Exhibit 10.1

COMMON STOCK PURCHASE

AGREEMENT

Dated as of March 18, 2011

among

API TECHNOLOGIES CORP.

and

THE PURCHASERS LISTED ON EXHIBIT A

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TABLE OF CONTENTS

 

          Page   ARTICLE I Purchase and Sale of Common Stock      1   

Section 1.1

   Purchase Price and Closing      1   

Section 1.2

   Delivery      2    ARTICLE II Representations and Warranties      2   

Section 2.1

   Representations and Warranties of the Company      2   

Section 2.2

   Representations and Warranties of the Purchasers      5    ARTICLE III
Covenants      7   

Section 3.1

   Delivery of Share Certificates      7   

Section 3.2

   NASDAQ Listing      8   

Section 3.3

   Independent Directors      8   

Section 3.4

   Participation Rights      9    ARTICLE IV Conditions      10   

Section 4.1

   Conditions Precedent to the Obligation of the Company to Close and to Sell
the Shares      10   

Section 4.2

   Conditions Precedent to the Obligation of the Purchasers to Close and to
Purchase the Shares      11    ARTICLE V Certificate Legend      12   

Section 5.1

   Legend      12    ARTICLE VI Termination      13   

Section 6.1

   Termination by Mutual Consent      13   

Section 6.2

   Effect of Termination      13    ARTICLE VII Miscellaneous      13   

Section 7.1

   Fees and Expenses      13   

Section 7.2

   Specific Enforcement; Consent to Jurisdiction      13   

Section 7.3

   Entire Agreement; Amendment      14   

Section 7.4

   Notices      14   

Section 7.5

   Waivers      15   

Section 7.6

   Headings      15   

Section 7.7

   Successors and Assigns      15   

Section 7.8

   No Third Party Beneficiaries      16   

Section 7.9

   Governing Law      16   

Section 7.10

   Survival      16   

Section 7.11

   Counterparts      16   

Section 7.12

   Publicity      16   

Section 7.13

   Securities Law      16   

Section 7.14

   Severability      17   

Section 7.15

   Further Assurances      17   

Section 7.16

   Independent Nature of Purchasers’ Obligations and Rights      17   

 

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Table of Contents

(continued)

 

          Page   EXHIBIT A    LIST OF PURCHASERS      A-1    EXHIBIT B    FORM
OF REGISTRATION RIGHTS AGREEMENT      B-1   

 

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COMMON STOCK PURCHASE AGREEMENT

This COMMON STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of March 18,
2011, is made by and among API Technologies Corp., a Delaware corporation (the
“Company”) and the entities and individuals listed on Exhibit A hereto (each, a
“Purchaser” and collectively, the “Purchasers”).

RECITALS

A. The Company and the Purchasers 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, and the rules and regulations promulgated
thereunder (the “Securities Act”), including Regulation D (“Regulation D”), as
promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act.

B. The Purchasers wish to purchase, and the Company wishes to sell, upon the
terms and conditions stated in this Agreement, up to 17,095,102 shares (the
“Shares”) of common stock, par value $0.001 per share, of the Company (“Common
Stock”).

C. Concurrently with the execution and delivery of this Agreement, the Company
is entering into a Registration Rights Agreement, substantially in the form
attached hereto as Exhibit B (the “Registration Rights Agreement”) with the
Purchasers with respect to the Shares.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:

ARTICLE I

Purchase and Sale of Common Stock

Section 1.1 Purchase Price and Closing. Upon the terms and subject to the
conditions set forth herein, the Company agrees to issue and sell to the
Purchasers and, the Purchasers, severally but not jointly, agree to purchase
that number of Shares at a price per Share equal to $6.00, in each case as set
forth opposite such Purchaser’s name on Exhibit A hereto. The aggregate purchase
price payable by each Purchaser for the Shares that such Purchaser is hereby
agreeing to purchase is set forth opposite such Purchaser’s name on Exhibit A
hereto (the “Purchase Price”). The closing of the purchase and sale of the
Shares to be acquired from the Company under this Agreement (the “Closing”)
shall take place at the offices of Wilson Sonsini Goodrich & Rosati, P.C., 650
Page Mill Road, Palo Alto, California 94304 at 10:00 a.m., Pacific Time (i) on
or before March 18, 2011, provided, that all of the conditions set forth in
Article IV hereof and applicable to the Closing shall have been fulfilled or
waived in accordance herewith, or (ii) at such other time and place or on such
date as the Purchasers purchasing a majority of the Shares hereunder and the
Company may agree upon (the “Closing Date”). The entire Purchase Price payable
by each Purchaser pursuant

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hereto shall be paid by such Purchaser in cash, by wire transfer of immediately
available funds at the Closing.

Section 1.2 Delivery. At the Closing, the Company shall issue to each Purchaser
certificate(s) representing the Shares in such number as is set forth opposite
such Purchaser’s name on Exhibit A hereto against payment of the Purchase Price
therefor by wire transfer of immediately available funds to an account
designated by the Company. At the Closing, each Purchaser and the Company shall
execute and deliver this Agreement, the Registration Rights Agreement and the
other documents set forth in Article IV.

ARTICLE II

Representations and Warranties

Section 2.1 Representations and Warranties of the Company. In order to induce
the Purchasers to enter into this Agreement and to purchase the Shares, the
Company hereby makes the following representations and warranties to the
Purchasers:

(a) Organization, Good Standing and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has the requisite corporate power to own, lease and operate its
properties and assets and to conduct its business as it is now being conducted.
The Company is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except for
any jurisdiction(s) (alone or in the aggregate) in which the failure to be so
qualified will not have a Material Adverse Effect. For the purposes of this
Agreement, “Material Adverse Effect” means any adverse effect on the business,
operations, properties or financial condition of the Company which is material
to the Company taken as a whole. The Company’s subsidiaries are listed on
Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended
May 31, 2010 and are the only subsidiaries, direct or indirect, of the Company.

(b) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and perform this Agreement, the Registration Rights
Agreement and the other agreements and documents contemplated hereby and thereby
and executed by the Company or to which the Company is party (collectively, the
“Transaction Documents”), and to issue and sell the Shares in accordance with
the terms hereof. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly and validly authorized by all necessary
corporate action, and no further consent or authorization of the Company, its
board of directors (the “Board”) or its stockholders is required. Each of the
Transaction Documents constitutes, or shall constitute when executed and
delivered, a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) to the extent that the
indemnification provisions contained in the Registration Rights Agreement may be
limited by applicable law and principles of public policy, (ii) as

 

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limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, and (iii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies or by general
principles of equity.

(c) Capitalization. The authorized capital stock of the Company as of the date
of this Agreement consists of 100,000,000 shares of Common Stock, of which
32,002,272 shares are issued and outstanding as of March 1, 2011 and one share
of Special Voting Stock, $0.01 par value, which is authorized, issued and
outstanding as of March 1, 2011. All of the outstanding shares of Common Stock
and Special Voting Stock have been duly and validly authorized. No shares of
Common Stock or Special Voting Stock of the Company are entitled to preemptive
rights. As of March 1, 2011, except (i) options to purchase 3,259,195 shares of
Common Stock issued pursuant to the Company’s Amended and Restated 2006 Equity
Incentive Plan (the “Plan”) and outstanding as of the date of this Agreement,
(ii) an additional 3,581,585 shares of Common Stock reserved for issuance
pursuant to the Plan, (iii) options to purchase 10,418 shares of Common Stock
that were not issued under the Plan, (iv) 955,362 shares underlying outstanding
warrants and (v) as set forth in the Transaction Documents, there are no
outstanding options, warrants, scrip, rights to subscribe to, call or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company, and there are no
contracts, commitments, understandings, or arrangements by which the Company is
or may become bound to issue additional shares of the capital stock of the
Company or options, securities or rights convertible into shares of capital
stock of the Company. Except as set forth in the Transaction Documents, the
Company is not a party to or bound by any agreement or understanding granting
registration or anti-dilution rights to any person with respect to any of its
equity or debt securities. The Company has furnished or made available to the
Purchasers true and correct copies of the Company’s Certificate of Incorporation
as in effect on the date hereof (the “Certificate”) and the Company’s Bylaws as
in effect on the date hereof (the “Bylaws”).

(d) Issuance of the Shares. The Shares to be issued at the Closing have been
duly authorized by all necessary corporate action and, when paid for or issued
in accordance with the terms hereof, the Shares shall be validly issued and
outstanding, fully paid and nonassessable and free and clear of all liens,
encumbrances and rights of refusal of any kind (other than those arising from
the actions or inactions of the Purchasers themselves), and the holders shall be
entitled to all rights accorded to a holder of Common Stock; provided, however,
that the Shares may be subject to restriction on transfer under state and
federal securities laws.

(e) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not (i) violate any provision of
the Certificate or Bylaws, (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, mortgage, deed of trust, indenture, note, bond,
license, lease agreement, instrument or obligation to which the Company is a
party or by which the Company’s properties or assets are bound, (iii) create or
impose a lien, mortgage, security interest, charge or encumbrance of any nature
on any property or asset of the Company under any agreement or any commitment to
which the Company is a party or by which the

 

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Company is bound or by which any of its properties or assets are bound, or
(iv) result in a violation of any federal, state, local or foreign statute,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected, except, in all cases
other than violations pursuant to clause (i) above, for such conflicts,
defaults, terminations, amendments, acceleration, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect.

(f) Financial Statements. The consolidated financial statements and the related
notes of the Company and its subsidiaries included or incorporated by reference
in the SEC Documents comply in all material respects with the applicable
requirements of the Securities Act, the Exchange Act, and the rules and
regulations of the SEC, as applicable, and fairly present in all material
respects the financial position, results of operations and cash flows of the
Company and its subsidiaries as of the dates indicated and for the periods
specified, subject, in the case of the unaudited financial statements, to the
absence of disclosures normally made in footnotes and to customary year-end
adjustments that are not material. Such financial statements have been prepared
in conformity with U.S. generally accepting accounting principles applied on a
consistent basis throughout the periods covered thereby (except as disclosed in
the SEC Documents filed before the date of this Agreement), and the supporting
schedules included or incorporated by reference in the SEC Documents fairly
present the information required to be stated therein. The other financial
information included or incorporated by reference in the SEC Documents has been
derived from the accounting records of the Company and its subsidiaries and
presents fairly or will present fairly the information shown thereby.

(g) Reporting Status. The Company is subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and has,
in a timely manner, filed all documents that the Company was required to file
thereunder during the twelve (12) months prior to the Closing Date (the “SEC
Documents”). The SEC Documents complied as to form in all material respects with
the SEC’s requirements as of their respective filing dates, and the information
contained therein as of the date thereof did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except to the extent that information
contained in any such document has been revised or superseded by a later filed
SEC Document.

(h) Reporting Company; Form S-3. The Company is not an “ineligible issuer” (as
defined in Rule 405 promulgated under the Securities Act) and is eligible to
register the Shares for resale by the Purchasers on a registration statement on
Form S-3 under the Securities Act. Provided the Purchaser is not deemed to be an
underwriter with respect to any shares, to the Company’s knowledge, there exist
no facts or circumstances (including without limitation any required approvals
or waivers or any circumstances that may delay or prevent the obtaining of
accountant’s consents) that reasonably could be expected to prohibit or delay
the preparation and filing of a registration statement on Form S-3 (the
“Registration Statement”) that will be available for the resale of the Shares by
the Purchasers.

(i) No Undisclosed Events or Circumstances. Since February 28, 2011, except as
set forth in the SEC Documents, no event or circumstance has occurred or exists
with

 

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respect to the Company or its businesses, properties, operations or financial
condition, which, under applicable federal securities law, rule or regulation,
requires public disclosure or announcement by the Company but which has not been
publicly so announced or disclosed.

(j) Securities Act of 1933. The Company has complied and will comply with all
applicable federal and state securities laws in connection with the offer,
issuance and sale of the Shares hereunder. Neither the Company nor anyone acting
on its behalf, directly or indirectly, has or will sell, offer to sell or
solicit offers to buy any of the Shares, or similar securities to, or solicit
offers with respect thereto from, or enter into any preliminary conversations or
negotiations relating thereto with, any person, or has taken or will take any
action such that the issuance and sale of any of the Shares are not exempt from
the registration provisions of the Securities Act and applicable state
securities laws. 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 any of the Shares.

(k) Governmental Approvals. Except for the filing of any notice prior or
subsequent to the Closing that may be required under applicable state and/or
federal securities laws (which if required, shall be filed on a timely basis),
no authorization, consent, approval, license, exemption of, filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality located in the United States is or will be
necessary for, or in connection with, the issuance or delivery of the Shares or
for the performance by the Company of its obligations under the Transaction
Documents.

(l) No Investment Company. Neither the Company nor any of its subsidiaries is or
will be after giving effect to the transactions contemplated by the Purchase
Agreement an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

Section 2.2 Representations and Warranties of the Purchasers. Each of the
Purchasers hereby makes the following representations and warranties to the
Company with respect solely to itself and not with respect to any other
Purchaser:

(a) Organization and Standing of the Purchasers. If such Purchaser is an entity,
such Purchaser is a corporation, limited liability company or partnership duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization.

(b) Authorization and Power. Such Purchaser has all requisite power and
authority to execute and deliver the Transaction Documents, to purchase the
Shares and to carry out and perform its obligations under the terms of the
Transaction Documents. All action on the part of such Purchaser necessary for
the authorization, execution, delivery and performance of the Transaction
Documents, and the performance of all such Purchaser’s obligations under the
Transaction Documents, has been taken or will be taken prior to the Closing. The
Transaction Documents constitute, or shall constitute when executed and
delivered, valid and legally binding

 

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obligations of such Purchaser enforceable against such Purchaser in accordance
with their terms, except: (i) to the extent that the indemnification provisions
contained in the Registration Rights Agreement may be limited by applicable law
and principles of public policy, (ii) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, and (iii) as limited by
laws relating to the availability of specific performance, injunctive relief or
other equitable remedies or by general principles of equity. No consent,
approval, authorization, order, filing, registration or qualification of or with
any court, governmental authority or third person is required to be obtained by
such Purchaser in connection with the execution and delivery of the Transaction
Documents by such Purchaser or the performance of such Purchaser’s obligations
hereunder or thereunder.

(c) Acquisition for Investment. Such Purchaser is purchasing the Shares solely
for its own account, not as a nominee or agent, and for the purpose of
investment and not with a view to or for resale in connection with the
distribution thereof. Such Purchaser does not have a present intention to sell
any of the Shares, nor a present arrangement (whether or not legally binding) or
intention to effect any distribution of any of the Shares to or through any
person or entity. Such Purchaser acknowledges that it (i) has such knowledge and
experience in financial and business matters such that such Purchaser is capable
of evaluating the merits and risks of its investment in the Company and (ii) is
able to bear the financial risks associated with an investment in the Company.

(d) Rule 144. Such Purchaser understands that the Shares must be held
indefinitely unless such Shares are registered under the Securities Act or an
exemption from registration is available. Such Purchaser acknowledges that it is
familiar with the provisions of Rule 144 promulgated pursuant to the Securities
Act (“Rule 144”), which permit resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, which may include, among
other things, the availability of certain current public information about the
Company; the resale occurring not less than a specified period after a party has
purchased and paid for the security to be sold; the number of shares being sold
during any three-month period not exceeding specified limitations; the sale
being effected through a “brokers’ transaction,” a transaction directly with a
“market maker” or a “riskless principal transaction” (as those terms are defined
in the Securities Act or the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder); and the filing of a Form 144
notice, if applicable, and that such Purchaser has been advised that Rule 144
permits resales only under certain circumstances. Such Purchaser understands
that to the extent that Rule 144 is not available, such Purchaser will be unable
to sell any Shares without either registration under the Securities Act or the
existence of another exemption from such registration requirement. Such
Purchaser understands that, although Rule 144 is not exclusive, the SEC has
expressed its opinion that persons proposing to sell restricted securities
received in a private offering, other than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and the brokers who
participate in the transactions do so at their own risk.

(e) General. Such Purchaser understands that the Shares are being offered and
sold in reliance on a transactional exemption from the registration requirements
of federal and state securities laws, and the Company is relying upon the truth
and accuracy of the

 

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representations, warranties, agreements, acknowledgments and understandings of
such Purchaser set forth herein in order to determine the applicability of such
exemptions and the suitability of such Purchaser to acquire the Shares. Such
Purchaser understands that no United States federal or state agency or any
government or governmental agency has passed upon or made any recommendation or
endorsement of the Shares.

(f) Opportunities for Additional Information. Such Purchaser acknowledges that
such Purchaser has had the opportunity to ask questions of and receive answers
from, or obtain additional information from, the executive officers of the
Company concerning the Transaction Documents, the exhibits and schedules
attached hereto and thereto and the transactions contemplated by the Transaction
Documents, as well as the business, management, financial and other affairs of
the Company, and to the extent deemed necessary in light of such Purchaser’s
personal knowledge of the Company’s affairs, such Purchaser has asked such
questions and received answers to the full satisfaction of such Purchaser. Such
Purchaser believes that it has received all the information such Purchaser
considers necessary or appropriate for deciding whether to purchase the Shares.
Such Purchaser also acknowledges that it is relying solely on its own advisors
and the representations, warranties, covenants, agreements and statements
contained in the Purchase Agreement and in the other Transaction Documents.

(g) No General Solicitation. Such Purchaser acknowledges that the Shares were
not offered to such Purchaser by means of any form of general or public
solicitation or general advertising, or publicly disseminated advertisements or
sales literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio, or (ii) any seminar or meeting to which such
Purchaser was invited by any of the foregoing means of communications.

(h) Accredited Investor. Such Purchaser is an accredited investor (as defined in
Rule 501 of Regulation D), and such Purchaser has such experience in business
and financial matters that it is capable of evaluating the merits and risks of
an investment in the Shares. Such Purchaser acknowledges that an investment in
the Securities is speculative and involves a high degree of risk.

ARTICLE III

Covenants

The Company covenants with each Purchaser as follows:

Section 3.1 Delivery of Share Certificates. At Closing or as soon thereafter as
reasonably possible (but in any event no later than two Business Days
immediately following the Closing Date), the Company shall deliver to each
Purchaser certificates representing the Shares (in such denominations as each
Purchaser may request) acquired by such Purchaser at the Closing.

 

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Section 3.2 NASDAQ Listing. Promptly following the Closing, the Company shall
use its commercially reasonable efforts to cause the Shares to be listed for
trading on the NASDAQ Stock Market as soon as reasonably practicable.

Section 3.3 Independent Directors.

(a) From the date hereof, and until the Company’s listing on the Nasdaq Stock
Market, the Company shall not have less than three (3) independent directors
(with independence being determined in accordance with the listing rules of the
NASDAQ Stock Market).

(b) Until the fifth (5th) anniversary of the date hereof, the Company shall not,
and shall not permit any of its subsidiaries to, without the prior written
consent of a majority of the independent directors of the Company (with
independence being determined in accordance with the listing rules of the NASDAQ
Stock Market), either directly or indirectly:

(i) enter into, modify, or amend any contract, agreement, arrangement, or
transaction with any affiliate of the Company (including Vintage Capital
Management, LLC or any of its affiliates) (including without limitation any
contract, agreement, arrangement, or transaction that would have any support or
administrative services of the Company or its subsidiaries performed by Vintage
Capital Management, LLC or any of its affiliates), other than (x) any contract,
agreement, arrangement, or transaction solely among the Company and any
wholly-owned subsidiaries, and (y) any contract, agreement, arrangement, or
transaction which (A) is entered into by the Company or any of its subsidiaries
in the ordinary course of their respective businesses, consistent with prior
practice, and (B) involves payment of consideration by or to the Company or any
of its subsidiaries and otherwise has a value to the Company or any of its
subsidiaries of less than $100,000;

(ii) effect any reverse stock split or stock combination;

(iii) repurchase, redeem, cancel or otherwise consummate a transaction involving
any securities of the Company if the effect thereof would cause Vintage Capital
Management, LLC and/or its affiliates to own ninety percent (90%) or more of any
class of securities of the Company; or

(iv) approve, enter into or consummate any Change in Control transaction in
which Vintage Capital Management, LLC or any of its affiliates (i) is receiving
any transaction fees or other fees or (ii) is being paid, in respect of any
equity securities of the Company, any consideration in addition to or in a
different form than what is being paid to all other holders of the Common Stock.
For the purposes of this Agreement, “Change in Control” means (i) a change in
ownership or control of the Company effected through a transaction or series of
transactions whereby any individual or entity or related “group” of individuals
or entities directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
possessing more than fifty percent (50%) of the total combined voting power of
the Company’s securities outstanding immediately after such acquisition, whether
by means of a sale, merger, consolidation or otherwise or (ii) the sale

 

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or conveyance of all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole.

Section 3.4 Participation Rights.

(a) If the Company, after the Closing, subsequently authorizes the issuance or
sale of any shares of Common Stock, any securities (including debt securities)
containing options or rights to acquire any shares of Common Stock (other than
as a dividend on the outstanding shares of Common Stock) or any securities
exchangeable for or convertible into Common Stock (collectively, “Securities”),
other than in an Exempt Issuance, the Company shall first offer to sell to each
Purchaser a portion of such Securities, the allocation of which shall be equal
to the number of such Securities multiplied by the quotient determined by
dividing (x) the number of shares of Common Stock held by such Purchaser
(including shares of Common Stock issuable upon conversion or exchange of other
securities of the Company) by (y) the total number of shares of Common Stock
then outstanding (including shares of Common Stock issuable upon conversion or
exchange of other securities of the Company). The Purchasers shall be entitled
to purchase all or any portion of its allotment of such Securities at the most
favorable price and on the most favorable terms as such Securities are to be
offered to any other parties. The purchase price for all Securities offered to
the Purchasers shall be payable in cash or, to the extent otherwise consistent
with the terms offered to any other parties, installments over time. For
purposes of this Agreement, “Exempt Issuance” means any issuance of Securities
(i) as consideration in connection with the acquisition of another company or
business or a joint venture agreement; (ii) to employees or consultants or
directors of the Company or any of its subsidiaries pursuant to arrangements
approved by the Board; (iii) upon conversion or exercise of, or in exchange for,
any securities of the Company or any options or other rights to acquire
securities of the Company; (iv) in connection with any settlement of any action,
suit, proceeding or litigation approved by the Board; (v) in connection with
sponsored research, collaboration, technology license, development, OEM,
marketing or other similar agreements or strategic partnerships approved by the
Board; (vi) to suppliers or third party service providers in connection with the
provision of goods or services pursuant to transactions approved by the Board;
(vii) to banks, equipment lessors, real property lessors, financial institutions
or other persons engaged in the business of making loans pursuant to a debt
financing, commercial leasing or real property leasing transaction approved by
the Board; or (viii) pursuant to any stock split, stock dividend, stock
combination, recapitalization or similar transaction that affects all
stockholders or holders of any class of securities (as the case may be)
proportionately.

(b) In order to exercise its purchase rights hereunder, each Purchaser must
within fifteen (15) days after receipt of written notice from the Company
describing in reasonable detail the Securities being offered, the purchase price
thereof, the payment terms and such Purchaser’s allotment of the Securities
deliver a written notice to the Company describing its election hereunder.

(c) Upon the expiration of the offering period described above, the Company
shall be entitled to sell the Securities which the Purchasers have not elected
to purchase during the 60 days following such expiration on terms and conditions
no more favorable to the purchasers thereof than those offered to the
Purchasers. Any Securities offered or sold by the

 

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Company after such 60-day period must be reoffered to the Purchasers pursuant to
the terms of this Section 3.4.

(d) The provisions of this Section 3.4 shall terminate, with respect to each
Purchaser, upon the date that such Purchaser and its affiliates no longer own in
the aggregate at least five percent (5%) of the outstanding Common Stock
(calculated on a fully converted and exchanged basis).

ARTICLE IV

Conditions

Section 4.1 Conditions Precedent to the Obligation of the Company to Close and
to Sell the Shares. The obligation hereunder of the Company to close and issue
and sell the Shares to the Purchasers on the Closing Date is subject to the
satisfaction or waiver, at or before the Closing, of each of the conditions set
forth below. These conditions are for the Company’s sole benefit and may be
waived by the Company at any time in its sole discretion.

(a) Accuracy of the Purchasers’ Representations and Warranties. The
representations and warranties of each Purchaser in this Agreement shall be true
and correct in all material respects as of the date when made and as of the
Closing as though made at that time, except for representations and warranties
that are expressly made as of a particular date, which shall be true and correct
in all material respects as of such date.

(b) Performance by the Purchasers. Each Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Purchasers at or prior to the Closing Date.

(c) No Suspension, Etc. Trading in the Common Stock shall not have been
suspended by the SEC (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated prior to the
Closing), and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose trades are
reported by Bloomberg, nor shall a banking moratorium have been declared by the
United States authorities, nor shall there have occurred any national or
international calamity or crisis of such magnitude in its effect on any
financial market which, in each case, in the reasonable judgment of the
Purchasers, makes it impracticable or inadvisable to purchase the Shares.

(d) No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

 

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(e) No Proceedings or Litigation. No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company or any of the officers, directors or affiliates of the Company,
seeking to restrain, prevent or change the transactions contemplated by this
Agreement, or seeking damages in connection with such transactions.

(f) Delivery of Purchase Price. The Purchase Price for the Shares shall have
been delivered to the Company by each Purchaser at the Closing.

(g) Delivery of Transaction Documents. The Transaction Documents to which the
Purchasers are party shall have been duly executed and delivered by each of the
Purchasers to the Company.

Section 4.2 Conditions Precedent to the Obligation of the Purchasers to Close
and to Purchase the Shares. The obligation hereunder of the Purchasers to
purchase the Shares and consummate the transactions contemplated by this
Agreement is subject to the satisfaction or waiver, at or before the Closing, of
each of the conditions set forth below. These conditions are for each
Purchaser’s sole benefit and may be waived by each Purchaser at any time in its
sole discretion.

(a) Accuracy of the Company’s Representations and Warranties. Each of the
representations and warranties of the Company in this Agreement shall be true
and correct in all material respects as of the Closing, except for
representations and warranties that speak as of a particular date, which shall
be true and correct in all material respects as of such date.

(b) Performance by the Company. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Closing Date.

(c) No Suspension, Etc. Trading in the Common Stock shall not have been
suspended by the SEC (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated prior to the
Closing), and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose trades are
reported by Bloomberg, nor shall a banking moratorium have been declared by the
United States authorities, nor shall there have occurred any national or
international calamity or crisis of such magnitude in its effect on any
financial market which, in each case, in the reasonable judgment of the
Purchasers, makes it impracticable or inadvisable to purchase the Shares.

(d) No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.

 

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(e) No Proceedings or Litigation. No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company or any of the officers, directors or affiliates of the Company,
seeking to restrain, prevent or change the transactions contemplated by this
Agreement, or seeking damages in connection with such transactions.

(f) Shares. The Company shall have made arrangements for delivery of the
certificates representing the Shares (in such denominations as each Purchaser
may request) being acquired by the Purchasers at the Closing.

(g) Officer’s Certificate. On the Closing Date, the Company shall have delivered
to the Purchasers a certificate of an executive officer of the Company, dated as
of the Closing Date, confirming the accuracy of the Company’s representations,
warranties and covenants as of the Closing Date and confirming the compliance by
the Company with the conditions precedent set forth in Section 4.2(a) and
Section 4.2 (b) as of the Closing Date.

(h) Registration Rights Agreement. As of the Closing Date, the parties shall
have entered into the Registration Rights Agreement.

(i) Minimum Investment. The Company shall have received the entire Purchase
Price from each Purchaser, representing an aggregate amount equal to a minimum
of $100,000,000 in gross proceeds in respect of the sale of the Shares.

ARTICLE V

Certificate Legend

Section 5.1 Legend. Each certificate representing the Shares shall be stamped or
otherwise imprinted with a legend substantially in the following form (in
addition to any legend required by applicable state securities or “blue sky”
laws):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.”

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Shares upon which it is
stamped if, unless otherwise

 

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required by state securities laws, (i) while such Shares are registered for
resale under the Securities Act, (ii) in connection with a sale, assignment or
other transfer, such holder provides the Company with an opinion of counsel
reasonably satisfactory to the Company, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Shares may be made without
registration under the applicable requirements of the Securities Act and that
such legend is no longer required, or (iii) such holder provides the Company
with reasonable assurance that the Shares can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A, and such holder delivers the legended Shares
to the Company or the Company’s transfer agent.

ARTICLE VI

Termination

Section 6.1 Termination by Mutual Consent. This Agreement may be terminated at
any time prior to the Closing Date by the mutual written consent of the Company
and the Purchasers.

Section 6.2 Effect of Termination. In the event of termination by the Company or
the Purchasers, written notice thereof shall forthwith be given to the other
party and the transactions contemplated by this Agreement shall be terminated
without further action by any party. If this Agreement is terminated as provided
in Section 6.1 herein, this Agreement shall become void and of no further force
and effect, except for Sections 7.1 and 7.2. Nothing in this Section 6.2 shall
be deemed to release the Company or any Purchaser from any liability for any
breach under this Agreement or to impair the rights of the Company or such
Purchaser to compel specific performance by the other party of its obligations
under this Agreement.

ARTICLE VII

Miscellaneous

Section 7.1 Fees and Expenses. Each party shall pay the fees and expenses of its
advisors, counsel, accountants and other experts, if any, and all other
expenses, incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement; provided, however, that
the Company shall pay the brokers’, finders’ and placement agents’ fees for the
brokers, finders and placement agents that have been retained by the Company.

Section 7.2 Specific Enforcement; Consent to Jurisdiction.

 

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(a) The Company and the Purchasers acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement or the
other Transaction Documents were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent or cure breaches of
the provisions of this Agreement or the other Transaction Documents and to
enforce specifically the terms and provisions hereof or thereof, this being in
addition to any other remedy to which any of them may be entitled by law or
equity.

(b) With respect to any disputes arising out of or related to this Agreement or
any of the other Transaction Documents or the transactions contemplated hereby
or thereby, the parties consent to the exclusive jurisdiction of, and venue in,
the state courts in Wilmington County in the State of Delaware (or in the event
of exclusive federal jurisdiction, the courts of the District of Delaware). The
parties hereby waive, and agree not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. The
Company and each Purchaser consent to process being served in any such suit,
action or proceeding by mailing a copy thereof 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 in
this Section 7.2 shall affect or limit any right to serve process in any other
manner permitted by law. The Company and the Purchasers hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
the Shares, this Agreement or the Registration Rights Agreement, shall be
entitled to reimbursement for reasonable legal fees from the non-prevailing
party.

Section 7.3 Entire Agreement; Amendment. This Agreement and the Transaction
Documents contain the entire understanding and agreement of the parties with
respect to the matters covered hereby and, except as specifically set forth
herein or in the other Transaction Documents, neither the Company nor any
Purchaser make any representation, warranty, covenant or undertaking with
respect to such matters, and they supersede all prior understandings and
agreements with respect to said subject matter, all of which are merged herein.
No provision of this Agreement may be waived or amended other than by a written
instrument signed by the Company and the holders of at least a majority in
interest of the then-outstanding Shares, and no provision hereof may be waived
other than by a written instrument signed by the party against whom enforcement
of any such amendment or waiver is sought. No such amendment shall be effective
to the extent that it applies to less than all of the holders of the Shares then
outstanding. No consideration shall be offered or paid to any person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration is also offered to all of the parties to
the Transaction Documents or holders of Shares, as the case may be.

Section 7.4 Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery if delivered in person or upon transmission if
sent by telecopy or facsimile at the address or number designated below

 

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(if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received), or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:

 

If to the Company:   

API Technologies Corp.

4705 S. Apopka Vineland Road

Suite 210

Orlando, FL 32819

Attention: Brian Kahn, Chairman and Chief Executive Officer

Facsimile: (208) 728-8007

 

With copies (which shall not constitute notice) to:

 

Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, California 94304

Attn: Bradley L. Finkelstein

Facsimile: (650) 493-6811

If to any Purchaser:    At the address of such Purchaser set forth on Exhibit A
to this Agreement.

Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

Section 7.5 Waivers. No waiver by any party 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 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 accruing to
it thereafter.

Section 7.6 Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.

Section 7.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. After the
Closing, the assignment by a party to this Agreement of any rights hereunder
shall not affect the obligations of such party under this Agreement. Except as

 

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provided herein, the Purchasers may not assign the Shares and their rights under
this Agreement and the other Transaction Documents and any other rights hereto
and thereto without the consent of the Company.

Section 7.8 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

Section 7.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without giving
effect to the choice of law provisions. This Agreement shall not be interpreted
or construed with any presumption against the party causing this Agreement to be
drafted.

Section 7.10 Survival. Unless this Agreement is terminated under Section 6.1,
the representations and warranties of the Company and the Purchasers contained
in Article II shall survive the execution and delivery hereof and the Closing
until the date one (1) year from the Closing Date, and the agreements and
covenants set forth in Articles I, III, V and VII of this Agreement shall
survive the execution and delivery hereof and the Closing hereunder.

Section 7.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart.

Section 7.12 Publicity. The Company agrees that it will not disclose, and will
not include in any public announcement, the names of the Purchasers without the
consent of the Purchasers in accordance with Section 7.3, which consent shall
not be unreasonably withheld or delayed, or unless and until such disclosure is
required by law, rule or applicable regulation, and then only to the extent of
such requirement; provided, however, that the Purchasers acknowledge and agree
that they will be included as selling shareholders in the Registration
Statement.

Section 7.13 Securities Laws. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF
THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF
ANY STATE AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL,
UNLESS THE SALE OF SECURITIES IS EXEMPT

 

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FROM QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

Section 7.14 Severability. The provisions of this Agreement are severable and,
in the event that any court of competent jurisdiction shall determine that any
one or more of the provisions or part of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement and this Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.

Section 7.15 Further Assurances. From and after the date of this Agreement, upon
the request of the Purchasers or the Company, the Company and each Purchaser
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement and the Registration Rights
Agreement.

Section 7.16 Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under any Transaction Document 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 any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto
or thereto, 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 the
Transaction Documents. Each Purchaser confirms that it has independently
participated in the negotiation of the transactions contemplated hereby with the
advice of its own counsel and advisors. Each Purchaser shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.

[Remainder of page intentionally left blank. Signature pages to follow.]

 

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

 

COMPANY: API TECHNOLOGIES CORP. By:  

 

Name:   Brian Kahn Title:   Chairman and Chief Executive Officer

 

[Signature Page to Common Stock Purchase Agreement]

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

 

PURCHASER:

 

 

Email:  

 

Address:  

 

 

Number of Shares:                                                              

Price Per Share: $6.00

Aggregate Purchase Price: $                             

Please provide us with the following information:

 

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

 

2.   The relationship between the Purchaser and the registered holder listed in
response to item 1 above:  

 

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

 

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

 

 

[Signature Page to Common Stock Purchase Agreement]

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EXHIBIT A

LIST OF PURCHASERS

Purchasers

 

Name

   Number of
Shares      Price per Share      Aggregate
Purchase Price  

Richard Schottenfeld

     83,333       $ 6.00       $ 499,998.00   

Schottenfeld Group Holdings, LP

     83,333       $ 6.00       $ 499,998.00   

Paul Stoffel

     150,000       $ 6.00       $ 900,000.00   

Costa Brava Partnership III LP

     900,000       $ 6.00       $ 5,400,000.00   

Doug Topkis

     100,000       $ 6.00       $ 600,000.00   

Eric M. Goldberg

     33,333       $ 6.00       $ 200,000.00   

Donald Wright & Judy Phillips

     25,000       $ 6.00       $ 150,000.00   

Hoak Public Equities LP

     625,000       $ 6.00       $ 3,750,000.00   

Hoak Private Equities 1, LP

     208,334       $ 6.00       $ 1,250,004.00   

Becker Drapkin Partners QPLP

     434,500       $ 6.00       $ 2,607,000.00   

Becker Drapkin Partners Fund

     65,500       $ 6.00       $ 393,000.00   

Matt Drapkin

     41,666       $ 6.00       $ 249,996.00   

Wynnefield Partners Small Cap Value, LP I

     934,088       $ 6.00       $ 5,604,528.00   

Wynnefield Partners Small Cap Value, LP

     684,997       $ 6.00       $ 4,109,982.00   

Wynnefield Small Cap Value Offshore Fund Ltd

     456,665       $ 6.00       $ 2,739,990.00   

Wynnefield Capital Inc. Profit Sharing LLC

     109,250       $ 6.00       $ 655,500.00   

Catalysis Offshore Ltd

     100,000       $ 6.00       $ 600,000.00   

Catlysis Partners LLC

     233,333       $ 6.00       $ 1,399,998.00   

Hayman Capital Master Fund LP

     1,666,667       $ 6.00       $ 10,000,002.00   

Nick A. Merrick Separate Property

     33,333       $ 6.00       $ 200,000.00   

Career Collection Ltd

     333,333       $ 6.00       $ 2,000,000.00   

K2 Principal Fund LP

     250,000       $ 6.00       $ 1,500,000.00   

Horizon Credit Opportunities Master Fund Ltd.

     58,333       $ 6.00       $ 349,998.00   

JMP Fam Holdings Inc.

     41,667       $ 6.00       $ 250,000.00   

Claudio Mannarino

     8,333       $ 6.00       $ 50,000.00   

Thomas Trent Gregax

     4,166       $ 6.00       $ 24,996.00   

The Gramercy Fund

     8,334       $ 6.00       $ 50,004.00   

Icarus Investment Corp

     166,667       $ 6.00       $ 1,000,000.00   

D.A.J.J Family Trust

     166,667       $ 6.00       $ 1,000,000.00   

Phil Dezwirek

     166,667       $ 6.00       $ 1,000,000.00   

LDL Corp

     8,000       $ 6.00       $ 48,000.00   

105711 Ontario Limited

     4,000       $ 6.00       $ 24,000.00   

Billidan Family Trust

     17,000       $ 6.00       $ 102,000.00   

Leonard & Lori Latchman Family Trust

     8,500       $ 6.00       $ 51,000.00   

Spartan Fund Management

     42,000       $ 6.00       $ 252,000.00   

Matrix Small Companies Fund

     65,000       $ 6.00       $ 390,000.00   

The Harvey & Phyllis Sandler Foundation, Inc.

     33,000       $ 6.00       $ 198,000.00   

Harvey Sandler Revocable Trust

     465,000       $ 6.00       $ 2,790,000.00   

GMPIM Equity Opportunities Master Fund LP

     83,002       $ 6.00       $ 498,010.00   

DCF Partners LP

     500,000       $ 6.00       $ 3,000,000.00   

Ron Tarsy

     30,000       $ 6.00       $ 180,000.00   

Greg Arrese

     30,000       $ 6.00       $ 180,000.00   

Curt Schenker

     8,333       $ 6.00       $ 49,998.00   

Michael Alpert

     33,667       $ 6.00       $ 202,000.00   

Thomas Alpert

     8,000       $ 6.00       $ 48,000.00   

Cooper Family Trust dtd 8/1/04

     10,000       $ 6.00       $ 60,000.00   

Jay Cooper

     10,000       $ 6.00       $ 60,000.00   

Palogic Value Fund, LP

     85,000       $ 6.00       $ 510,000.00   

L. Kevin Dann

     200,000       $ 6.00       $ 1,200,000.00   

Glynn Ventures

     166,667       $ 6.00       $ 1,000,002.00   

Carter Pottash

     166,667       $ 6.00       $ 1,000,002.00   

Provident Premier Master Fund Ltd.

     250,000       $ 6.00       $ 1,500,000.00   

Kelleher Family Trust Dtd 1/18/07

     5,000       $ 6.00       $ 30,000.00   

Greenstone Value Opportunity Fund, LP

     35,000       $ 6.00       $ 210,000.00   

Grand Slam Master Fund Ltd

     83,400       $ 6.00       $ 500,400.00   

Black Horse Capital LP

     509,584       $ 6.00       $ 3,057,504.00   

Black Horse Capital Master Fund

     323,750       $ 6.00       $ 1,942,500.00   

Donald Wright & Julie Phillips

     25,000       $ 6.00       $ 150,000.00   

Senator Sidecar Master Fund LP

     4,550,000       $ 6.00       $ 27,300,000.00   

Atlas Allocation Fund, LP

     250,000       $ 6.00       $ 1,500,000.00   

Riley Investment Partners LP

     67,000       $ 6.00       $ 402,000.00   

B. Riley & Co. LLC

     100,000       $ 6.00       $ 600,000.00   

Nokomis Capital LLC

     416,700       $ 6.00       $ 2,500,200.00   

Pyramid Trading LP

     166,667       $ 6.00       $ 1,000,002.00   

Equitec Proprietary Markets LLC

     166,667       $ 6.00       $ 1,000,002.00         17,095,102       $ 6.00
      $ 102,570,614.00   

 

A-1

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EXHIBIT B

FORM OF REGISTRATION RIGHTS AGREEMENT