Exhibit 10.30

 

SHARE PURCHASE AGREEMENT

 

This SHARE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
7th April 2008, by and among Ebix, Inc., a Delaware corporation (the “Company”),
and one or more purchasers comprised of client accounts and funds managed by
Ashford Capital Management, Inc. (“ACM”; with each ACM client or fund referred
to as a “Purchaser”).

 

The Company desires to issue and sell to the ACM Purchasers (collectively, the
“Purchasers”) an aggregate of one-hundred ten thousand (110,000) shares of the
Company’s Common Stock (the “Shares”) at a purchase price of Seventy-Two and
87/100 United States Dollars (US$72.87) per share, for an aggregate price of
eight million fifteen thousand seven hundred United States Dollars (US
$8,015,700,00), all upon the terms and conditions set forth herein (the
“Offering”).  The Shares to be issued to and purchased by each ACM Purchaser are
called the “Purchaser Shares” and references to the Shares includes the
Purchaser Shares except as stated otherwise).

 

IN CONSIDERATION of the mutual covenants and agreements contained herein, the
parties hereby agree as follows:

 

1.                                       AUTHORIZATION OF SALE OF THE SHARES

 

Subject to the terms and conditions of this Agreement, the Company has
authorized the sale of the Shares.  The Company and each of the Purchasers are
entering into their respective Agreements in mutual reliance upon the exemption
from securities registration afforded by the provisions of Regulation D
(“Regulation D”) promulgated by the United States Securities Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended and in effect (the
“Securities Act”).

 

2.                                       AGREEMENT TO SELL AND PURCHASE THE
SHARES

 

2.1           PURCHASE AND SALE.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, THE PURCHASER AGREES TO PURCHASE, AND THE COMPANY AGREES TO SELL AND
ISSUE TO PURCHASER, AT THE CLOSING (AS DEFINED BELOW) 110,000 PURCHASER SHARES. 
THE NUMBER OF SHARES AND THE PURCHASE PRICE FOR SUCH SHARES BEING ISSUED TO AND
PURCHASED BY EACH ACM PURCHASER WILL BE AS SET OUT OPPOSITE EACH SUCH ACM
PURCHASER’S NAME AS INDICATED ON THE SIGNATURE PAGE FOR EACH SUCH ACM
PURCHASER.  THE COMPANY WILL ISSUE SHARES IN THE OFFERING TO EACH ACM PURCHASER
UNDER THE SAME TERMS AND CONDITIONS, AND AT THE SAME PURCHASE PRICE, ALL AS
EVIDENCED BY THE PROVISIONS OF THIS AGREEMENT.

 

2.2           PURCHASE PRICE.  THE PURCHASE PRICE OF EACH SHARE SHALL BE
SEVENTY-TWO AND 87/100 US DOLLARS (US$72.87) (THE “PER SHARE PRICE”).

 

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2.3           OBLIGATIONS SEVERAL NOT JOINT.  THE OBLIGATIONS OF EACH PURCHASER
UNDER THIS AGREEMENT ARE SEVERAL AND NOT JOINT WITH THE OBLIGATIONS OF ANY OTHER
PURCHASER, AND NO PURCHASER SHALL BE RESPONSIBLE IN ANY WAY FOR THE PERFORMANCE
OF THE OBLIGATIONS OF ANY OTHER PURCHASER UNDER THIS AGREEMENT.  NOTHING
CONTAINED HEREIN, AND NO ACTION TAKEN BY ANY PURCHASER PURSUANT HERETO, SHALL BE
DEEMED TO CONSTITUTE THE PURCHASERS AS A PARTNERSHIP, AN ASSOCIATION, A JOINT
VENTURE OR ANY OTHER KIND OF ENTITY, OR CREATE A PRESUMPTION THAT THE PURCHASERS
ARE IN ANY WAY ACTING IN CONCERT OR AS A GROUP WITH RESPECT TO SUCH OBLIGATIONS
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PURCHASER SHALL BE
ENTITLED TO INDEPENDENTLY PROTECT AND ENFORCE ITS RIGHTS, INCLUDING WITHOUT
LIMITATION THE RIGHTS ARISING OUT OF THIS AGREEMENT, AND IT SHALL NOT BE
NECESSARY FOR ANY OTHER PURCHASER TO BE JOINED AS AN ADDITIONAL PARTY IN ANY
PROCEEDING FOR SUCH PURPOSE.

 

2.4           OTHER TRANSACTIONS.

 

(A)           AS DISCLOSED BY THE COMPANY TO THE PURCHASERS:  (I) THE COMPANY
PREVIOUSLY HAS OFFERED, ISSUED AND SOLD SHARES OF ITS COMMON STOCK (THE “OTHER
SHARES”) TO ONE OR MORE OTHER QUALIFIED PERSONS AND ENTITIES AS PURCHASERS (THE
“OTHER PRIOR PURCHASERS”), AT VARIOUS TIMES AND UPON DIFFERING TERMS, CONDITIONS
AND PRICING, IN SEPARATE PRIVATE PLACEMENT TRANSACTIONS IN ACCORDANCE WITH
REGULATION D AND EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
ACT, SEPARATELY AND APART FROM THIS OFFERING (COLLECTIVELY, THE “OTHER PLACEMENT
OFFERINGS”); AND (II) AFTER THE DATE HEREOF THE COMPANY MAY OFFER, ISSUE, AND
SELL ADDITIONAL SHARES OF ITS COMMON STOCK (THE “ADDITIONAL SHARES”) TO ONE OR
MORE QUALIFIED PERSONS AND ENTITIES AS PURCHASERS (THE “ADDITIONAL OTHER
PURCHASERS”), AT VARIOUS TIMES AND UPON DIFFERING TERMS, CONDITIONS AND PRICING,
IN ONE OR MORE SEPARATE PRIVATE PLACEMENT TRANSACTIONS IN ACCORDANCE WITH
REGULATION D AND EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
ACT, SEPARATELY AND APART FROM THIS OFFERING (COLLECTIVELY, THE “ADDITIONAL
OTHER PLACEMENT OFFERINGS”).

 

(B)           THE COMPANY DOES NOT INTEND TO, AND WILL NOT, ISSUE OR SELL ANY
OTHER SHARES OF ITS COMMON STOCK IN ANY TRANSACTION THAT WOULD BE CONSIDERED
PART OF THIS OFFERING OR OTHERWISE REQUIRED TO BE INTEGRATED WITH THIS OFFERING
UNDER THE SECURITIES ACT TO ANY PERSON OR ENTITY OTHER THAN THE ACM PURCHASERS
HEREUNDER; PROVIDED, HOWEVER THAT THE COMPANY MAY ISSUE ADDITIONAL SHARES OF ITS
COMMON STOCK IN ONE OR MORE TRANSACTIONS (I) TO THE EXTENT SUCH TRANSACTIONS ARE
CONSISTENT WITH AND MAINTAIN THE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AFFORDED UNDER REGULATION D FOR THIS OFFERING AND (II) IF SUCH
ADDITIONAL SHARES OF COMMON STOCK ARE ISSUED AND SOLD PURSUANT TO A FORM OF
AGREEMENT WITH PROVISIONS THAT ARE IDENTICAL TO THE PROVISIONS OF THIS AGREEMENT
WITH THE PURCHASERS, EXCEPT (X) AS TO NUMBER OF SHARES AND OTHER INFORMATION
SPECIFICALLY IDENTIFYING THE OTHER PURCHASERS, (Y) AS TO PURCHASE PRICE PER
SHARE.  WHICH WILL NOT BE LESS THAN THE PURCHASE PRICE PER SHARE IN THIS
AGREEMENT, AND (Z) AS OTHERWISE DISCLOSED IN WRITING BY THE COMPANY TO THE ACM
PURCHASERS HEREUNDER PRIOR TO THE CLOSING OF ANY SUCH OTHER TRANSACTION
CONSTITUTING PART OF THIS OFFERING OR OTHERWISE INTEGRATED WITH THIS OFFERING.

 

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3.                                       DELIVERY OF THE SHARES AT THE CLOSING

 

3.1           THE COMPLETION OF THE PURCHASE AND SALE OF THE SHARES, INCLUDING
THE PURCHASER SHARES (THE “CLOSING”) IS OCCURRING SUBSTANTIALLY
CONTEMPORANEOUSLY WITH THE EXECUTION OF THIS AGREEMENT (THE “CLOSING DATE”).

 

3.2           THE COMPANY SHALL AUTHORIZE ITS TRANSFER AGENT (THE “TRANSFER
AGENT”) TO ISSUE TO THE PURCHASER AS OF THE CLOSING ONE OR MORE STOCK
CERTIFICATES (IN SUCH DENOMINATIONS AS SUCH PURCHASER SHALL REQUEST, THE
“CERTIFICATES”) REGISTERED IN THE NAME OF THE PURCHASER OR ITS CUSTODIAL
DESIGNEE AGAINST PAYMENT BY THE PURCHASER OF THE PURCHASE PRICE FOR SUCH
PURCHASER SHARES BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS.

 

3.3           THE COMPANY’S OBLIGATION TO COMPLETE THE ISSUANCE AND SALE OF THE
SHARES TO THE PURCHASER AT THE CLOSING SHALL BE SUBJECT TO THE SATISFACTION OF
THE FOLLOWING CONDITIONS, ANY ONE OR MORE OF WHICH MAY BE WAIVED BY THE COMPANY:

 

(A)           RECEIPT BY THE COMPANY OF THE FULL AMOUNT OF THE PURCHASE PRICE
FOR THE SHARES BEING PURCHASED UNDER THIS AGREEMENT BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS; AND

 

(B)           THE REPRESENTATIONS AND WARRANTIES MADE BY THE PURCHASER IN THIS
AGREEMENT SHALL BE TRUE AND CORRECT AND THE UNDERTAKINGS OF THE PURCHASER HEREIN
SHALL HAVE BEEN FULFILLED IN ALL MATERIAL RESPECTS ON OR BEFORE THE CLOSING.

 

3.4           THE PURCHASER’S OBLIGATIONS TO PURCHASE THE SHARES FROM THE
COMPANY SHALL BE SUBJECT TO THE SATISFACTION OF THE FOLLOWING CONDITIONS, WHICH
MAY BE WAIVED BY THE PURCHASER:

 

(A)           THE REPRESENTATIONS AND WARRANTIES MADE BY THE COMPANY IN THIS
AGREEMENT SHALL BE TRUE AND CORRECT AS OF THE DATE OF THIS AGREEMENT AND THE
UNDERTAKINGS OF THE COMPANY HEREIN SHALL HAVE BEEN FULFILLED IN ALL MATERIAL
RESPECTS ON OR BEFORE THE CLOSING; AND

 

(B)           THE COMPANY WILL BE SIMULTANEOUSLY ISSUING AND SELLING TO THE
PURCHASERS AN AGGREGATE AMOUNT OF AT LEAST 110,000 SHARES FOR AN AGGREGATE
PURCHASE PRICE OF AT LEAST US$8,015,700 (INCLUDING THE PURCHASER’S PURCHASER
SHARES HEREUNDER) IN ACCORDANCE WITH THE OFFERING.

 

4.                                       REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE COMPANY

 

The Company hereby represents and warrants to the Purchaser as follows:

 

4.1           ISSUANCE, SALE AND DELIVERY OF THE SHARES

 

(A)           THE SHARES HAVE BEEN DULY AUTHORIZED FOR ISSUANCE AND SALE TO THE
PURCHASER PURSUANT TO THIS AGREEMENT AND, WHEN ISSUED AND DELIVERED BY THE
COMPANY PURSUANT TO THIS AGREEMENT AGAINST PAYMENT OF THE CONSIDERATION SET
FORTH IN THIS

 

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AGREEMENT.  WILL BE VALIDLY ISSUED AND FULLY PAID AND NONASSESSABLE AND FREE AND
CLEAR OF ALL PLEDGES, LIENS AND ENCUMBRANCES.  THE CERTIFICATES EVIDENCING THE
SHARES WHEN DELIVERED, WILL BE IN DUE AND PROPER FORM UNDER DELAWARE LAW.

 

(B)           THE ISSUANCE OF THE SHARES IS NOT SUBJECT TO PREEMPTIVE OR OTHER
SIMILAR RIGHTS.

 

(C)           SUBJECT TO THE ACCURACY OF THE PURCHASERS’ REPRESENTATIONS AND
WARRANTIES IN SECTION 5 OF THIS AGREEMENT, THE OFFER, SALE AND ISSUANCE OF THE
SHARES IN CONFORMITY WITH THE TERMS OF THIS AGREEMENT CONSTITUTE TRANSACTIONS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SECTION 5 OF THE SECURITIES ACT,
AND FROM THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF THE LAWS OF ANY
APPLICABLE STATE OR UNITED STATES JURISDICTION.

 

4.2           DUE EXECUTION AND PERFORMANCE; REPRESENTATIONS OF THE COMPANY

 

(A)           EXECUTION ENFORCEABILITY.  THIS AGREEMENT HAS BEEN DULY EXECUTED
AND DELIVERED BY THE COMPANY AND CONSTITUTES A VALID AND BINDING OBLIGATION OF
THE COMPANY, ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE WITH ITS TERMS,
EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY (I) APPLICABLE BANKRUPTCY OR
OTHER SIMILAR LAWS RELATING TO, OR AFFECTING GENERALLY THE ENFORCEMENT OF,
CREDITORS’ RIGHTS OR REMEDIES, (II) GENERAL PRINCIPLES OF EQUITY OR
(III) APPLICABLE LAWS AND CONSIDERATION OF PUBLIC POLICY RELATING TO
INDEMNIFICATION AND CONTRIBUTION PROVISIONS.

 

(B)           AUTHORITY.  THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT, AND THE COMPANY’S SALE, ISSUANCE AND DELIVERY OF THE SHARES, HAVE
BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART OF THE
COMPANY.

 

(C)           ORGANIZATION.  EACH OF THE COMPANY AND ITS SUBSIDIARIES (AS
DEFINED IN RULE 405 UNDER THE SECURITIES ACT) IS DULY ORGANIZED AND VALIDLY
EXISTING IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS
ORGANIZATION.  EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS FULL POWER AND
AUTHORITY TO OWN, OPERATE AND OCCUPY ITS PROPERTIES AND TO CONDUCT ITS BUSINESS
AS PRESENTLY CONDUCTED AND IS REGISTERED OR QUALIFIED TO DO BUSINESS AND IN GOOD
STANDING IN EACH JURISDICTION IN WHICH IT OWNS OR LEASES PROPERTY OR TRANSACTS
BUSINESS AND WHERE THE FAILURE TO BE SO QUALIFIED WOULD HAVE A MATERIAL ADVERSE
EFFECT UPON THE FINANCIAL CONDITION OR BUSINESS, OPERATIONS, ASSETS OR PROSPECTS
OF THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE (A “MATERIAL ADVERSE
EFFECT”).

 

(D)           DUE AUTHORIZATION.  THE COMPANY HAS ALL REQUISITE POWER AND
AUTHORITY TO EXECUTE, DELIVER AND PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT,
AND HAS TAKEN ALL NECESSARY CORPORATE ACTION TO ENTER INTO AND PERFORM THIS
AGREEMENT, TO ISSUE THE SHARES IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

 

(E)           NON-CONTRAVENTION.  EXCEPT AS WOULD NOT REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT, THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE ISSUANCE AND SALE OF THE SHARES UNDER THIS AGREEMENT, THE FULFILLMENT OF THE
TERMS OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY WILL NOT

 

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(A) CONFLICT WITH OR CONSTITUTE A VIOLATION OF, OR DEFAULT (WITH OR WITHOUT THE
GIVING OF NOTICE OR THE PASSAGE OF TIME OR BOTH) UNDER, (I) ANY MATERIAL BOND,
DEBENTURE, NOTE OR OTHER EVIDENCE OF INDEBTEDNESS, OR UNDER ANY MATERIAL LEASE,
INDENTURE, MORTGAGE, DEED OF TRUST, LOAN AGREEMENT, JOINT VENTURE OR OTHER
AGREEMENT OR INSTRUMENT TO WHICH THE COMPANY OR ANY SUBSIDIARY IS A PARTY OR BY
WHICH IT OR ANY OF ITS SUBSIDIARIES OR THEIR RESPECTIVE PROPERTIES ARE BOUND,
(II) THE CHARTER, BY-LAWS OR OTHER ORGANIZATIONAL DOCUMENTS OF THE COMPANY OR
ANY SUBSIDIARY, OR (III) ANY LAW, ADMINISTRATIVE REGULATION, ORDINANCE OR ORDER
OF ANY COURT OR GOVERNMENTAL AGENCY, ARBITRATION PANEL OR AUTHORITY APPLICABLE
TO THE COMPANY OR ANY SUBSIDIARY OR THEIR RESPECTIVE PROPERTIES, OR (B) RESULT
IN THE CREATION OR IMPOSITION OF ANY LIEN, ENCUMBRANCE, CLAIM, SECURITY INTEREST
OR RESTRICTION WHATSOEVER UPON ANY OF THE MATERIAL PROPERTIES OR ASSETS OF THE
COMPANY OR ANY SUBSIDIARY OR AN ACCELERATION OF INDEBTEDNESS PURSUANT TO ANY
OBLIGATION, AGREEMENT OR CONDITION CONTAINED IN ANY MATERIAL BOND, DEBENTURE,
NOTE OR ANY OTHER EVIDENCE OF INDEBTEDNESS OR ANY MATERIAL INDENTURE, MORTGAGE,
DEED OF TRUST OR ANY OTHER AGREEMENT OR INSTRUMENT TO WHICH THE COMPANY OR ANY
SUBSIDIARY IS A PARTY OR BY WHICH ANY OF THEM IS BOUND OR TO WHICH ANY OF THE
PROPERTY OR ASSETS OF THE COMPANY OR ANY SUBSIDIARY IS SUBJECT.  NO CONSENT,
APPROVAL, AUTHORIZATION OR OTHER ORDER OF, OR REGISTRATION, QUALIFICATION OR
FILING WITH, ANY REGULATORY BODY, ADMINISTRATIVE AGENCY, SELF-REGULATORY
ORGANIZATION, STOCK EXCHANGE OR MARKET, OR OTHER GOVERNMENTAL BODY IN THE UNITED
STATES IS REQUIRED FOR THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE
VALID ISSUANCE AND SALE SHARES, OTHER THAN SUCH AS HAVE BEEN MADE OR OBTAINED,
AND EXCEPT FOR ANY SECURITIES FILINGS REQUIRED TO BE MADE UNDER FEDERAL OR STATE
SECURITIES LAWS.

 

(F)            SEC DOCUMENTS FILINGS.

 

(I)            SINCE JANUARY 1, 2007, THE COMPANY AND ITS SUBSIDIARIES HAVE
FILED ALL REPORTS, SCHEDULES, FORMS, STATEMENTS AND OTHER DOCUMENTS REQUIRED TO
BE FILED BY IT WITH THE SEC PURSUANT TO THE REPORTING REQUIREMENTS OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE “1934 ACT”) (COLLECTIVELY, THE
“SEC DOCUMENTS”).  AS OF THEIR RESPECTIVE DATES, THE SEC DOCUMENTS COMPLIED IN
ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF THE 1934 ACT AND THE RULES AND
REGULATIONS OF THE SEC PROMULGATED THEREUNDER APPLICABLE TO THE SEC DOCUMENTS,
AND NONE OF THE SEC DOCUMENTS, AT THE TIME THEY WERE FILED WITH THE SEC,
CONTAINED ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITTED TO STATE A MATERIAL
FACT REQUIRED TO BE STATED THEREIN OR NECESSARY IN ORDER TO MAKE THE STATEMENTS
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING.

 

(II)           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 DOCUMENTS, TO THE
EXTENT SUCH AGREEMENTS ARE REQUIRED TO BE INCLUDED OR IDENTIFIED PURSUANT TO THE
RULES AND REGULATIONS OF THE SEC.

 

(III)          THE FINANCIAL STATEMENTS OF THE COMPANY INCLUDED IN THE SEC
DOCUMENTS COMPLY IN ALL MATERIAL RESPECTS WITH APPLICABLE ACCOUNTING
REQUIREMENTS AND THE RULES AND REGULATIONS OF THE SEC WITH RESPECT THERETO AS IN
EFFECT AT THE TIME OF FILING (OR, IF AMENDED OR SUPERSEDED BY A FILING PRIOR TO
THE CLOSING DATE, THEN ON THE

 

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DATE OF SUCH 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.

 

(G)           ABSENCE OF CERTAIN CHANGES.  EXCEPT AS DISCLOSED IN THE SEC
DOCUMENTS FILED AT LEAST THIRTY (30) DAYS PRIOR TO THE DATE HEREOF, SINCE 31
DECEMBER 2007 THERE HAS BEEN NO ADVERSE CHANGE OR ADVERSE DEVELOPMENT IN THE
BUSINESS, PROPERTIES, ASSETS, OPERATIONS, FINANCIAL CONDITION, PROSPECTS,
LIABILITIES OR RESULTS OF OPERATIONS OF THE COMPANY OR ITS SUBSIDIARIES WHICH TO
THE KNOWLEDGE OF THE COMPANY WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.

 

(H)           CAPITALIZATION.  AS OF THE DATE HEREOF, THE AUTHORIZED CAPITAL
STOCK OF THE COMPANY CONSISTS OF (I) 10,000,000 SHARES OF COMMON STOCK, OF WHICH
AS OF THE DATE HEREOF, 3,472,969 SHARES ARE ISSUED, 3,464,069 ARE OUTSTANDING,
843,431 SHARES ARE ISSUABLE AND RESERVED FOR ISSUANCE PURSUANT TO THE COMPANY’S
STOCK OPTION PLANS OR SECURITIES EXERCISABLE OR EXCHANGEABLE FOR, OR CONVERTIBLE
INTO, SHARES OF COMMON STOCK, AND (II) 500,000 SHARES OF PREFERRED STOCK, OF
WHICH AS OF THE DATE HEREOF NO SHARES ARE ISSUED.  ALL OF SUCH OUTSTANDING
SHARES HAVE BEEN, OR UPON ISSUANCE WILL BE, VALIDLY ISSUED, FULLY PAID AND
NONASSESSABLE.  EXCEPT AS DISCLOSED IN THE SEC DOCUMENTS, AS OF THE DATE HEREOF,
(I) NO SHARES OF THE COMPANY’S CAPITAL STOCK ARE SUBJECT TO PREEMPTIVE RIGHTS OR
ANY OTHER SIMILAR RIGHTS OR ANY LIENS OR ENCUMBRANCES SUFFERED OR PERMITTED BY
THE COMPANY, (II) THERE ARE NO OUTSTANDING OPTIONS, WARRANTS, SCRIP, RIGHTS TO
SUBSCRIBE TO, CALLS OR COMMITMENTS OF ANY CHARACTER WHATSOEVER RELATING TO, OR
SECURITIES OR RIGHTS CONVERTIBLE INTO, ANY SHARES OF CAPITAL STOCK OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES, OR CONTRACTS, COMMITMENTS, UNDERSTANDINGS OR
ARRANGEMENTS BY WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS OR MAY BECOME
BOUND TO ISSUE ADDITIONAL SHARES OF CAPITAL STOCK OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR OPTIONS, WARRANTS, SCRIP, RIGHTS TO SUBSCRIBE TO, CALLS OR
COMMITMENTS OF ANY CHARACTER WHATSOEVER RELATING TO, OR SECURITIES OR RIGHTS
CONVERTIBLE INTO, ANY SHARES OF CAPITAL STOCK OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (III) THERE ARE NO OUTSTANDING SECURITIES OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES WHICH CONTAIN ANY REDEMPTION OR SIMILAR PROVISIONS, AND THERE
ARE NO CONTRACTS, COMMITMENTS, UNDERSTANDINGS OR ARRANGEMENTS BY WHICH THE
COMPANY OR ANY OF ITS SUBSIDIARIES IS OR MAY BECOME BOUND TO REDEEM A SECURITY
OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, (IV) THERE ARE NO SECURITIES OR
INSTRUMENTS CONTAINING ANTI-DILUTION OR SIMILAR PROVISIONS THAT WILL BE
TRIGGERED BY THE ISSUANCE SHARES AND (V) THE COMPANY DOES NOT HAVE ANY STOCK
APPRECIATION RIGHTS OR “PHANTOM STOCK” PLANS OR AGREEMENTS OR ANY SIMILAR PLAN
OR AGREEMENT.  THE COMPANY DISCLOSED IN ITS SEC DOCUMENTS OR HAS FURNISHED TO
PURCHASER TRUE AND CORRECT COPIES OF THE COMPANY’S CERTIFICATE OF INCORPORATION,
AS AMENDED AND AS IN EFFECT ON THE DATE HEREOF (THE “CERTIFICATE OF
INCORPORATION”), AND THE COMPANY’S BY-LAWS, AS IN EFFECT ON THE DATE HEREOF (THE
“BY-LAWS”).

 

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(I)            LISTING AND MAINTENANCE REQUIREMENTS.  THE COMPANY HAS NOT, IN
THE TWELVE MONTHS PRECEDING THE DATE HEREOF, RECEIVED NOTICE (WRITTEN OR ORAL)
FROM ANY EXCHANGE OR 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 EXCHANGE OR 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.

 

(J)            REGISTRATION RIGHTS.  EXCEPT AS PREVIOUSLY DISCLOSED BY THE
COMPANY TO THE PURCHASERS WITH RESPECT TO THE OTHER SHARES ISSUED TO OTHER PRIOR
PURCHASERS IN OTHER PLACEMENT OFFERINGS, AND THE INCLUSION OF SUCH OTHER SHARES
TOGETHER WITH THE SHARES BEING ISSUED UNDER THE OFFERING IN A REGISTRATION
STATEMENT (AS DEFINED IN SECTION 7.2(A) BELOW):  (I) THE COMPANY HAS NOT ENTERED
INTO ANY OTHER AGREEMENT AND IS NOT CURRENTLY SUBJECT TO ANY AGREEMENT THAT
OBLIGATES THE COMPANY TO FILE ANY OTHER REGISTRATION STATEMENT ON BEHALF OF ANY
OTHER PERSON OR ENTITY ANY RIGHTS TO HAVE ANY COMMON STOCK OR ANY OTHER
SECURITIES OF THE COMPANY REGISTERED WITH THE SEC OR REGISTERED OR QUALIFIED FOR
PUBLIC SALE OR TRADING WITH ANY OTHER GOVERNMENTAL AUTHORITY OR EXCHANGE AND
(II) THE EXECUTION AND PERFORMANCE BY THE COMPANY OF THIS AGREEMENT, INCLUDING
THE ISSUANCE OF THE SHARES AND THE REGISTRATION OF THE SHARES FOR SALE TO THE
PUBLIC AS CONTEMPLATED BY THIS AGREEMENT, DO NOT GIVE RISE TO ANY RIGHTS
(INCLUDING “PIGGY-BACK” REGISTRATION RIGHTS) BY ANY OTHER PERSON OR ENTITY TO
HAVE ANY COMMON STOCK OR OTHER SECURITIES OF THE COMPANY REGISTERED WITH THE SEC
OR ANY OTHER GOVERNMENTAL AUTHORITY.  THE COMPANY MAY ENTER INTO ONE OR MORE
OTHER AGREEMENTS AFTER THE DATE HEREOF IN CONNECTION WITH THE ISSUANCE AND SALE
OF ADDITIONAL SHARES TO ADDITIONAL OTHER PURCHASERS IN ADDITIONAL OTHER
PLACEMENT OFFERINGS THAT MAY OBLIGATE THE COMPANY TO INCLUDE THE ADDITIONAL
SHARES TOGETHER WITH THE SHARES IN A REGISTRATION STATEMENT; PROVIDED, HOWEVER,
THAT THE COMPANY (I) WILL NOT GRANT ANY REGISTRATION RIGHTS THAT ARE SUPERIOR OR
IN PREFERENCE TO THE SHARES HELD BY THE PURCHASERS, AND (II) WILL GIVE PRIOR
WRITTEN NOTICE TO THE PURCHASERS HEREUNDER AS TO THE TERMS AND CONDITIONS OF THE
COMPANY’S OBLIGATION TO INCLUDE ANY SUCH ADDITIONAL SHARES UNDER THE
REGISTRATION STATEMENT COVERING THE SHARES WITHIN A REASONABLE PERIOD OF TIME
PRIOR TO THE CLOSING OF THE SALE OF THE ADDITIONAL SHARES.

 

(K)           ABSENCE OF LITIGATION.  EXCEPT AS DISCLOSED IN THE SEC DOCUMENTS,
THERE IS NO ACTION, SUIT, CLAIM, OR PROCEEDING, OR, TO THE COMPANY’S KNOWLEDGE,
ANY OTHER INQUIRY OR INVESTIGATION, BEFORE OR BY ANY COURT, PUBLIC BOARD,
GOVERNMENT AGENCY, SELF-REGULATORY ORGANIZATION OR BODY PENDING OR, TO THE
KNOWLEDGE OF THE COMPANY, THREATENED AGAINST OR AFFECTING THE COMPANY OR ANY
SUBSIDIARY THAT WOULD, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR BE REASONABLY
LIKELY TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(L)            COMPLIANCE.  EXCEPT AS WOULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE OR BE REASONABLY LIKELY TO RESULT IN A MATERIAL ADVERSE EFFECT,
(I) NEITHER THE COMPANY NOR ANY SUBSIDIARY IS IN DEFAULT UNDER OR IN VIOLATION
OF (AND NO EVENT HAS OCCURRED THAT HAS NOT BEEN WAIVED THAT, WITH NOTICE OR
LAPSE OF TIME OR BOTH, WOULD RESULT IN A DEFAULT BY THE COMPANY OR ANY
SUBSIDIARY UNDER), NOR HAS THE COMPANY OR ANY SUBSIDIARY RECEIVED WRITTEN NOTICE
OF A CLAIM THAT IT IS IN DEFAULT UNDER OR THAT IT IS IN VIOLATION OF ANY
INDENTURE, LOAN OR CREDIT AGREEMENT OR ANY OTHER AGREEMENT OR INSTRUMENT

 

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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) NEITHER THE COMPANY NOR
ANY SUBSIDIARY IS IN VIOLATION OF ANY ORDER OF ANY COURT.  ARBITRATOR OR
GOVERNMENTAL BODY, OR (III) NEITHER THE COMPANY NOR ANY SUBSIDIARY IS OR HAS
BEEN IN VIOLATION OF ANY STATUTE, RULE OR REGULATION OF ANY GOVERNMENTAL
AUTHORITY.

 

(M)          TITLE TO ASSETS.  THE COMPANY AND EACH SUBSIDIARY HAS GOOD AND
MARKETABLE TITLE IN ALL PERSONAL PROPERTY OWNED BY THEM THAT IS MATERIAL TO THE
BUSINESS OF THE COMPANY AND EACH SUBSIDIARY, IN EACH CASE FREE AND CLEAR OF ALL
LIENS, EXCEPT FOR LIENS THAT DO NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR
BE REASONABLY LIKELY TO RESULT IN A MATERIAL ADVERSE EFFECT.  ANY REAL PROPERTY
AND FACILITIES HELD UNDER LEASE BY THE COMPANY OR ANY SUBSIDIARY IS HELD BY IT
UNDER VALID, SUBSISTING AND ENFORCEABLE LEASES OF WHICH THE COMPANY AND EACH
SUBSIDIARY IS IN MATERIAL COMPLIANCE.

 

(N)           NO GENERAL SOLICITATION;  PLACEMENT AGENT’S 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
SHARES.  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 HAS NOT ENGAGED ANY PLACEMENT AGENT OR OTHER AGENT IN CONNECTION WITH
THE SALE OF THE SHARES IN THE OFFERING.

 

(O)           PRIVATE PLACEMENT.  NEITHER THE COMPANY OR ITS AFFILIATES, NOR ANY
OTHER PERSON OR ENTITY AUTHORIZED BY THE COMPANY TO ACT ON ITS BEHALF, HAS
ENGAGED IN A GENERAL SOLICITATION OR GENERAL ADVERTISING (WITHIN THE MEANING OF
REGULATION D OF THE SECURITIES ACT) OF INVESTORS WITH RESPECT TO OFFERS OR SALES
OF THE SHARES IN THE OFFERING.  THE COMPANY HAS OFFERED THE SHARES FOR SALE ONLY
TO THE PURCHASERS AND CERTAIN OTHER “ACCREDITED INVESTORS” WITHIN THE MEANING OF
RULE 501 OF REGULATION D UNDER THE SECURITIES ACT.  NEITHER THE COMPANY, 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 SHARES IN THE OFFERING AS CONTEMPLATED
HEREBY OR (II) CAUSE THE OFFERING OF THE SHARES TO BE INTEGRATED WITH PRIOR
OFFERINGS OF SECURITIES BY THE COMPANY FOR PURPOSES OF ANY APPLICABLE LAW,
REGULATION OR STOCKHOLDER APPROVAL PROVISIONS, INCLUDING, WITHOUT LIMITATION,
UNDER THE RULES AND REGULATIONS OF ANY EXCHANGE OR TRADING MARKET, IN A MANNER
THAT WOULD DISQUALIFY THIS OFFERING FROM THE EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT AFFORDED BY REGULATION D.  ASSUMING THE ACCURACY OF’ THE
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS, NO REGISTRATION UNDER THE
SECURITIES ACT IS REQUIRED FOR THE OFFER AND SALE OF THE SHARES UNDER THE
OFFERING BY THE COMPANY TO THE PURCHASERS AS CONTEMPLATED HEREBY.

 

(P)           NO INVESTMENT COMPANY STATUS.  THE COMPANY AND EACH OF ITS
SUBSIDIARIES IS NOT NOW, AND AFTER THE SALE OF THE SHARES IN THE OFFERING AND
THE

 

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APPLICATION OF THE NET PROCEEDS FROM THE SALE OF THE SHARES, WILL NOT BE, AN
“INVESTMENT COMPANY” WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED.

 

(Q)           EXCHANGE & LISTING COMPLIANCE.  THE SALE AND ISSUANCE OF THE
SHARES DOES NOT CONTRAVENE THE RULES AND REGULATIONS OF ANY EXCHANGE OR TRADING
MARKET ON WHICH THE COMMON STOCK IS LISTED OR QUOTED.

 

(R)            INTERNAL ACCOUNTING CONTROLS.  BASED SOLELY UPON THE COMPANY’S
INTERNAL REVIEW AND ASSESSMENT, AND WITHOUT SEPARATE REVIEW BY INDEPENDENT
ACCOUNTANTS, THE COMPANY REASONABLY BELIEVES THAT THE COMPANY MAINTAINS A SYSTEM
OF INTERNAL ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE REASONABLE ASSURANCE THAT
(I) TRANSACTIONS ARE EXECUTED IN ACCORDANCE WITH MANAGEMENT’S GENERAL OR
SPECIFIC AUTHORIZATIONS, (II) TRANSACTIONS ARE RECORDED AS NECESSARY TO PERMIT
PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES AND TO MAINTAIN ASSET ACCOUNTABILITY, (III) ACCESS TO
ASSETS IS PERMITTED ONLY IN ACCORDANCE WITH MANAGEMENT’S GENERAL OR SPECIFIC
AUTHORIZATION, AND (IV) THE RECORDED ACCOUNTABILITY FOR ASSETS IS COMPARED WITH
THE EXISTING ASSETS AT REASONABLE INTERVALS AND APPROPRIATE ACTION IS TAKEN WITH
RESPECT TO ANY DIFFERENCES.

 

(S)           SARBANES-OXLEY ACT.  BASED SOLELY UPON THE COMPANY’S INTERNAL
REVIEW AND ASSESSMENT, AND WITHOUT SEPARATE REVIEW BY INDEPENDENT ACCOUNTANTS OR
LEGAL COUNSEL, THE COMPANY REASONABLY BELIEVES THAT IT 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.

 

(T)            PATENTS AND TRADEMARKS.  THE COMPANY AND EACH SUBSIDIARY OWNS, OR
POSSESSES ADEQUATE RIGHTS OR LICENSES TO USE, ALL TRADEMARKS, TRADE NAMES,
SERVICE MARKS, SERVICE MARK REGISTRATIONS, SERVICE NAMES, PATENTS, PATENT
RIGHTS, COPYRIGHTS.  INVENTIONS, LICENSES, APPROVALS, GOVERNMENTAL
AUTHORIZATIONS, TRADE SECRETS AND OTHER INTELLECTUAL PROPERTY RIGHTS
(“INTELLECTUAL PROPERTY RIGHTS”) NECESSARY TO CONDUCT THEIR RESPECTIVE
BUSINESSES AS NOW CONDUCTED.  NONE OF THE COMPANY’S OR ANY SUBSIDIARY’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 ANY
SUBSIDIARY OF INTELLECTUAL PROPERTY RIGHTS OF OTHERS.  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 ANY
SUBSIDIARY REGARDING ITS INTELLECTUAL PROPERTY RIGHTS.

 

(U)           REGISTRATION STATEMENT MATTERS.  THE COMPANY MEETS THE ELIGIBILITY
REQUIREMENTS FOR USE OF A REGISTRATION STATEMENT ON FORM S-1 FOR THE RESALE OF
THE SHARES BY THE PURCHASERS.  THE COMPANY IS NOT AWARE OF ANY FACTS OR
CIRCUMSTANCES THAT WOULD PROHIBIT OR DELAY THE PREPARATION AND FILING OF A
REGISTRATION STATEMENT WITH RESPECT TO THE SHARES.

 

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5.             REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER;
COVENANTS OF THE COMPANY

 

The Purchaser represents, warrants and covenants to the Company as follows:

 

5.1           SECURITIES LAW REPRESENTATIONS, WARRANTIES AND COVENANTS

 

(A)           THE PURCHASER IS KNOWLEDGEABLE, SOPHISTICATED AND EXPERIENCED IN
MAKING, AND IS QUALIFIED TO MAKE, DECISIONS WITH RESPECT TO INVESTMENTS IN
SHARES REPRESENTING AN INVESTMENT DECISION LIKE THAT INVOLVED IN THE PURCHASE OF
THE SHARES, INCLUDING INVESTMENTS IN SECURITIES ISSUED BY THE COMPANY, AND HAS
REQUESTED, RECEIVED, REVIEWED AND CONSIDERED ALL INFORMATION IT DEEMS RELEVANT
IN MAKING AN INFORMED DECISION TO PURCHASE THE SHARES.  THE PURCHASER IS NOT
RELYING, IN MAKING ITS DECISION TO PURCHASE THE SHARES, ON ANY ORAL
REPRESENTATIONS OR STATEMENTS MADE BY THE COMPANY’S PERSONNEL, AND IS RELYING
SOLELY ON THE INFORMATION CONTAINED IN THE COMPANY’S SEC DOCUMENTS.  THE
PURCHASER HAS CAREFULLY CONSIDERED THE POTENTIAL RISKS RELATING TO THE COMPANY
AND A PURCHASE OF THE SHARES, INCLUDING THE RISKS IDENTIFIED UNDER -RISK
FACTORS” IN THE SEC DOCUMENTS, AND FULLY UNDERSTANDS THAT THE SHARES ARE
SPECULATIVE AND INCLUDE A HIGH DEGREE OF RISK OF LOSS.  THE PURCHASER
ACKNOWLEDGES THAT NO ASSURANCES ARE GIVEN BY THE COMPANY THAT ANY PENDING PLANS
WILL BE COMPLETED.

 

(B)           THE PURCHASER IS ACQUIRING THE SHARES IN THE ORDINARY COURSE OF
ITS BUSINESS AND FOR ITS OWN ACCOUNT.  AND HAS NO PRESENT INTENTION OF
DISTRIBUTING ANY OF THE SHARES NOR ANY ARRANGEMENT OR UNDERSTANDING WITH ANY
OTHER PERSONS REGARDING THE DISTRIBUTION OF SUCH SHARES, OR AS WOULD OTHERWISE
NOT BE IN VIOLATION OF THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS.

 

(C)           THE PURCHASER HAS COMPLETED OR CAUSED TO BE COMPLETED AND
DELIVERED TO THE COMPANY THE STOCK CERTIFICATE QUESTIONNAIRE AND THE
REGISTRATION STATEMENT QUESTIONNAIRE ATTACHED TO THIS AGREEMENT AS APPENDICES I
AND II, FOR USE IN PREPARATION OF THE CERTIFICATES, ANY NECESSARY FILINGS
REQUIRED BY APPLICABLE STATE SECURITIES LAWS, AND THE REGISTRATION STATEMENT (AS
DEFINED IN SECTION 7.2(A) BELOW), AND THE ANSWERS TO THE QUESTIONNAIRES ARE TRUE
AND CORRECT AND WILL BE TRUE AND CORRECT AS OF THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.

 

(D)           THE PURCHASER UNDERSTANDS THAT NO UNITED STATES FEDERAL OR STATE
AGENCY OR ANY OTHER GOVERNMENT OR GOVERNMENTAL AGENCY HAS PASSED ON OR MADE ANY
RECOMMENDATION OR ENDORSEMENT OF THE SHARES OR THE FAIRNESS OR SUITABILITY OF
THE INVESTMENT IN THE SHARES NOR HAVE SUCH AUTHORITIES PASSED UPON OR ENDORSED
THE MERITS OF THE OFFERING OF THE SHARES.

 

(E)           THE PURCHASER IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF
RULE 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT.  THE PURCHASER IS
ABLE TO BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE SHARES.

 

(F)            THE PURCHASER UNDERSTANDS THAT THE OFFER AND SALE OF THE SHARES
TO THE PURCHASER HAVE NOT BEEN AND ARE NOT BEING REGISTERED UNDER THE SECURITIES
ACT OR ANY STATE SECURITIES LAWS, AND THE SHARES MAY NOT BE OFFERED FOR SALE,
SOLD, ASSIGNED, PLEDGED,

 

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TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL (I) SUBSEQUENTLY
REGISTERED UNDER A SHELF REGISTRATION BEING FILED BY THE COMPANY, (II) THE
PURCHASER SHALL HAVE DELIVERED TO THE COMPANY AN OPINION OF COUNSEL, REASONABLY
ACCEPTABLE TO THE COMPANY IN A GENERALLY ACCEPTABLE FORM, TO THE EFFECT THAT
SUCH SHARES TO BE OFFERED FOR SALE, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR
OTHERWISE DISPOSED OF MAY BE SO OFFERED FOR SALE.  SOLD, ASSIGNED, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION, OR (III) THE PURCHASER PROVIDES THE COMPANY WITH WRITTEN
REASONABLE ASSURANCE THAT SUCH SHARES CAN BE OR ARE BEING OFFERED FOR SALE,
SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF PURSUANT TO, AND
IN COMPLIANCE WITH, RULE 144 UNDER THE SECURITIES ACT; PROVIDED, FURTHER, THAT
IN NO EVENT MAY THE SHARES BE OFFERED FOR SALE, SOLD, ASSIGNED, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF PRIOR TO 60 DAYS AFTER THE CLOSING.

 

(G)           THE PURCHASER UNDERSTANDS THAT THE CERTIFICATES REPRESENTING THE
SHARES PURCHASED BY IT HEREUNDER, UNTIL THE OCCURRENCE OF AN EVENT DESCRIBED IN
SECTION 5.1(1), SHALL BEAR A RESTRICTIVE LEGEND IN SUBSTANTIALLY THE FOLLOWING
FORM (AND A STOP-TRANSFER ORDER MAY BE PLACED AGAINST TRANSFER OF SUCH
CERTIFICATES):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. 
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED, ASSIGNED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, (B) AN OPINION OF COUNSEL, REASONABLY
ACCEPTABLE TO THE COMPANY, IN A GENERALLY ACCEPTED FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (C) WRITTEN
REASONABLE ASSURANCE THAT IT WILL BE DONE PURSUANT TO, AND IN COMPLIANCE WITH,
RULE 144 UNDER SAID ACT.

 

(H)           THE COMPANY AGREES TO CAUSE SUCH LEGEND AND STOP TRANSFER ORDER TO
BE REMOVED FROM THE CERTIFICATES REPRESENTING THE SHARES UPON THE OCCURRENCE OF
AN EVENT DESCRIBED IN SECTION 5.1(F).  FOLLOWING THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT WHICH INCLUDES THE SHARES, OR AT SUCH EARLIER TIME AS A
LEGEND IS NO LONGER REQUIRED FOR THE SHARES, THE COMPANY, PROMPTLY FOLLOWING THE
DELIVERY BY A PURCHASER TO THE COMPANY OR THE COMPANY’S TRANSFER AGENT OF A
LEGENDED CERTIFICATE REPRESENTING SUCH SECURITIES, WILL DELIVER OR CAUSE TO BE
DELIVERED TO SUCH PURCHASER A CERTIFICATE REPRESENTING SUCH SECURITIES THAT IS
FREE FROM ALL RESTRICTIVE LEGENDS.  IF REQUESTED BY A PURCHASER, CERTIFICATES
FOR SECURITIES SUBJECT TO LEGEND REMOVAL HEREUNDER SHALL BE TRANSMITTED BY THE
TRANSFER AGENT OF THE COMPANY TO THE PURCHASERS BY CREDITING THE ACCOUNT OF THE
PURCHASER’S PRIME BROKER WITH THE DEPOSITORY TRUST COMPANY (“DTC”).

 

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(I)            THE PURCHASER WILL COMPLY, AT ITS OWN EXPENSE, WITH ALL
APPLICABLE LAWS AND REGULATIONS IN ANY FOREIGN JURISDICTION IN WHICH IT
PURCHASES, OFFERS, SELLS OR DELIVERS ANY OF THE SHARES.

 

5.2           RESALES OF SHARES

 

(A)           THE COMPANY SHALL NOTIFY THE PURCHASER IF IT DETERMINES, IN GOOD
FAITH FOLLOWING CONSULTATION WITH ITS BOARD OF DIRECTORS OR A COMMITTEE
THEREOF.  THAT AN EVENT HAS HAPPENED AS A RESULT OF WHICH THE REGISTRATION
STATEMENT OR THE PROSPECTUS (AS DEFINED IN SECTION 7.4.1 BELOW) INCLUDES AN
UNTRUE STATEMENT OF MATERIAL FACT OR OMITS TO STATE A MATERIAL FACT REQUIRED TO
BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING IN
LIGHT OF THE CIRCUMSTANCES THEN EXISTING.  UPON RECEIPT OF SUCH NOTICE, THE
PURCHASER WILL SUSPEND ITS USE OF THE PROSPECTUS UNTIL SUCH TIME AS AN AMENDMENT
OR SUPPLEMENT TO THE REGISTRATION STATEMENT OR THE PROSPECTUS HAS BEEN FILED BY
THE COMPANY AND ANY SUCH AMENDMENT TO THE REGISTRATION STATEMENT IS DECLARED
EFFECTIVE BY THE COMMISSION, OR UNTIL SUCH TIME AS THE COMPANY HAS FILED AN
APPROPRIATE REPORT WITH THE COMMISSION PURSUANT TO THE EXCHANGE ACT, IN EACH
CASE TO CORRECT SUCH MISSTATEMENT OR OMISSION.  THE COMPANY SHALL USE ITS BEST
EFFORTS TO PREPARE AND FILE WITH THE COMMISSION ANY SUCH AMENDMENT, SUPPLEMENT
OR REPORT, AS THE CASE MAY BE, AS SOON AS PRACTICABLE AFTER DELIVERING SUCH
NOTICE TO THE PURCHASER.

 

(B)           IN ADDITION TO THE FOREGOING PROVISIONS OF SECTION 5.2(B), THE
COMPANY MAY, UPON WRITTEN NOTICE TO THE PURCHASER, SUSPEND THE USE OF THE
PROSPECTUS FOR UP TO SIXTY (60) DAYS, NO MORE THAN THIRTY (30) DAYS OF WHICH MAY
BE CONSECUTIVE, IN ANY 365-DAY PERIOD (LESS THE NUMBER OF DAYS IN SUCH 365-DAY
PERIOD THAT THE PURCHASER MUST SUSPEND ITS USE OF THE PROSPECTUS PURSUANT TO
SECTION 5.2(A)) BASED ON THE REASONABLE DETERMINATION OF THE COMPANY’S BOARD OF
DIRECTORS OR A COMMITTEE THEREOF THAT THERE IS A SIGNIFICANT BUSINESS PURPOSE
FOR SUCH DETERMINATION, SUCH AS PENDING CORPORATE DEVELOPMENTS, PUBLIC FILINGS
WITH THE SEC OR SIMILAR EVENTS.  NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
IN SECTION 5.2(A), THE COMPANY SHALL IN NO EVENT BE REQUIRED TO DISCLOSE THE
BUSINESS PURPOSE FOR WHICH IT HAS SUSPENDED THE USE OF THE PROSPECTUS PURSUANT
TO THIS SECTION 5.2(B) IF THE COMPANY DETERMINES IN ITS GOOD FAITH JUDGMENT THAT
THE BUSINESS PURPOSE SHOULD REMAIN CONFIDENTIAL.

 

(C)           THE COMPANY SHALL NOTIFY THE PURCHASER (I) OF ANY REQUEST BY THE
COMMISSION FOR AN AMENDMENT OR ANY SUPPLEMENT TO SUCH REGISTRATION STATEMENT OR
ANY RELATED PROSPECTUS, OR ANY OTHER INFORMATION REQUEST BY ANY OTHER
GOVERNMENTAL AGENCY DIRECTLY RELATING TO THE OFFERING OF THE SHARES, AND (II) OF
THE ISSUANCE BY THE COMMISSION OF ANY STOP ORDER SUSPENDING THE EFFECTIVENESS OF
SUCH REGISTRATION STATEMENT OR OF ANY ORDER PREVENTING OR SUSPENDING THE USE OF
ANY RELATED PROSPECTUS OR THE INITIATION OR THREAT OF ANY PROCEEDING FOR THAT
PURPOSE.

 

(D)           THE PURCHASER FURTHER COVENANTS TO NOTIFY THE COMPANY PROMPTLY OF
THE SALE OF ANY OF ITS SHARES.

 

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5.3           DUE EXECUTION, DELIVERY AND PERFORMANCE

 

(A)           THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY THE
PURCHASER AND CONSTITUTES A VALID AND BINDING OBLIGATION OF THE PURCHASER,
ENFORCEABLE AGAINST THE PURCHASER IN ACCORDANCE WITH ITS TERMS, EXCEPT AS SUCH
ENFORCEABILITY MAY BE LIMITED BY (I) APPLICABLE BANKRUPTCY OR OTHER SIMILAR LAWS
RELATING TO, OR AFFECTING GENERALLY THE ENFORCEMENT OF, CREDITORS’ RIGHTS OR
REMEDIES, (II) GENERAL PRINCIPLES OF EQUITY OR (III) APPLICABLE LAWS AND
CONSIDERATION OF PUBLIC POLICY RELATING TO INDEMNIFICATION AND CONTRIBUTION
PROVISIONS.

 

(B)           THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT AND THE
FULFILLMENT OF THE TERMS OF THIS AGREEMENT HAVE BEEN DULY AUTHORIZED BY ALL
NECESSARY CORPORATE, AGENCY OR OTHER ACTION AND WILL NOT CONFLICT WITH OR
VIOLATE THE PROVISIONS OF THE ORGANIZATIONAL DOCUMENTS OF THE PURCHASER,
INCLUDING, WITHOUT LIMITATION, ITS CHARTER, BYLAWS, PARTNERSHIP AGREEMENT OR
OPERATING AGREEMENT, AS APPLICABLE, OR ANY APPLICABLE STATUTE, LAW, RULE,
REGULATION, ORDINANCE, DECISION, DIRECTIVE OR ORDER, EXCEPT AS WOULD NOT,
INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY
OF THE PURCHASER TO CONSUMMATE THE TRANSACTION CONTEMPLATED HEREUNDER.

 

6.             SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS

 

Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchasers in this Agreement shall survive the execution of this Agreement,
the delivery to the Purchasers of the Shares being purchased and the payment
therefor.

 

7.             FORM D FILING; REGISTRATION; COMPLIANCE WITH THE SECURITIES ACT;
COVENANTS

 

7.1           REGULATION D.  THE COMPANY SHALL:  FILE IN A TIMELY MANNER A
FORM D RELATING TO THE SALE OF THE SHARES UNDER THIS AGREEMENT, PURSUANT TO
REGULATION D UNDER THE SECURITIES ACT;

 

7.2           REGISTRATION OF SHARES

 

The Company shall:

 

(A)           AS SOON AS PRACTICABLE AFTER THE CLOSING DATE, BUT IN NO EVENT
LATER THAN THE 45TH DAY FOLLOWING THE CLOSING DATE, PREPARE AND FILE WITH THE
COMMISSION A REGISTRATION STATEMENT ON FORM S-3 (OR, IF THE COMPANY IS
INELIGIBLE TO USE FORM S-3, THEN ON SUCH OTHER FORM AS IS AVAILABLE FOR SUCH
REGISTRATION) REGISTERING UNDER THE SECURITIES ACT THE SALE OF THE SHARES BY THE
PURCHASERS FROM TIME TO TIME ON THE FACILITIES OF ANY NATIONAL SECURITIES
EXCHANGE ON WHICH THE COMMON STOCK IS TRADED OR IN PRIVATELY NEGOTIATED
TRANSACTIONS (THE “REGISTRATION STATEMENT”);

 

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(B)           USE ITS REASONABLE BEST EFFORTS TO CAUSE THE COMMISSION TO NOTIFY
THE COMPANY OF THE COMMISSION’S WILLINGNESS TO DECLARE THE REGISTRATION
STATEMENT EFFECTIVE ON OR BEFORE 90 DAYS AFTER THE CLOSING DATE;

 

(C)           CAUSE THE SHARES TO BE DULY LISTED FOR TRADING ON THE NASDAQ
GLOBAL MARKET CONCURRENTLY WITH THE EFFECTIVENESS OF THE REGISTRATION STATEMENT;

 

(D)           IF FOR ANY REASON, THE SEC DOES NOT PERMIT ALL SHARES TO BE
INCLUDED IN THE REGISTRATION STATEMENT SUCH THAT THE REGISTRATION STATEMENT MAY
BE USED FOR RESALES IN A MANNER THAT PERMITS THE CONTINUOUS RESALE AT THE MARKET
BY THE PURCHASERS AS SELLING STOCKHOLDERS PARTICIPATING THEREIN WITHOUT BEING
NAMED THEREIN AS “UNDERWRITERS”, THEN THE COMPANY SHALL PREPARE AND FILE WITH
THE SEC ONE OR MORE SEPARATE REGISTRATION STATEMENTS THAT MEETS SUCH CRITERIA
WITH RESPECT TO ANY SUCH SHARES NOT INCLUDED IN THE PREVIOUS REGISTRATION
STATEMENT.

 

(I)            THE COMPANY WILL THEN USE ITS BEST EFFORTS AT THE FIRST
OPPORTUNITY THAT IS PERMITTED BY THE SEC, BUT IN NO EVENT LATER THAN THE LATER
OF SIXTY (60) CALENDAR DAYS FROM THE DATE SUBSTANTIALLY ALL OF THE SECURITIES
REGISTERED UNDER THE REGISTRATION STATEMENT HAVE BEEN SOLD BY THE PURCHASERS OR
SIX (6) MONTHS FROM THE DATE THE REGISTRATION STATEMENT WAS DECLARED EFFECTIVE,
TO REGISTER FOR RESALE THE SHARES THAT HAVE BEEN EXCLUDED FROM BEING REGISTERED
(PROVIDED SUCH REGISTRATION STATEMENT MEETS THE CRITERIA SET FORTH ABOVE AS TO
SELLING STOCKHOLDERS NOT BEING DEEMED TO BE UNDERWRITERS).  THE COMPANY SHALL
USE ALL REASONABLE BEST EFFORTS TO CAUSE ANY SUCH REGISTRATION STATEMENT TO BE
DECLARED EFFECTIVE WITHIN SEVENTY-FIVE (75) DAYS FOLLOWING THE FILING THEREOF.

 

(II)           IN THE EVENT THE SEC DOES NOT PERMIT A REGISTRATION STATEMENT TO
INCLUDE ALL OF THE SHARES FOR THE REASONS SET FORTH IN THE THIS PARAGRAPH, THEN
THE COMPANY SHALL REDUCE THE NUMBER OF SHARES TO BE INCLUDED IN SUCH
REGISTRATION STATEMENT BY ALL PURCHASERS UNTIL SUCH TIME AS THE SEC SHALL SO
PERMIT SUCH REGISTRATION STATEMENT TO BECOME EFFECTIVE AND BE USED FOR RESALES
IN A MANNER THAT PERMITS THE CONTINUOUS RESALE AT THE MARKET BY THE PURCHASERS
PARTICIPATING THEREIN WITHOUT BEING NAMED THEREIN AS “UNDERWRITERS”.  IN MAKING
SUCH REDUCTION, THE COMPANY SHALL REDUCE THE NUMBER OF SHARES TO BE INCLUDED BY
ALL PURCHASERS ON A PRO RATA BASIS BASED UPON THE NUMBER OF SHARES OTHERWISE
REQUIRED TO BE INCLUDED FOR EACH PURCHASER.

 

(E)           NOTIFY PURCHASER PROMPTLY UPON THE REGISTRATION STATEMENT, AND ANY
POST-EFFECTIVE AMENDMENT THERETO, BEING DECLARED EFFECTIVE BY THE COMMISSION;

 

(F)            PREPARE AND FILE WITH THE COMMISSION SUCH AMENDMENTS AND
SUPPLEMENTS TO THE REGISTRATION STATEMENT AND THE PROSPECTUS (AS DEFINED IN
SECTION 7.4.1 BELOW) AND TAKE SUCH OTHER ACTION, IF ANY, AS MAY BE NECESSARY TO
KEEP THE REGISTRATION STATEMENT EFFECTIVE UNTIL THE EARLIER OF (I) THE DATE ON
WHICH ALL OF THE SHARES MAY BE RESOLD BY THE PURCHASERS WITHOUT REGISTRATION AND
WITHOUT REGARD TO ANY VOLUME LIMITATIONS BY REASON OF RULE 144(K) UNDER THE
SECURITIES ACT OR ANY OTHER RULE OF SIMILAR EFFECT (TAKING INTO ACCOUNT THE
STATUS OF ANY PURCHASER THAT MAY BE DEEMED TO BE AN “AFFILIATE” OF THE COMPANY
FOR PURPOSES OF RULE 144), (II) ALL OF THE SHARES HAVE BEEN SOLD

 

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PURSUANT TO THE REGISTRATION STATEMENT OR RULE 144 UNDER THE SECURITIES ACT OR
ANY OTHER RULE OF SIMILAR EFFECT, OR (III) THE SECOND ANNIVERSARY OF THE CLOSING
DATE.

 

(G)           PROMPTLY FURNISH TO THE PURCHASER WITH RESPECT TO THE SHARES
REGISTERED UNDER THE REGISTRATION STATEMENT SUCH REASONABLE NUMBER OF COPIES OF
THE PROSPECTUS, INCLUDING ANY SUPPLEMENTS TO OR AMENDMENTS OF THE PROSPECTUS, IN
ORDER TO FACILITATE THE PUBLIC SALE OR OTHER DISPOSITION OF ALL OR ANY OF THE
SHARES BY THE PURCHASERS;

 

(H)           DURING THE PERIOD WHEN COPIES OF THE PROSPECTUS ARE REQUIRED TO BE
DELIVERED UNDER THE SECURITIES ACT OR THE EXCHANGE ACT, FILE ALL DOCUMENTS
REQUIRED TO BE FILED WITH THE COMMISSION PURSUANT TO SECTION 13, 14 OR 15 OF THE
EXCHANGE ACT WITHIN THE TIME PERIODS REQUIRED BY THE EXCHANGE ACT AND THE
RULES AND REGULATIONS PROMULGATED THERE UNDER:

 

(I)            FILE DOCUMENTS REQUIRED OF THE COMPANY FOR CUSTOMARY BLUE SKY
CLEARANCE IN ALL STATES REQUIRING BLUE SKY CLEARANCE; PROVIDED, HOWEVER, THAT
THE COMPANY SHALL NOT BE REQUIRED TO QUALIFY TO DO BUSINESS OR CONSENT TO
SERVICE OF PROCESS IN ANY JURISDICTION IN WHICH IT IS NOT NOW SO QUALIFIED OR
HAS NOT SO CONSENTED; AND

 

(J)            PROMPTLY FILE WITH THE SEC A REQUEST FOR ACCELERATION IN
ACCORDANCE WITH RULE 461 PROMULGATED UNDER THE SECURITIES ACT AFTER THE DATE
THAT THE COMPANY IS NOTIFIED (ORALLY OR IN WRITING, WHICHEVER IS EARLIER) BY THE
SEC THAT A REGISTRATION STATEMENT WILL NOT BE “REVIEWED,” OR WILL NOT BE SUBJECT
TO FURTHER REVIEW, SUCH THAT THE REGISTRATION STATEMENT SHALL BE DECLARED
EFFECTIVE NO LATER THAN 5 TRADING DAYS AFTER SUCH NOTIFICATION;

 

(K)           PROMPTLY NOTIFY THE PURCHASERS IN WRITING OF THE EXISTENCE OF ANY
FACT OR THE HAPPENING OF ANY EVENT, DURING THE REGISTRATION STATEMENT PERIOD
(BUT NOT AS TO THE SUBSTANCE OF ANY SUCH FACT OR EVENT), THAT MAKES ANY
STATEMENT OF A MATERIAL FACT MADE IN THE REGISTRATION STATEMENT, THE PROSPECTUS,
ANY AMENDMENT OR SUPPLEMENT THERETO, OR ANY DOCUMENT INCORPORATED BY REFERENCE
THEREIN UNTRUE, OR THAT REQUIRES THE MAKING OF ANY ADDITIONS TO OR CHANGES IN
THE REGISTRATION STATEMENT OR THE PROSPECTUS IN ORDER TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING; PROVIDED, HOWEVER, THAT NO NOTICE BY THE COMPANY SHALL
BE REQUIRED PURSUANT TO THIS SUBSECTION (K) IN THE EVENT THAT THE COMPANY
CONTEMPORANEOUSLY FILES A PROSPECTUS SUPPLEMENT OR AMENDMENT TO UPDATE THE
PROSPECTUS, WHICH, IN EITHER CASE, CONTAINS THE REQUISITE INFORMATION WITH
RESPECT TO SUCH MATERIAL EVENT THAT RESULTS IN SUCH REGISTRATION STATEMENT NO
LONGER CONTAINING ANY SUCH UNTRUE OR MISLEADING STATEMENTS;

 

(L)            FURNISH TO EACH PURCHASER UPON WRITTEN REQUEST, FROM THE DATE OF
THIS AGREEMENT UNTIL THE END OF THE REGISTRATION PERIOD, ONE COPY OF ITS
PERIODIC REPORTS FILED WITH THE SEC PURSUANT TO THE EXCHANGE ACT AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER; AND

 

(M)          PAY AND BEAR ALL EXPENSES IN CONNECTION WITH THE PROCEDURES
DESCRIBED IN OF THIS SECTION 7.2 AND THE REGISTRATION OF THE SHARES PURSUANT TO
THE REGISTRATION STATEMENT(S) OTHER THAN FEES AND EXPENSES, IF ANY, OF LEGAL
COUNSEL OR OTHER

 

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ADVISERS TO THE PURCHASERS OR UNDERWRITING DISCOUNTS, BROKERAGE FEES AND
COMMISSIONS INCURRED BY THE PURCHASERS, IF ANY; PROVIDED, HOWEVER, THAT THE
COMPANY SHALL PAY ALL REASONABLE FEES AND DISBURSEMENTS OF ONLY ONE COUNSEL TO
THE PURCHASERS.

 

7.3           TRANSFER OF SHARES AFTER REGISTRATION.  THE PURCHASER AGREES THAT
IT WILL NOT EFFECT ANY DISPOSITION OF THE SHARES OR ITS RIGHT TO PURCHASE THE
SHARES THAT WOULD CONSTITUTE A SALE WITHIN THE MEANING OF THE SECURITIES ACT,
EXCEPT AS CONTEMPLATED IN THE REGISTRATION STATEMENT REFERRED TO IN SECTION 7.1
OR AS OTHERWISE PERMITTED BY LAW, AND THAT IT WILL PROMPTLY NOTIFY THE COMPANY
OF ANY CHANGES IN THE INFORMATION SET FORTH IN THE REGISTRATION STATEMENT
REGARDING THE PURCHASER OR ITS PLAN OF DISTRIBUTION.

 

7.4           INDEMNIFICATION.  FOR THE PURPOSE OF THIS SECTION 7.4, THE TERM
“REGISTRATION STATEMENT” SHALL INCLUDE ANY PRELIMINARY OR FINAL PROSPECTUS,
EXHIBIT, SUPPLEMENT OR AMENDMENT INCLUDED IN OR RELATING TO THE REGISTRATION
STATEMENT REFERRED TO IN SECTION 7.2.

 

7.4.1        INDEMNIFICATION BY THE COMPANY.  SUBJECT TO SECTION 7.4.5, THE
COMPANY AGREES TO INDEMNIFY AND HOLD HARMLESS THE PURCHASER, THE PURCHASER’S
OFFICERS, DIRECTORS, TRUSTEES, PARTNERS, MEMBERS, EMPLOYEES AND AGENTS, AND EACH
PERSON, IF ANY, WHO CONTROLS OR IS UNDER COMMON CONTROL WITH THE PURCHASER
WITHIN THE MEANING OF THE SECURITIES ACT (EACH, A “PURCHASER INDEMNITEE),
AGAINST ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES, JOINT OR SEVERAL,
TO WHICH SUCH PURCHASER INDEMNITEES MAY BECOME SUBJECT, UNDER THE SECURITIES
ACT, THE EXCHANGE ACT, OR ANY OTHER FEDERAL OR STATE STATUTORY LAW OR
REGULATION, OR AT COMMON LAW OR OTHERWISE (INCLUDING IN SETTLEMENT OF ANY
LITIGATION, IF SUCH SETTLEMENT IS EFFECTED WITH THE WRITTEN CONSENT OF THE
COMPANY), INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES (OR
ACTIONS IN RESPECT THEREOF AS CONTEMPLATED BELOW) ARISE OUT OF OR ARE BASED UPON
ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF ANY MATERIAL FACT CONTAINED
OR INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES, AND ALL OTHER DOCUMENTS FILED AS A PART THEREOF,
INCLUDING ANY INFORMATION DEEMED TO BE A PART THEREOF AS OF THE TIME OF
EFFECTIVENESS PURSUANT TO PARAGRAPH (B) OF RULE 430A, OR PURSUANT TO RULE 434,
UNDER THE SECURITIES ACT, OR IN THE PROSPECTUS RELATED THERETO, IN THE FORM
FIRST FILED WITH THE COMMISSION PURSUANT TO RULE 424(B) UNDER THE SECURITIES ACT
OR FILED AS PART OF THE REGISTRATION STATEMENT AT THE TIME OF EFFECTIVENESS IF
NO RULE 424(B) FILING IS REQUIRED (THE “PROSPECTUS”), OR ANY AMENDMENT OR
SUPPLEMENT TO THE REGISTRATION STATEMENT OR PROSPECTUS, OR ARISE OUT OF OR ARE
BASED UPON THE OMISSION OR ALLEGED OMISSION TO STATE IN ANY OF THEM A MATERIAL
FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS IN ANY OF
THEM, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING,
AND WILL REIMBURSE THE PURCHASER INDEMNITEE FOR REASONABLE LEGAL AND OTHER
EXPENSES AS SUCH EXPENSES ARE INCURRED BY SUCH PURCHASER INDEMNITEE OR
CONTROLLING PERSON IN CONNECTION WITH INVESTIGATING, DEFENDING, SETTLING,
COMPROMISING OR PAYING ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY, EXPENSE OR
ACTION; PROVIDED, HOWEVER, THAT THE COMPANY WILL NOT BE LIABLE IN ANY SUCH CASE
TO A PURCHASER INDEMNITEE TO THE EXTENT THAT ANY SUCH LOSS, CLAIM, DAMAGE,
LIABILITY OR EXPENSE ARISES OUT OF OR IS BASED UPON (I) AN UNTRUE STATEMENT OR
ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION MADE IN THE
REGISTRATION STATEMENT, THE PROSPECTUS OR ANY AMENDMENT OR SUPPLEMENT THERETO IN
RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED TO THE
COMPANY BY OR

 

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ON BEHALF OF A PURCHASER EXPRESSLY FOR USE IN THE REGISTRATION STATEMENT, THE
PROSPECTUS OR ANY AMENDMENT OR SUPPLEMENT THERETO, OR (II) THE FAILURE OF THE
APPLICABLE PURCHASER TO COMPLY WITH THE COVENANTS AND AGREEMENTS CONTAINED IN
SECTION 5.2 OR 7.2 OF THIS AGREEMENT REGARDING THE RESALE OF THE SHARES, OR
(III) THE INACCURACY OF ANY REPRESENTATIONS AND WARRANTIES MADE BY THE PURCHASER
IN THIS AGREEMENT OR (IV) ANY UNTRUE STATEMENT OR OMISSION OF A MATERIAL FACT
REQUIRED TO MAKE SUCH STATEMENT NOT MISLEADING IN ANY PROSPECTUS THAT IS
CORRECTED IN ANY SUBSEQUENT PROSPECTUS OR SUPPLEMENT THERETO THAT WAS DELIVERED
TO THE APPLICABLE PURCHASER A REASONABLE AMOUNT OF TIME BEFORE THE PERTINENT
SALE OR SALES BY SUCH PURCHASER OR (V) A DIRECT CLAIM AGAINST THE COMPANY BY
SUCH PURCHASER INDEMNITEE IF SUCH PURCHASER INDEMNITEE IS A PERSON THAT IS UNDER
COMMON CONTROL WITH ANY PURCHASER (AS OPPOSED TO A THIRD-PARTY CLAIM AGAINST
SUCH PURCHASER INDEMNITEE).

 

7.4.2        INDEMNIFICATION BY THE PURCHASER.  SUBJECT TO SECTION 7.3.5, THE
PURCHASER WILL SEVERALLY AND NOT JOINTLY INDEMNIFY AND HOLD HARMLESS THE
COMPANY, EACH OF ITS DIRECTORS, EACH OF ITS OFFICERS WHO SIGNED THE REGISTRATION
STATEMENT AND EACH PERSON, IF ANY, WHO CONTROLS THE COMPANY WITHIN THE MEANING
OF THE SECURITIES ACT, AGAINST ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
EXPENSES TO WHICH THE COMPANY, EACH OF ITS DIRECTORS, EACH OF ITS OFFICERS WHO
SIGNED THE REGISTRATION STATEMENT OR CONTROLLING PERSON MAY BECOME SUBJECT,
UNDER THE SECURITIES ACT, THE EXCHANGE ACT, OR ANY OTHER FEDERAL OR STATE
STATUTORY LAW OR REGULATION, OR AT COMMON LAW OR OTHERWISE (INCLUDING IN
SETTLEMENT OF ANY LITIGATION, IF SUCH SETTLEMENT IS EFFECTED WITH THE WRITTEN
CONSENT OF SUCH PURCHASER), INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES
OR EXPENSES (OR ACTIONS IN RESPECT THEREOF AS CONTEMPLATED BELOW) ARISE OUT OF
OR ARE BASED UPON (I) ANY FAILURE ON THE PART OF SUCH PURCHASER TO COMPLY WITH
THE COVENANTS AND AGREEMENTS CONTAINED IN SECTION 5.2 OR 7.2 OF THIS AGREEMENT
REGARDING THE RESALE OF THE SHARES OR (II) THE INACCURACY OF ANY REPRESENTATIONS
AND WARRANTIES MADE BY SUCH PURCHASER IN THIS AGREEMENT OR (III) ANY UNTRUE OR
ALLEGED UNTRUE STATEMENT OF ANY MATERIAL FACT CONTAINED IN THE REGISTRATION
STATEMENT, THE PROSPECTUS, OR ANY AMENDMENT OR SUPPLEMENT THERETO, OR ARISE OUT
OF OR ARE BASED UPON THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A
MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING, IN EACH CASE TO THE EXTENT, BUT ONLY TO THE EXTENT, THAT
SUCH UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED
OMISSION WAS MADE IN THE REGISTRATION STATEMENT, THE PROSPECTUS, OR ANY
AMENDMENT OR SUPPLEMENT THERETO, IN RELIANCE UPON AND IN CONFORMITY WITH
WRIT-TEN INFORMATION FURNISHED TO THE COMPANY BY OR ON BEHALF OF SUCH PURCHASER
EXPRESSLY FOR USE THEREIN AND SUCH PURCHASER WILL REIMBURSE THE COMPANY, EACH OF
ITS DIRECTORS, EACH OF ITS OFFICERS WHO SIGNED THE REGISTRATION STATEMENT AND
EACH CONTROLLING PERSON FOR REASONABLE LEGAL AND OTHER EXPENSES AS SUCH EXPENSES
ARE INCURRED BY THE COMPANY, EACH OF ITS DIRECTORS, EACH OF ITS OFFICERS WHO
SIGNED THE REGISTRATION STATEMENT AND EACH CONTROLLING PERSON IN CONNECTION WITH
INVESTIGATING, DEFENDING, SETTLING, COMPROMISING OR PAYING ANY SUCH LOSS, CLAIM,
DAMAGE, LIABILITY, EXPENSE OR ACTION; PROVIDED, HOWEVER, THAT THE PURCHASER
SHALL NOT BE LIABLE FOR ANY SUCH UNTRUE OR ALLEGED UNTRUE STATEMENT OR OMISSION
OR ALLEGED OMISSION OF WHICH THE PURCHASER HAS DELIVERED TO THE COMPANY IN
WRITING A CORRECTION OF SUCH UNTRUE STATEMENT OR OMISSION OF A MATERIAL FACT A
REASONABLE AMOUNT OF TIME BEFORE THE OCCURRENCE OF THE TRANSACTION FROM OR UPON
WHICH SUCH LOSS, CLAIM, DAMAGE, LIABILITY OR EXPENSE AROSE OR WAS BASED.

 

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7.4.3       INDEMNIFICATION PROCEDURE.

 

(A)           PPROMPTLY AFTER RECEIPT BY AN INDEMNIFIED PARTY UNDER THIS
SECTION 7.4 OF NOTICE OF THE THREAT OR COMMENCEMENT OF ANY ACTION, SUCH
INDEMNIFIED PARTY WILL, IF A CLAIM IN RESPECT THEREOF IS TO BE MADE AGAINST AN
INDEMNIFYING PARTY UNDER THIS SECTION 7.4, PROMPTLY NOTIFY THE INDEMNIFYING
PARTY IN WRITING OF THE CLAIM; BUT THE OMISSION SO TO NOTIFY THE INDEMNIFYING
PARTY WILL NOT RELIEVE IT FROM ANY LIABILITY WHICH IT MAY HAVE TO ANY
INDEMNIFIED PARTY FOR CONTRIBUTION OR OTHERWISE UNDER THE INDEMNITY AGREEMENT
CONTAINED IN THIS SECTION 7.4 TO THE EXTENT IT IS NOT PREJUDICED AS A RESULT OF
SUCH FAILURE.

 

(B)           IN CASE ANY SUCH ACTION IS BROUGHT AGAINST ANY INDEMNIFIED PART)
AND SUCH INDEMNIFIED PARTY SEEKS OR INTENDS TO SEEK INDEMNITY FROM AN
INDEMNIFYING PARTY, THE INDEMNIFYING PARTY WILL BE ENTITLED TO PARTICIPATE IN,
AND, TO THE EXTENT THAT IT MAY WISH, JOINTLY WITH ALL OTHER INDEMNIFYING PARTIES
SIMILARLY NOTIFIED, TO ASSUME THE DEFENSE THEREOF WITH COUNSEL REASONABLY
SATISFACTORY TO SUCH INDEMNIFIED PARTY; PROVIDED, HOWEVER, IF THE DEFENDANTS IN
ANY SUCH ACTION INCLUDE BOTH THE INDEMNIFIED PARTY AND THE INDEMNIFYING PARTY
AND THE INDEMNIFIED PARTY SHALL HAVE REASONABLY CONCLUDED THAT THERE MAY BE A
CONFLICT BETWEEN THE POSITIONS OF THE INDEMNIFYING PARTY AND THE INDEMNIFIED
PARTY IN CONDUCTING THE DEFENSE OF ANY SUCH ACTION OR THAT THERE MAY BE LEGAL
DEFENSES AVAILABLE TO IT OR OTHER INDEMNIFIED PARTIES THAT ARE DIFFERENT FROM OR
ADDITIONAL TO THOSE AVAILABLE TO THE INDEMNIFYING PARTY, THE INDEMNIFIED PARTY
OR PARTIES SHALL HAVE THE RIGHT TO SELECT SEPARATE COUNSEL TO ASSUME SUCH LEGAL
DEFENSES AND TO OTHERWISE PARTICIPATE IN THE DEFENSE OF SUCH ACTION ON BEHALF OF
SUCH INDEMNIFIED PARTY OR PARTIES.  UPON RECEIPT OF NOTICE FROM THE INDEMNIFYING
PARTY TO SUCH INDEMNIFIED PARTY OF ITS ELECTION SO TO ASSUME THE DEFENSE OF SUCH
ACTION AND APPROVAL BY THE INDEMNIFIED PARTY OF COUNSEL, WHICH APPROVAL SHALL
NOT BE UNREASONABLY WITHHELD, THE INDEMNIFYING PARTY WILL NOT BE LIABLE TO SUCH
INDEMNIFIED PARTY UNDER THIS SECTION 7.4 FOR ANY LEGAL OR OTHER EXPENSES
SUBSEQUENTLY INCURRED BY SUCH INDEMNIFIED PARTY IN CONNECTION WITH THE DEFENSE
THEREOF UNLESS:

 

(I)            THE INDEMNIFIED PARTY SHALL HAVE EMPLOYED SUCH COUNSEL IN
CONNECTION WITH THE ASSUMPTION OF LEGAL DEFENSES IN ACCORDANCE WITH THE PROVISO
TO THE PRECEDING SENTENCE (IT BEING UNDERSTOOD, HOWEVER, THAT THE INDEMNIFYING
PARTY SHALL NOT BE LIABLE FOR THE EXPENSES OF INURE THAN ONE SEPARATE COUNSEL,
APPROVED BY SUCH INDEMNIFYING PARTY REPRESENTING ALL OF THE INDEMNIFIED PARTIES
WHO ARE PARTIES TO SUCH ACTION), OR

 

(II)           THE INDEMNIFYING PARTY SHALL NOT HAVE EMPLOYED COUNSEL REASONABLY
SATISFACTORY TO THE INDEMNIFIED PARTY TO REPRESENT THE INDEMNIFIED PARTY WITHIN
A REASONABLE TIME AFTER NOTICE OF COMMENCEMENT OF ACTION, IN EACH OF WHICH CASES
THE REASONABLE FEES AND EXPENSES OF COUNSEL SHALL BE AT THE EXPENSE OF THE
INDEMNIFYING PARTY.

 

7.4.4        CONTRIBUTION.  IF THE INDEMNIFICATION PROVIDED FOR IN THIS
SECTION 7.4 IS REQUIRED BY CLAUSE (I) OF SECTION 7.4.1 OR CLAUSE (III) OF
SECTION 7.4.2 BUT IS FOR ANY REASON HELD TO BE UNAVAILABLE TO OR OTHERWISE
INSUFFICIENT TO HOLD HARMLESS AN INDEMNIFIED PARTY UNDER THIS SECTION 7.4 IN
RESPECT TO ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR

 

18

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EXPENSES REFERRED TO IN THIS AGREEMENT, THEN EACH APPLICABLE INDEMNIFYING PARTY
SHALL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY SUCH INDEMNIFIED PARTY AS A
RESULT OF ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES REFERRED TO IN
THIS AGREEMENT IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT THE RELATIVE
FAULT OF THE COMPANY AND THE PURCHASER IN CONNECTION WITH THE STATEMENTS OR
OMISSIONS, THE INACCURACIES IN THE REPRESENTATIONS AND WARRANTIES IN THIS
AGREEMENT OR THE BREACH OF COVENANTS AND AGREEMENTS IN THIS AGREEMENT THAT
RESULTED IN SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES, AS WELL AS
ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS.  THE RELATIVE FAULT OF THE COMPANY
AND THE EACH PURCHASER SHALL BE DETERMINED BY REFERENCE TO, AMONG OTHER THINGS,
WHETHER THE UNTRUE OR ALLEGED STATEMENT OF A MATERIAL FACT OR THE OMISSION OR
ALLEGED OMISSION TO STATE A MATERIAL FACT OR THE INACCURATE OR THE ALLEGED
INACCURATE REPRESENTATION OR WARRANTY RELATES TO INFORMATION SUPPLIED BY THE
COMPANY OR BY SUCH PURCHASER AND THE PARTIES’ RELATIVE INTENT, KNOWLEDGE, ACCESS
TO INFORMATION AND OPPORTUNITY TO CORRECT OR PREVENT SUCH STATEMENT OR
OMISSION.  THE AMOUNT PAID OR PAYABLE BY A PARTY AS A RESULT OF THE LOSSES,
CLAIMS, DAMAGES, LIABILITIES AND EXPENSES REFERRED TO ABOVE SHALL BE DEEMED TO
INCLUDE, SUBJECT TO THE LIMITATIONS SET FORTH IN SECTION 7.4.3, ANY LEGAL OR
OTHER FEES OR EXPENSES REASONABLY INCURRED BY SUCH PARTY IN CONNECTION WITH
INVESTIGATING OR DEFENDING ANY ACTION OR CLAIM.  THE PROVISIONS SET FORTH IN
SECTION 7.4.3 WITH RESPECT TO THE NOTICE OF THE THREAT OR COMMENCEMENT OF ANY
THREAT OR ACTION SHALL APPLY IF A CLAIM FOR CONTRIBUTION IS TO BE MADE UNDER
THIS SECTION 7.4.4; PROVIDED, HOWEVER, THAT NO ADDITIONAL NOTICE SHALL BE
REQUIRED WITH RESPECT TO ANY THREAT OR ACTION FOR WHICH NOTICE HAS BEEN GIVEN
UNDER SECTION 7.4 FOR PURPOSES OF INDEMNIFICATION.  THE COMPANY AND THE
PURCHASER AGREE THAT IT WOULD NOT BE JUST AND EQUITABLE IF CONTRIBUTION PURSUANT
TO THIS SECTION 7.4 WERE DETERMINED SOLELY BY PRO RATA ALLOCATION (EVEN IF THE
PURCHASERS WERE TREATED AS ONE ENTITY FOR SUCH PURPOSE) OR BY ANY OTHER METHOD
OF ALLOCATION WHICH DOES NOT TAKE ACCOUNT OF THE EQUITABLE CONSIDERATIONS
REFERRED TO IN THIS PARAGRAPH.  NOTWITHSTANDING THE PROVISIONS OF THIS
SECTION 7.4, NO PURCHASER SHALL BE REQUIRED TO CONTRIBUTE ANY AMOUNT IN EXCESS
OF THE AMOUNT BY WHICH THE TOTAL PROCEEDS RECEIVED BY IT FROM THE SALE OF THE
SHARES EXCEEDS THE AMOUNT OF ANY DAMAGES THAT SUCH PURCHASER 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.  EACH PURCHASER’S OBLIGATIONS TO CONTRIBUTE PURSUANT TO THIS
SECTION 7.4 ARE SEVERAL AND NOT JOINT.

 

7.4.5        LIMITS ON LIABILITY.  IN NO EVENT SHALL THE AGGREGATE LIABILITY
HEREUNDER OF THE PURCHASER EXCEED:  (X) THE PURCHASE PRICE PAID BY THE PURCHASER
FOR THE SHARES IT BOUGHT HEREUNDER WITH RESPECT TO THE MATTERS DESCRIBED IN
CLAUSES (I) AND (II) OF SECTION 7.4.2; AND (Y) THE NET PROCEEDS TO SUCH
PURCHASER AS A RESULT OF THE SALE OF SHARES PURSUANT TO A REGISTRATION
STATEMENT, PROSPECTUS OR ANY AMENDMENT OR SUPPLEMENT THERETO WITH RESPECT TO THE
MATTERS DESCRIBED IN CLAUSE (III) OF SECTION 7.4.2.

 

7.5           RULE 144 INFORMATION.  UNTIL THE EARLIER OF (I) THE DATE ON WHICH
ALL THE SHARES MAY BE RESOLD BY THE PURCHASERS WITHOUT REGISTRATION AND WITHOUT
REGARD TO ANY VOLUME LIMITATIONS BY REASON OF RULE 144(K) UNDER THE SECURITIES
ACT OR ANY OTHER RULE OF SIMILAR EFFECT (TAKING INTO ACCOUNT THE STATUS OF ANY
PURCHASER THAT MAY BE DEEMED TO BE AN “AFFILIATE” OF THE COMPANY FOR PURPOSES OF
RULE 144) OR (II) ALL OF THE SHARES HAVE BEEN

 

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SOLD PURSUANT TO THE REGISTRATION STATEMENT OR RULE 144 UNDER THE SECURITIES ACT
OR ANY OTHER RULE OF SIMILAR EFFECT, THE COMPANY SHALL FILE ALL REPORTS REQUIRED
TO BE FILED BY IT UNDER THE SECURITIES ACT.  THE RULES AND REGULATIONS
PROMULGATED THEREUNDER AND THE EXCHANGE ACT SO LONG AS IT IS SUBJECT TO SUCH
REQUIREMENTS AND SHALL TAKE SUCH FURTHER REASONABLE ACTION TO THE EXTENT
REQUIRED TO ENABLE THE PURCHASER TO SELL THE SHARES PURSUANT TO RULE 144 UNDER
THE SECURITIES ACT (AS SUCH RULE MAY BE AMENDED FROM TIME TO TIME).

 

8.             NOTICES

 

All notices, requests, consents and other communications under this Agreement
shall be in writing, shall be mailed by first-class registered or certified
airmail, confirmed facsimile or nationally recognized overnight express courier
postage prepaid, and shall be delivered as addressed as follows:

 

(A)           IF TO THE COMPANY, TO:
EBIX, INC.
FIVE CONCOURSE PARKWAY, SUITE 3200
ATLANTA, GA 30328
ATTENTION:  ROBIN RAINA
TELEPHONE:  678-281-2031
FACSIMILE:  678-281-2019

 

or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and

 

(B)           IF TO THE PURCHASER, AT ITS ADDRESS OR FACSIMILE NUMBER AS SET
FORTH ON THE SIGNATURE PAGE TO THIS AGREEMENT, OR AT SUCH OTHER ADDRESS OR
ADDRESSES OR FACSIMILE NUMBER OR NUMBERS AS MAY HAVE BEEN FURNISHED TO THE
COMPANY IN WRITING.

 

Such notice shall be deemed effectively given upon confirmation of receipt by
facsimile, one business day after deposit with such overnight courier or three
days after deposit of such registered or certified airmail with the U.S. Postal
Service, as applicable.

 

9.             MODIFICATION; AMENDMENT; TERMINATION.

 

This Agreement may not be modified or amended except pursuant to an instrument
in writing signed by the Company and the Purchaser.

 

10.           ENTIRE AGREEMENT.

 

This Agreement supersedes all other prior oral or written agreements between the
parties with respect to the matters discussed herein and contains the entire
understanding with respect to the matters covered herein.

 

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11.           HEADINGS.

 

The headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.

 

12.           SEVERABILITY.

 

If any provision contained in this Agreement should be held to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby.

 

13.           GOVERNING LAW; JURISDICTION.

 

This Agreement shall be governed by and construed in accordance with the laws of
the state of Delaware and the federal law of the United States of America,
without giving effect to any choice of law or conflict of law provision or
rule that would cause the application of the laws of any other jurisdiction.

 

14.           COUNTERPARTS.

 

This Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party to this Agreement and delivered to the other
parties.

 

15.           SUCCESSORS AND ASSIGNS.

 

This Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns:  provided that the Purchaser may not
assign its rights or obligations hereunder without the consent of the Company.

 

16.           NO THIRD-PARTY BENEFICIARIES.

 

This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other person.

 

17.           GENERAL MATTERS.

 

(A)           MATERIAL NON-PUBLIC INFORMATION.  THE COMPANY AND EACH PURCHASER
ACKNOWLEDGE AND CONFIRM THEIR MUTUAL UNDERSTANDINGS AS FOLLOWS:

 

(I)            THE COMPANY HAS NOT PROVIDED TO ANY PURCHASER ANY MATERIAL
NON-PUBLIC INFORMATION OTHER THAN INFORMATION RELATED TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, ALL OF WHICH INFORMATION RELATED TO THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE DISCLOSED BY THE COMPANY IN A TIMELY
MANNER.

 

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(II)           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 SUBSIDIARY OR THEIR
BUSINESSES, 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.

 

(III)          NO PURCHASER MAKES OR HAS MADE ANY REPRESENTATIONS OR WARRANTIES
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY OTHER THAN THOSE SET FORTH
EXPRESSLY IN THIS AGREEMENT.

 

(IV)          THE COMPANY AND EACH PURCHASER SHALL BE RELYING ON THE FOREGOING
REPRESENTATIONS IN EFFECTING TRANSACTIONS IN SECURITIES OF THE COMPANY AS
CONTEMPLATED UNDER THIS AGREEMENT.

 

(B)           PUBLIC DISCLOSURE.  WITHIN A TIMELY MANNER AND IN COMPLIANCE WITH
APPLICABLE SEC RULES AND EXCHANGE REQUIREMENTS, THE COMPANY SHALL FILE A CURRENT
REPORT ON FORM 8-K DESCRIBING THE TERMS OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT IN THE FORM REQUIRED BY THE EXCHANGE ACT AND ATTACHING THIS AGREEMENT
AS AN EXHIBIT TO SUCH FILING (THE “8-K FILING”), BUT NOT INCLUDING THE NAMES OF
THE PURCHASERS OR THE INDIVIDUAL AMOUNTS OF SHARES PURCHASED HEREBY WITHOUT THE
PURCHASER’S CONSENT.

 

(C)           CONFIDENTIALITY.  EXCEPT FOR SUCH DISCLOSURE AS THE COMPANY IS
ADVISED BY COUNSEL IS REQUIRED TO BE INCLUDED IN DOCUMENTS FILED WITH THE SEC OR
OTHERWISE REQUIRED BY LAW, THE COMPANY SHALL NOT USE THE NAME OF, OR MAKE
REFERENCE TO, ANY PURCHASER OR ANY OF ITS AFFILIATES IN ANY PRESS RELEASE OR IN
ANY PUBLIC MANNER (INCLUDING ANY REPORTS OR FILINGS MADE BY THE COMPANY UNDER
THE EXCHANGE ACT) WITHOUT SUCH PURCHASER’S PRIOR WRITTEN CONSENT, WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD.  EXCEPT AS REQUIRED BY LAW, THE PURCHASER
SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY MAKE ANY PUBLIC
ANNOUNCEMENT OR ISSUE ANY PRESS RELEASE THAT INCLUDES THE NAME OF THE COMPANY
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

(D)           OTHER PUBLIC DISCLOSURE.  IF A PURCHASER HAS, OR BELIEVES IT HAS,
RECEIVED ANY MATERIAL, NONPUBLIC INFORMATION REGARDING THE COMPANY OR ANY OF ITS
SUBSIDIARIES, IT SHALL PROVIDE THE COMPANY WITH WRITTEN NOTICE THEREOF AND THE
COMPANY SHALL WITHIN FIVE (5) BUSINESS DAYS THEREAFTER, MAKE PUBLIC DISCLOSURE
OF SUCH MATERIAL, NONPUBLIC INFORMATION IF PERMITTED UNDER APPLICABLE LAW OR
WITHOUT BREACH OR VIOLATION OF ANY AGREEMENT, CONTRACT OR OTHER OBLIGATION OF
THE COMPANY UNLESS THE BOARD OF DIRECTORS OF THE COMPANY SHALL DETERMINE THAT
SUCH DISCLOSURE WOULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL AND ADVERSE
EFFECT ON THE COMPANY OR ITS BUSINESS, PROSPECTS, FINANCES OR PROPERTIES.

 

(E)           PARITY OF PURCHASERS.  THE COMPANY HAS NOT AND SHALL NOT ENTER
INTO ANY OTHER AGREEMENT OR ARRANGEMENTS WITH ANY OF THE PURCHASERS THAT IS NOT
ALSO DISCLOSED TO AND MADE AVAILABLE TO THE PURCHASER HEREUNDER, ON A LIKE-KIND
BASIS.  NO CONSIDERATION SHALL BE OFFERED OR PAID TO ANY PERSON TO AMEND OR
CONSENT TO A WAIVER OR

 

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MODIFICATION OF ANY PROVISION OF ANY OF THIS AGREEMENT OR THE SHARES UNLESS THE
SAME CONSIDERATION IS ALSO OFFERED TO ALL OF THE PARTIES TO SUCH AGREEMENTS. 
FOR CLARIFICATION PURPOSES, THIS PROVISION CONSTITUTES A SEPARATE RIGHT GRANTED
TO EACH PURCHASER BY THE COMPANY AND NEGOTIATED SEPARATELY BY EACH PURCHASER,
AND IS INTENDED FOR THE COMPANY TO TREAT THE PURCHASERS AS A CLASS AND SHALL NOT
IN ANY WAY BE CONSTRUED AS THE PURCHASERS ACTING IN CONCERT OR AS A GROUP WITH
RESPECT TO THE PURCHASE, DISPOSITION OR VOTING OF SECURITIES OR OTHERWISE.

 

(F)            INVESTOR STATUS.  THE COMPANY ACKNOWLEDGES AND AGREES THAT EACH
OF THE PURCHASERS IS ACTING SOLELY IN THE CAPACITY OF AN ARM’S LENGTH PURCHASER
WITH RESPECT TO THE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY.  THE COMPANY FURTHER ACKNOWLEDGES THAT NO PURCHASER IS ACTING AS A
FINANCIAL ADVISOR OR FIDUCIARY OF THE COMPANY (OR IN ANY SIMILAR CAPACITY) WITH
RESPECT TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND ANY
INFORMATION OR ADVICE GIVEN BY ANY PURCHASER OR ANY OF THEIR RESPECTIVE
REPRESENTATIVES OR AGENTS IN CONNECTION WITH THE OFFERING, THE AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY IS MERELY INCIDENTAL TO THE
PURCHASER’S PURCHASE OF THE SHARES.  THE COMPANY FURTHER REPRESENTS TO EACH
PURCHASER 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 DIRECTORS, OFFICERS AND INDEPENDENT ADVISORS AND
REPRESENTATIVES.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.

 

EBIX, INC.

 

 

By:

   /S/

 

Robin Raina

President & Chief Executive Officer

 

 

PURCHASER

 

Ashford Capital Management, Inc. w/ discretion f/b/o

 

 

By:

   /S/

 

Name:

Theodore H. Ashford

Title:

Chairman & CEO, Ashford Capital Management, Inc.

Address:

One Walkers Mill Road

 

Wilmington, DE 19807

 

Facsimile: 302-655-4641

 

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