SET FORTH
OPPOSITE SUCH INVESTOR’S NAME ON EXHIBIT A HERETO UNDER THE HEADING “PURCHASE
PRICE” IN UNITED STATES DOLLARS AND IN IMMEDIATELY AVAILABLE FUNDS, BY WIRE
TRANSFER TO AN ACCOUNT DESIGNATED IN WRITING TO SUCH INVESTOR BY THE COMPANY FOR
SUCH PURPOSE.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

3.1   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  THE COMPANY HEREBY
REPRESENTS AND WARRANTS TO THE INVESTORS AS FOLLOWS (WHICH REPRESENTATIONS AND
WARRANTIES SHALL BE DEEMED TO APPLY, WHERE APPROPRIATE, TO EACH SUBSIDIARY OF
THE COMPANY), AS OF THE DATE HEREOF AND AS OF THE CLOSING:

(A)   MAJOR SUBSIDIARIES.  THE COMPANY HAS NO MAJOR SUBSIDIARIES OTHER THAN
THOSE LISTED IN SCHEDULE 3.1(A) HERETO.  EXCEPT AS DISCLOSED IN SCHEDULE 3.1(A)
HERETO, THE COMPANY OWNS, DIRECTLY OR INDIRECTLY, ALL OF THE CAPITAL STOCK OR
COMPARABLE EQUITY INTERESTS OF EACH MAJOR SUBSIDIARY FREE AND CLEAR OF ANY LIEN
AND ALL THE ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OR COMPARABLE EQUITY
INTEREST OF EACH MAJOR SUBSIDIARY ARE VALIDLY ISSUED AND ARE FULLY PAID,
NON-ASSESSABLE AND FREE OF PREEMPTIVE AND SIMILAR RIGHTS.

(B)   ORGANIZATION AND QUALIFICATION.  EACH OF THE COMPANY AND THE MAJOR
SUBSIDIARIES IS AN ENTITY DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION OR ORGANIZATION (AS
APPLICABLE), WITH THE REQUISITE LEGAL AUTHORITY TO OWN AND USE ITS PROPERTIES
AND ASSETS AND TO CARRY ON ITS BUSINESS AS CURRENTLY CONDUCTED.  NEITHER THE
COMPANY NOR ANY MAJOR SUBSIDIARY IS IN VIOLATION 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 MAJOR
SUBSIDIARIES IS DULY QUALIFIED TO DO 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,

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WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT.

(C)   AUTHORIZATION; ENFORCEMENT.  THE COMPANY HAS THE REQUISITE CORPORATE
AUTHORITY TO ENTER INTO AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY EACH
OF THE TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY AND OTHERWISE TO CARRY OUT
ITS OBLIGATIONS HEREUNDER AND THEREUNDER.  THE EXECUTION AND DELIVERY OF EACH OF
THE TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY BY THE COMPANY AND THE
CONSUMMATION BY IT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY HAVE BEEN
DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART OF THE COMPANY AND
NO FURTHER CONSENT OR ACTION IS REQUIRED BY THE COMPANY, ITS BOARD OF DIRECTORS
OR ITS STOCKHOLDERS.  EACH OF THE TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY
HAS BEEN (OR UPON DELIVERY WILL BE) DULY EXECUTED BY THE COMPANY AND IS, OR WHEN
DELIVERED IN ACCORDANCE WITH THE TERMS HEREOF, WILL CONSTITUTE, THE VALID AND
BINDING OBLIGATION OF THE COMPANY ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE
WITH ITS TERMS, EXCEPT AS MAY BE LIMITED BY (I) APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION OR OTHER LAWS OF GENERAL APPLICATION RELATING TO OR
AFFECTING THE ENFORCEMENT OF CREDITORS RIGHTS GENERALLY, AND (II) THE EFFECT OF
RULES OF LAW GOVERNING THE AVAILABILITY OF SPECIFIC PERFORMANCE AND OTHER
EQUITABLE REMEDIES.

(D)   NO CONFLICTS.  THE EXECUTION, DELIVERY AND PERFORMANCE OF THE TRANSACTION
DOCUMENTS TO WHICH IT IS A PARTY BY THE COMPANY AND THE CONSUMMATION BY THE
COMPANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY DO NOT, AND WILL
NOT, (I) CONFLICT WITH OR VIOLATE ANY PROVISION OF THE COMPANY’S OR ANY MAJOR
SUBSIDIARY’S CERTIFICATE OR ARTICLES OF INCORPORATION, BYLAWS OR OTHER
ORGANIZATIONAL OR CHARTER DOCUMENTS, (II) CONFLICT WITH, OR CONSTITUTE A DEFAULT
(OR AN EVENT THAT WITH NOTICE OR LAPSE OF TIME OR BOTH WOULD BECOME A DEFAULT)
UNDER, OR GIVE TO OTHERS ANY RIGHTS OF TERMINATION, AMENDMENT, ACCELERATION OR
CANCELLATION (WITH OR WITHOUT NOTICE, LAPSE OF TIME OR BOTH) OF, ANY AGREEMENT,
CREDIT FACILITY, DEBT OR OTHER INSTRUMENT (EVIDENCING A COMPANY OR MAJOR
SUBSIDIARY DEBT OR OTHERWISE) OR OTHER UNDERSTANDING TO WHICH THE COMPANY OR ANY
MAJOR SUBSIDIARY IS A PARTY OR BY WHICH ANY PROPERTY OR ASSET OF THE COMPANY OR
ANY MAJOR SUBSIDIARY IS BOUND, OR AFFECTED, EXCEPT TO THE EXTENT THAT SUCH
CONFLICT, DEFAULT, TERMINATION, AMENDMENT, ACCELERATION OR CANCELLATION RIGHT
WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, OR (III)
RESULT IN A VIOLATION OF ANY LAW, RULE, REGULATION, ORDER, JUDGMENT, INJUNCTION,
DECREE OR OTHER RESTRICTION OF ANY COURT OR GOVERNMENTAL AUTHORITY TO WHICH THE
COMPANY OR A MAJOR SUBSIDIARY IS SUBJECT (INCLUDING, ASSUMING THE ACCURACY OF
THE REPRESENTATIONS AND WARRANTIES OF THE INVESTORS SET FORTH IN SECTION 3.2
HEREOF, FEDERAL AND STATE SECURITIES LAWS AND REGULATIONS AND THE RULES AND
REGULATIONS OF ANY SELF-REGULATORY ORGANIZATION TO WHICH THE COMPANY OR ITS
SECURITIES ARE SUBJECT, INCLUDING ALL APPLICABLE TRADING MARKETS), OR BY WHICH
ANY PROPERTY OR ASSET OF THE COMPANY OR A MAJOR SUBSIDIARY IS BOUND OR AFFECTED,
EXCEPT TO THE EXTENT THAT SUCH VIOLATION WOULD NOT REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT.

(E)   THE SECURITIES.  THE SECURITIES ARE DULY AUTHORIZED AND, WHEN ISSUED AND
PAID FOR IN ACCORDANCE WITH THE TRANSACTION DOCUMENTS, WILL BE DULY AND VALIDLY
ISSUED, FULLY PAID AND NONASSESSABLE, FREE AND CLEAR OF ALL LIENS AND WILL NOT
BE SUBJECT TO PREEMPTIVE OR SIMILAR RIGHTS OF STOCKHOLDERS (OTHER THAN THOSE
GRANTED TO THE INVESTORS UNDER SECTION 4.7).  THE OFFER,

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ISSUANCE AND SALE OF THE SHARES TO THE INVESTORS PURSUANT TO THIS AGREEMENT ARE
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

(F)    CAPITALIZATION.  THE AGGREGATE NUMBER OF SHARES AND TYPE OF ALL
AUTHORIZED, ISSUED AND OUTSTANDING CLASSES OF CAPITAL STOCK, OPTIONS AND OTHER
SECURITIES OF THE COMPANY (WHETHER OR NOT PRESENTLY CONVERTIBLE INTO OR
EXERCISABLE OR EXCHANGEABLE FOR SHARES OF CAPITAL STOCK OF THE COMPANY) IS SET
FORTH IN SCHEDULE 3.1(F) HERETO.  ALL OUTSTANDING SHARES OF CAPITAL STOCK ARE
DULY AUTHORIZED, VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE AND HAVE BEEN
ISSUED IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE SECURITIES
LAWS.  EXCEPT AS DISCLOSED IN SCHEDULE 3.1(F) HERETO, THE COMPANY DID NOT HAVE
OUTSTANDING AT DECEMBER 31, 2006 ANY OTHER OPTIONS, SCRIPT RIGHTS TO SUBSCRIBE
TO, CALLS OR COMMITMENTS OF ANY CHARACTER WHATSOEVER RELATING TO, OR SECURITIES,
RIGHTS OR OBLIGATIONS CONVERTIBLE INTO OR EXERCISABLE OR EXCHANGEABLE FOR, OR
ENTERED INTO ANY AGREEMENT GIVING ANY PERSON ANY RIGHT TO SUBSCRIBE FOR OR
ACQUIRE, ANY SHARES OF COMMON STOCK, OR SECURITIES OR RIGHTS CONVERTIBLE OR
EXCHANGEABLE INTO SHARES OF COMMON STOCK.  EXCEPT AS SET FORTH ON SCHEDULE
3.1(F) HERETO, AND EXCEPT FOR CUSTOMARY ADJUSTMENTS AS A RESULT OF STOCK
DIVIDENDS, STOCK SPLITS, COMBINATIONS OF SHARES, REORGANIZATIONS,
RECAPITALIZATIONS, RECLASSIFICATIONS OR OTHER SIMILAR EVENTS, THERE ARE NO
ANTI-DILUTION OR PRICE ADJUSTMENT PROVISIONS CONTAINED IN ANY SECURITY ISSUED BY
THE COMPANY (OR IN ANY AGREEMENT PROVIDING RIGHTS TO SECURITY HOLDERS) AND THE
ISSUANCE AND SALE OF THE SECURITIES WILL NOT OBLIGATE THE COMPANY TO ISSUE
SHARES OF COMMON STOCK OR OTHER SECURITIES TO ANY PERSON (OTHER THAN THE
INVESTORS) AND WILL NOT RESULT IN A RIGHT OF ANY HOLDER OF SECURITIES TO ADJUST
THE EXERCISE, CONVERSION, EXCHANGE OR RESET PRICE UNDER SUCH SECURITIES.  TO THE
KNOWLEDGE OF THE COMPANY, EXCEPT AS DISCLOSED IN THE SEC REPORTS AND ANY
SCHEDULES 13D OR 13G FILED WITH THE SEC PURSUANT TO RULE 13D-1 OF THE EXCHANGE
ACT BY REPORTING PERSONS OR IN SCHEDULE 3.1(F) HERETO, NO PERSON OR GROUP OF
RELATED PERSONS BENEFICIALLY OWNS (AS DETERMINED PURSUANT TO RULE 13D-3 UNDER
THE EXCHANGE ACT), OR HAS THE RIGHT TO ACQUIRE, BY AGREEMENT WITH OR BY
OBLIGATION BINDING UPON THE COMPANY, BENEFICIAL OWNERSHIP OF IN EXCESS OF 5% OF
THE OUTSTANDING COMMON STOCK.

(G)   SEC REPORTS; FINANCIAL STATEMENTS.  EXCEPT AS SET FORTH ON SCHEDULE
3.1(G), THE COMPANY HAS FILED ALL REPORTS REQUIRED TO BE FILED BY IT UNDER THE
EXCHANGE ACT, INCLUDING PURSUANT TO SECTION 13(A) OR 15(D) THEREOF, FOR THE 12
MONTHS PRECEDING THE DATE HEREOF ON A TIMELY BASIS OR HAS RECEIVED A VALID
EXTENSION OF SUCH TIME OF FILING AND HAS FILED ANY SUCH SEC REPORTS PRIOR TO THE
EXPIRATION OF ANY SUCH EXTENSION AND HAS FILED ALL REPORTS REQUIRED TO BE FILED
BY IT UNDER THE EXCHANGE ACT, INCLUDING PURSUANT TO SECTION 13(A) OR 15(D)
THEREOF, FOR THE TWO YEARS PRECEDING THE DATE HEREOF.  SUCH REPORTS REQUIRED TO
BE FILED BY THE COMPANY UNDER THE EXCHANGE ACT, INCLUDING PURSUANT TO SECTION
13(A) OR 15(D) THEREOF, TOGETHER WITH ANY MATERIALS FILED OR FURNISHED BY THE
COMPANY UNDER THE EXCHANGE ACT, WHETHER OR NOT ANY SUCH REPORTS WERE REQUIRED
BEING COLLECTIVELY REFERRED TO HEREIN AS THE “SEC REPORTS” AND, TOGETHER WITH
THIS AGREEMENT AND THE SCHEDULES TO THIS AGREEMENT, THE “DISCLOSURE MATERIALS”. 
AS OF THEIR RESPECTIVE DATES, THE SEC REPORTS FILED BY THE COMPANY COMPLIED IN
ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF THE SECURITIES ACT AND THE
EXCHANGE ACT AND THE RULES AND REGULATIONS OF THE SEC PROMULGATED THEREUNDER,
AND NONE OF THE SEC REPORTS, WHEN FILED BY THE COMPANY, 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

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COMPANY INCLUDED IN THE SEC REPORTS 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, THE
NOTES THERETO AND EXCEPT THAT UNAUDITED FINANCIAL STATEMENTS MAY NOT CONTAIN ALL
FOOTNOTES REQUIRED BY GAAP OR MAY BE CONDENSED OR SUMMARY STATEMENTS, AND FAIRLY
PRESENT IN ALL MATERIAL RESPECTS THE CONSOLIDATED 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, YEAR-END AUDIT ADJUSTMENTS.  ALL
MATERIAL AGREEMENTS TO WHICH THE COMPANY OR ANY SUBSIDIARY IS A PARTY OR TO
WHICH THE PROPERTY OR ASSETS OF THE COMPANY OR ANY SUBSIDIARY ARE SUBJECT ARE
INCLUDED AS PART OF OR IDENTIFIED IN THE SEC REPORTS, TO THE EXTENT SUCH
AGREEMENTS ARE REQUIRED TO BE INCLUDED OR IDENTIFIED PURSUANT TO THE RULES AND
REGULATIONS OF THE SEC.

(H)   SINCE THE DATE OF THE LATEST AUDITED FINANCIAL STATEMENTS INCLUDED WITHIN
THE SEC REPORTS, EXCEPT AS DISCLOSED IN THE SEC REPORTS OR IN SCHEDULE 3.1(H)
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 THE CHANGED ITS AUDITORS, EXCEPT AS DISCLOSED IN ITS SEC
REPORTS, (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 (EXCEPT FOR REPURCHASES BY THE COMPANY OF SHARES OF CAPITAL
STOCK HELD BY EMPLOYEES, OFFICERS, DIRECTORS, OR CONSULTANTS PURSUANT TO AN
OPTION OF THE COMPANY TO REPURCHASE SUCH SHARES UPON THE TERMINATION OF
EMPLOYMENT OR SERVICES), AND (V) THE COMPANY HAS NOT ISSUED ANY EQUITY
SECURITIES TO ANY OFFICER, DIRECTOR OR AFFILIATE, EXCEPT PURSUANT TO EXISTING
COMPANY STOCK-BASED PLANS.  THE COMPANY HAS NOT TAKEN ANY STEPS TO SEEK
PROTECTION PURSUANT TO ANY BANKRUPTCY LAW NOR DOES THE COMPANY HAVE ANY
KNOWLEDGE OR REASON TO BELIEVE THAT ITS CREDITORS INTEND TO INITIATE INVOLUNTARY
BANKRUPTCY PROCEEDINGS OR ANY ACTUAL KNOWLEDGE OF ANY FACT WHICH WOULD
REASONABLY LEAD A CREDITOR TO DO SO.  THE COMPANY IS NOT AS OF THE DATE HEREOF,
AND AFTER GIVING EFFECT TO THE TRANSACTIONS CONTEMPLATED HEREBY TO OCCUR AT THE
APPLICABLE CLOSING, WILL NOT BE INSOLVENT (AS DEFINED BELOW).  FOR PURPOSES OF
THIS SECTION 3.1(H), “INSOLVENT” MEANS (I) THE PRESENT FAIR SALEABLE VALUE OF
THE COMPANY’S ASSETS IS LESS THAN THE AMOUNT REQUIRED TO PAY THE COMPANY’S TOTAL
INDEBTEDNESS (AS DEFINED IN SECTION 3.1(Z)), (II) THE COMPANY IS UNABLE TO PAY
ITS DEBTS AND LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE, AS SUCH DEBTS
AND LIABILITIES BECOME ABSOLUTE AND MATURED, (III) THE COMPANY INTENDS TO INCUR
OR BELIEVES THAT IT WILL INCUR DEBTS THAT WOULD BE BEYOND ITS ABILITY TO PAY AS
SUCH DEBTS MATURE OR (IV) THE COMPANY HAS UNREASONABLY SMALL CAPITAL WITH WHICH
TO CONDUCT THE BUSINESS IN WHICH IT IS ENGAGED AS SUCH BUSINESS IS NOW CONDUCTED
AND IS PROPOSED TO BE CONDUCTED.

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(I)    ABSENCE OF LITIGATION.  EXCEPT AS DISCLOSED IN THE SEC REPORTS, THERE IS
NO ACTION, SUIT, CLAIM, OR PROCEEDING, 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 OF ITS SUBSIDIARIES
THAT COULD, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.

(J)    COMPLIANCE.  EXCEPT AS DESCRIBED IN SCHEDULE 3.1(J), NEITHER THE COMPANY
NOR ANY SUBSIDIARY, EXCEPT IN EACH CASE AS WOULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, REASONABLY BE EXPECTED TO HAVE OR RESULT IN A MATERIAL ADVERSE
EFFECT, (I) IS IN DEFAULT UNDER OR IN VIOLATION OF (AND NO EVENT HAS OCCURRED
THAT HAS NOT BEEN WAIVED THAT, WITH NOTICE OR LAPSE OF TIME OR BOTH, WOULD
RESULT IN A DEFAULT BY THE COMPANY OR ANY SUBSIDIARY UNDER), NOR HAS THE COMPANY
OR ANY SUBSIDIARY RECEIVED 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 (WHETHER OR NOT SUCH DEFAULT OR VIOLATION HAS BEEN
WAIVED), (II) IS IN VIOLATION OF ANY ORDER OF ANY COURT, ARBITRATOR OR
GOVERNMENTAL BODY, OR (III) IS OR HAS BEEN IN VIOLATION OF ANY STATUTE, RULE OR
REGULATION OF ANY GOVERNMENTAL AUTHORITY.

(K)   TITLE TO ASSETS.  THE COMPANY AND THE SUBSIDIARIES OWN NO REAL PROPERTY
EXCEPT AS DESCRIBED IN SCHEDULE 3.1(K).  THE COMPANY AND THE SUBSIDIARIES HAVE
GOOD AND MARKETABLE TITLE IN ALL PERSONAL PROPERTY OWNED BY THEM THAT IS
MATERIAL TO THE BUSINESS OF THE COMPANY AND THE SUBSIDIARIES, IN EACH CASE FREE
AND CLEAR OF ALL LIENS, EXCEPT FOR LIENS THAT DO NOT, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE OR RESULT IN A MATERIAL ADVERSE EFFECT.  ANY REAL PROPERTY AND
FACILITIES HELD UNDER LEASE BY THE COMPANY AND THE SUBSIDIARIES ARE HELD BY THEM
UNDER VALID, SUBSISTING AND ENFORCEABLE LEASES OF WHICH THE COMPANY AND THE
SUBSIDIARIES ARE IN MATERIAL COMPLIANCE.

(L)    NO GENERAL SOLICITATION; FEES.  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 SECURITIES.  THE
COMPANY SHALL BE RESPONSIBLE FOR THE PAYMENT OF ANY PLACEMENT AGENT’S FEES,
FINANCIAL ADVISORY FEES, OR BROKERS’ COMMISSION (OTHER THAN FOR PERSONS ENGAGED
BY ANY INVESTOR OR ITS INVESTMENT ADVISOR) RELATING TO OR ARISING OUT OF THE
ISSUANCE OF THE SECURITIES PURSUANT TO THIS AGREEMENT.  THE COMPANY SHALL PAY,
AND HOLD EACH INVESTOR HARMLESS AGAINST, ANY LIABILITY, LOSS OR EXPENSE
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEY’S FEES AND OUT-OF-POCKET
EXPENSES) ARISING IN CONNECTION WITH ANY SUCH CLAIM FOR FEES ARISING OUT OF THE
ISSUANCE OF THE SECURITIES PURSUANT TO THIS AGREEMENT.  THE COMPANY HAS NOT
ENGAGED ANY PLACEMENT AGENT OR OTHER AGENT IN CONNECTION WITH THE SALE OF THE
SECURITIES.

(M)    PRIVATE PLACEMENT.  NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES NOR,
ANY PERSON ACTING ON THE COMPANY’S BEHALF HAS, DIRECTLY OR INDIRECTLY, AT ANY
TIME WITHIN THE PAST SIX MONTHS, MADE ANY OFFER OR SALE OF ANY SECURITY OR
SOLICITATION OF ANY OFFER TO BUY ANY SECURITY UNDER CIRCUMSTANCES THAT WOULD
(I) ELIMINATE THE AVAILABILITY OF THE EXEMPTION FROM REGISTRATION UNDER
REGULATION D UNDER THE SECURITIES ACT IN CONNECTION WITH THE OFFER AND SALE BY
THE COMPANY OF THE SECURITIES AS CONTEMPLATED HEREBY OR (II) CAUSE THE OFFERING
OF THE SECURITIES

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PURSUANT TO THE TRANSACTION DOCUMENTS TO BE INTEGRATED WITH PRIOR OFFERINGS BY
THE COMPANY FOR PURPOSES OF ANY APPLICABLE LAW, REGULATION OR STOCKHOLDER
APPROVAL PROVISIONS, INCLUDING, WITHOUT LIMITATION, UNDER THE RULES AND
REGULATIONS OF ANY TRADING MARKET.  THE SALE AND ISSUANCE OF THE SECURITIES
HEREUNDER DOES NOT CONTRAVENE THE RULES AND REGULATIONS OF ANY TRADING MARKET ON
WHICH THE COMMON STOCK IS LISTED OR QUOTED.  THE COMPANY IS NOT REQUIRED TO BE
REGISTERED AS, AND IS NOT AN AFFILIATE OF, AN “INVESTMENT COMPANY” WITHIN THE
MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.  THE COMPANY IS NOT
REQUIRED TO BE REGISTERED AS, A UNITED STATES REAL PROPERTY HOLDING CORPORATION
WITHIN THE MEANING OF THE FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT OF 1980.

(N)   LISTING AND MAINTENANCE REQUIREMENTS.  THE COMPANY HAS NOT, IN THE TWELVE
MONTHS PRECEDING THE DATE HEREOF, RECEIVED NOTICE (WRITTEN OR ORAL) FROM ANY
TRADING MARKET ON WHICH THE COMMON STOCK IS OR HAS BEEN LISTED OR QUOTED TO THE
EFFECT THAT THE COMPANY IS NOT IN COMPLIANCE WITH THE LISTING OR MAINTENANCE
REQUIREMENTS OF SUCH TRADING MARKET.  THE COMPANY IS, AND HAS NO REASON TO
BELIEVE THAT IT WILL NOT IN THE FORESEEABLE FUTURE CONTINUE TO BE, IN COMPLIANCE
WITH ALL SUCH LISTING AND MAINTENANCE REQUIREMENTS.

(O)   REGISTRATION RIGHTS.  EXCEPT AS DESCRIBED IN SCHEDULE 3.1(O), THE COMPANY
HAS NOT GRANTED OR AGREED TO GRANT TO ANY PERSON ANY RIGHTS (INCLUDING
“PIGGY-BACK” REGISTRATION RIGHTS) TO HAVE ANY SECURITIES OF THE COMPANY
REGISTERED WITH THE SEC OR ANY OTHER GOVERNMENTAL AUTHORITY THAT HAVE NOT BEEN
SATISFIED OR WAIVED.

(P)   APPLICATION OF TAKEOVER PROTECTIONS.  EXCEPT AS DESCRIBED IN SCHEDULE
3.1(P), THERE IS NO CONTROL SHARE ACQUISITION, BUSINESS COMBINATION, POISON PILL
(INCLUDING ANY DISTRIBUTION UNDER A RIGHTS AGREEMENT) OR OTHER SIMILAR
ANTI-TAKEOVER PROVISION UNDER THE COMPANY’S CHARTER DOCUMENTS OR THE LAWS OF ITS
STATE OF INCORPORATION THAT IS OR COULD BECOME APPLICABLE TO ANY OF THE
INVESTORS AS A RESULT OF THE INVESTORS AND THE COMPANY FULFILLING THEIR
OBLIGATIONS OR EXERCISING THEIR RIGHTS UNDER THE TRANSACTION DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, AS A RESULT OF THE COMPANY’S ISSUANCE OF THE
SECURITIES AND THE INVESTORS’ OWNERSHIP OF THE SECURITIES.

(Q)   DISCLOSURE.  THE COMPANY CONFIRMS THAT NEITHER IT NOR ANY OFFICERS,
DIRECTORS OR AFFILIATES, HAS PROVIDED ANY OF THE INVESTORS (OTHER THAN EXCLUDED
INVESTORS) OR THEIR AGENTS OR COUNSEL WITH ANY INFORMATION THAT CONSTITUTES OR
MIGHT CONSTITUTE MATERIAL, NONPUBLIC INFORMATION (OTHER THAN THE EXISTENCE AND
TERMS OF THE ISSUANCE OF SECURITIES, AS CONTEMPLATED BY THIS AGREEMENT).  THE
COMPANY CONFIRMS THAT NEITHER IT NOR ANY OFFICERS, DIRECTORS OR AFFILIATES, HAS
PROVIDED ANY OF THE INVESTORS (OTHER THAN EXCLUDED INVESTORS) OR THEIR AGENTS OR
COUNSEL WITH ANY INFORMATION THAT CONSTITUTES OR MIGHT CONSTITUTE MATERIAL,
NONPUBLIC INFORMATION (OTHER THAN THE EXISTENCE AND TERMS OF THE ISSUANCE OF
SECURITIES, AS CONTEMPLATED BY THIS AGREEMENT).  THE COMPANY UNDERSTANDS AND
CONFIRMS THAT EACH OF THE INVESTORS WILL RELY ON THE FOREGOING REPRESENTATIONS
IN EFFECTING TRANSACTIONS IN SECURITIES OF THE COMPANY (OTHER THAN EXCLUDED
INVESTORS).  ALL DISCLOSURE PROVIDED BY THE COMPANY TO THE INVESTORS REGARDING
THE COMPANY, ITS BUSINESS AND THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING
THE SCHEDULES TO THIS AGREEMENT, FURNISHED BY OR ON THE BEHALF OF THE COMPANY
ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AND DO NOT CONTAIN ANY UNTRUE
STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT NECESSARY IN

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ORDER TO MAKE THE STATEMENTS MADE THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES
UNDER WHICH THEY WERE MADE, NOT MISLEADING.  TO THE COMPANY’S KNOWLEDGE, EXCEPT
FOR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, NO EVENT OR CIRCUMSTANCE
HAS OCCURRED OR INFORMATION EXISTS WITH RESPECT TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR ITS OR THEIR BUSINESS, PROPERTIES, OPERATIONS OR FINANCIAL
CONDITION, WHICH, UNDER APPLICABLE LAW, RULE OR REGULATION, REQUIRES PUBLIC
DISCLOSURE OR ANNOUNCEMENT BY THE COMPANY BUT WHICH HAS NOT BEEN SO PUBLICLY
ANNOUNCED OR DISCLOSED.  THE COMPANY ACKNOWLEDGES AND AGREES THAT NO INVESTOR
MAKES OR HAS MADE ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE
TRANSACTIONS CONTEMPLATED HEREBY OTHER THAN THOSE SET FORTH IN THE TRANSACTION
DOCUMENTS.

(R)    ACKNOWLEDGMENT REGARDING INVESTORS’ PURCHASE OF SECURITIES.  BASED UPON
THE ASSUMPTION THAT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE
CONSUMMATED IN ALL MATERIAL RESPECTS IN CONFORMITY WITH THE TRANSACTION
DOCUMENTS, THE COMPANY ACKNOWLEDGES AND AGREES THAT EACH OF THE INVESTORS IS
ACTING SOLELY IN THE CAPACITY OF AN ARM’S LENGTH PURCHASER WITH RESPECT TO THE
TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  THE
COMPANY FURTHER ACKNOWLEDGES THAT NO INVESTOR IS ACTING AS A FINANCIAL ADVISOR
OR FIDUCIARY OF THE COMPANY (OR IN ANY SIMILAR CAPACITY) WITH RESPECT TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND ANY ADVICE GIVEN BY ANY
INVESTOR OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR AGENTS IN CONNECTION WITH
THE TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
IS MERELY INCIDENTAL TO THE INVESTORS’ PURCHASE OF THE SECURITIES.  THE COMPANY
FURTHER REPRESENTS TO EACH INVESTOR THAT THE COMPANY’S DECISION TO ENTER INTO
THIS AGREEMENT HAS BEEN BASED SOLELY ON THE INDEPENDENT EVALUATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY BY THE COMPANY AND ITS REPRESENTATIVES.

(S)   PATENTS AND TRADEMARKS.  THE COMPANY AND ITS SUBSIDIARIES OWN, OR POSSESS
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 NOW CONDUCTED.  EXCEPT AS SET FORTH IN
SCHEDULE 3.1(S), NONE OF THE COMPANY’S INTELLECTUAL PROPERTY RIGHTS HAVE EXPIRED
OR TERMINATED, OR ARE EXPECTED TO EXPIRE OR TERMINATE, WITHIN THREE YEARS FROM
THE DATE OF THIS AGREEMENT.  THE COMPANY DOES NOT HAVE ANY KNOWLEDGE OF ANY
INFRINGEMENT BY THE COMPANY OR ITS SUBSIDIARIES OF INTELLECTUAL PROPERTY RIGHTS
OF OTHERS.  EXCEPT AS SET FORTH IN SCHEDULE 3.1(S), THE COMPANY DOES NOT HAVE
ANY KNOWLEDGE OF ANY INFRINGEMENT BY OTHERS OF INTELLECTUAL PROPERTY RIGHTS OF
THE COMPANY OR ITS SUBSIDIARIES.  EXCEPT AS DISCLOSED IN THE SEC REPORTS, THERE
IS NO CLAIM, ACTION OR PROCEEDING BEING MADE OR BROUGHT, OR TO THE KNOWLEDGE OF
THE COMPANY, BEING THREATENED, AGAINST THE COMPANY OR ITS SUBSIDIARIES REGARDING
ITS INTELLECTUAL PROPERTY RIGHTS.

(T)    INSURANCE.  THE COMPANY AND THE SUBSIDIARIES ARE INSURED BY INSURERS OF
RECOGNIZED FINANCIAL RESPONSIBILITY AGAINST SUCH LOSSES AND RISKS AND IN SUCH
AMOUNTS AS ARE PRUDENT AND CUSTOMARY IN THE BUSINESSES AND LOCATIONS IN WHICH
THE COMPANY AND THE SUBSIDIARIES ARE ENGAGED.

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(U)   REGULATORY PERMITS.  THE COMPANY AND THE SUBSIDIARIES POSSESS ALL
CERTIFICATES, AUTHORIZATIONS AND PERMITS ISSUED BY THE APPROPRIATE FEDERAL,
STATE, LOCAL OR FOREIGN REGULATORY AUTHORITIES NECESSARY TO CONDUCT THEIR
RESPECTIVE BUSINESSES AS DESCRIBED IN THE SEC REPORTS (“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.

(V)   TRANSACTIONS WITH AFFILIATES AND EMPLOYEES.  EXCEPT AS SET FORTH OR
INCORPORATED BY REFERENCE IN THE COMPANY’S SEC REPORTS, NONE OF THE OFFICERS,
DIRECTORS OR EMPLOYEES OF THE COMPANY IS PRESENTLY A PARTY TO ANY TRANSACTION
THAT WOULD BE REQUIRED TO BE REPORTED ON FORM 10-K WITH THE COMPANY OR ANY OF
ITS SUBSIDIARIES (OTHER THAN FOR ORDINARY COURSE SERVICES AS EMPLOYEES, OFFICERS
OR DIRECTORS), INCLUDING ANY CONTRACT, AGREEMENT OR OTHER ARRANGEMENT PROVIDING
FOR THE FURNISHING OF SERVICES TO OR BY, PROVIDING FOR RENTAL OF REAL OR
PERSONAL PROPERTY TO OR FROM, OR OTHERWISE REQUIRING PAYMENTS TO OR FROM ANY
SUCH OFFICER, DIRECTOR OR EMPLOYEE OR, TO THE COMPANY’S KNOWLEDGE, ANY
CORPORATION, PARTNERSHIP, TRUST OR OTHER ENTITY IN WHICH ANY SUCH OFFICER,
DIRECTOR, OR EMPLOYEE HAS A SUBSTANTIAL INTEREST OR IS AN OFFICER, DIRECTOR,
TRUSTEE OR PARTNER.

(W)  INTERNAL ACCOUNTING CONTROLS.  THE COMPANY AND THE SUBSIDIARIES MAINTAIN A
SYSTEM OF INTERNAL ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE REASONABLE
ASSURANCE THAT (I) TRANSACTIONS ARE EXECUTED IN ACCORDANCE WITH MANAGEMENT’S
GENERAL OR SPECIFIC AUTHORIZATIONS, (II) TRANSACTIONS ARE RECORDED AS NECESSARY
TO PERMIT PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH 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.

(X)    SARBANES-OXLEY ACT. THE COMPANY IS IN COMPLIANCE IN ALL MATERIAL RESPECTS
WITH APPLICABLE REQUIREMENTS OF THE SARBANES-OXLEY ACT OF 2002 AND APPLICABLE
RULES AND REGULATIONS PROMULGATED BY THE SEC THEREUNDER, EXCEPT WHERE SUCH
NONCOMPLIANCE WOULD NOT HAVE, INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL
ADVERSE EFFECT.

(Y)   FOREIGN CORRUPT PRACTICES.  NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES NOR, TO THE KNOWLEDGE OF THE COMPANY, ANY DIRECTOR, OFFICER, AGENT,
EMPLOYEE OR OTHER PERSON ACTING ON BEHALF OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES HAS, IN THE COURSE OF ITS ACTIONS FOR, OR ON BEHALF OF, THE COMPANY
(I) USED ANY CORPORATE FUNDS FOR ANY UNLAWFUL CONTRIBUTION, GIFT, ENTERTAINMENT
OR OTHER UNLAWFUL EXPENSES RELATING TO POLITICAL ACTIVITY; (II) MADE ANY DIRECT
OR INDIRECT UNLAWFUL PAYMENT TO ANY FOREIGN OR DOMESTIC GOVERNMENT OFFICIAL OR
EMPLOYEE FROM CORPORATE FUNDS; (III) VIOLATED OR IS IN VIOLATION OF ANY
PROVISION OF THE U.S. FOREIGN CORRUPT PRACTICES ACT OF 1977, AS AMENDED; OR (IV)
MADE ANY UNLAWFUL BRIBE, REBATE, PAYOFF, INFLUENCE PAYMENT, KICKBACK OR OTHER
UNLAWFUL PAYMENT TO ANY FOREIGN OR DOMESTIC GOVERNMENT OFFICIAL OR EMPLOYEE.

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(Z)    INDEBTEDNESS.  EXCEPT AS DISCLOSED IN SCHEDULE 3.1(Z), NEITHER THE
COMPANY NOR ANY OF ITS SUBSIDIARIES (I) HAS ANY OUTSTANDING INDEBTEDNESS (AS
DEFINED BELOW), (II) IS IN VIOLATION OF ANY TERM OF OR IN DEFAULT UNDER ANY
CONTRACT, AGREEMENT OR INSTRUMENT RELATING TO ANY INDEBTEDNESS, EXCEPT WHERE
SUCH VIOLATIONS AND DEFAULTS WOULD NOT RESULT, INDIVIDUALLY OR IN THE AGGREGATE,
IN A MATERIAL ADVERSE EFFECT, OR (III) IS A PARTY TO ANY CONTRACT, AGREEMENT OR
INSTRUMENT RELATING TO ANY INDEBTEDNESS, THE PERFORMANCE OF WHICH, IN THE
JUDGMENT OF THE COMPANY’S OFFICERS, HAS OR IS EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.  SCHEDULE 3.1(Z) PROVIDES A DETAILED DESCRIPTION OF THE MATERIAL
TERMS OF ANY SUCH OUTSTANDING INDEBTEDNESS.  FOR PURPOSES OF THIS AGREEMENT: 
(X) “INDEBTEDNESS” OF ANY PERSON MEANS, WITHOUT DUPLICATION (A) ALL INDEBTEDNESS
FOR BORROWED MONEY, (B) ALL OBLIGATIONS ISSUED, UNDERTAKEN OR ASSUMED AS THE
DEFERRED PURCHASE PRICE OF PROPERTY OR SERVICES (OTHER THAN TRADE PAYABLES
ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS), (C) ALL REIMBURSEMENT OR
PAYMENT OBLIGATIONS WITH RESPECT TO LETTERS OF CREDIT, SURETY BONDS AND OTHER
SIMILAR INSTRUMENTS, (D) ALL OBLIGATIONS EVIDENCED BY NOTES, BONDS, DEBENTURES
OR SIMILAR INSTRUMENTS, INCLUDING OBLIGATIONS SO EVIDENCED INCURRED IN
CONNECTION WITH THE ACQUISITION OF PROPERTY, ASSETS OR BUSINESSES, (E) ALL
INDEBTEDNESS CREATED OR ARISING UNDER ANY CONDITIONAL SALE OR OTHER TITLE
RETENTION AGREEMENT, OR INCURRED AS FINANCING, IN EITHER CASE WITH RESPECT TO
ANY PROPERTY OR ASSETS ACQUIRED WITH THE PROCEEDS OF SUCH INDEBTEDNESS (EVEN
THOUGH THE RIGHTS AND REMEDIES OF THE SELLER OR BANK UNDER SUCH AGREEMENT IN THE
EVENT OF DEFAULT ARE LIMITED TO REPOSSESSION OR SALE OF SUCH PROPERTY), (F) ALL
MONETARY OBLIGATIONS UNDER ANY LEASING OR SIMILAR ARRANGEMENT WHICH, IN
CONNECTION WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, CONSISTENTLY APPLIED
FOR THE PERIODS COVERED THEREBY, IS CLASSIFIED AS A CAPITAL LEASE, (G) ALL
INDEBTEDNESS REFERRED TO IN CLAUSES (A) THROUGH (F) ABOVE SECURED BY (OR FOR
WHICH THE HOLDER OF SUCH INDEBTEDNESS HAS AN EXISTING RIGHT, CONTINGENT OR
OTHERWISE, TO BE SECURED BY) ANY MORTGAGE, LIEN, PLEDGE, CHARGE, SECURITY
INTEREST OR OTHER ENCUMBRANCE UPON OR IN ANY PROPERTY OR ASSETS (INCLUDING
ACCOUNTS AND CONTRACT RIGHTS) OWNED BY ANY PERSON, EVEN THOUGH THE PERSON WHICH
OWNS SUCH ASSETS OR PROPERTY HAS NOT ASSUMED OR BECOME LIABLE FOR THE PAYMENT OF
SUCH INDEBTEDNESS, AND (H) ALL CONTINGENT OBLIGATIONS IN RESPECT OF INDEBTEDNESS
OR OBLIGATIONS OF OTHERS OF THE KINDS REFERRED TO IN CLAUSES (A) THROUGH (G)
ABOVE; (Y) “CONTINGENT OBLIGATION” MEANS, AS TO ANY PERSON, ANY DIRECT OR
INDIRECT LIABILITY, CONTINGENT OR OTHERWISE, OF THAT PERSON WITH RESPECT TO ANY
INDEBTEDNESS, LEASE, DIVIDEND OR OTHER OBLIGATION OF ANOTHER PERSON IF THE
PRIMARY PURPOSE OR INTENT OF THE PERSON INCURRING SUCH LIABILITY, OR THE PRIMARY
EFFECT THEREOF, IS TO PROVIDE ASSURANCE TO THE OBLIGEE OF SUCH LIABILITY THAT
SUCH LIABILITY WILL BE PAID OR DISCHARGED, OR THAT ANY AGREEMENTS RELATING
THERETO WILL BE COMPLIED WITH, OR THAT THE HOLDERS OF SUCH LIABILITY WILL BE
PROTECTED (IN WHOLE OR IN PART) AGAINST LOSS WITH RESPECT THERETO; AND (Z)
“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.

(AA)  EMPLOYEE RELATIONS.  NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS A
PARTY TO ANY COLLECTIVE BARGAINING AGREEMENT OR EMPLOYS ANY MEMBER OF A UNION. 
THE COMPANY BELIEVES THAT ITS RELATIONS WITH ITS EMPLOYEES ARE AS DISCLOSED IN
THE SEC REPORTS.  EXCEPT AS DISCLOSED IN THE SEC REPORTS, DURING THE PERIOD
COVERED BY THE SEC REPORTS, NO EXECUTIVE OFFICER OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES (AS DEFINED IN RULE 501(F) OF THE SECURITIES ACT) HAS NOTIFIED THE
COMPANY OR ANY SUCH SUBSIDIARY THAT SUCH OFFICER INTENDS TO LEAVE THE COMPANY OR
ANY SUCH SUBSIDIARY OR OTHERWISE TERMINATE SUCH OFFICER’S EMPLOYMENT WITH THE
COMPANY OR ANY SUCH SUBSIDIARY.  TO THE KNOWLEDGE OF THE COMPANY OR ANY SUCH

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SUBSIDIARY, NO EXECUTIVE OFFICER OF THE COMPANY OR ANY OF ITS SUBSIDIARIES IS IN
VIOLATION OF ANY MATERIAL TERM OF ANY EMPLOYMENT CONTRACT, CONFIDENTIALITY,
DISCLOSURE OR PROPRIETARY INFORMATION AGREEMENT, NON-COMPETITION AGREEMENT, OR
ANY OTHER CONTRACT OR AGREEMENT OR ANY RESTRICTIVE COVENANT, AND THE CONTINUED
EMPLOYMENT OF EACH SUCH EXECUTIVE OFFICER DOES NOT SUBJECT THE COMPANY OR ANY
SUCH SUBSIDIARY TO ANY LIABILITY WITH RESPECT TO ANY OF THE FOREGOING MATTERS.

(BB)  LABOR MATTERS.      THE COMPANY AND ITS SUBSIDIARIES ARE 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.

(CC)  ENVIRONMENTAL LAWS.  THE COMPANY AND ITS SUBSIDIARIES (I) ARE IN
COMPLIANCE IN ALL MATERIAL RESPECTS WITH ANY AND ALL ENVIRONMENTAL LAWS (AS
HEREINAFTER DEFINED), (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 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.

(DD)  SUBSIDIARY RIGHTS.  EXCEPT AS SET FORTH IN SCHEDULE 3.1(DD), THE COMPANY
OR ONE OF ITS SUBSIDIARIES HAS THE UNRESTRICTED RIGHT TO VOTE, AND (SUBJECT TO
LIMITATIONS IMPOSED BY APPLICABLE LAW) TO RECEIVE DIVIDENDS AND DISTRIBUTIONS
ON, ALL CAPITAL SECURITIES OF ITS SUBSIDIARIES AS OWNED BY THE COMPANY OR SUCH
SUBSIDIARY.

(EE)  TAX STATUS.  THE COMPANY AND EACH OF ITS SUBSIDIARIES (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) 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, AND THE OFFICERS OF THE COMPANY KNOW
OF NO BASIS FOR ANY SUCH CLAIM.

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(FF)                   RIGHT OF FIRST OFFER.  THE COMPANY HAS NOT GRANTED TO ANY
PERSON ANY RIGHTS OF FIRST OFFER OR RIGHTS OF FIRST REFUSAL WITH RESPECT TO THE
PROVISION OR OBTAINING OF ANY DEBT OR EQUITY FINANCING, INCLUDING, BUT NOT
LIMITED TO, ANY RIGHTS TO PROVIDE ADDITIONAL FINANCING CURRENTLY AVAILABLE UNDER
THE CREDIT FACILITIES DESCRIBED ON SCHEDULE 3.1(Z) HERETO, EXCEPT FOR SUCH
RIGHTS OF FIRST OFFER OR RIGHTS OF FIRST REFUSAL THAT BY THEIR TERMS HAVE
EXPIRED OR TERMINATED AND ARE NO LONGER EFFECTIVE AS OF THE CLOSING DATE.

3.2   REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.  EACH INVESTOR HEREBY, AS
TO ITSELF ONLY AND FOR NO OTHER INVESTOR, REPRESENTS AND WARRANTS TO THE COMPANY
AS FOLLOWS, AS OF THE DATE HEREOF AND AS OF THE CLOSING:

(A)   ORGANIZATION; AUTHORITY.  SUCH INVESTOR IS AN ENTITY DULY ORGANIZED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS
ORGANIZATION WITH THE REQUISITE CORPORATE, PARTNERSHIP OR OTHER POWER AND
AUTHORITY TO ENTER INTO AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THE
TRANSACTION DOCUMENTS AND OTHERWISE TO CARRY OUT ITS OBLIGATIONS HEREUNDER AND
THEREUNDER.  THE PURCHASE BY SUCH INVESTOR OF THE SECURITIES HEREUNDER HAS BEEN
DULY AUTHORIZED BY ALL NECESSARY CORPORATE, PARTNERSHIP OR OTHER ACTION ON THE
PART OF SUCH INVESTOR.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY
SUCH INVESTOR AND CONSTITUTES THE VALID AND BINDING OBLIGATION OF SUCH INVESTOR,
ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS, EXCEPT AS MAY BE LIMITED BY
(I) APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION OR OTHER LAWS OF GENERAL
APPLICATION RELATING TO OR AFFECTING THE ENFORCEMENT OF CREDITORS RIGHTS
GENERALLY, AND (II) THE EFFECT OF RULES OF LAW GOVERNING THE AVAILABILITY OF
SPECIFIC PERFORMANCE AND OTHER EQUITABLE REMEDIES.

(B)   NO PUBLIC SALE OR DISTRIBUTION.  SUCH INVESTOR IS ACQUIRING THE COMMON
SHARES IN THE ORDINARY COURSE OF BUSINESS FOR ITS OWN ACCOUNT AND NOT WITH A
VIEW TOWARDS, OR FOR RESALE IN CONNECTION WITH, THE PUBLIC SALE OR DISTRIBUTION
THEREOF, EXCEPT PURSUANT TO SALES REGISTERED UNDER THE SECURITIES ACT OR UNDER
AN EXEMPTION FROM SUCH REGISTRATION AND IN COMPLIANCE WITH APPLICABLE FEDERAL
AND STATE SECURITIES LAWS, AND SUCH INVESTOR DOES NOT HAVE A PRESENT ARRANGEMENT
TO EFFECT ANY DISTRIBUTION OF THE SECURITIES TO OR THROUGH ANY PERSON OR ENTITY;
PROVIDED, HOWEVER, THAT BY MAKING THE REPRESENTATIONS HEREIN, SUCH INVESTOR DOES
NOT AGREE TO HOLD ANY OF THE SECURITIES FOR ANY MINIMUM OR OTHER SPECIFIC TERM
AND RESERVES THE RIGHT TO DISPOSE OF THE SECURITIES AT ANY TIME IN ACCORDANCE
WITH OR PURSUANT TO A REGISTRATION STATEMENT OR AN EXEMPTION UNDER THE
SECURITIES ACT.

(C)   INVESTOR STATUS.  AT THE TIME SUCH INVESTOR WAS OFFERED THE SECURITIES, IT
WAS, AND AT THE DATE HEREOF IT IS, AN “ACCREDITED INVESTOR” AS DEFINED IN RULE
501(A) UNDER THE SECURITIES ACT OR A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A(A) UNDER THE SECURITIES ACT.  SUCH INVESTOR IS NOT A REGISTERED
BROKER DEALER REGISTERED UNDER SECTION 15(A) OF THE EXCHANGE ACT, OR A MEMBER OF
THE NASD, INC. OR AN ENTITY ENGAGED IN THE BUSINESS OF BEING A BROKER DEALER. 
EXCEPT AS OTHERWISE DISCLOSED IN WRITING TO THE COMPANY ON EXHIBIT B-2 (ATTACHED
HERETO) ON OR PRIOR TO THE DATE OF THIS AGREEMENT, SUCH INVESTOR IS NOT
AFFILIATED WITH ANY BROKER DEALER REGISTERED UNDER SECTION 15(A) OF THE EXCHANGE
ACT, OR A MEMBER OF THE NASD, INC. OR AN ENTITY ENGAGED IN THE BUSINESS OF BEING
A BROKER DEALER.

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(D)   EXPERIENCE OF SUCH INVESTOR.  SUCH INVESTOR, EITHER ALONE OR TOGETHER WITH
ITS REPRESENTATIVES HAS SUCH KNOWLEDGE, SOPHISTICATION AND EXPERIENCE IN
BUSINESS AND FINANCIAL MATTERS SO AS TO BE CAPABLE OF EVALUATING THE MERITS AND
RISKS OF THE PROSPECTIVE INVESTMENT IN THE SECURITIES, AND HAS SO EVALUATED THE
MERITS AND RISKS OF SUCH INVESTMENT.  SUCH INVESTOR UNDERSTANDS THAT IT MUST
BEAR THE ECONOMIC RISK OF THIS INVESTMENT IN THE SECURITIES INDEFINITELY, AND IS
ABLE TO BEAR SUCH RISK AND IS ABLE TO AFFORD A COMPLETE LOSS OF SUCH INVESTMENT.

(E)   ACCESS TO INFORMATION.  SUCH INVESTOR ACKNOWLEDGES THAT IT HAS REVIEWED
THE DISCLOSURE MATERIALS AND HAS BEEN AFFORDED:  (I) THE OPPORTUNITY TO ASK SUCH
QUESTIONS AS IT HAS DEEMED NECESSARY OF, AND TO RECEIVE ANSWERS FROM,
REPRESENTATIVES OF THE COMPANY CONCERNING THE TERMS AND CONDITIONS OF THE
OFFERING OF THE SECURITIES AND THE MERITS AND RISKS OF INVESTING IN THE
SECURITIES; (II) ACCESS TO INFORMATION (OTHER THAN MATERIAL NON-PUBLIC
INFORMATION) ABOUT THE COMPANY AND THE MAJOR SUBSIDIARIES AND THEIR RESPECTIVE
FINANCIAL CONDITION, RESULTS OF OPERATIONS, BUSINESS, PROPERTIES, MANAGEMENT AND
PROSPECTS SUFFICIENT TO ENABLE IT TO EVALUATE ITS INVESTMENT; AND (III) THE
OPPORTUNITY TO OBTAIN SUCH ADDITIONAL INFORMATION THAT THE COMPANY POSSESSES OR
CAN ACQUIRE WITHOUT UNREASONABLE EFFORT OR EXPENSE THAT IS NECESSARY TO MAKE AN
INFORMED INVESTMENT DECISION WITH RESPECT TO THE INVESTMENT.  NEITHER SUCH
INQUIRIES NOR ANY OTHER INVESTIGATION CONDUCTED BY OR ON BEHALF OF SUCH INVESTOR
OR ITS REPRESENTATIVES OR COUNSEL SHALL MODIFY, AMEND OR AFFECT SUCH INVESTOR’S
RIGHT TO RELY ON THE TRUTH, ACCURACY AND COMPLETENESS OF THE DISCLOSURE
MATERIALS AND THE COMPANY’S REPRESENTATIONS AND WARRANTIES CONTAINED IN THE
TRANSACTION DOCUMENTS.  SUCH INVESTOR ACKNOWLEDGES RECEIPT OF COPIES OF THE SEC
REPORTS.

(F)    NO GOVERNMENTAL REVIEW.  SUCH 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.

(G)   NO CONFLICTS.  THE EXECUTION, DELIVERY AND PERFORMANCE BY SUCH INVESTOR OF
THIS AGREEMENT AND THE CONSUMMATION BY SUCH INVESTOR OF THE TRANSACTIONS
CONTEMPLATED HEREBY WILL NOT (I) RESULT IN A VIOLATION OF THE ORGANIZATIONAL
DOCUMENTS OF SUCH INVESTOR 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 SUCH INVESTOR
IS A PARTY, OR (III) RESULT IN A VIOLATION OF ANY LAW, RULE, REGULATION, ORDER,
JUDGMENT OR DECREE (INCLUDING FEDERAL AND STATE SECURITIES LAWS) APPLICABLE TO
SUCH INVESTOR, EXCEPT IN THE CASE OF CLAUSES (II) AND (III) ABOVE, FOR SUCH THAT
ARE NOT MATERIAL AND DO NOT OTHERWISE AFFECT THE ABILITY OF SUCH INVESTOR TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.

(H)   RESTRICTED SECURITIES.  THE INVESTORS UNDERSTAND THAT THE SECURITIES ARE
CHARACTERIZED AS “RESTRICTED SECURITIES” UNDER THE U.S. FEDERAL SECURITIES LAWS
INASMUCH AS THEY ARE BEING ACQUIRED FROM THE COMPANY IN A TRANSACTION NOT
INVOLVING A PUBLIC OFFERING AND THAT UNDER SUCH LAWS AND APPLICABLE REGULATIONS
SUCH SECURITIES MAY BE RESOLD WITHOUT REGISTRATION UNDER THE SECURITIES ACT ONLY
IN CERTAIN LIMITED CIRCUMSTANCES.

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(I)    LEGENDS.                IT IS UNDERSTOOD THAT, EXCEPT AS PROVIDED IN
SECTION 4.1(B) OF THIS AGREEMENT, CERTIFICATES EVIDENCING SUCH SECURITIES MAY
BEAR THE LEGEND SET FORTH IN SECTION 4.1(B).

(J)    NO LEGAL, TAX OR INVESTMENT ADVICE.  SUCH INVESTOR UNDERSTANDS THAT
NOTHING IN THIS AGREEMENT OR ANY OTHER MATERIALS PRESENTED BY OR ON BEHALF OF
THE COMPANY TO THE INVESTOR IN CONNECTION WITH THE PURCHASE OF THE SECURITIES
CONSTITUTES LEGAL, TAX OR INVESTMENT ADVICE.  SUCH INVESTOR HAS CONSULTED SUCH
LEGAL, TAX AND INVESTMENT ADVISORS AS IT, IN ITS SOLE DISCRETION, HAS DEEMED
NECESSARY OR APPROPRIATE IN CON­NECTION WITH ITS PURCHASE OF THE SECURITIES.

ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES

4.1   TRANSFER RESTRICTIONS.

(A)   THE INVESTORS COVENANT THAT THE SECURITIES WILL ONLY BE DISPOSED OF
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, AND IN COMPLIANCE WITH
THE REQUIREMENTS OF, THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND IN COMPLIANCE WITH
ANY APPLICABLE STATE SECURITIES LAWS.  IN CONNECTION WITH ANY TRANSFER OF
SECURITIES OTHER THAN PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR TO THE
COMPANY, OR PURSUANT TO RULE 144(K), THE COMPANY MAY REQUIRE THE TRANSFEROR TO
PROVIDE TO THE COMPANY AN OPINION OF COUNSEL SELECTED BY THE TRANSFEROR, THE
FORM AND SUBSTANCE OF WHICH OPINION SHALL BE REASONABLY SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER
THE SECURITIES ACT.  NOTWITHSTANDING THE FOREGOING, THE COMPANY HEREBY CONSENTS
TO AND AGREES TO REGISTER ON THE BOOKS OF THE COMPANY AND WITH ITS TRANSFER
AGENT, WITHOUT ANY SUCH LEGAL OPINION, EXCEPT TO THE EXTENT THAT THE TRANSFER
AGENT REQUESTS SUCH LEGAL OPINION, ANY TRANSFER OF SECURITIES BY AN INVESTOR TO
AN AFFILIATE OF SUCH INVESTOR, PROVIDED THAT THE TRANSFEREE CERTIFIES TO THE
COMPANY THAT IT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A) UNDER THE
SECURITIES ACT AND PROVIDED THAT SUCH AFFILIATE DOES NOT REQUEST ANY REMOVAL OF
ANY EXISTING LEGENDS ON ANY CERTIFICATE EVIDENCING THE SECURITIES.

(B)   THE INVESTORS AGREE TO THE IMPRINTING, SO LONG AS IS REQUIRED BY THIS
SECTION 4.1(B), OF THE FOLLOWING LEGEND ON ANY CERTIFICATE EVIDENCING ANY OF THE
SECURITIES:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

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CERTIFICATES EVIDENCING SECURITIES SHALL NOT BE REQUIRED TO CONTAIN SUCH LEGEND
OR ANY OTHER LEGEND (I) WHILE A REGISTRATION STATEMENT (INCLUDING THE
REGISTRATION STATEMENT) COVERING THE RESALE OF THE SECURITIES IS EFFECTIVE UNDER
THE SECURITIES ACT, (II) FOLLOWING ANY SALE OF SUCH SECURITIES PURSUANT TO RULE
144 IF THE HOLDER PROVIDES THE COMPANY WITH A LEGAL OPINION (AND THE DOCUMENTS
UPON WHICH THE LEGAL OPINION IS BASED) REASONABLY ACCEPTABLE TO THE COMPANY TO
THE EFFECT THAT THE SECURITIES CAN BE SOLD UNDER RULE 144, (III) IF THE HOLDER
PROVIDES THE COMPANY WITH A LEGAL OPINION (AND THE DOCUMENTS UPON WHICH THE
LEGAL OPINION IS BASED)  REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT
THE SECURITIES ARE ELIGIBLE FOR SALE UNDER RULE 144(K), OR (IV) IF THE HOLDER
PROVIDES THE COMPANY WITH A LEGAL OPINION (AND THE DOCUMENTS UPON WHICH THE
LEGAL OPINION IS BASED) REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT
THE LEGEND IS NOT REQUIRED UNDER APPLICABLE REQUIREMENTS OF THE SECURITIES ACT
(INCLUDING CONTROLLING JUDICIAL INTERPRETATIONS AND PRONOUNCEMENTS ISSUED BY THE
STAFF OF THE SEC).  THE COMPANY SHALL CAUSE ITS COUNSEL TO ISSUE THE LEGAL
OPINION INCLUDED IN THE TRANSFER AGENT INSTRUCTIONS TO THE TRANSFER AGENT ON THE
EFFECTIVE DATE.  FOLLOWING THE EFFECTIVE DATE OR AT SUCH EARLIER TIME AS A
LEGEND IS NO LONGER REQUIRED FOR CERTAIN SECURITIES, THE COMPANY WILL NO LATER
THAN THREE TRADING DAYS FOLLOWING THE DELIVERY BY AN INVESTOR TO THE COMPANY OR
THE TRANSFER AGENT OF (I) A LEGENDED CERTIFICATE REPRESENTING SUCH SECURITIES,
AND (II) AN OPINION OF COUNSEL TO THE EXTENT REQUIRED BY SECTION 4.1(A), DELIVER
OR CAUSE TO BE DELIVERED TO SUCH INVESTOR A CERTIFICATE REPRESENTING SUCH
SECURITIES THAT IS FREE FROM ALL RESTRICTIVE AND OTHER LEGENDS.  THE COMPANY MAY
NOT MAKE ANY NOTATION ON ITS RECORDS OR GIVE INSTRUCTIONS TO THE TRANSFER AGENT
THAT ENLARGE THE RESTRICTIONS ON TRANSFER SET FORTH IN THIS SECTION 4.1(B).

IF WITHIN THREE TRADING DAYS AFTER THE COMPANY’S RECEIPT OF A LEGENDED
CERTIFICATE AND THE OTHER DOCUMENTS AS SPECIFIED IN CLAUSES (I) AND (II) OF THE
PARAGRAPH IMMEDIATELY ABOVE, THE COMPANY SHALL FAIL TO ISSUE AND DELIVER TO SUCH
INVESTOR A CERTIFICATE REPRESENTING SUCH SECURITIES THAT IS FREE FROM ALL
RESTRICTIVE AND OTHER LEGENDS, AND IF ON OR AFTER SUCH TRADING DAY THE INVESTOR
PURCHASES (IN AN OPEN MARKET TRANSACTION OR OTHERWISE) SHARES OF COMMON STOCK TO
DELIVER IN SATISFACTION OF A SALE BY THE INVESTOR OF SHARES OF COMMON STOCK THAT
THE INVESTOR ANTICIPATED RECEIVING FROM THE COMPANY WITHOUT ANY RESTRICTIVE
LEGEND (THE “COVERING SHARES”), THEN THE COMPANY SHALL, WITHIN THREE TRADING
DAYS AFTER THE INVESTOR’S REQUEST, PAY CASH TO THE INVESTOR IN AN AMOUNT EQUAL
TO THE EXCESS (IF ANY) OF THE INVESTOR’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 CLAUSES (I)
AND (II) OF THE PARAGRAPH IMMEDIATELY ABOVE.

(C)   THE COMPANY WILL NOT OBJECT TO AND SHALL PERMIT (EXCEPT AS PROHIBITED BY
LAW) AN INVESTOR TO PLEDGE OR GRANT A SECURITY INTEREST IN SOME OR ALL OF THE
SECURITIES IN CONNECTION WITH A BONA FIDE MARGIN AGREEMENT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES, AND IF REQUIRED UNDER THE TERMS
OF SUCH AGREEMENT, LOAN OR ARRANGEMENT, THE COMPANY WILL NOT OBJECT TO AND SHALL
PERMIT (EXCEPT AS PROHIBITED BY LAW) SUCH INVESTOR TO TRANSFER PLEDGED OR
SECURED SECURITIES TO THE PLEDGEES OR SECURED PARTIES.  EXCEPT AS REQUIRED BY
LAW, SUCH A PLEDGE OR TRANSFER SHALL NOT BE SUBJECT TO APPROVAL OF THE COMPANY,
NO LEGAL OPINION OF THE PLEDGEE, SECURED PARTY OR PLEDGOR SHALL BE REQUIRED IN
CONNECTION THEREWITH, AND NO NOTICE SHALL BE REQUIRED OF SUCH PLEDGE.  EACH
INVESTOR ACKNOWLEDGES THAT THE COMPANY SHALL NOT BE RESPONSIBLE FOR ANY PLEDGES
RELATING TO, OR THE GRANT OF ANY SECURITY INTEREST IN, ANY OF THE SECURITIES OR
FOR ANY AGREEMENT, UNDERSTANDING OR ARRANGEMENT BETWEEN ANY INVESTOR AND ITS
PLEDGEE OR SECURED PARTY.  AT THE APPROPRIATE INVESTOR’S EXPENSE, THE

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COMPANY WILL EXECUTE AND DELIVER SUCH REASONABLE DOCUMENTATION AS A PLEDGEE OR
SECURED PARTY OF SECURITIES MAY REASONABLY REQUEST IN CONNECTION WITH A PLEDGE
OR TRANSFER OF THE SECURITIES, INCLUDING THE PREPARATION AND FILING OF ANY
REQUIRED PROSPECTUS SUPPLEMENT UNDER RULE 424(B)(3) OF THE SECURITIES ACT OR
OTHER APPLICABLE PROVISION OF THE SECURITIES ACT TO APPROPRIATELY AMEND THE LIST
OF SELLING STOCKHOLDERS THEREUNDER. PROVIDED THAT THE COMPANY IS IN COMPLIANCE
WITH THE TERMS OF THIS SECTION 4.1(C), THE COMPANY’S INDEMNIFICATION OBLIGATIONS
PURSUANT TO SECTION 6.4 SHALL NOT EXTEND TO ANY PROCEEDING OR LOSSES ARISING OUT
OF OR RELATED TO THIS SECTION 4.1(C).

4.2   FURNISHING OF INFORMATION.  UNTIL THE DATE THAT ANY INVESTOR OWNING COMMON
SHARES MAY SELL ALL OF THEM UNDER RULE 144(K) OF THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE COMPANY COVENANTS TO USE ITS BEST EFFORTS TO TIMELY
FILE (OR OBTAIN EXTENSIONS IN RESPECT THEREOF AND FILE WITHIN THE APPLICABLE
GRACE PERIOD) ALL REPORTS REQUIRED TO BE FILED BY THE COMPANY AFTER THE DATE
HEREOF PURSUANT TO THE EXCHANGE ACT.  THE COMPANY FURTHER COVENANTS THAT IT WILL
TAKE SUCH FURTHER ACTION AS ANY HOLDER OF SECURITIES MAY REASONABLY REQUEST TO
SATISFY THE PROVISIONS OF THIS SECTION 4.2.

4.3   INTEGRATION.  THE COMPANY SHALL NOT, AND SHALL USE ITS BEST EFFORTS TO
ENSURE THAT NO AFFILIATE 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
SECURITIES IN A MANNER THAT WOULD REQUIRE THE REGISTRATION UNDER THE SECURITIES
ACT OF THE SALE OF THE SECURITIES TO THE INVESTORS OR THAT WOULD BE INTEGRATED
WITH THE OFFER OR SALE OF THE SECURITIES FOR PURPOSES OF THE RULES AND
REGULATIONS OF ANY TRADING MARKET.

4.4   RESERVATION OF SECURITIES.  THE COMPANY SHALL MAINTAIN A RESERVE FROM ITS
DULY AUTHORIZED SHARES OF COMMON STOCK FOR ISSUANCE PURSUANT TO THE TRANSACTION
DOCUMENTS IN SUCH AMOUNT AS MAY BE REQUIRED TO FULFILL ITS OBLIGATIONS TO ISSUE
SUCH SHARES UNDER THE TRANSACTION DOCUMENTS.  IN THE EVENT THAT AT ANY TIME THE
THEN AUTHORIZED SHARES OF COMMON STOCK ARE INSUFFICIENT FOR THE COMPANY TO
SATISFY ITS OBLIGATIONS TO ISSUE SUCH SHARES UNDER THE TRANSACTION DOCUMENTS,
THE COMPANY SHALL PROMPTLY TAKE SUCH ACTIONS AS MAY BE REQUIRED TO INCREASE THE
NUMBER OF AUTHORIZED SHARES.

4.5   SECURITIES LAWS DISCLOSURE; PUBLICITY.  THE COMPANY SHALL, AT OR BEFORE
5:30 P.M., NEW YORK TIME, ON THE SIGNING DATE, OR AT OR BEFORE 5:30 P.M., NEW
YORK TIME, ON THE NEXT BUSINESS DAY FOLLOWING THE SIGNING DATE, ISSUE A PRESS
RELEASE REASONABLY ACCEPTABLE TO THE INVESTORS DISCLOSING ALL MATERIAL TERMS OF
THE TRANSACTIONS CONTEMPLATED HEREBY.  THE COMPANY SHALL, AT OR BEFORE 5:30
P.M., NEW YORK TIME, ON THE SIGNING DATE, OR AT OR BEFORE 5:30 P.M., NEW YORK
TIME, ON THE NEXT BUSINESS DAY FOLLOWING THE SIGNING DATE, FILE A CURRENT REPORT
ON FORM 8-K WITH THE SEC (THE “8-K FILING”) DESCRIBING THE TERMS OF THE
TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS, IN THE FORM REQUIRED BY
THE EXCHANGE ACT.  THEREAFTER, THE COMPANY SHALL TIMELY FILE ANY FILINGS AND
NOTICES REQUIRED BY THE SEC OR APPLICABLE LAW WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY AND PROVIDE COPIES THEREOF TO THE INVESTORS PROMPTLY AFTER
FILING.  EXCEPT AS HEREIN PROVIDED, THE COMPANY SHALL NOT PUBLICLY DISCLOSE THE
NAME OF ANY INVESTOR, OR INCLUDE THE NAME OF ANY INVESTOR IN ANY PRESS RELEASE
WITHOUT THE PRIOR WRITTEN CONSENT OF SUCH INVESTOR, UNLESS OTHERWISE REQUIRED BY
LAW.  THE COMPANY SHALL NOT, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES AND ITS
AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS NOT TO,
PROVIDE ANY INVESTOR WITH ANY MATERIAL

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NONPUBLIC INFORMATION REGARDING THE COMPANY OR ANY OF ITS SUBSIDIARIES FROM AND
AFTER THE ISSUANCE OF THE ABOVE REFERENCED PRESS RELEASE WITHOUT THE EXPRESS
WRITTEN CONSENT OF SUCH INVESTOR.

4.6   USE OF PROCEEDS.  THE COMPANY SHALL PAY UP TO A MAXIMUM OF $1.4 MILLION OF
THE NET PROCEEDS IN THE REPAYMENT THE TOTAL INDEBTEDNESS THAT IS SET FORTH ON
SCHEDULE 3.1(Z) HERETO. THE COMPANY INTENDS TO USE THE REMAINDER OF THE NET
PROCEEDS FROM THE SALE OF THE SECURITIES FOR PRODUCT DEVELOPMENT, WORKING
CAPITAL AND GENERAL CORPORATE PURPOSES.  PENDING THESE USES, THE COMPANY INTENDS
TO INVEST THE NET PROCEEDS FROM THIS OFFERING IN SHORT-TERM, INTEREST-BEARING,
INVESTMENT-GRADE SECURITIES, OR AS OTHERWISE PURSUANT TO THE COMPANY’S CUSTOMARY
INVESTMENT POLICIES.

4.7   RIGHT OF FIRST OFFER.  SO LONG AS THE INVESTORS HOLD SHARES REPRESENTING
(I) AT LEAST 50% OF THE REGISTRABLE SECURITIES AND (II) AT LEAST 5% OF ALL
SHARES OF THE OUTSTANDING CAPITAL STOCK OF THE COMPANY, THE COMPANY HEREBY
GRANTS TO PHOENIX A RIGHT OF FIRST OPPORTUNITY TO EXCLUSIVELY PROVIDE DEBT OR
EQUITY FINANCING, WHICH MAY INCLUDE THE ISSUANCE OF CONVERTIBLE SECURITIES OF
THE COMPANY OR ITS SUBSIDIARIES, TO THE COMPANY OR ANY SUBSIDIARY, SUBJECT TO
THE TERMS AND CONDITIONS SET FORTH HEREIN.  IF THE COMPANY OR ANY SUBSIDIARY OF
THE COMPANY PLANS TO OBTAIN ANY SUCH FINANCING, THEN PRIOR TO SEEKING,
NEGOTIATING OR OBTAINING ANY SUCH FINANCING OR ENTERING INTO ANY TERM SHEET,
LETTER OF INTENT, COMMITMENT OR SIMILAR ARRANGEMENT TO OBTAIN SUCH FINANCING
(EACH A “FUNDING OPPORTUNITY”) FROM A THIRD PARTY (OTHER THAN AN INVESTOR), THE
COMPANY AND PHOENIX SHALL DISCUSS THE MATERIAL ECONOMIC PARAMETERS OF THE
PROPOSED FUNDING OPPORTUNITY. PHOENIX SHALL THEN HAVE THIRTY (30) BUSINESS DAYS
AFTER THE DATE OF RECEIPT FROM THE COMPANY OF A DETAILED PROPOSED TERM SHEET OR
PROPOSED DEFINITIVE AGREEMENT TO NOTIFY THE COMPANY IN WRITING (THE “FINANCING
NOTICE”) WHETHER OR NOT IT INTENDS TO EXERCISE ITS RIGHT OF FIRST OPPORTUNITY TO
PROVIDE THE FINANCING TO THE COMPANY.  IF THE COMPANY AND PHOENIX CANNOT COME TO
A MUTUAL AGREEMENT AS TO THE TERMS AND CONDITIONS OF SUCH FINANCING WITHIN THAT
PERIOD OF THIRTY (30) BUSINESS DAYS, FOR ANY REASON WHATSOEVER, THEN THE COMPANY
MAY PURSUE OBTAINING SUCH FINANCING FROM A THIRD PARTY AS DESCRIBED BELOW,
PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE COMPANY CONSUMMATE SUCH FINANCING
WITH A PERSON OTHER THAN PHOENIX (OR ONE OF ITS AFFILIATES) ON TERMS MORE
FAVORABLE TO SUCH THIRD PARTY THAN THOSE OFFERED TO PHOENIX.  IN THE EVENT THAT
PHOENIX DOES NOT EXERCISE ITS RIGHT HEREUNDER, THEN THE COMPANY MAY PURSUE
OBTAINING THE PROPOSED FINANCING FROM OTHER PERSONS FOR A PERIOD OF SIXTY (60)
DAYS, AND, IN THE EVENT THAT THE COMPANY OBTAINS A SIGNED LETTER OF INTENT FROM
OTHER PERSONS WITHIN THAT 60-DAY PERIOD, IT MAY CONTINUE TO PURSUE SUCH PROPOSED
FINANCING FOR AN ADDITIONAL ONE HUNDRED TWENTY (120) DAYS.  NOTWITHSTANDING THE
FOREGOING, NO RIGHT OF FIRST OPPORTUNITY WILL EXIST FOR (I) ANY ISSUANCE OF
SECURITIES UPON CONVERSION, EXERCISE OR EXCHANGE OF EXISTING SECURITIES PURSUANT
TO TERMS IN EFFECT AND PUBLICLY DISCLOSED IN THE COMPANY’S SEC FILINGS AS OF
JULY 13, 2007; (II) ANY ISSUANCE BY A SUBSIDIARY TO ANOTHER SUBSIDIARY OR TO THE
COMPANY; OR (III) ANY ISSUANCE OR EXERCISE OF OPTIONS UNDER THE COMPANY’S
EMPLOYEE OR CONSULTANT INCENTIVE OPTION PLANS.

4.8   RESTRICTIONS OF SALES OF EXECUTIVE MANAGEMENT SHARES.  SO LONG AS ANY OF
THE COMMON SHARES ARE NOT FREELY SALEABLE IN AN ELIGIBLE MARKET, NO CAPITAL
STOCK OF THE COMPANY MAY BE SOLD BY ANY PERSON THAT HOLDS ANY EXECUTIVE
MANAGEMENT POSITION UNDER THE REGISTRATION STATEMENT, RULE 144 (AS DEFINED IN
SECTION 1.1 HEREOF) OR ANY OTHER METHOD.

4.9   BOARD OBSERVER AND DIRECTOR RIGHTS.  SO LONG AS THE INVESTORS HOLD COMMON
SHARES REPRESENTING (I) AT LEAST 50% OF THE REGISTRABLE SECURITIES AND (II) AT
LEAST 5% OF ALL SHARES OF THE

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OUTSTANDING CAPITAL STOCK OF THE COMPANY, PHOENIX SHALL BE ENTITLED TO DESIGNATE
UP TO TWO INDIVIDUALS AS NON-VOTING OBSERVERS WHO SHALL BE ENTITLED TO ATTEND
ALL MEETINGS OF THE BOARD OF DIRECTORS OF THE COMPANY (THE “BOARD”) AND ANY
COMMITTEE MEETING OF THE BOARD, AND SHALL BE ENTITLED TO RECEIVE ANY AND ALL
DOCUMENTATION, MATERIAL AND INFORMATION PROVIDED BY THE COMPANY TO THE BOARD AT
THE SAME TIME THAT IT IS PROVIDED BY THE COMPANY TO THE BOARD.  THE COMPANY
SHALL BEAR ALL REASONABLE EXPENSES PURSUANT TO THIS SECTION 4.9. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE TRANSACTION DOCUMENTS, ANY
OBSERVER DESIGNATED BY PHOENIX MAY BE EXCLUDED FROM ANY MEETING OF THE BOARD AND
ANY COMMITTEE OF THE BOARD IF NECESSARY, BASED ON A WRITTEN OPINION OF COUNSEL
TO THE COMPANY, TO PROTECT THE ATTORNEY-CLIENT PRIVILEGE.

4.10  CERTAIN OTHER ACTIONS REQUIRING CONSENT.  UNTIL THE EARLIER OCCURRENCE OF
EITHER (I) THE INVESTORS NO LONGER HOLD COMMON SHARES REPRESENTING BOTH (A) AT
LEAST 50% OF THE REGISTRABLE SECURITIES AND (B) AT LEAST 5% OF ALL SHARES OF THE
OUTSTANDING CAPITAL STOCK OF THE COMPANY, OR (II) 24 MONTHS AFTER THE EFFECTIVE
DATE, THE COMPANY SHALL NOT SELL, TRANSFER OR OTHERWISE DISPOSE OF ANY OF ITS
MATERIAL PROPERTIES, ASSETS AND RIGHTS INCLUDING, WITHOUT LIMITATION, ITS
SOFTWARE AND INTELLECTUAL PROPERTY, TO ANY PERSON, EXCEPT FOR SALES TO CUSTOMERS
IN THE ORDINARY COURSE OF BUSINESS, WITHOUT THE CONSENT OF PHOENIX. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, SHARES HELD BY AN ASSIGNEE OF
AN INVESTOR SHALL NOT BE COUNTED IN THE CALCULATION SET FORTH IN THIS SECTION
4.10 AND PHOENIX MAY NOT ASSIGN ITS RIGHTS UNDER THIS SECTION 4.10 EXCEPT TO A
CONTROLLED OR CONTROLLING AFFILIATE OF PHOENIX.

4.11  INFORMATION RIGHTS.  SO LONG AS THE INVESTORS HOLD COMMON SHARES
REPRESENTING (I) AT LEAST 50% OF THE REGISTRABLE SECURITIES AND (II) AT LEAST 5%
OF ALL SHARES OF THE OUTSTANDING CAPITAL STOCK OF THE COMPANY, THE COMPANY SHALL
PROVIDE PHOENIX WITH (A) TRUE AND COMPLETE COPIES OF THE MONTHLY, QUARTERLY AND
YEARLY FINANCIAL STATEMENTS OF THE COMPANY AS SOON AS REASONABLY PRACTICABLE
AFTER THEY BECOME AVAILABLE, BUT IN NO EVENT MORE THAN THIRTY (30) DAYS
FOLLOWING THE END OF EACH CALENDAR MONTH, FORTY-FIVE (45) DAYS FOLLOWING THE END
OF EACH CALENDAR QUARTER, OR NINETY (90) DAYS FOLLOWING THE END OF EACH CALENDAR
YEAR, RESPECTIVELY; AND (B) TRUE AND COMPLETE COPIES OF SUCH OTHER REPORTS AND
UPDATES REGARDING SALES, REVENUES, BACKLOG, PIPELINE AND OTHER OPERATING DATA AS
THE COMPANY’S MANAGEMENT REGULARLY PROVIDES TO ITS BOARD.  PHOENIX MAY SHARE THE
INFORMATION DISCLOSED UNDER THIS SECTION 4.11 WITH OTHER INVESTORS PROVIDED THAT
SUCH INVESTOR HAS PREVIOUSLY ENTERED INTO THIS AGREEMENT OR A CONFIDENTIALITY
AGREEMENT, WHICH ACKNOWLEDGES SUCH INVESTOR’S OBLIGATION TO REFRAIN FROM TRADING
ON THE BASIS OF MATERIAL NON-PUBLIC INFORMATION.

4.12  ADVISORY FEE.  UPON CLOSING, THE COMPANY SHALL PAY TO PHOENIX THE ADVISORY
FEE AS DIRECTED BY PHOENIX.

ARTICLE V
CONDITIONS

5.1   CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE INVESTORS.  THE OBLIGATION
OF EACH INVESTOR TO ACQUIRE SECURITIES AT THE CLOSING IS SUBJECT TO THE
SATISFACTION OR WAIVER BY SUCH INVESTOR, AT OR BEFORE THE CLOSING, OF EACH OF
THE FOLLOWING CONDITIONS:

(A)   REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND WARRANTIES OF THE
COMPANY CONTAINED HEREIN SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
(EXCEPT AS TO THOSE

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REPRESENTATIONS AND WARRANTIES QUALIFIED BY MATERIALITY) AS OF THE DATE WHEN
MADE AND AS OF THE CLOSING AS THOUGH MADE ON AND AS OF SUCH DATE; AND

(B)   PERFORMANCE.  THE COMPANY AND EACH INVESTOR SHALL HAVE PERFORMED,
SATISFIED AND COMPLIED IN ALL MATERIAL RESPECTS (EXCEPT AS TO THOSE COVENANTS,
AGREEMENTS AND CONDITIONS QUALIFIED BY MATERIALITY) WITH ALL COVENANTS,
AGREEMENTS AND CONDITIONS REQUIRED BY THE TRANSACTION DOCUMENTS TO BE PERFORMED,
SATISFIED OR COMPLIED WITH BY IT AT OR PRIOR TO THE CLOSING.

5.2   CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY.  THE OBLIGATION OF
THE COMPANY TO SELL THE SECURITIES AT THE CLOSING IS SUBJECT TO THE SATISFACTION
OR WAIVER BY THE COMPANY, AT OR BEFORE THE CLOSING, OF EACH OF THE FOLLOWING
CONDITIONS:

(A)   REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND WARRANTIES OF
EACH INVESTOR CONTAINED HEREIN SHALL BE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS (EXCEPTS AS TO THOSE REPRESENTATIONS AND WARRANTIES QUALIFIED BY
MATERIALITY) AS OF THE DATE WHEN MADE AND AS OF THE CLOSING DATE AS THOUGH MADE
ON AND AS OF SUCH DATE; AND

(B)   PERFORMANCE.  EACH INVESTOR SHALL HAVE PERFORMED, SATISFIED AND COMPLIED
IN ALL MATERIAL RESPECTS (EXCEPT AS TO THOSE COVENANTS, AGREEMENTS AND
CONDITIONS QUALIFIED BY MATERIALITY) WITH ALL COVENANTS, AGREEMENTS AND
CONDITIONS REQUIRED BY THE TRANSACTION DOCUMENTS TO BE PERFORMED, SATISFIED OR
COMPLIED WITH BY SUCH INVESTOR AT OR PRIOR TO THE CLOSING.

ARTICLE VI
REGISTRATION RIGHTS

6.1   REGISTRATION STATEMENT.

(A)   THE COMPANY SHALL USE ITS BEST EFFORTS TO PREPARE AND FILE WITH THE SEC A
REGISTRATION STATEMENT COVERING THE RESALE OF ALL REGISTRABLE SECURITIES FOR AN
OFFERING TO BE MADE ON A CONTINUOUS BASIS PURSUANT TO RULE 415 WITHIN 45 DAYS OF
THE CLOSING DATE, AND IN ANY EVENT ON OR PRIOR TO THE FILING DATE.  THE
REGISTRATION STATEMENT SHALL BE ON FORM S-3 (EXCEPT IF THE COMPANY IS NOT THEN
ELIGIBLE TO REGISTER FOR RESALE THE REGISTRABLE SECURITIES ON FORM S-3, IN WHICH
CASE SUCH REGISTRATION SHALL BE ON FORM S-1 OR ANOTHER APPROPRIATE FORM IN
ACCORDANCE WITH THE SECURITIES ACT AND THE EXCHANGE ACT) AND SHALL CONTAIN
(EXCEPT IF OTHERWISE DIRECTED BY VOTE OF REQUIRED HOLDERS OR REQUESTED BY THE
SEC) THE “PLAN OF DISTRIBUTION” IN SUBSTANTIALLY THE FORM ATTACHED HERETO AS
EXHIBIT D.

(B)   LEGAL COUNSEL.  THE REQUIRED HOLDERS SHALL HAVE THE RIGHT TO SELECT ONE
LEGAL COUNSEL TO REVIEW AND OVERSEE ANY REGISTRATION PURSUANT TO THIS SECTION
6.1 (“LEGAL COUNSEL”), WHICH SHALL BE THELEN REID BROWN RAYSMAN & STEINER LLP OR
SUCH OTHER COUNSEL AS THEREAFTER DESIGNATED BY THE REQUIRED HOLDERS.  THE
COMPANY SHALL REASONABLY COOPERATE WITH LEGAL COUNSEL IN PERFORMING THE
COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT.

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(C)   THE COMPANY SHALL USE ITS BEST EFFORTS TO CAUSE THE REGISTRATION STATEMENT
TO BE DECLARED EFFECTIVE BY THE SEC AS PROMPTLY AS POSSIBLE AFTER THE FILING
THEREOF, BUT IN ANY EVENT PRIOR TO THE REQUIRED EFFECTIVENESS DATE, AND SHALL
USE ITS BEST EFFORTS TO KEEP THE REGISTRATION STATEMENT CONTINUOUSLY EFFECTIVE
UNDER THE SECURITIES ACT UNTIL THE EARLIER OF THE DATE THAT ALL COMMON SHARES
COVERED BY SUCH REGISTRATION STATEMENT HAVE BEEN SOLD OR CAN BE SOLD PUBLICLY
UNDER RULE 144(K) (THE “EFFECTIVENESS PERIOD”).

(D)   THE COMPANY SHALL NOTIFY THE INVESTORS IN WRITING PROMPTLY (AND IN ANY
EVENT WITHIN TWO TRADING DAYS) AFTER RECEIVING NOTIFICATION FROM THE SEC THAT
THE REGISTRATION STATEMENT HAS BEEN DECLARED EFFECTIVE.

(E)   SHOULD AN EVENT (AS DEFINED BELOW) OCCUR, THEN UPON THE OCCURRENCE OF SUCH
EVENT, AND EACH THIRTY (30) DAYS THEREAFTER UNTIL THE APPLICABLE EVENT IS CURED,
THE COMPANY SHALL PAY TO EACH INVESTOR AN AMOUNT IN CASH, AS LIQUIDATED DAMAGES
AND NOT AS A PENALTY, EQUAL TO ONE AND A HALF PERCENT (1.5%) OF THE GREATER OF
(I) THE WEIGHTED AVERAGE MARKET PRICE OF THE COMMON SHARES (ASSUMING NO
RESTRICTIONS ON SALE) DURING SUCH 30-DAY PERIOD, OR (II) THE MARKET PRICE OF THE
COMMON SHARES FIVE (5) DAYS AFTER THE CLOSING (ASSUMING NO RESTRICTIONS ON SALE)
(“CLOSING MARKET PRICE”) UNTIL THE REGISTRATION STATEMENT IS DECLARED EFFECTIVE
OR, AS TO ANY COMMON SHARES, UNTIL ALL OF SUCH COMMON SHARES CAN BE SOLD IN A
SINGLE TRANSACTION PURSUANT TO SEC RULE 144; PROVIDED, HOWEVER, THAT THE
LIQUIDATED DAMAGES AMOUNT UNDER THIS PROVISION SHALL BE PAID IN CASH, AND THAT
THE TOTAL AMOUNT OF PAYMENTS PURSUANT TO THIS SECTION 6.1(E) SHALL NOT EXCEED,
WHEN AGGREGATED WITH ALL SUCH PAYMENTS PAID TO ALL INVESTORS, TEN PERCENT (10%)
OF THE CLOSING MARKET PRICE.  THE PAYMENTS TO WHICH AN INVESTOR SHALL BE
ENTITLED PURSUANT TO THIS SECTION 6.1(E) ARE REFERRED TO HEREIN AS “EVENT
PAYMENTS.”  ANY EVENT PAYMENTS PAYABLE PURSUANT TO THE TERMS HEREOF SHALL APPLY
ON A PRO RATED BASIS FOR ANY PORTION OF A MONTH PRIOR TO THE CURE OF AN EVENT. 
IN THE EVENT THE COMPANY FAILS TO MAKE EVENT PAYMENTS IN A TIMELY MANNER, SUCH
EVENT PAYMENTS SHALL BEAR INTEREST AT THE RATE OF ONE PERCENT (1.0%) PER MONTH
(PRORATED FOR PARTIAL MONTHS) UNTIL PAID IN FULL.  ALL PRO RATED CALCULATIONS
MADE PURSUANT TO THIS PARAGRAPH SHALL BE BASED UPON THE ACTUAL NUMBER OF DAYS IN
SUCH PRO RATED MONTH.

For such purposes, each of the following shall constitute an “Event”:

(I)    THE REGISTRATION STATEMENT IS NOT DECLARED EFFECTIVE ON OR PRIOR TO THE
REQUIRED EFFECTIVENESS DATE;

(II)   EXCEPT AS PROVIDED FOR IN SECTION 6.1(F) (THE “EXCLUDED EVENTS”), AFTER
THE EFFECTIVE DATE, AN INVESTOR IS NOT PERMITTED TO SELL REGISTRABLE SECURITIES
UNDER THE REGISTRATION STATEMENT (OR A SUBSEQUENT REGISTRATION STATEMENT FILED
IN REPLACEMENT THEREOF) FOR ANY REASON (OTHER THAN THE FAULT OF SUCH INVESTOR)
FOR FIVE OR MORE TRADING DAYS (WHETHER OR NOT CONSECUTIVE);

(III)  EXCEPT AS A RESULT OF THE EXCLUDED EVENTS, THE COMMON STOCK IS NOT LISTED
OR QUOTED, OR IS SUSPENDED FROM TRADING, ON AN ELIGIBLE MARKET FOR A PERIOD OF
THREE CONSECUTIVE TRADING DAYS DURING THE EFFECTIVENESS PERIOD;

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(IV)  WITH RESPECT TO AN INVESTOR, THE COMPANY FAILS FOR ANY REASON TO DELIVER A
CERTIFICATE EVIDENCING ANY SECURITIES TO SUCH INVESTOR WITHIN FIVE TRADING DAYS
AFTER DELIVERY OF SUCH CERTIFICATE AS REQUIRED PURSUANT TO ANY TRANSACTION
DOCUMENT; OR

(V)   DURING THE EFFECTIVENESS PERIOD, EXCEPT AS A RESULT OF THE EXCLUDED
EVENTS, THE COMPANY FAILS TO HAVE ANY SHARES LISTED ON AN ELIGIBLE MARKET.

(F)    NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, AFTER 60
CONSECUTIVE TRADING DAYS OF CONTINUOUS EFFECTIVENESS OF THE INITIAL REGISTRATION
STATEMENT FILED AND DECLARED EFFECTIVE PURSUANT TO THIS AGREEMENT, THE COMPANY
MAY, BY WRITTEN NOTICE TO THE INVESTORS, SUSPEND SALES UNDER A REGISTRATION
STATEMENT AFTER THE EFFECTIVE DATE THEREOF AND/OR REQUIRE THAT THE INVESTORS
IMMEDIATELY CEASE THE SALE OF SHARES OF COMMON STOCK PURSUANT THERETO AND/OR
DEFER THE FILING OF ANY SUBSEQUENT REGISTRATION STATEMENT IF THE COMPANY IS
ENGAGED IN A MATERIAL MERGER, ACQUISITION OR SALE AND THE BOARD OF DIRECTORS
DETERMINES IN GOOD FAITH, BY APPROPRIATE RESOLUTIONS, THAT, AS A RESULT OF SUCH
ACTIVITY, (A) IT WOULD BE MATERIALLY DETRIMENTAL TO THE COMPANY (OTHER THAN AS
RELATING SOLELY TO THE PRICE OF THE COMMON STOCK) TO MAINTAIN A REGISTRATION
STATEMENT AT SUCH TIME OR (B) IT IS IN THE BEST INTERESTS OF THE COMPANY TO
SUSPEND SALES UNDER SUCH REGISTRATION AT SUCH TIME.  UPON RECEIPT OF SUCH
NOTICE, EACH INVESTOR SHALL IMMEDIATELY DISCONTINUE ANY SALES OF REGISTRABLE
SECURITIES PURSUANT TO SUCH REGISTRATION UNTIL SUCH INVESTOR IS ADVISED IN
WRITING BY THE COMPANY THAT THE CURRENT PROSPECTUS OR AMENDED PROSPECTUS, AS
APPLICABLE, MAY BE USED.  IN NO EVENT, HOWEVER, SHALL THIS RIGHT BE EXERCISED TO
SUSPEND SALES BEYOND THE PERIOD DURING WHICH (IN THE GOOD FAITH DETERMINATION OF
THE COMPANY’S BOARD OF DIRECTORS) THE FAILURE TO REQUIRE SUCH SUSPENSION WOULD
BE MATERIALLY DETRIMENTAL TO THE COMPANY.  THE COMPANY’S RIGHTS UNDER THIS
SECTION 6(F) MAY BE EXERCISED FOR A PERIOD OF NO MORE THAN 20 TRADING DAYS AT A
TIME AND NOT MORE THAN TWO TIMES IN ANY TWELVE-MONTH PERIOD, WITHOUT SUCH
SUSPENSION BEING CONSIDERED AS PART OF AN EVENT PAYMENT DETERMINATION. 
IMMEDIATELY AFTER THE END OF ANY SUSPENSION PERIOD UNDER THIS SECTION 6(F), THE
COMPANY SHALL TAKE ALL NECESSARY ACTIONS (INCLUDING FILING ANY REQUIRED
SUPPLEMENTAL PROSPECTUS) TO RESTORE THE EFFECTIVENESS OF THE APPLICABLE
REGISTRATION STATEMENT AND THE ABILITY OF THE INVESTORS TO PUBLICLY RESELL THEIR
REGISTRABLE SECURITIES PURSUANT TO SUCH EFFECTIVE REGISTRATION STATEMENT.

(G)   EXCEPT AS SET FORTH ON SCHEDULE 6.1(G), THE COMPANY SHALL NOT, FROM THE
DATE HEREOF UNTIL THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT, PREPARE AND
FILE WITH THE SEC A REGISTRATION STATEMENT RELATING TO AN OFFERING FOR ITS OWN
ACCOUNT OR THE ACCOUNT OF OTHERS UNDER THE SECURITIES ACT OF ANY OF ITS EQUITY
SECURITIES, OTHER THAN ANY REGISTRATION STATEMENT OR POST-EFFECTIVE AMENDMENT TO
A REGISTRATION STATEMENT (OR SUPPLEMENT THERETO) RELATING TO THE COMPANY’S
EMPLOYEE BENEFIT PLANS REGISTERED ON FORM S-8.

6.2   REGISTRATION PROCEDURES.  IN CONNECTION WITH THE COMPANY’S REGISTRATION
OBLIGATIONS HEREUNDER, THE COMPANY SHALL:

(A)   (A) PERMIT LEGAL COUNSEL TO REVIEW AND COMMENT UPON (I) A REGISTRATION
STATEMENT AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO ITS FILING WITH THE SEC AND
(II) ALL AMENDMENTS AND SUPPLEMENTS TO ALL REGISTRATION STATEMENTS (EXCEPT FOR
ANNUAL REPORTS ON FORM 10-K, AND REPORTS ON FORM 10-Q AND ANY SIMILAR OR
SUCCESSOR REPORTS) WITHIN A REASONABLE NUMBER OF DAYS

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PRIOR TO THEIR FILING WITH THE SEC, AND (B) NOT FILE ANY REGISTRATION STATEMENT
OR AMENDMENT OR SUPPLEMENT THERETO IN A FORM TO WHICH LEGAL COUNSEL REASONABLY
AND TIMELY OBJECTS.  THE COMPANY SHALL NOT SUBMIT A REQUEST FOR ACCELERATION OF
THE EFFECTIVENESS OF A REGISTRATION STATEMENT OR ANY AMENDMENT OR SUPPLEMENT
THERETO WITHOUT THE PRIOR APPROVAL OF LEGAL COUNSEL, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD OR DELAYED.  THE COMPANY SHALL FURNISH TO LEGAL COUNSEL,
WITHOUT CHARGE, (I) COPIES OF ANY CORRESPONDENCE FROM THE SEC OR THE STAFF OF
THE SEC TO THE COMPANY OR ITS REPRESENTATIVES RELATING TO ANY REGISTRATION
STATEMENT, (II) PROMPTLY AFTER THE SAME IS PREPARED AND FILED WITH THE SEC, ONE
COPY OF ANY REGISTRATION STATEMENT AND ANY AMENDMENT(S) THERETO, INCLUDING
FINANCIAL STATEMENTS AND SCHEDULES, ALL DOCUMENTS INCORPORATED THEREIN BY
REFERENCE, IF REQUESTED BY AN INVESTOR, AND ALL EXHIBITS AND (III) UPON THE
EFFECTIVENESS OF ANY REGISTRATION STATEMENT, ONE COPY OF THE PROSPECTUS INCLUDED
IN SUCH REGISTRATION STATEMENT AND ALL AMENDMENTS AND SUPPLEMENTS THERETO.  THE
COMPANY SHALL REASONABLY COOPERATE WITH LEGAL COUNSEL IN PERFORMING THE
COMPANY’S OBLIGATIONS PURSUANT TO THIS SECTION 6.2(A).  THE COMPANY SHALL
REFLECT IN EACH SUCH DOCUMENT WHEN SO FILED WITH THE SEC SUCH COMMENTS REGARDING
THE INVESTORS AND THE PLAN OF DISTRIBUTION AS THE INVESTORS MAY REASONABLY AND
PROMPTLY PROPOSE NO LATER THAN THREE (3) TRADING DAYS AFTER THE INVESTORS HAVE
BEEN SO FURNISHED WITH COPIES OF SUCH DOCUMENTS AS AFORESAID.

(B)   (I) SUBJECT TO SECTION 6.1(F), PREPARE AND FILE WITH THE SEC SUCH
AMENDMENTS, INCLUDING POST-EFFECTIVE AMENDMENTS, TO EACH REGISTRATION STATEMENT
AND THE PROSPECTUS USED IN CONNECTION THEREWITH AS MAY BE NECESSARY TO KEEP THE
REGISTRATION STATEMENT CONTINUOUSLY EFFECTIVE, AS TO THE APPLICABLE REGISTRABLE
SECURITIES FOR THE EFFECTIVENESS PERIOD AND PREPARE AND FILE WITH THE SEC SUCH
ADDITIONAL REGISTRATION STATEMENTS IN ORDER TO REGISTER FOR RESALE UNDER THE
SECURITIES ACT ALL OF THE REGISTRABLE SECURITIES; (II) CAUSE THE RELATED
PROSPECTUS TO BE AMENDED OR SUPPLEMENTED BY ANY REQUIRED PROSPECTUS SUPPLEMENT,
AND AS SO SUPPLEMENTED OR AMENDED TO BE FILED PURSUANT TO RULE 424;
(III) RESPOND AS PROMPTLY AS REASONABLY POSSIBLE, AND IN ANY EVENT WITHIN 12
TRADING DAYS (EXCEPT TO THE EXTENT THAT THE COMPANY REASONABLY REQUIRES
ADDITIONAL TIME TO RESPOND TO ACCOUNTING COMMENTS), TO ANY COMMENTS RECEIVED
FROM THE SEC WITH RESPECT TO THE REGISTRATION STATEMENT OR ANY AMENDMENT
THERETO; AND (IV) COMPLY IN ALL MATERIAL RESPECTS WITH THE PROVISIONS OF THE
SECURITIES ACT AND THE EXCHANGE ACT WITH RESPECT TO THE DISPOSITION OF ALL
REGISTRABLE SECURITIES COVERED BY THE REGISTRATION STATEMENT DURING THE
APPLICABLE PERIOD IN ACCORDANCE WITH THE INTENDED METHODS OF DISPOSITION BY THE
INVESTORS THEREOF SET FORTH IN THE REGISTRATION STATEMENT AS SO AMENDED OR IN
SUCH PROSPECTUS AS SO SUPPLEMENTED.

(C)   NOTIFY THE INVESTORS AS PROMPTLY AS REASONABLY POSSIBLE, AND (IF REQUESTED
BY THE INVESTORS CONFIRM SUCH NOTICE IN WRITING NO LATER THAN TWO TRADING DAYS
THEREAFTER, OF ANY OF THE FOLLOWING EVENTS:  (I) THE SEC NOTIFIES THE COMPANY
WHETHER THERE WILL BE A “REVIEW” OF ANY REGISTRATION STATEMENT; (II) THE SEC
COMMENTS IN WRITING ON ANY REGISTRATION STATEMENT; (III) ANY REGISTRATION
STATEMENT OR ANY POST-EFFECTIVE AMENDMENT IS DECLARED EFFECTIVE; (IV) THE SEC OR
ANY OTHER FEDERAL OR STATE GOVERNMENTAL AUTHORITY REQUESTS ANY AMENDMENT OR
SUPPLEMENT TO ANY REGISTRATION STATEMENT OR PROSPECTUS OR REQUESTS ADDITIONAL
INFORMATION RELATED THERETO; (V) THE SEC ISSUES ANY STOP ORDER SUSPENDING THE
EFFECTIVENESS OF ANY REGISTRATION STATEMENT OR INITIATES ANY PROCEEDINGS FOR
THAT PURPOSE; (VI) THE COMPANY RECEIVES NOTICE OF ANY SUSPENSION OF THE
QUALIFICATION OR EXEMPTION FROM QUALIFICATION OF ANY REGISTRABLE SECURITIES FOR
SALE IN ANY JURISDICTION, OR THE INITIATION OR THREAT OF ANY PROCEEDING FOR SUCH

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PURPOSE; OR (VII) THE FINANCIAL STATEMENTS INCLUDED IN ANY REGISTRATION
STATEMENT BECOME INELIGIBLE FOR INCLUSION THEREIN OR ANY REGISTRATION STATEMENT
OR PROSPECTUS OR OTHER DOCUMENT CONTAINS ANY UNTRUE STATEMENT OF A MATERIAL FACT
OR OMITS TO STATE ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY
TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING.

(D)   USE ITS BEST EFFORTS TO AVOID THE ISSUANCE OF OR, IF ISSUED, OBTAIN THE
WITHDRAWAL OF (I) ANY ORDER SUSPENDING THE EFFECTIVENESS OF ANY REGISTRATION
STATEMENT, OR (II) ANY SUSPENSION OF THE QUALIFICATION (OR EXEMPTION FROM
QUALIFICATION) OF ANY OF THE REGISTRABLE SECURITIES FOR SALE IN ANY
JURISDICTION, AS SOON AS POSSIBLE.

(E)   IF REQUESTED BY AN INVESTOR, PROVIDE SUCH INVESTOR WITHOUT CHARGE, AT
LEAST ONE CONFORMED COPY OF EACH REGISTRATION STATEMENT AND EACH AMENDMENT
THERETO, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES, AND ALL EXHIBITS TO THE
EXTENT REQUESTED BY SUCH PERSON (INCLUDING THOSE PREVIOUSLY FURNISHED OR
INCORPORATED BY REFERENCE) PROMPTLY AFTER THE FILING OF SUCH DOCUMENTS WITH THE
SEC.

(F)    PROMPTLY DELIVER TO EACH INVESTOR, WITHOUT CHARGE, AS MANY COPIES OF THE
PROSPECTUS OR PROSPECTUSES (INCLUDING EACH FORM OF PROSPECTUS) AND EACH
AMENDMENT OR SUPPLEMENT THERETO AS SUCH PERSONS MAY REASONABLY REQUEST.  THE
COMPANY HEREBY CONSENTS TO THE USE OF SUCH PROSPECTUS AND EACH AMENDMENT OR
SUPPLEMENT THERETO BY EACH OF THE SELLING INVESTORS IN CONNECTION WITH THE
OFFERING AND SALE OF THE REGISTRABLE SECURITIES COVERED BY SUCH PROSPECTUS AND
ANY AMENDMENT OR SUPPLEMENT THERETO TO THE EXTENT PERMITTED BY FEDERAL AND STATE
SECURITIES LAWS AND REGULATIONS.

(G)   (I) IN THE TIME AND MANNER REQUIRED BY EACH TRADING MARKET, PREPARE AND
FILE WITH SUCH TRADING MARKET AN ADDITIONAL SHARES LISTING APPLICATION COVERING
ALL OF THE REGISTRABLE SECURITIES; (II) TAKE ALL STEPS NECESSARY TO CAUSE SUCH
COMMON SHARES TO BE APPROVED FOR LISTING ON EACH TRADING MARKET AS SOON AS
POSSIBLE THEREAFTER; (III) PROVIDE TO EACH INVESTOR EVIDENCE OF SUCH LISTING;
AND (IV) EXCEPT AS A RESULT OF THE EXCLUDED EVENTS, DURING THE EFFECTIVENESS
PERIOD, MAINTAIN THE LISTING OF SUCH COMMON SHARES ON EACH SUCH TRADING MARKET
OR ANOTHER ELIGIBLE MARKET.

(H)   PRIOR TO ANY PUBLIC OFFERING OF REGISTRABLE SECURITIES, USE ITS BEST
EFFORTS TO REGISTER OR QUALIFY OR COOPERATE WITH THE SELLING INVESTORS IN
CONNECTION WITH THE REGISTRATION OR QUALIFICATION (OR EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION) OF SUCH REGISTRABLE SECURITIES FOR OFFER AND SALE
UNDER THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTIONS WITHIN THE UNITED
STATES AS ANY INVESTOR REQUESTS IN WRITING, TO KEEP EACH SUCH REGISTRATION OR
QUALIFICATION (OR EXEMPTION THEREFROM) EFFECTIVE FOR SO LONG AS REQUIRED, BUT
NOT TO EXCEED THE DURATION OF THE EFFECTIVENESS PERIOD, AND TO DO ANY AND ALL
OTHER ACTS OR THINGS REASONABLY NECESSARY OR ADVISABLE TO ENABLE THE DISPOSITION
IN SUCH JURISDICTIONS OF THE REGISTRABLE SECURITIES COVERED BY A REGISTRATION
STATEMENT; PROVIDED, HOWEVER, THAT THE COMPANY SHALL NOT BE OBLIGATED TO FILE
ANY GENERAL CONSENT TO SERVICE OF PROCESS OR TO QUALIFY AS A FOREIGN CORPORATION
OR AS A DEALER IN SECURITIES IN ANY JURISDICTION IN WHICH IT IS NOT SO QUALIFIED
OR TO SUBJECT ITSELF TO TAXATION IN RESPECT OF DOING BUSINESS IN ANY
JURISDICTION IN WHICH IT IS NOT OTHERWISE SO SUBJECT.

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(I)    COOPERATE WITH THE INVESTORS TO FACILITATE THE TIMELY PREPARATION AND
DELIVERY OF CERTIFICATES REPRESENTING REGISTRABLE SECURITIES TO BE DELIVERED TO
A TRANSFEREE PURSUANT TO A REGISTRATION STATEMENT, WHICH CERTIFICATES SHALL BE
FREE, TO THE EXTENT PERMITTED BY THIS AGREEMENT AND UNDER LAW, OF ALL
RESTRICTIVE LEGENDS, AND TO ENABLE SUCH CERTIFICATES TO BE IN SUCH DENOMINATIONS
AND REGISTERED IN SUCH NAMES AS ANY SUCH INVESTORS MAY REASONABLY REQUEST.

(J)    UPON THE OCCURRENCE OF ANY EVENT DESCRIBED IN SECTION 6.2(C)(VII), AS
PROMPTLY AS REASONABLY POSSIBLE, PREPARE A SUPPLEMENT OR AMENDMENT, INCLUDING A
POST-EFFECTIVE AMENDMENT, TO THE REGISTRATION STATEMENT OR A SUPPLEMENT TO THE
RELATED PROSPECTUS OR ANY DOCUMENT INCORPORATED OR DEEMED TO BE INCORPORATED
THEREIN BY REFERENCE, AND FILE ANY OTHER REQUIRED DOCUMENT SO THAT, AS
THEREAFTER DELIVERED, NEITHER THE REGISTRATION STATEMENT NOR SUCH PROSPECTUS
WILL 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 THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.

(K)   COOPERATE WITH ANY REASONABLE DUE DILIGENCE INVESTIGATION UNDERTAKEN BY
THE INVESTORS IN CONNECTION WITH THE SALE OF REGISTRABLE SECURITIES, INCLUDING,
WITHOUT LIMITATION, BY MAKING AVAILABLE DOCUMENTS AND INFORMATION; PROVIDED THAT
THE COMPANY WILL NOT DELIVER OR MAKE AVAILABLE TO ANY INVESTOR MATERIAL,
NONPUBLIC INFORMATION UNLESS SUCH INVESTOR REQUESTS IN ADVANCE IN WRITING TO
RECEIVE MATERIAL, NONPUBLIC INFORMATION AND AGREES TO KEEP SUCH INFORMATION
CONFIDENTIAL.

(L)    COMPLY WITH ALL RULES AND REGULATIONS OF THE SEC APPLICABLE TO THE
REGISTRATION OF THE SECURITIES.

(M)  IT SHALL BE A CONDITION PRECEDENT TO THE OBLIGATIONS OF THE COMPANY TO
COMPLETE THE REGISTRATION PURSUANT TO THIS AGREEMENT WITH RESPECT TO THE
REGISTRABLE SECURITIES OF ANY PARTICULAR INVESTOR OR TO MAKE ANY EVENT PAYMENTS
SET FORTH IN SECTION 6.1(E) TO SUCH INVESTOR THAT SUCH INVESTOR FURNISH TO THE
COMPANY THE INFORMATION SPECIFIED IN EXHIBITS B-1, B-2 AND B-3 HERETO AND SUCH
OTHER INFORMATION REGARDING ITSELF, THE REGISTRABLE SECURITIES AND OTHER SHARES
OF COMMON STOCK HELD BY IT AND THE INTENDED METHOD OF DISPOSITION OF THE
REGISTRABLE SECURITIES HELD BY IT (IF DIFFERENT FROM THE PLAN OF DISTRIBUTION
SET FORTH ON EXHIBIT D HERETO) AS SHALL BE REASONABLY REQUIRED TO EFFECT THE
REGISTRATION OF SUCH REGISTRABLE SECURITIES AND SHALL COMPLETE AND EXECUTE SUCH
DOCUMENTS IN CONNECTION WITH SUCH REGISTRATION AS THE COMPANY MAY REASONABLY
REQUEST.

(N)   THE COMPANY SHALL COMPLY WITH ALL APPLICABLE RULES AND REGULATIONS OF THE
SEC UNDER THE SECURITIES ACT AND THE EXCHANGE ACT, INCLUDING, WITHOUT
LIMITATION, RULE 172 UNDER THE SECURITIES ACT, FILE ANY FINAL PROSPECTUS,
INCLUDING ANY SUPPLEMENT OR AMENDMENT THEREOF, WITH THE SEC PURSUANT TO RULE 424
UNDER THE SECURITIES ACT, PROMPTLY INFORM THE INVESTORS IN WRITING IF, AT ANY
TIME DURING THE EFFECTIVENESS PERIOD, THE COMPANY DOES NOT SATISFY THE
CONDITIONS SPECIFIED IN RULE 172 AND, AS A RESULT THEREOF, THE INVESTORS ARE
REQUIRED TO MAKE AVAILABLE A PROSPECTUS IN CONNECTION WITH ANY DISPOSITION OF
REGISTRABLE SECURITIES AND TAKE SUCH OTHER ACTIONS AS MAY BE REASONABLY
NECESSARY TO FACILITATE THE REGISTRATION OF THE REGISTRABLE SECURITIES
HEREUNDER.

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(O)   THE COMPANY AGREES THAT, IF PHOENIX VENTURE FUND LLC (“PHOENIX VENTURE”)
OR ANY OTHER AFFILIATE OF PHOENIX (EACH, A “PHOENIX ENTITY”) COULD REASONABLY BE
DEEMED TO BE AN “UNDERWRITER,” AS DEFINED IN SECTION 2(A)(11) OF THE SECURITIES
ACT, IN CONNECTION WITH ANY REGISTRATION OF THE COMPANY’S SECURITIES OF ANY
PHOENIX ENTITY PURSUANT TO THIS AGREEMENT, AND ANY AMENDMENT OR SUPPLEMENT
THEREOF (ANY SUCH REGISTRATION STATEMENT OR AMENDMENT OR SUPPLEMENT A “PHOENIX
UNDERWRITER REGISTRATION STATEMENT”), THEN THE COMPANY WILL COOPERATE WITH SUCH
PHOENIX ENTITY IN ALLOWING SUCH PHOENIX ENTITY TO CONDUCT CUSTOMARY
“UNDERWRITER’S DUE DILIGENCE” WITH RESPECT TO THE COMPANY AND SATISFY ITS
OBLIGATIONS IN RESPECT THEREOF.  IN ADDITION, AT PHOENIX VENTURE’S REQUEST, THE
COMPANY WILL USE ITS BEST EFFORTS TO CAUSE ITS AUDITOR OR COUNSEL TO FURNISH TO
PHOENIX VENTURE, ON THE FIRST DATE OF THE EFFECTIVENESS OF THE PHOENIX
UNDERWRITER REGISTRATION STATEMENT (I) A LETTER, DATED SUCH DATE, FROM THE
COMPANY’S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS IN FORM AND SUBSTANCE AS IS
CUSTOMARILY GIVEN BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TO UNDERWRITERS IN
AN UNDERWRITTEN PUBLIC OFFERING, ADDRESSED TO PHOENIX VENTURE, AND (II) AN
OPINION, DATED AS OF SUCH DATE, OF COUNSEL REPRESENTING THE COMPANY FOR PURPOSES
OF SUCH PHOENIX UNDERWRITER REGISTRATION STATEMENT, IN FORM, SCOPE AND SUBSTANCE
AS IS CUSTOMARILY GIVEN IN AN UNDERWRITTEN PUBLIC OFFERING, INCLUDING, WITHOUT
LIMITATION, A STANDARD “10B-5” STATEMENT FOR SUCH OFFERING, ADDRESSED TO PHOENIX
VENTURE; SUCH COMFORT LETTER, LEGAL OPINION AND/OR 10B-5 STATEMENT SHALL BE
FURNISHED TO PHOENIX VENTURE (I) AT NO ADDITIONAL COST TO PHOENIX VENTURE IF
THEY ARE ALREADY PROVIDED TO ANOTHER PARTY IN CONNECTION WITH A PHOENIX
UNDERWRITER REGISTRATION STATEMENT OR (II) AT PHOENIX VENTURE’S EXPENSE IF SUCH
COMFORT LETTER, LEGAL OPINION AND/OR 10B-5 STATEMENT ARE NOT OTHERWISE BEING
PROVIDED IN CONNECTION WITH A PHOENIX UNDERWRITER REGISTRATION STATEMENT.  THE
COMPANY WILL ALSO PERMIT LEGAL COUNSEL TO PHOENIX VENTURE TO REVIEW AND COMMENT
UPON ANY SUCH PHOENIX UNDERWRITER REGISTRATION STATEMENT AT LEAST FIVE (5)
BUSINESS DAYS PRIOR TO ITS FILING WITH THE SEC AND ALL AMENDMENTS AND
SUPPLEMENTS TO ANY SUCH PHOENIX UNDERWRITER REGISTRATION STATEMENT WITHIN A
REASONABLE NUMBER OF DAYS PRIOR TO THEIR FILING WITH THE SEC AND NOT FILE ANY
PHOENIX UNDERWRITER REGISTRATION STATEMENT OR AMENDMENT OR SUPPLEMENT THERETO IN
A FORM TO WHICH PHOENIX VENTURE’S LEGAL COUNSEL REASONABLY AND TIMELY OBJECTS

6.3   REGISTRATION EXPENSES.  THE COMPANY SHALL PAY ALL FEES AND EXPENSES
INCIDENT TO THE PERFORMANCE OF OR COMPLIANCE WITH ARTICLE VI OF THIS AGREEMENT
BY THE COMPANY, INCLUDING WITHOUT LIMITATION (A) ALL REGISTRATION AND FILING
FEES AND EXPENSES, INCLUDING WITHOUT LIMITATION THOSE RELATED TO FILINGS WITH
THE SEC, ANY TRADING MARKET AND IN CONNECTION WITH APPLICABLE STATE SECURITIES
OR BLUE SKY LAWS, (B) PRINTING EXPENSES (INCLUDING WITHOUT LIMITATION EXPENSES
OF PRINTING CERTIFICATES FOR REGISTRABLE SECURITIES), (C) MESSENGER, TELEPHONE
AND DELIVERY EXPENSES, (D) FEES AND DISBURSEMENTS OF COUNSEL FOR THE COMPANY,
(E) FEES AND EXPENSES OF ALL OTHER PERSONS RETAINED BY THE COMPANY IN CONNECTION
WITH THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND
(F) ALL LISTING FEES TO BE PAID BY THE COMPANY TO THE TRADING MARKET.

6.4   INDEMNIFICATION

(A)   INDEMNIFICATION BY THE COMPANY.  THE COMPANY SHALL, NOTWITHSTANDING ANY
TERMINATION OF THIS AGREEMENT, INDEMNIFY AND HOLD HARMLESS EACH INVESTOR AND
PHOENIX, AS WELL AS THE OFFICERS, DIRECTORS, PARTNERS, MEMBERS, AGENTS AND
EMPLOYEES OF EACH OF THEM, EACH PERSON WHO CONTROLS ANY SUCH INVESTOR OR PHOENIX
(WITHIN THE MEANING OF SECTION 15 OF THE SECURITIES

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ACT OR SECTION 20 OF THE EXCHANGE ACT) AND THE OFFICERS, DIRECTORS, PARTNERS,
MEMBERS, AGENTS AND EMPLOYEES OF EACH SUCH CONTROLLING PERSON, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, FROM AND AGAINST ANY AND ALL LOSSES, AS
INCURRED, ARISING OUT OF OR RELATING TO (I) 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,
(II) 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, (III) ANY CAUSE OF ACTION, SUIT OR
CLAIM BROUGHT OR MADE AGAINST SUCH INDEMNIFIED PARTY (AS DEFINED IN SECTION
6.4(C) BELOW) BY A THIRD PARTY (INCLUDING FOR THESE PURPOSES A DERIVATIVE ACTION
BROUGHT ON BEHALF OF THE COMPANY), ARISING OUT OF OR RESULTING FROM (X) THE
EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THE TRANSACTION DOCUMENTS OR
ANY OTHER CERTIFICATE, INSTRUMENT OR DOCUMENT CONTEMPLATED HEREBY OR THEREBY,
(Y) ANY TRANSACTION FINANCED OR TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, WITH THE PROCEEDS OF THE ISSUANCE OF THE SECURITIES, OR (Z) THE
STATUS OF INDEMNIFIED PARTY AS HOLDER OF THE SECURITIES OR (IV) ANY UNTRUE OR
ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN THE REGISTRATION
STATEMENT, ANY PROSPECTUS OR ANY FORM OF COMPANY PROSPECTUS OR IN ANY AMENDMENT
OR SUPPLEMENT THERETO OR IN ANY COMPANY PRELIMINARY PROSPECTUS, OR ARISING OUT
OF OR RELATING TO ANY OMISSION OR ALLEGED OMISSION OF A MATERIAL FACT REQUIRED
TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN (IN THE CASE OF
ANY PROSPECTUS OR FORM OF PROSPECTUS OR SUPPLEMENT THERETO, IN THE LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE) NOT MISLEADING, EXCEPT TO THE EXTENT,
BUT ONLY TO THE EXTENT, THAT (A) SUCH UNTRUE STATEMENTS, ALLEGED UNTRUE
STATEMENTS, OMISSIONS OR ALLEGED OMISSIONS ARE BASED SOLELY UPON INFORMATION
REGARDING SUCH INVESTOR FURNISHED IN WRITING TO THE COMPANY BY SUCH INVESTOR FOR
USE THEREIN, OR TO THE EXTENT THAT SUCH INFORMATION RELATES TO SUCH INVESTOR OR
SUCH INVESTOR’S PROPOSED METHOD OF DISTRIBUTION OF REGISTRABLE SECURITIES AND
WAS REVIEWED AND EXPRESSLY APPROVED BY SUCH INVESTOR EXPRESSLY FOR USE IN THE
REGISTRATION STATEMENT, OR (B) WITH RESPECT TO ANY PROSPECTUS, IF THE UNTRUE
STATEMENT OR OMISSION OF MATERIAL FACT CONTAINED IN SUCH PROSPECTUS WAS
CORRECTED ON A TIMELY BASIS IN THE PROSPECTUS, AS THEN AMENDED OR SUPPLEMENTED,
IF SUCH CORRECTED PROSPECTUS WAS TIMELY MADE AVAILABLE BY THE COMPANY TO THE
INVESTOR, AND THE INVESTOR SEEKING INDEMNITY HEREUNDER WAS ADVISED IN WRITING
NOT TO USE THE INCORRECT PROSPECTUS PRIOR TO THE USE GIVING RISE TO LOSSES.

(B)   INDEMNIFICATION BY INVESTORS.  EACH INVESTOR SHALL INDEMNIFY AND HOLD
HARMLESS THE COMPANY, ITS DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES, EACH PERSON
WHO CONTROLS THE COMPANY (WITHIN THE MEANING OF SECTION 15 OF THE SECURITIES ACT
AND SECTION 20 OF THE EXCHANGE ACT), AND THE DIRECTORS, OFFICERS, AGENTS OR
EMPLOYEES OF SUCH CONTROLLING PERSONS, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, FROM AND AGAINST ALL LOSSES (AS DETERMINED BY A COURT OF
COMPETENT JURISDICTION IN A FINAL JUDGMENT NOT SUBJECT TO APPEAL OR REVIEW)
ARISING SOLELY OUT OF ANY UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN THE
REGISTRATION STATEMENT, ANY PROSPECTUS, OR ANY FORM OF PROSPECTUS, OR IN ANY
AMENDMENT OR SUPPLEMENT THERETO, OR ARISING OUT OF OR RELATING TO ANY OMISSION
OF A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE
STATEMENTS THEREIN (IN THE CASE OF ANY PROSPECTUS OR FORM OF PROSPECTUS OR
SUPPLEMENT THERETO, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE) NOT MISLEADING, BUT ONLY TO THE EXTENT THAT SUCH UNTRUE STATEMENT OR
OMISSION IS CONTAINED IN ANY INFORMATION SO FURNISHED BY SUCH INVESTOR IN
WRITING TO THE COMPANY SPECIFICALLY FOR INCLUSION IN SUCH REGISTRATION STATEMENT
OR SUCH PROSPECTUS OR TO THE EXTENT THAT SUCH UNTRUE STATEMENTS OR OMISSIONS ARE
BASED SOLELY

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UPON INFORMATION REGARDING SUCH INVESTOR FURNISHED TO THE COMPANY BY SUCH
INVESTOR IN WRITING EXPRESSLY FOR USE THEREIN, OR TO THE EXTENT THAT SUCH
INFORMATION RELATES TO SUCH INVESTOR OR SUCH INVESTOR’S PROPOSED METHOD OF
DISTRIBUTION OF REGISTRABLE SECURITIES AND WAS REVIEWED AND EXPRESSLY APPROVED
BY SUCH INVESTOR EXPRESSLY FOR USE IN THE REGISTRATION STATEMENT (IT BEING
UNDERSTOOD THAT THE INFORMATION PROVIDED BY THE INVESTOR TO THE COMPANY IN
EXHIBITS B-1, B-2 AND B-3 AND THE PLAN OF DISTRIBUTION SET FORTH ON EXHIBIT D,
AS THE SAME MAY BE MODIFIED BY SUCH INVESTOR AND OTHER INFORMATION PROVIDED BY
THE INVESTOR TO THE COMPANY IN OR PURSUANT TO THE TRANSACTION DOCUMENTS
CONSTITUTES INFORMATION REVIEWED AND EXPRESSLY APPROVED BY SUCH INVESTOR IN
WRITING EXPRESSLY FOR USE IN THE REGISTRATION STATEMENT), SUCH PROSPECTUS OR
SUCH FORM OF PROSPECTUS OR IN ANY AMENDMENT OR SUPPLEMENT THERETO.  IN NO EVENT
SHALL THE LIABILITY OF ANY SELLING INVESTOR HEREUNDER BE GREATER IN AMOUNT THAN
THE DOLLAR AMOUNT OF THE NET PROCEEDS RECEIVED BY SUCH INVESTOR UPON THE SALE OF
THE REGISTRABLE SECURITIES GIVING RISE TO SUCH INDEMNIFICATION OBLIGATION.

(C)   CONDUCT OF INDEMNIFICATION PROCEEDINGS.  IF ANY PROCEEDING SHALL BE
BROUGHT OR ASSERTED AGAINST ANY PERSON ENTITLED TO INDEMNITY HEREUNDER (AN
“INDEMNIFIED PARTY”), SUCH INDEMNIFIED PARTY SHALL PROMPTLY NOTIFY THE PERSON
FROM WHOM INDEMNITY IS SOUGHT (THE “INDEMNIFYING PARTY”) IN WRITING, AND THE
INDEMNIFYING PARTY SHALL ASSUME THE DEFENSE THEREOF, INCLUDING THE EMPLOYMENT OF
COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY AND THE PAYMENT OF ALL
FEES AND EXPENSES INCURRED IN CONNECTION WITH DEFENSE THEREOF; PROVIDED, THAT
THE FAILURE OF ANY INDEMNIFIED PARTY TO GIVE SUCH NOTICE SHALL NOT RELIEVE THE
INDEMNIFYING PARTY OF ITS OBLIGATIONS OR LIABILITIES PURSUANT TO THIS AGREEMENT,
EXCEPT (AND ONLY) TO THE EXTENT THAT IT SHALL BE FINALLY DETERMINED BY A COURT
OF COMPETENT JURISDICTION (WHICH DETERMINATION IS NOT SUBJECT TO APPEAL OR
FURTHER REVIEW) THAT SUCH FAILURE SHALL HAVE PROXIMATELY AND MATERIALLY
ADVERSELY PREJUDICED THE INDEMNIFYING PARTY.

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (ii) the Indemnifying Party shall have failed promptly to assume
the defense of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Proceeding; or (iii) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and the reasonable fees and expenses of separate counsel shall be at the
expense of the Indemnifying Party).  It shall be understood, however, that the
Indemnifying Party shall not, in connection with any one such Proceeding
(including separate Proceedings that have been or will be consolidated before a
single judge) be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all Indemnified Parties, which firm shall be
appointed by a majority of the Indemnified Parties.  The Indemnifying Party
shall not be liable for any settlement of any such Proceeding effected without
its written consent, which consent shall not be unreasonably withheld.  No
Indemnifying Party shall, without the prior written

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consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.

All reasonable fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section 6.4(c)) shall be paid to the Indemnified Party, as incurred, within 20
Trading Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

(D)   CONTRIBUTION.  IF A CLAIM FOR INDEMNIFICATION UNDER SECTION 6.4(A) OR (B)
IS UNAVAILABLE TO AN INDEMNIFIED PARTY (BY REASON OF PUBLIC POLICY OR
OTHERWISE), THEN EACH INDEMNIFYING PARTY, IN LIEU OF INDEMNIFYING SUCH
INDEMNIFIED PARTY, SHALL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY SUCH
INDEMNIFIED PARTY AS A RESULT OF SUCH LOSSES, IN SUCH PROPORTION AS IS
APPROPRIATE TO REFLECT THE RELATIVE FAULT OF THE INDEMNIFYING PARTY AND
INDEMNIFIED PARTY IN CONNECTION WITH THE ACTIONS, STATEMENTS OR OMISSIONS THAT
RESULTED IN SUCH LOSSES AS WELL AS ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS. 
THE RELATIVE FAULT OF SUCH INDEMNIFYING PARTY AND INDEMNIFIED PARTY SHALL BE
DETERMINED BY REFERENCE TO, AMONG OTHER THINGS, WHETHER ANY ACTION IN QUESTION,
INCLUDING ANY UNTRUE OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT OR OMISSION
OR ALLEGED OMISSION OF A MATERIAL FACT, HAS BEEN TAKEN OR MADE BY, OR RELATES TO
INFORMATION SUPPLIED BY, SUCH INDEMNIFYING PARTY OR INDEMNIFIED PARTY, AND THE
PARTIES’ RELATIVE INTENT, KNOWLEDGE, ACCESS TO INFORMATION AND OPPORTUNITY TO
CORRECT OR PREVENT SUCH ACTION, STATEMENT OR OMISSION.  THE AMOUNT PAID OR
PAYABLE BY A PARTY AS A RESULT OF ANY LOSSES SHALL BE DEEMED TO INCLUDE, SUBJECT
TO THE LIMITATIONS SET FORTH IN SECTION 6.4(C), ANY REASONABLE ATTORNEYS’ OR
OTHER REASONABLE FEES OR EXPENSES INCURRED BY SUCH PARTY IN CONNECTION WITH ANY
PROCEEDING TO THE EXTENT SUCH PARTY WOULD HAVE BEEN INDEMNIFIED FOR SUCH FEES OR
EXPENSES IF THE INDEMNIFICATION PROVIDED FOR IN THIS SECTION 6.4(D) WAS
AVAILABLE TO SUCH PARTY IN ACCORDANCE WITH ITS TERMS.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6.4(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. 
Notwithstanding the provisions of this Section 6.4(d), no Investor shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such Investor from the sale of the
Registrable Securities subject to the Proceeding exceed the amount of any
damages that such Investor has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.  No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section 6.4(d) are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

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6.5   DISPOSITIONS.  EACH INVESTOR AGREES THAT IT WILL COMPLY WITH THE
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AS APPLICABLE TO IT IN
CONNECTION WITH SALES OF REGISTRABLE SECURITIES PURSUANT TO THE REGISTRATION
STATEMENT AND SHALL SELL ITS REGISTRABLE SECURITIES IN ACCORDANCE WITH THE PLAN
OF DISTRIBUTION SET FORTH IN THE PROSPECTUS.  EACH INVESTOR FURTHER AGREES THAT,
UPON RECEIPT OF A NOTICE FROM THE COMPANY OF THE OCCURRENCE OF ANY EVENT OF THE
KIND DESCRIBED IN SECTIONS 6.2(C)(V), (VI) OR (VII), SUCH INVESTOR WILL
DISCONTINUE DISPOSITION OF SUCH REGISTRABLE SECURITIES UNDER THE REGISTRATION
STATEMENT UNTIL SUCH INVESTOR IS ADVISED IN WRITING BY THE COMPANY THAT THE USE
OF THE PROSPECTUS, OR AMENDED PROSPECTUS, AS APPLICABLE, MAY BE RESUMED.  THE
COMPANY MAY PROVIDE APPROPRIATE STOP ORDERS TO ENFORCE THE PROVISIONS OF THIS
PARAGRAPH.

6.6   NO PIGGYBACK ON REGISTRATIONS.  EXCEPT AS DESCRIBED IN SCHEDULE 6.6,
NEITHER THE COMPANY NOR ANY OF ITS SECURITY HOLDERS (OTHER THAN THE INVESTORS IN
SUCH CAPACITY PURSUANT HERETO AND THE EXCLUDED INVESTORS) MAY INCLUDE SECURITIES
OF THE COMPANY IN THE REGISTRATION STATEMENT OTHER THAN THE REGISTRABLE
SECURITIES.

6.7   PIGGY-BACK REGISTRATIONS.  IF AT ANY TIME DURING THE EFFECTIVENESS PERIOD
THERE IS NOT AN EFFECTIVE REGISTRATION STATEMENT COVERING ALL OF THE REGISTRABLE
SECURITIES AND THE COMPANY SHALL DETERMINE TO PREPARE AND FILE WITH THE SEC A
REGISTRATION STATEMENT RELATING TO AN OFFERING FOR ITS OWN ACCOUNT OR THE
ACCOUNT OF OTHERS UNDER THE SECURITIES ACT OF ANY OF ITS EQUITY SECURITIES,
OTHER THAN ON FORM S-4 OR FORM S-8 (EACH AS PROMULGATED UNDER THE SECURITIES
ACT) OR THEIR THEN EQUIVALENTS RELATING TO EQUITY SECURITIES TO BE ISSUED SOLELY
IN CONNECTION WITH ANY ACQUISITION OF ANY ENTITY OR BUSINESS OR EQUITY
SECURITIES ISSUABLE IN CONNECTION WITH STOCK OPTION OR OTHER EMPLOYEE BENEFIT
PLANS, THEN THE COMPANY SHALL SEND TO EACH INVESTOR NOT THEN ELIGIBLE TO SELL
ALL OF THEIR REGISTRABLE SECURITIES UNDER RULE 144 IN A THREE-MONTH PERIOD,
WRITTEN NOTICE OF SUCH DETERMINATION AND IF, WITHIN TEN DAYS AFTER RECEIPT OF
SUCH NOTICE, ANY SUCH INVESTOR SHALL SO REQUEST IN WRITING, THE COMPANY SHALL
INCLUDE IN SUCH REGISTRATION STATEMENT ALL OR ANY PART OF SUCH REGISTRABLE
SECURITIES SUCH INVESTOR REQUESTS TO BE REGISTERED.  NOTWITHSTANDING THE
FOREGOING, IN THE EVENT THAT, IN CONNECTION WITH ANY UNDERWRITTEN PUBLIC
OFFERING, THE MANAGING UNDERWRITER(S) THEREOF SHALL IMPOSE A LIMITATION ON THE
NUMBER OF SHARES OF COMMON STOCK WHICH MAY BE INCLUDED IN THE REGISTRATION
STATEMENT BECAUSE, IN SUCH UNDERWRITER(S)’ JUDGMENT, MARKETING OR OTHER FACTORS
DICTATE SUCH LIMITATION IS NECESSARY TO FACILITATE PUBLIC DISTRIBUTION, THEN THE
COMPANY SHALL BE OBLIGATED TO INCLUDE IN SUCH REGISTRATION STATEMENT ONLY SUCH
LIMITED PORTION OF THE REGISTRABLE SECURITIES WITH RESPECT TO WHICH SUCH
INVESTOR HAS REQUESTED INCLUSION HEREUNDER AS THE UNDERWRITER SHALL PERMIT;
PROVIDED, HOWEVER, THAT (I) THE COMPANY SHALL NOT EXCLUDE ANY REGISTRABLE
SECURITIES UNLESS THE COMPANY HAS FIRST EXCLUDED ALL OUTSTANDING SECURITIES, THE
HOLDERS OF WHICH ARE NOT CONTRACTUALLY ENTITLED TO INCLUSION OF SUCH SECURITIES
IN SUCH REGISTRATION STATEMENT OR ARE NOT CONTRACTUALLY ENTITLED TO PRO RATA
INCLUSION WITH THE REGISTRABLE SECURITIES AND (II) AFTER GIVING EFFECT TO THE
IMMEDIATELY PRECEDING PROVISO, ANY SUCH EXCLUSION OF REGISTRABLE SECURITIES
SHALL BE MADE PRO RATA AMONG THE INVESTORS SEEKING TO INCLUDE REGISTRABLE
SECURITIES AND THE HOLDERS OF OTHER SECURITIES HAVING THE CONTRACTUAL RIGHT TO
INCLUSION OF THEIR SECURITIES IN SUCH REGISTRATION STATEMENT BY REASON OF DEMAND
REGISTRATION RIGHTS, IN PROPORTION TO THE NUMBER OF REGISTRABLE SECURITIES OR
OTHER SECURITIES, AS APPLICABLE, SOUGHT TO BE INCLUDED BY EACH SUCH INVESTOR OR
OTHER HOLDER.  IF AN OFFERING IN CONNECTION WITH WHICH AN INVESTOR IS ENTITLED
TO REGISTRATION UNDER THIS SECTION 6.7 IS AN UNDERWRITTEN OFFERING, THEN EACH
INVESTOR WHOSE REGISTRABLE SECURITIES ARE INCLUDED IN SUCH REGISTRATION
STATEMENT SHALL, UNLESS

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OTHERWISE AGREED BY THE COMPANY, OFFER AND SELL SUCH REGISTRABLE SECURITIES IN
AN UNDERWRITTEN OFFERING USING THE SAME UNDERWRITER OR UNDERWRITERS AND, SUBJECT
TO THE PROVISIONS OF THIS AGREEMENT, ON THE SAME TERMS AND CONDITIONS AS OTHER
SHARES OF COMMON STOCK INCLUDED IN SUCH UNDERWRITTEN OFFERING AND SHALL ENTER
INTO AN UNDERWRITING AGREEMENT IN A FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO THE COMPANY AND THE UNDERWRITER OR UNDERWRITERS. UPON THE EFFECTIVENESS THE
REGISTRATION STATEMENT FOR WHICH PIGGY-BACK REGISTRATION HAS BEEN PROVIDED IN
THIS SECTION 6.7, ANY EVENT PAYMENTS PAYABLE TO AN INVESTOR WHOSE SECURITIES ARE
INCLUDED IN SUCH REGISTRATION STATEMENT SHALL TERMINATE AND NO LONGER BE
PAYABLE.

ARTICLE VII
MISCELLANEOUS

7.1   TERMINATION.  THIS AGREEMENT MAY BE TERMINATED BY THE COMPANY OR ANY
INVESTOR, BY WRITTEN NOTICE TO THE OTHER PARTIES, IF THE CLOSING HAS NOT BEEN
CONSUMMATED BY 5:00 P.M. (NEW YORK TIME) ON THE 20TH BUSINESS DAY FOLLOWING THE
DATE OF THIS AGREEMENT; PROVIDED THAT NO SUCH TERMINATION WILL AFFECT THE RIGHT
OF ANY PARTY TO SUE FOR ANY BREACH BY THE OTHER PARTY (OR PARTIES) AND OR THE
RIGHTS OF THE INVESTORS PURSUANT TO SECTIONS 6.3 AND 7.2 HEREOF.

7.2   FEES AND EXPENSES.  IN ADDITION TO ITS OBLIGATIONS PURSUANT TO SECTION 6.3
HEREOF, THE COMPANY SHALL PAY ALL EXPENSES AND ALL REASONABLE LEGAL FEES AND
EXPENSES AND DUE DILIGENCE COSTS INCURRED INCIDENT TO THE NEGOTIATION,
PREPARATION, EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT; PROVIDED,
HOWEVER, THAT THE AGGREGATE AMOUNT OF THE LEGAL FEES AND EXPENSES, DUE DILIGENCE
COSTS, COSTS OF ADVISERS, COUNSEL, ACCOUNTANTS AND OTHER EXPERTS, IF ANY, AND
ALL OTHER EXPENSES THAT SHALL BE PAID BY THE COMPANY TO THE INVESTORS OR
REIMBURSED BY THE COMPANY TO THE INVESTORS PURSUANT TO THIS SECTION 7.2 SHALL
NOT, WITHOUT THE COMPANY’S CONSENT, EXCEED $40,000 IF A CLOSING OCCURS OR
$25,000 IN THE ABSENCE OF A CLOSING.  IN ADDITION, THE COMPANY SHALL PAY ALL
TRANSFER AGENT FEES, STAMP TAXES AND OTHER TAXES AND DUTIES LEVIED IN CONNECTION
WITH THE SALE AND ISSUANCE OF THE APPLICABLE SECURITIES.

7.3   ENTIRE AGREEMENT.  THE TRANSACTION DOCUMENTS, TOGETHER WITH THE EXHIBITS
AND SCHEDULES THERETO, CONTAIN THE ENTIRE UNDERSTANDING OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS AND
UNDERSTANDINGS, ORAL OR WRITTEN, WITH RESPECT TO SUCH MATTERS, WHICH THE PARTIES
ACKNOWLEDGE HAVE BEEN MERGED INTO SUCH DOCUMENTS, EXHIBITS AND SCHEDULES.  AT OR
AFTER THE CLOSING, AND WITHOUT FURTHER CONSIDERATION, THE COMPANY WILL EXECUTE
AND DELIVER TO THE INVESTORS SUCH FURTHER DOCUMENTS AS MAY BE REASONABLY
REQUESTED IN ORDER TO GIVE PRACTICAL EFFECT TO THE INTENTION OF THE PARTIES
UNDER THE TRANSACTION DOCUMENTS.

7.4   NOTICES.  ANY AND ALL NOTICES OR OTHER COMMUNICATIONS OR DELIVERIES
REQUIRED OR PERMITTED TO BE PROVIDED HEREUNDER SHALL BE IN WRITING AND SHALL BE
DEEMED GIVEN AND EFFECTIVE ON THE EARLIEST OF (A) THE DATE OF TRANSMISSION, IF
SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA FACSIMILE OR EMAIL AT THE
FACSIMILE NUMBER OR EMAIL ADDRESS SPECIFIED IN THIS SECTION 7.4  PRIOR TO 6:30
P.M. (NEW YORK CITY TIME) ON A TRADING DAY, (B) THE NEXT TRADING DAY AFTER THE
DATE OF TRANSMISSION, IF SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA FACSIMILE
OR EMAIL AT THE FACSIMILE NUMBER OR EMAIL ADDRESS SPECIFIED IN THIS SECTION 7.4
ON A DAY THAT IS NOT A TRADING DAY OR LATER THAN 6:30 P.M. (NEW YORK CITY TIME)
ON ANY TRADING DAY, (C) THE TRADING DAY FOLLOWING THE DATE OF DEPOSIT WITH A
NATIONALLY

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RECOGNIZED OVERNIGHT COURIER SERVICE, OR (D) UPON ACTUAL RECEIPT BY THE PARTY TO
WHOM SUCH NOTICE IS REQUIRED TO BE GIVEN.  THE ADDRESSES, FACSIMILE NUMBERS AND
EMAIL ADDRESSES FOR SUCH NOTICES AND COMMUNICATIONS ARE THOSE SET FORTH ON THE
SIGNATURE PAGES HEREOF, OR SUCH OTHER ADDRESS OR FACSIMILE NUMBER AS MAY BE
DESIGNATED IN WRITING HEREAFTER, IN THE SAME MANNER, BY ANY SUCH PERSON.

7.5   AMENDMENTS; WAIVERS.  NO PROVISION OF THIS AGREEMENT MAY BE WAIVED OR
AMENDED EXCEPT IN A WRITTEN INSTRUMENT SIGNED, IN THE CASE OF AN AMENDMENT, BY
THE COMPANY AND EACH OF THE INVESTORS OR, IN THE CASE OF A WAIVER, BY THE PARTY
AGAINST WHOM ENFORCEMENT OF ANY SUCH WAIVER IS SOUGHT.  NO WAIVER OF ANY DEFAULT
WITH RESPECT TO ANY PROVISION, CONDITION OR REQUIREMENT OF THIS AGREEMENT SHALL
BE DEEMED TO BE A CONTINUING WAIVER IN THE FUTURE OR A WAIVER OF ANY SUBSEQUENT
DEFAULT OR A WAIVER OF ANY OTHER PROVISION, CONDITION OR REQUIREMENT HEREOF, NOR
SHALL ANY DELAY OR OMISSION OF ANY PARTY TO EXERCISE ANY RIGHT HEREUNDER IN ANY
MANNER IMPAIR THE EXERCISE OF ANY SUCH RIGHT.  NOTWITHSTANDING THE FOREGOING, A
WAIVER OR CONSENT TO DEPART FROM THE PROVISIONS HEREOF WITH RESPECT TO A MATTER
THAT RELATES EXCLUSIVELY TO THE RIGHTS OF INVESTORS UNDER ARTICLE VI MAY BE
GIVEN BY INVESTORS HOLDING AT LEAST A MAJORITY OF THE REGISTRABLE SECURITIES TO
WHICH SUCH WAIVER OR CONSENT RELATES.

7.6   CONSTRUCTION.  THE HEADINGS HEREIN ARE FOR CONVENIENCE ONLY, DO NOT
CONSTITUTE A PART OF THIS AGREEMENT AND SHALL NOT BE DEEMED TO LIMIT OR AFFECT
ANY OF THE PROVISIONS HEREOF.  THE LANGUAGE USED IN THIS AGREEMENT WILL BE
DEEMED TO BE THE LANGUAGE CHOSEN BY THE PARTIES TO EXPRESS THEIR MUTUAL INTENT,
AND NO RULES OF STRICT CONSTRUCTION WILL BE APPLIED AGAINST ANY PARTY.

7.7   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 THE INVESTORS.  ANY INVESTOR MAY ASSIGN ITS
RIGHTS UNDER THIS AGREEMENT TO ANY PERSON TO WHOM SUCH INVESTOR ASSIGNS OR
TRANSFERS (INCLUDING BY WAY OF DISTRIBUTION TO ITS MEMBERS, PARTNERS OR
STOCKHOLDERS) ANY SECURITIES, PROVIDED (I) SUCH TRANSFEROR AGREES IN WRITING
WITH THE TRANSFEREE OR ASSIGNEE TO ASSIGN SUCH RIGHTS, AND A COPY OF SUCH
AGREEMENT IS FURNISHED TO THE COMPANY AFTER SUCH ASSIGNMENT, (II) THE COMPANY IS
FURNISHED WITH WRITTEN NOTICE OF (X) THE NAME AND ADDRESS OF SUCH TRANSFEREE OR
ASSIGNEE AND (Y) THE REGISTRABLE SECURITIES WITH RESPECT TO WHICH SUCH
REGISTRATION RIGHTS ARE BEING TRANSFERRED OR ASSIGNED, (III) FOLLOWING SUCH
TRANSFER OR ASSIGNMENT, THE FURTHER DISPOSITION OF SUCH SECURITIES BY THE
TRANSFEREE OR ASSIGNEE IS RESTRICTED UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS, (IV) SUCH TRANSFEREE AGREES IN WRITING TO BE BOUND, WITH
RESPECT TO THE TRANSFERRED SECURITIES, BY THE PROVISIONS HEREOF THAT APPLY TO
THE “INVESTORS”, AND (V) SUCH TRANSFER SHALL HAVE BEEN MADE IN ACCORDANCE WITH
THE APPLICABLE REQUIREMENTS OF THIS AGREEMENT AND WITH ALL LAWS APPLICABLE
THERETO.

7.8   NO THIRD-PARTY BENEFICIARIES.  THIS AGREEMENT IS INTENDED FOR THE BENEFIT
OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS AND
IS NOT FOR THE BENEFIT OF, NOR MAY ANY PROVISION HEREOF BE ENFORCED BY, ANY
OTHER PERSON, EXCEPT THAT EACH INDEMNIFIED PARTY IS AN INTENDED THIRD PARTY
BENEFICIARY OF SECTION 6.4 AND (IN EACH CASE) MAY ENFORCE THE PROVISIONS OF SUCH
SECTION DIRECTLY AGAINST THE PARTIES WITH OBLIGATIONS THEREUNDER.

7.9   GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.  THE CORPORATE LAWS OF THE
STATE OF DELAWARE SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE

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RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS.  ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.  THE COMPANY AND INVESTORS HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY
OR ANY INVESTOR HEREUNDER, 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 WAIVE,
AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY
OR ANY INVESTOR, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION
OF ANY SUCH COURT, OR THAT 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 VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. 
THE COMPANY AND INVESTORS HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

7.10   SURVIVAL.  THE REPRESENTATIONS AND WARRANTIES, AGREEMENTS AND COVENANTS
CONTAINED HEREIN SHALL SURVIVE THE CLOSING.

7.11   EXECUTION.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE COUNTERPARTS,
ALL OF WHICH WHEN TAKEN TOGETHER SHALL BE CONSIDERED ONE AND THE SAME AGREEMENT
AND SHALL BECOME EFFECTIVE WHEN COUNTERPARTS HAVE BEEN SIGNED BY EACH PARTY AND
DELIVERED TO THE OTHER PARTY, IT BEING UNDERSTOOD THAT BOTH PARTIES NEED NOT
SIGN THE SAME COUNTERPART.  IN THE EVENT THAT ANY SIGNATURE IS DELIVERED BY
FACSIMILE TRANSMISSION OR EMAIL ATTACHMENT, SUCH SIGNATURE SHALL CREATE A VALID
AND BINDING OBLIGATION OF THE PARTY EXECUTING (OR ON WHOSE BEHALF SUCH SIGNATURE
IS EXECUTED) WITH THE SAME FORCE AND EFFECT AS IF SUCH FACSIMILE OR
EMAIL-ATTACHED SIGNATURE PAGE WERE AN ORIGINAL THEREOF.

7.12   SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS HELD TO BE INVALID
OR UNENFORCEABLE IN ANY RESPECT, THE VALIDITY AND ENFORCEABILITY OF THE
REMAINING TERMS AND PROVISIONS OF THIS AGREEMENT SHALL NOT IN ANY WAY BE
AFFECTED OR IMPAIRED THEREBY AND THE PARTIES WILL ATTEMPT TO AGREE UPON A VALID
AND ENFORCEABLE PROVISION THAT IS A REASONABLE SUBSTITUTE THEREFOR, AND UPON SO
AGREEING, SHALL INCORPORATE SUCH SUBSTITUTE PROVISION IN THIS AGREEMENT.

7.13   RESCISSION AND WITHDRAWAL RIGHT.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN (AND WITHOUT LIMITING ANY SIMILAR PROVISIONS OF) THE
TRANSACTION DOCUMENTS, WHENEVER ANY INVESTOR EXERCISES A RIGHT, ELECTION, DEMAND
OR OPTION OWED TO SUCH INVESTOR BY THE COMPANY UNDER A TRANSACTION DOCUMENT AND
THE COMPANY DOES NOT TIMELY PERFORM ITS RELATED OBLIGATIONS

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WITHIN THE PERIODS THEREIN PROVIDED, THEN, PRIOR TO THE PERFORMANCE BY THE
COMPANY OF THE COMPANY’S RELATED OBLIGATION, SUCH INVESTOR 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.

7.14   REPLACEMENT OF SECURITIES.  IF ANY CERTIFICATE OR INSTRUMENT EVIDENCING
ANY SECURITIES IS MUTILATED, LOST, STOLEN OR DESTROYED, THE COMPANY SHALL ISSUE
OR CAUSE TO BE ISSUED IN EXCHANGE AND SUBSTITUTION FOR AND UPON CANCELLATION
THEREOF, OR IN LIEU OF AND SUBSTITUTION THEREFOR, A NEW CERTIFICATE OR
INSTRUMENT, BUT ONLY UPON RECEIPT OF EVIDENCE REASONABLY SATISFACTORY TO THE
COMPANY OF SUCH LOSS, THEFT OR DESTRUCTION AND THE EXECUTION BY THE HOLDER
THEREOF OF A CUSTOMARY LOST CERTIFICATE AFFIDAVIT OF THAT FACT AND AN AGREEMENT
TO INDEMNIFY AND HOLD HARMLESS THE COMPANY FOR ANY LOSSES IN CONNECTION
THEREWITH.  THE APPLICANTS FOR A NEW CERTIFICATE OR INSTRUMENT UNDER SUCH
CIRCUMSTANCES SHALL ALSO PAY ANY REASONABLE THIRD-PARTY COSTS ASSOCIATED WITH
THE ISSUANCE OF SUCH REPLACEMENT SECURITIES.

7.15   REMEDIES.  IN ADDITION TO BEING ENTITLED TO EXERCISE ALL RIGHTS PROVIDED
HEREIN OR GRANTED BY LAW, INCLUDING RECOVERY OF DAMAGES, EACH OF THE INVESTORS
AND THE COMPANY WILL BE ENTITLED TO SEEK SPECIFIC PERFORMANCE UNDER THE
TRANSACTION DOCUMENTS.  THE PARTIES AGREE THAT MONETARY DAMAGES MAY NOT BE
ADEQUATE COMPENSATION FOR ANY LOSS INCURRED BY REASON OF ANY BREACH OF
OBLIGATIONS DESCRIBED IN THE FOREGOING SENTENCE AND HEREBY AGREE TO WAIVE IN ANY
ACTION FOR SPECIFIC PERFORMANCE OF ANY SUCH OBLIGATION (OTHER THAN IN CONNECTION
WITH ANY ACTION FOR A TEMPORARY RESTRAINING ORDER) THE DEFENSE THAT A REMEDY AT
LAW WOULD BE ADEQUATE.

7.16   PAYMENT SET ASIDE.  TO THE EXTENT THAT THE COMPANY MAKES A PAYMENT OR
PAYMENTS TO ANY INVESTOR HEREUNDER OR ANY INVESTOR ENFORCES OR EXERCISES ITS
RIGHTS HEREUNDER, AND SUCH PAYMENT OR PAYMENTS OR THE PROCEEDS OF SUCH
ENFORCEMENT OR EXERCISE OR ANY PART THEREOF ARE SUBSEQUENTLY INVALIDATED,
DECLARED TO BE FRAUDULENT OR PREFERENTIAL, SET ASIDE, RECOVERED FROM, DISGORGED
BY OR ARE REQUIRED TO BE REFUNDED, REPAID OR OTHERWISE RESTORED TO THE COMPANY
BY A TRUSTEE, RECEIVER OR ANY OTHER PERSON UNDER ANY LAW (INCLUDING, WITHOUT
LIMITATION, ANY BANKRUPTCY LAW, STATE OR FEDERAL LAW, COMMON LAW OR EQUITABLE
CAUSE OF ACTION), THEN TO THE EXTENT OF ANY SUCH RESTORATION THE OBLIGATION OR
PART THEREOF ORIGINALLY INTENDED TO BE SATISFIED SHALL BE REVIVED AND CONTINUED
IN FULL FORCE AND EFFECT AS IF SUCH PAYMENT HAD NOT BEEN MADE OR SUCH
ENFORCEMENT OR SETOFF HAD NOT OCCURRED.

7.17   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.

7.18   INDEPENDENT NATURE OF INVESTORS’ OBLIGATIONS AND RIGHTS.  THE OBLIGATIONS
OF EACH INVESTOR UNDER ANY TRANSACTION DOCUMENT ARE SEVERAL AND NOT JOINT WITH
THE OBLIGATIONS OF ANY OTHER INVESTOR, AND NO INVESTOR SHALL BE RESPONSIBLE IN
ANY WAY FOR THE PERFORMANCE OF THE OBLIGATIONS OF ANY OTHER INVESTOR UNDER ANY
TRANSACTION DOCUMENTS.  THE DECISION OF EACH INVESTOR TO PURCHASE SECURITIES
PURSUANT TO THIS AGREEMENT HAS BEEN MADE BY SUCH INVESTOR INDEPENDENTLY OF ANY
OTHER

38

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INVESTOR AND INDEPENDENTLY OF ANY INFORMATION, MATERIALS, STATEMENTS OR OPINIONS
AS TO THE BUSINESS, AFFAIRS, OPERATIONS, ASSETS, PROPERTIES, LIABILITIES,
RESULTS OF OPERATIONS, CONDITION (FINANCIAL OR OTHERWISE) OR PROSPECTS OF THE
COMPANY WHICH MAY HAVE BEEN MADE OR GIVEN BY ANY OTHER INVESTOR OR BY ANY AGENT
OR EMPLOYEE OF ANY OTHER INVESTOR, AND NO INVESTOR OR ANY OF ITS AGENTS OR
EMPLOYEES SHALL HAVE ANY LIABILITY TO ANY OTHER INVESTOR (OR ANY OTHER PERSON)
RELATING TO OR ARISING FROM ANY SUCH INFORMATION, MATERIALS, STATEMENTS OR
OPINIONS.  NOTHING CONTAINED HEREIN OR IN ANY TRANSACTION DOCUMENT, AND NO
ACTION TAKEN BY ANY INVESTOR PURSUANT THERETO, SHALL BE DEEMED TO CONSTITUTE THE
INVESTORS AS A PARTNERSHIP, AN ASSOCIATION, A JOINT VENTURE OR ANY OTHER KIND OF
ENTITY, OR CREATE A PRESUMPTION THAT THE INVESTORS ARE IN ANY WAY ACTING IN
CONCERT OR AS A GROUP WITH RESPECT TO SUCH OBLIGATIONS OR THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENT.  EACH INVESTOR ACKNOWLEDGES THAT NO
OTHER INVESTOR HAS ACTED AS AGENT FOR SUCH INVESTOR IN CONNECTION WITH MAKING
ITS INVESTMENT HEREUNDER AND THAT NO OTHER INVESTOR WILL BE ACTING AS AGENT OF
SUCH INVESTOR IN CONNECTION WITH MONITORING ITS INVESTMENT HEREUNDER.  EACH
INVESTOR SHALL BE ENTITLED TO INDEPENDENTLY PROTECT AND ENFORCE ITS RIGHTS,
INCLUDING WITHOUT LIMITATION THE RIGHTS ARISING OUT OF THIS AGREEMENT OR OUT OF
THE OTHER TRANSACTION DOCUMENTS, AND IT SHALL NOT BE NECESSARY FOR ANY OTHER
INVESTOR TO BE JOINED AS AN ADDITIONAL PARTY IN ANY PROCEEDING FOR SUCH PURPOSE.

[SIGNATURE PAGES TO FOLLOW]

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EXECUTION COPY

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

COMMUNICATION INTELLIGENCE CORPORATION

 

 

 

 

 

 

 

By:

/s/ Guido D. DiGregario

 

 

Name: Guido D. DiGregorio

 

Title: Chief Executive Officer and President

 

 

 

Address for Notice:

 

275 Shoreline Drive, #500

 

Redwood Shores, California 94065

 

 

 

Facsimile No.: (650) 802-7777

 

Telephone No.: (650) 802-7888

 

Attn: Frank Dane

 

 

 

With a copy to:

 

 

 

Davis Wright Tremaine LLP

 

1300 SW Fifth Avenue, Suite 2300

 

Portland, Oregon 97201

 

Facsimile:   (503) 778-5299

 

Telephone:  (503) 778-5214

 

Attn: Michael C. Philips, Esq.

 

COMPANY SIGNATURE PAGE

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Investor Signature Page

By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement dated as of August 24, 2007 (the “Purchase
Agreement”) by and among Communication Intelligence Corporation and the
Investors (as defined therein), as to the number of shares of Common Stock set
forth below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

Name of Investor:

 

 

 

Phoenix Venture Fund LLC

 

 

 

By: SG Phoenix Ventures LLC,

 

       its Managing Member

 

 

 

By:

 /s/ Andrea Goren

 

 

 

Name: Andrea Goren

 

 

Title: Member

 

 

 

 

 

Address:

110 East 59th Street, Suite 1901

 

 

 New York, New York 10022

 

 

 

Telephone No.: (212) 759-1909 x 201

 

 

 

Facsimile No.: (212) 202-7565

 

 

 

Email Address: agoren@sgphoenix.com

 

 

 

Number of Shares: 21,500,000

 

 

 

Aggregate Purchase Price: $3,000,000

 

 

 

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Exhibits:

A             Schedule of Investors

B             Instruction Sheet for Investors

C             Opinion of Company Corporate Counsel

D             Plan of Distribution

E              Company Transfer Agent Instructions

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