Exhibit 10(t)

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of July [___],
2015, between Dataram Corporation, a New Jersey corporation (the “Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and permitted assigns, a “Purchaser” and collectively, the
“Purchasers”).

PREAMBLE

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506 promulgated thereunder, the Company desires to
issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully
described in this Agreement (the “Offering”).

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 each Purchaser agree
as follows:

ARTICLE I.

DEFINITIONS

1.1      Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.18.

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

“Buy-In” shall have the meaning ascribed to such term in Section 4.1(g).

“Closing” shall have the meaning ascribed to such term in Section 2.1.

“Closing Date” shall mean such date on which the Closing is held, and is the
Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount at such Closing and
(ii) the Company’s obligations to deliver the Securities to be issued and sold
at such Closing, in each case, have been satisfied or waived.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $1.00 per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed.

 

 

 

“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.

“Copyrights” shall have the meaning ascribed to such term in Section 3.1(w).

“Disclosure Schedules” shall have the meaning ascribed to such term in Section
3.1.

“Disqualification Event” shall have the meaning ascribed to such term in Section
3.1(r).

“Evaluation Date” shall have the meaning ascribed to such term in Section
3.1(ii).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Governmental Entity” means any nation, state, county, city, town, village,
district, or other political jurisdiction of any nature, federal, state, local,
municipal, foreign, or other government, governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal), multi-national
organization or body; or body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature or instrumentality of any of the foregoing,
including any entity or enterprise owned or controlled by a government or a
public international organization or any of the foregoing

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(0).

“Indemnitee” shall have the meaning ascribed to such term in Section 3.1(g).

“Indemnified Liabilities” shall have the meaning ascribed to such term in
Section 3.1(g).

“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(o).

“Issuer Covered Person” shall have the meaning ascribed to such term in Section
3.1(r)

“Legend Removal Date” shall have the meaning ascribed to such term in Section
4.1(c).

“Liens” means a lien, charge pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.

“Listing Default” shall have the meaning ascribed to such term in Section 4.9.

“Marks” shall have the meaning ascribed to such term in Section 3.1(w).

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“Material Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(m).

“Material Permits” shall have the meaning ascribed to such term in Section
3.1(u).

“Maximum Rate” shall have the meaning ascribed to such term in Section 5.21.

“Money Laundering Laws” shall have the meaning ascribed to such term in Section
3.1(bb).

“NASDAQ CM” shall have the meaning ascribed to such term in Section 3.1(x).

“NASDAQ CM Conclusion” shall have the meaning ascribed to such term in Section
3.1(d).

“NASDAQ Rules” means the rules and regulations of The NASDAQ Stock Market LLC

“OFAC” shall have the meaning ascribed to such term in Section 3.1(y).

“Offering” shall have the meaning ascribed to such term in the Preamble.

“Patents” shall have the meaning ascribed to such term in Section 3.1(w).

“Permitted Indebtedness” means Indebtedness existing as of the date hereof as it
exists on the date hereof.

“Per Share Purchase Price” equals $1.00, subject to appropriate adjustment for
reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Stock that occur after the date of this
Agreement.

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

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

“Public Information Failure” shall have the meaning ascribed to such term in
Section 4.2(b).

“Public Information Failure Payments” shall have the meaning ascribed to such
term in Section 4.2(b).

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.7.

“Removal Date” means the date that all of the issued Shares have been sold
pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement
for the Company to be in compliance with the current public information
requirements under Rule 144 and without volume or manner-of-sale restrictions.

“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(d).

“Required Minimum” shall have the meaning ascribed to such term in Section 4.8.

“Rights in Mask Works” shall have the meaning ascribed to such term in Section
3.1(w).

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

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“SEC Filings” shall have the meaning ascribed to such term in Section 3.1(e).

“Securities” means the Shares.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Series B Escrow” means the escrow agreement entered into at or about the date
hereof, by and among the Company, Signature Bank N.A. and the purchasers of
Series B Preferred, pursuant to which the purchasers shall deposit Series B
Subscription Agreements and the subscription amounts therefor with Signature
Bank N.A. to be applied to the transactions contemplated thereunder.

“Series B Preferred” means the 0% Convertible Series B Preferred Stock of the
Company, par value $1.00 per share, offered, issued or sold by the Company as
Units, and all additional securities and agreements in connection therewith,
contemporaneous or following the date hereof.

“Series B Subscription Agreements” means, as to each purchaser of Series B
Preferred, the subscription agreement executed by such purchaser for the Series
B subscription amount set forth therein.

“Shares” means the shares of Common Stock issued or issuable to each Purchaser
pursuant to this Agreement.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock). 

“Subscription Amount” means, as to each Purchaser at each Closing, the aggregate
amount to be paid for Shares purchased hereunder at such Closing as specified
below such Purchaser’s name on the signature page of this Agreement and next to
the heading “Subscription Amount,” in United States dollars and in immediately
available funds.

“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a)
and shall, where applicable and with regard to future events, also include any
direct or indirect subsidiary of the Company formed or acquired after the date
hereof.

“Termination Date” shall have the meaning ascribed to such term in Section 2.1.

“Trade Secrets” shall have the meaning ascribed to such term in Section 3.1(w).

“Trading Day” means a day on which the principal Trading Market is open for
trading; provided, that in the event that the Common Stock is not listed or
quoted for trading on a Trading Market on the date in question, then Trading Day
shall mean a Business Day.

“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
MKT, NASDAQ CM, The NASDAQ Global Market, The NASDAQ Global Select Market, the
New York Stock Exchange, OTCQB, OTCQX, the Bulletin Board or the OTC Pink (or
any successors to any of the foregoing). Notwithstanding the foregoing, term
“Trading Market” shall only include the OTC Pink for any interim period of time
required upon the Company’s delisting from any other Trading Market provided
that the Company shall be required to list its Common Stock for trading or
quotation on another Trading Market (excluding the OTC Pink) promptly upon such
delisting and the failure to do so shall constitute a default under the terms of
this Agreement and the other Transaction Documents.

“Transaction Documents” means this Agreement all exhibits and schedules thereto
and hereto and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

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“Transfer Agent” means American Stock Transfer & Trust Company, LLC, and any
successor transfer agent of the Company.

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b)  if the Common Stock is not then listed or quoted for trading on a
Trading Market and if prices for the Common Stock are then reported on the OTC
Pink Marketplace maintained by OTC Markets Group Inc. (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent
closing price per share of the Common Stock so reported, or (c) in all other
cases, the fair market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Purchasers of a majority in
interest of the Securities then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.

ARTICLE II.

PURCHASE AND SALE

2.1      Closing. On the Closing Date, upon the terms and subject to the
conditions set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell,
and each of the Purchasers, severally and not jointly, agrees to purchase Shares
for an aggregate purchase price $500,000 (or such lesser amount as shall not
exceed 19.99% of the issued and outstanding shares of Common Stock of the
Company, as determined in accordance with the NASDAQ Rules) at the Per Share
Purchase Price, and such purchase and sale being the “Closing”). Prior to the
Closing, each Purchaser shall deliver to the Company such Purchaser’s Closing
Subscription Amount as set forth on the signature page hereto executed by such
Purchaser by a wire transfer of immediately available funds and the Company
shall, on the Closing Date, deliver to each Purchaser a certificate representing
the number of Shares purchased by such Purchaser at the Closing as determined
pursuant to Section 2.2(a). The Company and each Purchaser shall also deliver
the other items set forth in Section 2.2 deliverable at the Closing. Upon
satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3
and receipt of the aggregate Offering amount by the Company, the Closing shall
occur at the principal offices of the Company or such other location as the
parties shall mutually agree. Notwithstanding anything herein to the contrary,
the Closing Date shall occur on or before August 15, 2015 (such outside date,
“Termination Date”). If the Closing is not held on or before the Termination
Date, the Company shall cause each Subscription Amount to be returned, without
interest thereon or deduction therefrom to the Purchaser who delivered such
Subscription Amount.

2.2      Deliveries.

(a)      On or prior to the Closing Date, the Company shall deliver or cause to
be delivered to the Purchasers the following:

(i)      this Agreement duly executed by the Company;

(ii)      legal opinion of Baker & Hostetler LLP, counsel to the Company,
substantially in the form of Exhibit B attached hereto;

(iii)      a certificate evidencing a number of Shares equal to such Purchaser’s
Closing Subscription Amount divided by the Per Share Purchase Price, registered
in the name of such Purchaser;

(iv)      the Officer’s Certificate (as defined herein);

(v)      the Secretary’s Certificate (as defined herein); and

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(vi)      evidence of NASDAQ CM Conclusion.

(b)      On or prior to the Closing Date, each Purchaser shall deliver or cause
to be delivered to the Company the following:

(i)      this Agreement duly executed by such Purchaser; and

(ii)      such Purchaser’s Closing Subscription Amount by wire transfer to the
account specified by the Company on Exhibit A hereto.

2.3      Closing Conditions.

(a)      The obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being met:

(i)      the accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchasers contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);

(ii)      all obligations, covenants and agreements of each Purchaser under this
Agreement required to be performed at or prior to the Closing Date shall have
been performed in all material respects;

(iii)      the delivery by each Purchaser of the items set forth in Section
2.2(b) of this Agreement;

(iv)      the Company shall have received executed signature pages to this
Agreement from Purchasers and the Company shall have received payment of
immediately available funds representing corresponding Subscription Amounts
equal to $500,000, in the aggregate, from such Purchasers in cash; and

(v)      the Company shall, on the Closing Date or, in any event, no later than
45 days after the Closing Date, have accepted subscriptions for at least
$6,000,000 of units consisting of Series B Preferred and warrants to purchase
securities of the Company, subject to terms of the Series B Subscription
Agreements, the Series B Escrow and the governing Certificate of Designation of
Rights, Powers, Preferences, Privileges and Restrictions of the 0% Series B
Convertible Preferred Stock of Dataram Corporation, substantively in the form in
existence on the Closing Date, which substantively final form shall have been
approved by the Company’s Board of Directors as of the Closing Date, the failure
of which shall be deemed a material breach of this Agreement.

(b)      The respective obligations of the Purchasers hereunder in connection
with the Closing are subject to the following conditions being met:

(i)      the representations and warranties of the Company shall have been true
and correct in all material respects on the date of this Agreement (except
whether such representations are qualified by material or material adverse
effect, which shall be true and correct in all respects) and shall be true and
correct as of the Closing as if made on the Closing Date and the Company shall
have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with
by the Company in connection with the consummation of the transactions
contemplated by the Transaction Documents at or prior to the Closing Date and
the Company shall deliver a certificate, executed by its Chief Executive
Officer, dated as of the Closing Date, certifying that the foregoing is true
(the “Officer’s Certificate”);

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(ii)      the Company shall deliver to the Purchasers, a certificate from the
Company, signed by its Secretary or Assistant Secretary, including incumbency
specimen signatures of any signatory of any Transaction Document of the Company
and certifying that the attached copies of the Company’s restated certificate of
incorporation, as amended and bylaws, as amended, and resolutions of the Board
of Directors of the Company approving this the transactions contemplated by this
Agreement, are all true, complete and correct and remain in full force and
effect (the “Secretary’s Certificate”);

(iii)      all obligations, covenants and agreements of the Company under this
Agreement required to be performed at or prior to the Closing Date shall have
been performed;

(iv)      the delivery by the Company of the items set forth in Section 2.2(a)
of this Agreement;

(v)      there shall have been no Material Adverse Effect with respect to the
Company since the date hereof;

(vi)      from the date hereof to the Closing Date, trading in the Common Stock
shall not have been suspended by the Commission or the Company’s principal
Trading Market and, at any time from the date hereof prior to the Closing Date,
trading in securities generally as reported by Bloomberg L.P. shall not have
been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States or
New York State authorities nor shall there have occurred any material outbreak
or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, makes
it impracticable or inadvisable to purchase the Securities at the Closing; and

(vi)      the Company shall have received executed signature pages to this
Agreement from Purchasers and the Company shall have received corresponding
Subscription Amounts from such Purchasers in cash.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1      Representations and Warranties of the Company. Except as set forth in
the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation or warranty made herein only to the
extent of the disclosure contained in the corresponding section of the
Disclosure Schedules, the Company hereby makes the following representations and
warranties to each Purchaser as of the Closing Date:

(a)      Organization and Qualification. The Company and each of the direct and
indirect subsidiaries of the Company (the “Subsidiaries”) is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation. The Company and each of its Subsidiaries is duly qualified to do
business, and is in good standing in the states required due to (i) the
ownership or lease of real or personal property for use in the operation of the
Company's business or (ii) the nature of the business conducted by the Company,
except where the failure to so qualify would not, individually or in the
aggregate, have a Material Adverse Effect (as defined herein). The Company and
each of its Subsidiaries has all requisite power, right and authority to own,
operate and lease its properties and assets, to carry on its business as now
conducted, to execute, deliver and perform its obligations under this Agreement
and the other Transaction Documents to which it is a party, and to carry out the
transactions contemplated hereby and thereby, subject to the Required Approvals.
All actions on the part of the Company and its officers and directors necessary
for the authorization, execution, delivery and performance of this Agreement and
the other Transaction Documents, the consummation of the transactions
contemplated hereby and thereby, and the performance of all of the Company's
obligations under this Agreement and the other Transaction

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Documents have been taken or will be taken prior to the Closing. This Agreement
has been, and the other Transaction Documents to which the Company is a party on
the Closing will be, duly executed and delivered by the Company, and this
Agreement is, and each of the other Transaction Documents to which it is a party
on the Closing will be, a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as may be
limited by bankruptcy, reorganization, insolvency, moratorium and similar laws
of general application relating to or affecting the enforcement of rights of
creditors, and except as enforceability of the obligations hereunder are subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or law). All of the Subsidies and the
Company’s ownership interests therein are set forth on Schedule 3(a). The
Company owns, directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.

 

(b)      Issuance of Securities. The Shares to be issued to the Purchaser
pursuant to this Agreement and the applicable Transaction Documents, when issued
and delivered in accordance with the terms of this Agreement, will be duly and
validly issued and will be fully paid and non-assessable.

(c)      Authorization; Enforcement. The execution, delivery and performance of
this Agreement and the other Transaction Documents by the Company, and the
consummation of the transactions contemplated hereby and thereby, will not (i)
constitute a violation (with or without the giving of notice or lapse of time,
or both) of any provision of any law or any judgment, decree, order, regulation
or rule of any court, agency or other governmental authority applicable to the
Company, (ii) except as set forth in Section 3(d) below, require any consent,
approval or authorization of, or declaration, filing or registration with, any
person, (iii) result in a default (with or without the giving of notice or lapse
of time, or both) under, acceleration or termination of, or the creation in any
party of the right to accelerate, terminate, modify or cancel, any agreement,
lease, note or other restriction, encumbrance, obligation or liability to which
the Company is a party or by which it is bound or to which any assets of the
Company are subject, (iv) result in the creation of any lien or encumbrance upon
the assets of the Company, or upon any shares of Common Stock, preferred stock
or other securities of the Company, (v) conflict with or result in a breach of
or constitute a default under any provision of the certificate of incorporation
or bylaws of the Company, or (vi) invalidate or adversely affect any permit,
license, authorization or status used in the conduct of the business of the
Company.

(d)      Filings, Consents and Approvals. The Company is not required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) satisfactory conclusion of the review by The NASDAQ Capital Market
(“NASDAQ CM Conclusion”) of the Offering and the issuance of the Shares and the
Listing of Additional Shares Application covering the Shares, such that NASDAQ
deems that no further actions or approvals are required by the Company in order
to consummate the transactions contemplated hereby, and (ii) the filing of Form
D with the Commission and such filings as are required to be made under
applicable state securities laws (collectively, the “Required Approvals”).

(e)      SEC Filings. The Company is subject to, and in full compliance with,
the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). The Company has made available to each
Purchaser through the EDGAR system true and complete copies of the Company’s
filings for the prior two full fiscal years plus any interim period
(collectively, the “SEC Filings”), and all such SEC Filings are incorporated
herein by reference. The SEC Filings, when they were filed with the Commission
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), complied in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations thereunder and
did not, as of such date, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. All reports and statements required to be filed by
the Company under the Exchange Act have been filed, together with all exhibits
required to be filed therewith. The Company and each of its direct and indirect
Subsidiaries are engaged in all material respects only in the business described
in the SEC Filings, and the SEC Filings contain a complete and accurate
description in all material respects of the business of the Company and the
Subsidiaries.

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(f)      No Financial Advisor. The Company acknowledges and agrees that each
Purchaser is acting solely in the capacity of an arm’s length purchaser with
respect to the Securities and the transactions contemplated hereby. The Company
further acknowledges that Purchaser is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any advice given by any
Purchaser or any of its representatives or agents in connection with this
Agreement and the transactions contemplated hereby is merely incidental to such
Purchaser’s purchase of the Securities. 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 representatives.

(g)      Indemnification. The Company will indemnify and hold harmless each
Purchaser and, where applicable, its directors, officers, employees, agents,
advisors and shareholders (each, an “Indemnitee”) from and against any and all
loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all fees, costs and expenses whatsoever reasonably incurred
in investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or threatened) (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Company or any Subsidiary in any of the
Transaction Documents, (ii) any breach of any covenant, agreement or obligation
of the Company or any Subsidiary contained in any of the Transaction Documents
or (iii) any cause of action, suit, proceeding or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative
action brought on behalf of the Company or any Subsidiary) or which otherwise
involves such Indemnitee that arises out of or results from (A) the execution,
delivery, performance or enforcement of any of the Transaction Documents, (B)
any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, or (C) the
status of such Purchaser or holder of the Securities either as an investor in
the Company pursuant to the transactions contemplated by the Transaction
Documents or as a party to this Agreement (including, without limitation, as a
party in interest or otherwise in any action or proceeding for injunctive or
other equitable relief). To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

(h)      Capitalization and Additional Issuances. The capitalization of the
Company is as set forth in Schedule 3.1(h). Except as set forth in Schedule
3.1(h), the Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents.
Except as disclosed on Schedule 3.1(h), there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock equivalents. Except as
set forth on Schedule 3.1(h), the issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under any of such securities. All of the outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in material compliance with all federal and
state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities. Except for NASDAQ CM Conclusion, no further approval or
authorization of any shareholder, the Board of Directors or others is required
for the issuance and sale of the Securities. There are no shareholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s shareholders.

9

 

 

(i)      Private Placements. Assuming the accuracy of each Purchaser’s
representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers as contemplated hereby.

(j)      Investment Company. The Company is not, and is not an affiliate of, and
immediately after receipt of payment for the Shares will not be or be an
affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company Act.

(k)      Reporting Company/Shell Company Status. The Company is a publicly-held
company subject to reporting obligations pursuant to Sections 12(g) and 13 of
the Exchange Act. Pursuant to the provisions of the Exchange Act, the Company
has timely filed all reports and other materials required to be filed by the
Company thereunder with the SEC during the preceding twelve months. The Company
is not and has never been a “shell company”, as that term is employed in Rule
144 under the Securities Act. The Company is in full compliance with the
continued listing standards of NASDAQ CM 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.

(l)      Litigation. Except as set forth on Schedule 3.1(l), there is no action,
suit, proceeding, inquiry or investigation before or by the Trading Market, any
court, public board, other Governmental Entity, self-regulatory organization or
body pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries, the Common Stock or any of the
Company’s or its Subsidiaries’ officers or directors which is outside of the
ordinary course of business or individually or in the aggregate material to the
Company or any of its Subsidiaries.  No director, officer or employee of the
Company or any of its Subsidiaries has willfully violated 18 U.S.C. §1519 or
engaged in spoliation in reasonable anticipation of litigation.  Without
limitation of the foregoing, there has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the
Commission involving the Company, any of its Subsidiaries or any current or
former director or officer of the Company or any of its Subsidiaries.  The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company under the
Securities Act or the Exchange Act.

(m)      Employee Relations. Neither the Company nor any of its Subsidiaries is
a party to any collective bargaining agreement or employs any member of a
union.  The Company believes that its and its Subsidiaries’ relations with their
respective employees are good.  The Company and its Subsidiaries are in
compliance with all federal, state, local and foreign laws and regulations
respecting labor, employment and employment practices and benefits, terms and
conditions of employment and wages and hours, except as disclosed in Schedule
3.1(m) or where failure to be in compliance would not, either individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.
“Material Adverse Effect” means any material adverse effect on (i) the business,
properties, assets, liabilities, operations (including results thereof),
condition (financial or otherwise) or prospects of the Company or any
Subsidiary, individually or taken as a whole, (ii) the transactions contemplated
hereby or in any of the other Transaction Documents or (iii) the authority or
ability of the Company or any of its Subsidiaries to perform any of their
respective obligations under any of the Transaction Documents.

(n)      Tax Status. The Company and each of its Subsidiaries (i) has timely
made or filed all foreign, federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject,
(ii) has timely paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and (iii)
has set aside on its books provision reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply.  There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Company and its Subsidiaries know of no basis for any such claim.  The Company
is not operated in such a manner as to qualify as a passive foreign investment
company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986,
as amended.

10

 

 

(o)      Indebtedness and Other Contracts. Except as set forth on Schedule
3.1(o) annexed hereto, neither the Company nor any of its Subsidiaries (i) has
any outstanding Indebtedness (as defined below), (ii) is a party to any
contract, agreement or instrument, the violation of which, or default under
which, by the other party(ies) to such contract, agreement or instrument could
reasonably be expected to result in a Material Adverse Effect, (iii) is in
violation of any term of, or in default under, any contract, agreement or
instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material
Adverse Effect, or (iv) is a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse Effect.  For
purposes of this Agreement:  (x) “Indebtedness” of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all obligations issued,
undertaken or assumed as the deferred purchase price of property or services
(including, without limitation, “capital leases” in accordance with generally
accepted accounting principles) (other than trade payables entered into in the
ordinary course of business), (C) all reimbursement or payment obligations with
respect to letters of credit, surety bonds and other similar instruments, (D)
all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with generally accepted
accounting principles, consistently applied for the periods covered thereby, is
classified as a capital lease, (G) all indebtedness referred to in clauses (A)
through (F) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any mortgage,
claim, lien, tax, right of first refusal, pledge, charge, security interest or
other encumbrance upon or in any property or assets (including accounts and
contract rights) owned by any Person, even though the Person which owns such
assets or property has not assumed or become liable for the payment of such
indebtedness, and (H) all Contingent Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (A) through (G) above.

(p)      No Undisclosed Events, Liabilities, Developments or Circumstances.
Since the date of the latest audited financial statements included within the
SEC Filings, except as specifically disclosed in a subsequent SEC Filing: (i)
there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any material liabilities (contingent or otherwise) other than
(A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to General Accepted
Accounting Principles (“GAAP”) or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its shareholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) except as set forth on Schedule
3.1(p), the Company has not issued any equity securities to any officer,
director or Affiliate. The Company does not have pending before the SEC any
request for confidential treatment of information. Except for the issuance of
the Securities contemplated by this Agreement or as set forth on Schedule
3.1(p), no event, liability, fact, circumstance, occurrence or development has
occurred or exists or is reasonably expected to occur or exist with respect to
the Company or its Subsidiaries or their respective businesses, properties,
operations, assets or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least two Trading Days prior to the date that this representation is made.

(q)      No Additional Agreements. Neither the Company nor any of its
Subsidiaries has any agreement or understanding with any Purchaser with respect
to the transactions contemplated by the Transaction Documents other than
pursuant to documents substantially identical to the Transaction Documents.

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(r)      No Disqualification Events. To the Company’s knowledge, none of the
Company, any of its predecessors, any affiliated issuer, any director, executive
officer, other officer of the Company participating in the offering contemplated
hereby, any beneficial owner of 20% or more of the Company’s outstanding voting
equity securities, calculated on the basis of voting power, nor any promoter (as
that term is defined in Rule 405 under the Securities Act) connected with the
Company in any capacity at the time of sale (each, an “Issuer Covered Person”)
is subject to any of the “Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The
Company has exercised reasonable care to determine whether any Issuer Covered
Person is subject to a Disqualification Event.

(s)      General Solicitation. None of the Company, any of its affiliates (as
defined in Rule 501(b) under the Securities Act) or any person acting on behalf
of the Company or such affiliate will solicit any offer to buy or offer or sell
the Securities by means of any form of general solicitation or general
advertising within the meaning of Regulation D, including: (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio; and
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.

(t)      Compliance. To the Company’s knowledge, neither the Company nor any
Subsidiary: (i) is in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both,
would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been
waived), (ii) is in violation of any judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been in violation
of any statute, rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.

(u)      Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Filings, except where the failure
to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any Material Permit.

(v)      Title to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property (if any) owned by them and
good and marketable title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, in each case free
and clear of all liens, except as set forth on Schedule 3.1(v) and except for
(i) liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries and (ii) liens for the payment of federal,
state or other taxes, for which appropriate reserves have been made in
accordance with GAAP and the payment of which is neither delinquent nor subject
to penalties. Any real property and facilities held under lease by the Company
and the Subsidiaries is held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries are in compliance.

(w)      Intellectual Property.

(i)      The term “Intellectual Property Rights” includes:

(A)      the name of the Company and each Subsidiary, all fictional business
names, trading names, registered and unregistered trademarks, service marks, and
applications of the Company and each Subsidiary (collectively, “Marks'');

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(B)      all patents, patent applications, and inventions and discoveries that
may be patentable of the Company and each Subsidiary (collectively, “Patents'');

(C)      all copyrights in both unpublished works and published works of the
Company and each Subsidiary (collectively, “Copyrights”);

(D)      all rights in mask works of the Company and each Subsidiary
(collectively, “Rights in Mask Works''); and

(E)      all know-how, trade secrets, confidential information, customer lists,
software, technical information, data, process technology, plans, drawings, and
blue prints (collectively, “Trade Secrets''); owned, used, or licensed by the
Company and each Subsidiary as licensee or licensor

(ii)      Agreements. There are no outstanding and, to Company’s knowledge, no
threatened disputes or disagreements with respect to any agreements relating to
any Intellectual Property Rights to which the Company is a party or by which the
Company is bound.

(iii)      Know-How Necessary for the Business. The Intellectual Property Rights
are all those necessary for the operation of the Company’s businesses as it is
currently conducted. The Company is the owner of all right, title, and interest
in and to each of the Intellectual Property Rights, except as set forth on
Schedule 3.1(w), free and clear of all liens, security interests, charges,
encumbrances, equities, and other adverse claims, and has the right to use all
of the Intellectual Property Rights. To the Company’s knowledge, no employee of
the Company has entered into any contract that restricts or limits in any way
the scope or type of work in which the employee may be engaged or requires the
employee to transfer, assign, or disclose information concerning his work to
anyone other than of the Company.

(iv)      Patents. The Company is the owner of all right, title and interest in
and to each of the Patents, free and clear of all Liens and other adverse
claims. All of the issued Patents are currently in compliance with formal legal
requirements (including payment of filing, examination, and maintenance fees and
proofs of working or use), are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within ninety days after the
Closing Date. No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To the Company’s knowledge
except as set forth in Schedule 3.1(w): (1) there is no potentially interfering
patent or patent application of any third party, and (2) no Patent is infringed
or has been challenged or threatened in any way. To the Company’s knowledge,
none of the products manufactured and sold, nor any process or know-how used, by
the Company infringes or is alleged to infringe any patent or other proprietary
right of any other Person.

(v)      Trademarks. The Company is the owner of all right, title, and interest
in and to each of the Marks, free and clear of all Liens and other adverse
claims. All Marks that have been registered with the United States Patent and
Trademark Office are currently in compliance with all formal legal requirements
(including the timely post-registration filing of affidavits of use and
incontestability and renewal applications), are valid and enforceable, and are
not subject to any maintenance fees or taxes or actions falling due within
ninety days after the Closing Date. Except as set forth in Schedule 3.1(w), no
Mark has been or is now involved in any opposition, invalidation, or
cancellation and, to the Company’s knowledge, no such action is threatened with
respect to any of the Marks. To the Company’s knowledge: (1) there is no
potentially interfering trademark or trademark application of any third party,
and (2) no Mark is infringed or has been challenged or threatened in any way. To
the Company’s knowledge, none of the Marks used by the Company infringes or is
alleged to infringe any trade name, trademark, or service mark of any third
party.

(vi)      Copyrights. The Company is the owner of all right, title, and interest
in and to each of the Copyrights, free and clear of all Liens and other adverse
claims. All the Copyrights have been registered and are currently in compliance
with formal requirements, are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within ninety days after the
date of the Closing. To the Company’s knowledge, no Copyright is infringed or
has been challenged or threatened in any way. To the Company’s knowledge, none
of the subject matter of any of the Copyrights infringes or is alleged to
infringe any copyright of any third party or is a derivative work based on the
work of a third party. All works encompassed by the Copyrights have been marked
with the proper copyright notice.

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(vii)      Trade Secrets. With respect to each Trade Secret, the documentation
relating to such Trade Secret is current, accurate, and sufficient in detail and
content to identify and explain it and to allow its full and proper use without
reliance on the knowledge or memory of any individual. The Company has taken all
reasonable precautions to protect the secrecy, confidentiality, and value of its
Trade Secrets. The Company has good title and an absolute and exclusive right to
use the Trade Secrets. The Trade Secrets are not part of the public knowledge or
literature, and, to the Company’s knowledge, have not been used, divulged, or
appropriated either for the benefit of any Person (other the Company) or to the
detriment of the Company. No Trade Secret is subject to any adverse claim or has
been challenged or threatened in any way.

(x)      Stock Option Plans. Since commencement of trading of the Company’s
Common Stock on The NASDAQ Capital Market (“NASDAQ CM”), each stock option
granted by the Company under the stock option plan was granted (i) in accordance
with the terms of such stock option plan and (ii) with an exercise price at
least equal to the fair market value of the Common Stock on the date such stock
option would be considered granted under GAAP and applicable law. No stock
option granted under any stock option plan has been backdated. The Company has
not knowingly granted, and there is no and has been no Company policy or
practice to knowingly grant, stock options prior to, or otherwise knowingly
coordinate the grant of stock options with, the release or other public
announcement of material information regarding the Company or its Subsidiaries
or their financial results or prospects.

(y)      Office of Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).

(z)      Listing and Maintenance Requirements. The Common Stock is listed on
NASDAQ CM under the symbol DRAM. Except as disclosed on Schedule 3.1(z), the
Company has not, in the twenty-four (24) months preceding the date hereof,
received notice from any Trading Market on which the Common Stock is or has been
listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market.

(aa)      Regulation M Compliance.  The Company has not, and to its knowledge no
one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company.

(bb)      Money Laundering. The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance in all material respects
with applicable financial record-keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering Laws”), and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any Subsidiary with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened.

(cc)      Acknowledgment Regarding Purchaser’s Trading Activity. Anything in
this Agreement or elsewhere herein to the contrary notwithstanding, it is
understood and acknowledged by the Company that: (i) none of the Purchasers has
been asked by the Company to agree, nor has any Purchaser agreed, to desist from
purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the
Securities for any specified term, (ii) past or

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future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or “derivative” transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities,
(iii) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, may presently have a
“short” position in the Common Stock and (iv) each Purchaser shall not be deemed
to have any affiliation with or control over any arm’s length counter-party in
any “derivative” transaction. The Company further understands and acknowledges
that (y) one or more Purchasers may engage in hedging activities at various
times during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Underlying Shares
deliverable with respect to Securities are being determined, and (z) such
hedging activities (if any) could reduce the value of the existing shareholders’
equity interests in the Company at and after the time that the hedging
activities are being conducted.  The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the
Transaction Documents. There are no disagreements of any kind presently
existing, or reasonably anticipated by the Company to arise, between the Company
and the accountants and lawyers formerly or presently employed by the Company
and the Company is current with respect to any fees owed to its accountants and
lawyers which could affect the Company’s ability to perform any of its
obligations under any of the Transaction Documents.

(dd)      Acknowledgment Regarding Purchasers’ Purchase of Securities. 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 Transaction
Documents and the transactions contemplated 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 the Transaction
Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers’ purchase of the Securities. The Company
further represents to each Purchaser that the Company’s decision to enter into
this Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

(ee)      No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company,
nor any of its Affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the Company
for purposes of: (i) the Securities Act which would require the registration of
any such securities under the Securities Act, or (ii) any applicable shareholder
approval provisions of any Trading Market on which any of the securities of the
Company are listed or designated.

(ff)      Application of Takeover Protections. The Company and the Board of
Directors will have taken as of the Closing Date all necessary action, if any,
in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Certificate of
Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Purchasers as a result
of the Purchasers and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation as a
result of the Company’s issuance of the Securities and the Purchasers’ ownership
of the Securities.

(gg)      Registration Rights. Except as set forth on Schedule 3.1(gg) and as
contemplated by the Series B Subscription Agreements, no Person has any right to
cause the Company or any Subsidiary to effect the registration under the
Securities Act of any securities of the Company or any Subsidiary.

(hh)      Certain Fees. Except as disclosed on Schedule 3.1(hh), no brokerage,
finder’s fees, commissions or due diligence fees are or will be payable by the
Company or any Subsidiary to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents. The Purchasers shall
have no obligation with respect to any such fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
Section 4(hh) that may be due in connection with the transactions contemplated
by the Transaction Documents.

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(ii)      Sarbanes-Oxley; Internal Accounting Controls. The Company and the
Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and
any and all applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of the Closing Date.
Except as set forth on Schedule 3.1(ii), the Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP 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. Except as disclosed in the SEC Filings, the Company and the
Subsidiaries have established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries
and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission’s rules and forms. The Company’s
certifying officers have evaluated the effectiveness of the disclosure controls
and procedures of the Company and the Subsidiaries as of the end of the period
covered by the most recently filed periodic report under the Exchange Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no changes in the internal control over financial reporting (as such
term is defined in the Exchange Act) of the Company and its Subsidiaries that
have materially affected, or is reasonably likely to materially affect, the
internal control over financial reporting of the Company and its Subsidiaries.

(jj)      Transactions With Affiliates and Employees. Except as set forth on
Schedule 3.1(jj), none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or lending of
money to or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee, shareholder, member or partner, in each case in
excess of $50,000 other than for: (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company except as disclosed on Schedule
3.1(jj).

(kk)      Insurance. The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged, including, but not limited to, directors and
officers insurance coverage at least equal to the aggregate Offering amount.
Neither the Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.

(ll)      Disclosure. Except with respect to the material terms and conditions
of the transactions contemplated by the Transaction Documents or disclosed as
Other Written Information, the Company confirms that neither it nor any other
Person acting on its behalf has provided any of the Purchasers or their agents
or counsel with any information that it believes constitutes or might constitute
material, non-public information. The Company understands and confirms that the
Purchasers will rely on the foregoing representation in effecting transactions
in securities of the Company. All of the disclosure furnished by or on behalf of
the Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the
Disclosure Schedules to this Agreement, when taken together as a whole, is true
and correct and does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The press releases disseminated by the Company during the twelve
months preceding the date of this Agreement taken as a whole do not contain any
untrue statement of a material fact or omit 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 and when made, not misleading.
The Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth herein.

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(mm)      Solvency. Based on the consolidated financial condition of the Company
as of the Closing Date, and the Company’s good faith estimate of the fair market
value of its assets, after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder: (i) the fair saleable value
of the Company’s assets exceeds the amount that will be required to be paid on
or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account
the particular capital requirements of the business conducted by the Company,
consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its liabilities when such amounts are
required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). The Company has no
knowledge of any facts or circumstances which lead it to believe that it will
file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(mm)
sets forth as of the date hereof all outstanding liens and secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments which has not been disclosed in the SEC Filings.
Except as disclosed on Schedule 3.1(mm), neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.

(nn)      Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor
to the knowledge of the Company or any Subsidiary, any agent or other person
acting on behalf of the Company or any Subsidiary, has: (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law or (iv) violated in any
material respect any provision of FCPA.

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

(pp)      Accountants and Lawyers. The Company’s accounting firm is set forth on
Schedule 3.1(qq) of the Disclosure Schedules. To the knowledge and belief of the
Company, such accounting firm: (i) is a registered public accounting firm as
required by the Exchange Act and (ii) shall express its opinion with respect to
the financial statements to be included in the Company’s Annual Report for the
fiscal year ending April 30, 2015. There are no disagreements of any kind
presently existing, or reasonably anticipated by the Company to arise, between
the Company and the accountants and lawyers formerly or presently employed by
the Company and the Company is current with respect to any fees owed to its
accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.

(qq)      Survival. The foregoing representations and warranties shall survive
the Closing Date.

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3.2      Representations and Warranties of the Purchasers. Each Purchaser,
severally and not jointly, hereby acknowledges, agrees with and represents,
warrants and covenants to the Company, as follows:

(a)      The Purchaser has full power and authority to enter into this
Agreement, the execution and delivery of which has been duly authorized, if
applicable, and this Agreement constitutes a valid and legally binding
obligation of the Purchaser, except as may be limited by bankruptcy,
reorganization, insolvency, moratorium and similar laws of general application
relating to or affecting the enforcement of rights of creditors, and except as
enforceability of the obligations hereunder are subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or law).

(b)      The Purchaser acknowledges its understanding that the Offering and sale
of the Securities is intended to be exempt from registration under the
Securities Act, by virtue of Section 4(a)(2) of the Securities Act and the
provisions of Regulation D promulgated thereunder (“Regulation D”). In
furtherance thereof, the Purchaser represents and warrants to the Company and
its affiliates as follows:

(i)      The Purchaser realizes that the basis for the exemption from
registration may not be available if, notwithstanding the Purchaser’s
representations contained herein, the Purchaser is merely acquiring the
Securities for a fixed or determinable period in the future, or for a market
rise, or for sale if the market does not rise. The Purchaser does not have any
such intention.

(ii)      The Purchaser realizes that the basis for exemption would not be
available if the Offering is part of a plan or scheme to evade registration
provisions of the Securities Act or any applicable state or federal securities
laws, except sales pursuant to a registration statement or sales that are
exempted under the Securities Act.

(iii)      The Purchaser is acquiring the Securities solely for the Purchaser’s
own beneficial account, for investment purposes, and not with a view towards, or
resale in connection with, any distribution of the Securities.

(iv)      The Purchaser has the financial ability to bear the economic risk of
the Purchaser’s investment, has adequate means for providing for its current
needs and contingencies, and has no need for liquidity with respect to an
investment in the Company.

(v)      The Purchaser and the Purchaser’s attorney, accountant, purchaser
representative and/or tax advisor, if any (collectively, the “Advisors”) has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of a prospective investment in the
Securities. If other than an individual, the Purchaser also represents it has
not been organized solely for the purpose of acquiring the Securities.

(vi)      The Purchaser (together with its Advisors, if any) has received all
documents requested by the Purchaser, if any, and has carefully reviewed them
and understands the information contained therein, prior to the execution of
this Agreement.

(c)      The Purchaser is not relying on the Company or any of its employees,
agents, sub-agents or advisors with respect to the legal, tax, economic and
related considerations involved in this investment. The Purchaser has relied on
the advice of, or has consulted with, only its Advisors. Each Advisor, if any,
has disclosed to the Purchaser in writing (a copy of which is annexed to this
Agreement) the specific details of any and all past, present or future
relationships, actual or contemplated, between the Advisor and the Company or
any affiliate or sub-agent thereof.

(d)      The Purchaser has carefully considered the potential risks relating to
the Company and a purchase of the Securities, and fully understands that the
Securities are a speculative investment that involves a high degree of risk of
loss of the Purchaser’s entire investment. Among other things, the Purchaser has
carefully considered each of the risks described under the heading “Risk
Factors” in the Company’s SEC Filings (as defined above) and any additional
disclosures in the nature of Risk Factors described herein.

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(e)      The Purchaser will not sell or otherwise transfer any Securities
without registration under the Securities Act or an exemption therefrom, and
fully understands and agrees that the Purchaser must bear the economic risk of
its purchase because, among other reasons, the Securities have not been
registered under the Securities Act or under the securities laws of any state
and, therefore, cannot be resold, pledged, assigned or otherwise disposed of
unless they are subsequently registered under the Securities Act and under the
applicable securities laws of such states, or an exemption from such
registration is available. In particular, the Purchaser is aware that the
Securities are “restricted securities,” as such term is defined in Rule 144, and
they may not be sold pursuant to Rule 144 unless all of the conditions of Rule
144 are met. The Purchaser also understands that the Company is under no
obligation to register the Securities on behalf of the Purchaser or to assist
the Purchaser in complying with any exemption from registration under the
Securities Act or applicable state securities laws. The Purchaser understands
that any sales or transfers of the Securities are further restricted by state
securities laws and the provisions of this Agreement.

(f)      No oral or written representations or warranties have been made, or
information furnished, to the Purchaser or its Advisors, if any, by the Company
or any of its officers, employees, agents, sub-agents, affiliates, advisors or
subsidiaries in connection with the Offering, other than any representations of
the Company contained herein, and in subscribing for the Securities, the
Purchaser is not relying upon any representations other than those contained
herein.

(g)      The Purchaser’s overall commitment to investments that are not readily
marketable is not disproportionate to the Purchaser’s net worth, and an
investment in the Securities will not cause such overall commitment to become
excessive.

(h)      The Purchaser understands and agrees that the certificates for the
Securities shall bear substantially the following legend:

“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 OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER
(IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE
TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

(i)      Certificates evidencing Securities shall not be required to contain the
legend set forth in Section 3.2 (h) above or any other legend (i) while a
registration statement covering the resale of such Securities is effective under
the Securities Act, (ii) following any sale of such Securities pursuant to Rule
144 (assuming the transferor is not an affiliate of the Company), (iii) if such
Securities are eligible to be sold, assigned or transferred under Rule 144
(provided that the Purchaser provides the Company with reasonable assurances
that such Securities are eligible for sale, assignment or transfer under Rule
144 which shall not include an opinion of the Purchaser’s counsel), (iv) in
connection with a sale, assignment or other transfer (other than under Rule
144), provided that the Purchaser provides the Company with an opinion of
counsel, at the expense of the Company, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Securities may be made
without registration under the applicable requirements of the Securities Act or
(v) if such legend is not required under applicable requirements of the
Securities Act (including, without limitation, controlling judicial
interpretations and pronouncements issued by the Commission). If a legend is not
required pursuant to the foregoing, the Company shall no later than three (3)
business days following the delivery by the Purchaser to the Company or the
transfer agent (with notice to the Company) of a legended certificate
representing such Securities (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer, if

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applicable), together with any other deliveries from the Purchaser as may be
required above in this Section 3.2 (i), as directed by the Purchaser, either:
(A) provided that the Company’s transfer agent is participating in the DTC Fast
Automated Securities Transfer Program, credit the aggregate number of shares of
Common Stock to which the Purchaser shall be entitled to the Purchaser’s or its
designee’s balance account with DTC through its Deposit and Withdrawal at
Custodian system or (B) if the Company’s transfer agent is not participating in
the DTC Fast Automated Securities Transfer Program, issue and deliver (via
reputable overnight courier) to the Purchaser, a certificate representing such
Securities that is free from all restrictive and other legends, registered in
the name of the Purchaser or its designee. The Company shall be responsible for
any transfer agent fees, fees of legal counsel to the Company or DTC fees with
respect to any issuance of Securities or the removal of any legends with respect
to any Securities in accordance herewith.

(j)      Neither the Commission nor any state securities commission has approved
the Securities or passed upon or endorsed the merits of the Offering. There is
no government or other insurance covering any of the Securities.

(k)      The Purchaser and its Advisors, if any, have had a reasonable
opportunity to ask questions of and receive answers from a person or persons
acting on behalf of the Company concerning the Offering and the business,
financial condition, results of operations and prospects of the Company, and all
such questions have been answered to the full satisfaction of the Purchaser and
its Advisors, if any.

(l)      (i)      In making the decision to invest in the Securities, the
Purchaser has relied solely upon the information provided by the Company in the
Transaction Documents. To the extent necessary, the Purchaser has retained, at
its own expense, and relied upon appropriate professional advice regarding the
investment, tax and legal merits and consequences of this Agreement and the
purchase of the Securities hereunder. The Purchaser disclaims reliance on any
statements made or information provided by any person or entity in the course of
Purchaser’s consideration of an investment in the Securities other than the
Transaction Documents.

(ii)      The Purchaser represents and warrants that: (i) the Purchaser was
contacted regarding the sale of the Securities by the Company (or an authorized
agent or representative thereof) with whom the Purchaser had a prior substantial
pre-existing relationship and (ii) no Securities were offered or sold to it by
means of any form of general solicitation or general advertising, and in
connection therewith, the Purchaser did not (A) receive or review any
advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether
closed circuit, or generally available; or (B) attend any seminar meeting or
industry investor conference whose attendees were invited by any general
solicitation or general advertising; or (C) observe any website or filing of the
Company with the Commission in which any offering of securities by the Company
was described and as a result learned of any offering of securities by the
Company.

(m)      The Purchaser has taken no action that would give rise to any claim by
any person for brokerage commissions, finders’ fees or the like relating to this
Agreement or the transactions contemplated hereby.

(n)      The Purchaser is not relying on the Company or any of its employees,
agents, or advisors with respect to the legal, tax, economic and related
considerations of an investment in the Securities, and the Purchaser has relied
on the advice of, or has consulted with, only its own Advisors.

(o)      The Purchaser acknowledges that any estimates or forward-looking
statements or projections furnished by the Company to the Purchaser were
prepared by the management of the Company in good faith, but that the attainment
of any such projections, estimates or forward-looking statements cannot be
guaranteed by the Company or its management and should not be relied upon.

(p)      No oral or written representations have been made, or oral or written
information furnished, to the Purchaser or its Advisors, if any, in connection
with the Offering that are in any way inconsistent with the information
contained herein.

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(q)      (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”)
represents that such fiduciary has been informed of and understands the
Company’s investment objectives, policies and strategies, and that the decision
to invest “plan assets” (as such term is defined in ERISA) in the Company is
consistent with the provisions of ERISA that require diversification of plan
assets and impose other fiduciary responsibilities. The Purchaser or Plan
fiduciary (i) is responsible for the decision to invest in the Company; (ii) is
independent of the Company and any of its affiliates; (iii) is qualified to make
such investment decision; and (iv) in making such decision, the Purchaser or
Plan fiduciary has not relied primarily on any advice or recommendation of the
Company or any of its affiliates.

(r)      The Purchaser is an “Accredited Investor” as defined in Rule 501(a)
under the Securities Act. In general, an “Accredited Investor” is deemed to be
an institution with assets in excess of $5,000,000 or individuals with a net
worth in excess of $1,000,000 (excluding such person’s residence) or annual
income exceeding $200,000 or $300,000 jointly with his or her spouse.

(s)      The Purchaser, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and financial matters
so as to be capable of evaluating the merits and risks of the Offering, and has
so evaluated the merits and risks of such investment. The Purchaser has not
authorized any person or entity to act as its Purchaser Representative (as that
term is defined in Regulation D of the General Rules and Regulations under the
Securities Act) in connection with the Offering. The Purchaser is able to bear
the economic risk of an investment in the Securities and, at the present time,
is able to afford a complete loss of such investment.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1      Transfer Restrictions.

(a)      The Securities may only be disposed of in compliance with state and
federal securities laws.  In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144, to the Company
or to an Affiliate of a Purchaser or in connection with a pledge as contemplated
in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities under the Securities
Act.  As a condition of such transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and the other applicable
Transaction Documents and shall have the rights and obligations of a Purchaser
under this Agreement.

(b)      The Purchasers agree to the imprinting, so long as is required by this
Section 4.1, of a legend on the Securities in the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  TO THE EXTENT PERMITTED BY
APPLICABLE SECURITIES LAWS, THIS SECURITY [AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.”

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The Company acknowledges and agrees that, a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and the other applicable Transaction Documents and, if required under the terms
of such arrangement, such Purchaser may transfer pledged or secured Securities
into the name of the pledgees or secured parties, in their respective capacities
as such.  Such a pledge or transfer would not be subject to approval of the
Company and no legal opinion of legal counsel of the pledgee, secured party or
pledgor shall be required in connection therewith.  Further, no notice shall be
required of such pledge.  At the appropriate Purchaser’s expense, the Company
will execute and deliver such reasonable documentation as a pledgee or secured
party of Securities may reasonably request in connection with a pledge or
transfer of the Securities.

(c)      Certificates evidencing the Shares shall not contain any legend
(including the legend set forth in Section 4.1(b) hereof), (i) following any
sale of such Shares pursuant to Rule 144 or pursuant to an effective
registration statement or (ii) if such Shares are eligible for sale under Rule
144, without the requirement for the Company to be in compliance with the
current public information required under Rule 144 as to such Shares and without
volume or manner-of-sale restrictions or (iii) if such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission).  The
Company shall cause its counsel to issue a legal opinion to the Transfer Agent
promptly for any Security after the Removal Date if required by the Transfer
Agent to effect the removal of the legend hereunder upon the occurrence of the
sale of the Shares, if a sale is so required in such circumstances.  If all or
any portion of the Shares are included in an effective registration statement to
cover the resale of such Shares (and the Purchaser provides the Company or the
Company’s counsel with any reasonable certifications requested by the Company
with respect to future sales of such Shares) or the Shares may be sold under
Rule 144 without the requirement for the Company to be in compliance with the
current public information and any other limitations or requirements set forth
in Rule 144, including, without limitation, volume or manner-of-sale
restrictions, or if a legend is not otherwise required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission) then such Shares will be
reissued without the legend. The Company agrees that following the Removal Date
or at such time as such legend is no longer required under this Section 4.1(c),
it will, no later than seven Trading Days following the delivery by a Purchaser
to the Company or the Transfer Agent of a certificate representing Shares issued
with a restrictive legend, together with any reasonable certifications requested
by the Company, the Company’s counsel or the Transfer Agent (such seventh
Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to
such Purchaser a certificate representing such shares that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section 4. Certificates for Securities subject to
legend removal hereunder shall be transmitted by the Transfer Agent to the
Purchaser by crediting the account of the Purchaser’s prime broker with the
Depository Trust Company through its Deposit and Withdrawal at Custodian system
(“DWAC”) as directed by such Purchaser if the Transfer Agent is then a
participant in such system, it is commercially reasonable for the Company to do
so and either (i) there is an effective registration statement permitting the
resale of such Securities by the Purchaser (and the Purchaser provides the
Company or the Company’s counsel with any requested certifications with respect
to future sales of such Securities) or (ii) the shares are eligible for resale
by the Purchaser without further volume limitations or manner-of-sale
restrictions and may be sold without the requirement for the Company to be in
compliance with Rule 144(c)(1) of the Securities Act (and the Purchaser provides
the Company or the Company’s counsel with any requested certifications with
respect to the sale of such Securities).

(d)      In addition to such Purchaser’s other available remedies, the Company
shall pay to a Purchaser, in cash, as partial liquidated damages and not as a
penalty, for each $1,000 of Shares (based on the greater of the VWAP of the
Common Stock on the date such Securities are submitted to the Transfer Agent or
the purchase price of such Shares) delivered for removal of the restrictive
legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per
Trading Day five (5) Trading Days after such damages have begun to accrue) for
each Trading Day following the Legend Removal Date until such certificate is
delivered without a legend. Nothing herein shall limit such Purchaser’s right to
pursue actual damages for the Company’s failure to deliver certificates
representing any Securities as required by the Transaction Documents, and such
Purchaser shall have the right to pursue all remedies available to it at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief.

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(e)      In lieu of delivering physical certificates representing the unlegended
shares, upon request of a Purchaser, so long as the certificates therefor do not
bear a legend and the Purchaser is not obligated to return such certificate for
the placement of a legend thereon and provided it is commercially reasonable for
the Company to do so, the Company shall cause its transfer agent to
electronically transmit the unlegended shares by crediting the account of
Purchaser’s prime broker with the Depository Trust Company through its DWAC
system, provided that the Company’s Common Stock is DTC eligible and the
Company’s transfer agent participates in the Deposit Withdrawal at Custodian
system. Such delivery must be made on or before the Legend Removal Date.

(f)      In the event a Purchaser shall request delivery of unlegended shares as
described in this Section 4.1 and the Company is required to deliver such
unlegended shares, the Company may not refuse to deliver unlegended shares based
on any claim that such Purchaser or anyone associated or affiliated with such
Purchaser has not complied with Purchaser’s obligations under the Transaction
Documents, or for any other reason, unless, an injunction or temporary
restraining order from a court, on notice, restraining and or enjoining delivery
of such unlegended shares shall have been sought and obtained by the Company and
the Company has posted a surety bond for the benefit of such Purchaser in the
amount of the greater of (i) 120% of the amount of the aggregate purchase price
of the Shares which is subject to the injunction or temporary restraining order,
or (ii) the VWAP of the Common Stock on the trading day before the issue date of
the injunction multiplied by the number of unlegended shares to be subject to
the injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to such Purchaser to the extent Purchaser obtains judgment in Purchaser’s favor.

(g)      In addition to any other rights available to Purchaser, if the Company
fails to deliver to a Purchaser unlegended shares as required pursuant to this
Agreement and after the Legend Removal Date the Purchaser, or a broker on the
Purchaser’s behalf, purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of
the shares of Common Stock which the Purchaser was entitled to receive in
unlegended form from the Company (a “Buy-In”), then the Company shall promptly
pay in cash to the Purchaser (in addition to any remedies available to or
elected by the Purchaser) the amount, if any, by which (A) the Purchaser’s total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (B) the aggregate purchase price of the shares
of Common Stock delivered to the Company for reissuance as unlegended shares
together with interest thereon at a rate of 15% per annum accruing until such
amount and any accrued interest thereon is paid in full (which amount shall be
paid as liquidated damages and not as a penalty). For example, if a Purchaser
purchases shares of Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to $10,000 of purchase price of Shares delivered to
the Company for reissuance as unlegended shares, the Company shall be required
to pay the Purchaser $1,000, plus interest, if any. The Purchaser shall provide
the Company written notice indicating the amounts payable to the Purchaser in
respect of the Buy-In.

4.2      Furnishing of Information; Public Information.

(a)      Until no shares of Series B Preferred are outstanding, the Company
covenants to maintain the registration of the Common Stock under Section 12(b)
or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to the Exchange Act even if
the Company is not then subject to the reporting requirements of the Exchange
Act.

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(b)      At any time commencing on the Closing Date and ending at such time that
all of the Securities may be sold without the requirement for the Company to be
in compliance with Rule 144(c)(1) and otherwise without restriction or
limitation pursuant to Rule 144, if the Company shall fail for any reason to
satisfy the current public information requirement under Rule 144(c) (a “Public
Information Failure”) then, in addition to such Purchaser’s other available
remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, by reason of any such delay in or reduction of its
ability to sell the Securities, an amount in cash equal to two percent (2.0%) of
the aggregate Subscription Amount of such Purchaser’s Securities held by such
Purchaser on the day of a Public Information Failure and on every thirtieth
(30th) day (pro-rated for periods totaling less than thirty days) thereafter
until the earlier of (a) the date such Public Information Failure is cured and
(b) such time that such public information is no longer required for the
Purchasers to transfer the Underlying Shares pursuant to Rule 144. The payments
to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are
referred to herein as “Public Information Failure Payments.” Public Information
Failure Payments shall be paid on the earlier of (i) the last day of the
calendar month during which such Public Information Failure Payments are
incurred and (ii) the third (3rd) Business Day after the event or failure giving
rise to the Public Information Failure Payments is cured. In the event the
Company fails to make Public Information Failure Payments in a timely manner,
such Public Information Failure Payments shall bear interest at the rate of 1.5%
per month (prorated for partial months) until paid in full. Nothing herein shall
limit such Purchaser’s right to pursue actual damages for the Public Information
Failure, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief.

4.3      Integration.  The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities by the Company in a manner that would require the registration
under the Securities Act of the sale of the Securities or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market such that it would require shareholder
approval prior to the closing of such other transaction unless shareholder
approval is obtained before the closing of such subsequent transaction, provided
the closing of the sale of Series B Preferred into the Series B Escrow shall not
be a violation of this agreement.

4.4      Securities Laws Disclosure; Publicity.  The Company shall, by 9:00 a.m.
(New York City time) on the first (1st) Trading Day immediately following the
Closing Date, issue a press release disclosing the material terms of the
transactions contemplated hereby, and shall file a Current Report on Form 8-K,
including the Transaction Documents as exhibits thereto (the “Form 8-K”) within
four Business Days of the date hereof. From and after the issuance of such press
release and Form 8-K, the Company represents to the Purchasers that it shall
have publicly disclosed all material, non-public information delivered to any of
the Purchasers by the Company or any of its Subsidiaries, or any of their
respective officers, directors, employees or agents in connection with the
transactions contemplated by the Transaction Documents. The Company and each
Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld, delayed, denied or conditioned, except if such
disclosure is required by law, in which case the disclosing party shall promptly
provide the other party with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Purchaser, or include the name of any Purchaser in any
filing with the Commission or any regulatory agency or Trading Market unless the
name of such Purchaser is already included in the body of the Transaction
Documents, without the prior written consent of such Purchaser, except: (a) as
required by federal or state securities law in connection with the filing of
final Transaction Documents with the Commission and (b) to the extent such
disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (b).

4.5      Non-Public Information.  Except for the schedules and exhibits to this
Agreement and the Transaction Documents, and except to the extent the Company
has entered into a non-disclosure, confidentiality or similar agreement with
such Purchaser, the Company covenants and agrees that neither it, nor any other
Person acting on its behalf, will provide any Purchaser or its agents or counsel
with any information that the Company believes constitutes material non-public
information, unless (i) prior thereto such Purchaser shall have entered into a
written agreement with the Company regarding the confidentiality and use of such
information, or (ii) such Purchaser receives such information in connection with
serving as an officer and/or director of the Company.  The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company.

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4.6      Use of Proceeds.  The Company will use the net proceeds to the Company
from the sale of the Shares hereunder as set forth on Schedule 4.6. The Company
shall not use such proceeds: (a) for the satisfaction of any portion of the
Company’s debt (other than payment of trade payables in the ordinary course of
the Company’s business and prior practices), (b) for the redemption of any
Common Stock or Common Stock Equivalents, (c) for the settlement of any
outstanding litigation or (d) in violation of the law, including FCPA or OFAC.

4.7      Indemnification of Purchasers.  Subject to the provisions of this
Section 4.7, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any shareholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with
any such shareholder or any violations by such Purchaser Party of securities
laws or any conduct by such Purchaser Party which constitutes fraud, gross
negligence, willful misconduct or malfeasance).  If any action shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, such Purchaser Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company
in writing, (ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of such Purchaser Party’s counsel, a material conflict on
any material issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for the
reasonable fees and expenses of no more than one such separate counsel for all
Purchaser Parties.  The Company will not be liable to any Purchaser Party under
this Agreement (y) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld,
conditioned or delayed; or (z) to the extent, but only to the extent that a
loss, claim, damage or liability is attributable to any Purchaser Party’s breach
of any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents. The
indemnification required by this Section 4.7 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and
when bills are received or are incurred. The indemnity agreements contained
herein shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others and any liabilities the Company
may be subject to pursuant to law.

4.8      Reservation of Common Stock. As of the Closing Date, the Company has
reserved and shall continue to reserve and keep available at all times, free of
preemptive rights, a sufficient number of shares of Common Stock for the purpose
of enabling the Company to issue Shares pursuant to this Agreement (other than
Section 4.14 but only to the extent the number of shares of Common Stock
issuable under Section 4.14 is not known) (such amount being the “Required
Minimum”). If, on any date, the number of authorized but unissued (and otherwise
unreserved) shares of Common Stock is less than the Required Minimum on such
date, then the Board of Directors shall use commercially reasonable efforts to
amend the Company’s certificate or articles of incorporation to increase the
number of authorized but unissued shares of Common Stock to at least the
Required Minimum at such time, as soon as possible and in any event not later
than the 60th day after such date.

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4.9      Listing of Common Stock. The Company hereby agrees to maintain the
listing or quotation of the Common Stock on the Trading Market on which it is
currently listed, and concurrently with each Closing, the Company, if
applicable, shall apply to list or quote all of the Shares on such Trading
Market and promptly secure the listing of all of the Shares on such Trading
Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will then include in such
application all of the Shares, and will take such other action as is necessary
to cause all of the Shares to be listed or quoted on such other Trading Market
as promptly as possible. The Company will then take all action necessary to
continue the listing or quotation and trading of its Common Stock on a Trading
Market until five years after the Closing Date and will comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or
rules of the Trading Market at least until five years after the Closing Date. In
the event the afore-described listing is not continuously maintained for five
years after the date of such listing (a “Listing Default”), then in addition to
any other rights the Purchasers may have hereunder or under applicable law, on
the first day of a Listing Default and on each monthly anniversary of each such
Listing Default date (if the applicable Listing Default shall not have been
cured by such date) until the applicable Listing Default is cured, the Company
shall pay to each Purchaser an amount in cash, as partial liquidated damages and
not as a penalty, equal to 2% of the aggregate Subscription Amount of the
Securities then held by such Purchaser on the day of a Listing Default and on
every thirtieth (30th)day (pro-rated for periods less than thirty days)
thereafter until the date such Listing Default is cured. If the Company fails to
pay any liquidated damages pursuant to this Section in a timely manner, the
Company will pay interest thereon at a rate of 1.5% per month (pro-rated for
partial months) to the Purchaser.

4.10      Reimbursement. If any Purchaser becomes involved in any capacity in
any Proceeding by or against any Person who is a shareholder of the Company
(except as a result of sales, pledges, margin sales and similar transactions by
such Purchaser to or with any current shareholder), solely as a result of such
Purchaser’s acquisition of the Securities under this Agreement, the Company will
reimburse such Purchaser for its reasonable legal and other expenses (including
the cost of any investigation preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are incurred. The
reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliates of the Purchasers who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Purchasers and any such Affiliate, and shall be binding upon and
inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchasers and any such Affiliate and any
such Person. The Company also agrees that neither the Purchasers nor any such
Affiliates, partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company solely as a result of acquiring the Securities under
this Agreement.

4.11      Equal Treatment of Purchasers.  No consideration (including any
modification of any Transaction Document) 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 Purchasers that are parties to such Transaction Document. 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. The foregoing shall
not include any consideration or agreement with the Series B Preferred
purchasers.

4.12      Notice of Disqualification Events. The Company will notify the
Purchasers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with
the passage of time, become a Disqualification Event relating to any Issuer
Covered Person not otherwise disclosed herein.

4.13      Acknowledgment of Dilution.  The Company acknowledges that the
issuance of the Securities and the Series B Preferred may result in dilution of
the outstanding shares of Common Stock, which dilution may be substantial under
certain market conditions. The Company further acknowledges that its obligations
under the Transaction Documents and the Series B Preferred, including, without
limitation, its obligation to issue the Shares pursuant to the Transaction
Documents, are unconditional and absolute, but subject to the terms and
conditions of the Transaction Documents, and not subject to any right of set
off, counterclaim, delay or reduction, regardless of the effect of any such
dilution or any claim the Company may have against any Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other
shareholders of the Company.

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4.14      Intentionally omitted.

4.15      Intentionally omitted.

4.16      DTC Program. For a period of two (2) years from the Closing Date, the
Company will employ as the transfer agent for the Common Stock a participant in
the Depository Trust Company Automated Securities Transfer Program and cause the
Common Stock to be transferable pursuant to such program, if it is determined by
the Company to be commercially reasonable to do so.

4.17      Form D; Blue Sky Filings.  The Company agrees to timely file a Form D
with respect to the sale of the Securities by the Company under this Agreement
as required under Regulation D. The Company shall take such action as the
Company shall reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchasers at the Closing
under applicable securities or “Blue Sky” laws of the states of the United
States, and shall provide evidence of such actions promptly upon request of any
Purchaser.

4.18      Shareholder Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that any
Purchaser is an “Acquiring Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the Company and the
Purchasers.

4.19      Certain Transactions and Confidentiality. Each Purchaser, severally
and not jointly with the other Purchasers, covenants that neither it, nor any
Affiliate acting on its behalf or pursuant to any understanding with it will
execute any purchases or sales, including Short Sales, of any of the Company’s
securities during the period commencing with the execution of this Agreement and
ending at such time that the transactions contemplated by this Agreement are
first publicly disclosed or required to be disclosed, whichever occurs first, in
the Form 8-K described in Section 4.4.  Each Purchaser, severally and not
jointly with the other Purchasers, covenants that, until such time as the
transactions contemplated by this Agreement are publicly disclosed or required
to be publicly disclosed, whichever occurs first, by the Company in such Form
8-K, such Purchaser will maintain the confidentiality of the existence and terms
of this transaction and the information included in the Transaction Documents
and the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly
acknowledges and agrees that (i) no Purchaser makes any representation, warranty
or covenant hereby that it will not engage in effecting transactions in any
securities of the Company after the time that the transactions contemplated by
this Agreement are required to be disclosed in the Form 8-K described in Section
4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any
transactions in any securities of the Company in accordance with applicable
securities laws from and after the time that the transactions contemplated by
this Agreement are first disclosed or required to be disclosed, whichever occurs
first, in the Form 8-K described in Section 4.4, and (iii) no Purchaser shall
have any duty of confidentiality to the Company or its Subsidiaries after the
filing of such Form 8-K or after the date such Form 8-K is required to have been
filed, whichever occurs first.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.

4.20      Maintenance of Property. The Company shall keep all of its property,
which is necessary or useful to the conduct of its business, in good working
order and condition, ordinary wear and tear excepted.

4.21      Preservation of Corporate Existence. The Company shall preserve and
maintain its corporate existence, rights, privileges and franchises in the
jurisdiction of its then-incorporation, and qualify and remain qualified, as a
foreign corporation in each jurisdiction in which such qualification is
necessary in view of its business or operations and where the failure to qualify
or remain qualified might reasonably have a Material Adverse Effect upon the
financial condition, business or operations of the Company taken as a whole.

 

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ARTICLE V.

MISCELLANEOUS

5.1      Termination.  This Agreement may be terminated by any Purchaser, as to
such Purchaser’s obligations hereunder only and without any effect whatsoever on
the obligations between the Company and the other Purchasers, by written notice
given at any time to the Company, if the Closing has not been consummated on or
before August 15, 2015; provided, however, that such termination will not affect
the right of any party to sue for any breach by any other party (or parties).

5.2      Fees and Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, 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.  The Company shall pay all Transfer
Agent fees, DTC fees, stamp taxes and other similar taxes and duties levied in
connection with the delivery of any Securities to the Purchasers in addition to
paying the cost of any counsel or other expenses incurred in rendering Rule 144
opinions of any such Purchaser upon request. The Company agrees to pay or
reimburse all legal fees and expenses of counsel to the Lead Investor in
connection with this Agreement and any of the Transaction Documents, at Closing,
and thereafter from time to time in connection with the preparation, review
and/or approval of any matter contemplated herein, in any Company or Purchaser
filing, or any of the Transaction Documents.

5.3      Entire Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.

5.4      Notices.  All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, or facsimile, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (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: (i) if to the Company, to: Dataram Corporation,
Route 571, P.O. Box 7258, Princeton, NJ 08543, with a copy by fax only to (which
shall not constitute notice): 609-799-6734, with an additional copy by e-mail
only to (which shall not constitute notice): BakerHostetler, 600 Anton Blvd.,
Suite 900, Costa Mesa, CA 92626, Attn: Randolf W. Katz, Esq., e-mail:
rwkatz@bakerlaw.com, and (ii) if to the Purchasers, to: the addresses and fax
numbers indicated on the signature pages hereto, with an additional copy by fax
only to (which shall not constitute notice): Sichenzia Ross Friedman Ference
LLP, 61 Broadway, 32nd Floor, New York, NY 10006, Attn: Harvey Kesner, Esq.,
fax: (212) 930-9725.

5.5      Amendments; Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least a
majority in interest of the Securities then outstanding (the “Majority in
Interest”), or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought. Whenever the term “consent of the
Purchasers” or a similar term is employed herein, it shall mean the consent of a
Majority in Interest. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

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5.6      Headings.  The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

5.7      Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns.  The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser.  Any Purchaser may assign
any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided that such transferee
agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the “Purchasers.”

5.8      No Third-Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.7.

5.9      Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof.  Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper or is an inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained herein shall be deemed to limit
in any way any right to serve process in any other manner permitted by law.  If
either party shall commence an action or proceeding to enforce any provisions of
the Transaction Documents, then in addition to the obligations of the Company
under Section 4.7, the prevailing party in such action, suit or proceeding shall
be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.

5.10      Survival.  The representations and warranties contained herein shall
survive the Closing and the delivery of the Securities at the Closings for the
applicable statute of limitations.

5.11      Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood that the
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

5.12      Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

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5.13      Rescission and Withdrawal Right.  Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights.

5.14      Replacement of Securities.  If any certificate or instrument
evidencing any of the Securities is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon surrender and cancellation thereof (in the case of mutilation), or in lieu
of and substitution therefor, a new certificate or instrument, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft,
destruction, or mutilation, and of the ownership of such Security.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity and
bonds) associated with the issuance of such replacement Securities.

5.15      Remedies.  In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

5.16      Payment Set Aside.  To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

5.17      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 or non-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 hereof 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 shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of the other Transaction Documents, and it
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.  Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the
Transaction Documents.  The Company has elected to provide all Purchasers with
the same terms and Transaction Documents for the convenience of the Company and
not because it was required or requested to do so by any of the Purchasers. It
is expressly understood and agreed that each provision contained in this
Agreement and in each other Transaction Document is between the Company and a
Purchaser, solely, and not between the Company and the Purchasers collectively
and not between and among the Purchasers.

5.18      Liquidated Damages.  The Company’s obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts due thereunder have been paid
notwithstanding the fact that the instrument or security pursuant to which such
partial liquidated damages or other amounts are due and payable shall have been
canceled.

30

 

 

5.19      Saturdays, Sundays, Holidays, etc.  If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.

5.20      Construction. The parties agree that each of them and/or their
respective counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments thereto. In addition, each and every reference to share prices and
shares of Common Stock in any Transaction Document shall be subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

5.21      WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

5.22      Equitable Adjustment. Trading volume amounts, price/volume amounts and
similar figures in the Transaction Documents shall be equitably adjusted (but
without duplication) to offset the effect of stock splits, similar events and as
otherwise described in this Agreement, if such events shall occur between the
date of this Agreement and Closing. 

(Signature Pages Follow)

 

 

31

 

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

DATARAM Corporation

 

 

Address for Notice:

By:__________________________________________

Name:

Title:

 

 

 

With a copy to (which shall not constitute notice):

 

 

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

32

 

[PURCHASER SIGNATURE PAGE TO DATARAM Corporation

SUBSCRIPTION AGREEMENT]

 

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

Name of Purchaser: _____________________________________________________________

Signature of Authorized Signatory of Purchaser:
______________________________________

Name of Authorized Signatory:
____________________________________________________

Title of Authorized Signatory:
_____________________________________________________

Email Address of Authorized Signatory:
_____________________________________________

Facsimile Number of Authorized Signatory:
___________________________________________

Address for Notice to Purchaser:

 

 

 

Address for Delivery of Securities to Purchaser (if not same as address for
notice):

 

______________________________________________________________________________

 

______________________________________________________________________________

 

______________________________________________________________________________

 

 

Subscription Amount: US$________________

 

Common Stock: ___________________ Shares

 

 

EIN Number, if applicable, will be provided under separate cover:
________________________

 

 

 

[SIGNATURE PAGES CONTINUE]

 

33

 

 

EXHIBIT A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34

 

 

EXHIBIT B

 

 

 

 

 

FORM OF LEGAL OPINION

 

[SEE ATTACHED]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35

 

 

EXHIBIT C

 

ACCREDITED INVESTOR QUESTIONNAIRE

IN CONNECTION WITH INVESTMENT IN COMMON STOCK

OF DATARAM CORPORATION, A NEW JERSEY CORPORATION

PURSUANT TO SECURITIES PURCHASE AGREEMENT DATED ______, 2015

 

TO:        Dataram Corporation
Route 571, P.O. Box 7258
Princeton, NJ 08543

INSTRUCTIONS

PLEASE ANSWER ALL QUESTIONS. If the appropriate answer is “None” or “Not
Applicable”, so state. Please print or type your answers to all questions.
Attach additional sheets if necessary to complete your answers to any item.

Your answers will be kept strictly confidential at all times. However, Dataram
Corporation (the “Company”) may present this Questionnaire to such parties as it
deems appropriate in order to assure itself that the offer and sale of
securities of the Company will not result in a violation of the registration
provisions of the Securities Act of 1933, as amended, or a violation of the
securities laws of any state.

1.   Please provide the following information:

Name:
_______________________________________________________________________________________

Name of additional purchaser:
____________________________________________________________________
(Please complete information in Question 5)

Date of birth, or if other than an individual, year of organization or
incorporation:

_____________________________________________________________________________________________

_____________________________________________________________________________________________

2.   Residence address, or if other than an individual, principal office
address:

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

Telephone number:
______________________________________________________________________________

Social Security Number:
__________________________________________________________________________

Taxpayer Identification Number:
____________________________________________________________________

3. Business address:
_____________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

Business telephone number:
_______________________________________________________________________

36

 

4.   Send mail to:    Residence _____    Business _____

5.   With respect to tenants in common, joint tenants and tenants by the
entirety, complete only if information differs from that above:

Residence address:
_____________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

Telephone number:
______________________________________________________________________________

Social Security Number:
__________________________________________________________________________

Taxpayer Identification Number:
____________________________________________________________________

Business address:
_______________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

Business telephone number:
_______________________________________________________________________

Send mail to:    Residence _____    Business _____

6.   Please describe your present or most recent business or occupation and
indicate such information as the nature of your employment, how long you have
been employed there, the principal business of your employer, the principal
activities under your management or supervision and the scope (e.g. dollar
volume, industry rank, etc.) of such activities:

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

7.   Please state whether you (i) are associated with or affiliated with a
member of the Financial Industry Regulatory Association, Inc. (“FINRA”), (ii)
are an owner of stock or other securities of FINRA member (other than stock or
other securities purchased on the open market), or (iii) have made a
subordinated loan to any FINRA member:

    _______     _______     Yes     No

If you answered yes to any of (i) – (iii) above, please indicate the applicable
answer and briefly describe the facts below:

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

37

 

 

8A.   Applicable to Individuals ONLY. Please answer the following questions
concerning your financial condition as an “accredited investor” (within the
meaning of Rule 501 of Regulation D). If the purchaser is more than one
individual, each individual must initial an answer where the question indicates
a “yes” or “no” response and must answer any other question fully, indicating to
which individual such answer applies. If the purchaser is purchasing jointly
with his or her spouse, one answer may be indicated for the couple as a whole:

8.1   Does your net worth* (or joint net worth with your spouse) exceed
$1,000,000?

    _______     _______     Yes     No

8.2   Did you have an individual income** in excess of $200,000 or joint income
together with your spouse in excess of $300,000 in each of the two most recent
years and do you reasonably expect to reach the same income level in the current
year?

    _______     _______     Yes     No

8.3   Are you an executive officer of the Company?

    _______     _______     Yes     No

* For purposes hereof, net worth shall be deemed to include ALL of your assets,
liquid or illiquid MINUS any liabilities.

** For purposes hereof, the term “income” is not limited to “adjusted gross
income” as that term is defined for federal income tax purposes, but rather
includes certain items of income which are deducted in computing “adjusted gross
income”. For investors who are salaried employees, the gross salary of such
investor, minus any significant expenses personally incurred by such investor in
connection with earning the salary, plus any income from any other source
including unearned income, is a fair measure of “income” for purposes hereof.
For investors who are self-employed, “income” is generally construed to mean
total revenues received during the calendar year minus significant expenses
incurred in connection with earning such revenues.

8.B   Applicable to Corporations, Partnerships, Trusts, Limited Liability
Companies and other Entities ONLY:

The purchaser is an accredited investor because the purchaser falls within at
least one of the following categories (Check all appropriate lines):

___(i) a bank as defined in Section 3(a)(2) of the Act or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the Act
whether acting in its individual or fiduciary capacity;

___(ii) a broker-dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended;

___(iii) an insurance company as defined in Section 2(13) of the Act;

___(iv) an investment company registered under the Investment Company Act of
1940, as amended (the “Investment Act”) or a business development company as
defined in Section 2(a)(48) of the Investment Act;

___(v) a Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958, as amended;

38

 

 

___(vi) a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, where such plan has total assets
in excess of $5,000,000;

___(vii) an employee benefit plan within the meaning of Title 1 of the Employee
Retirement Income Security Act of 1974, as amended (the “Employee Act”), where
the investment decision is made by a plan fiduciary, as defined in Section 3(21)
of the Employee Act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or an employee benefit plan
that has total assets in excess of $5,000,000, or a self-directed plan the
investment decisions of which are made solely by persons that are accredited
investors;

___(viii) a private business development company, as defined in Section
202(a)(22) of the Investment Advisers Act of 1940, as amended;

___(ix) an organization described in Section 501(c)(3) of the Internal Revenue
Code, a corporation, a Massachusetts or similar business trust, or a
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000;

___(x) a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a “sophisticated” person, as described in Rule 506(b)(2)(ii) promulgated
under the Act, who has such knowledge and experience in financial and business
matters that he or she is capable of evaluating the merits and risks of the
prospective investment;

___(xi) an entity in which all of the equity investors are persons or entities
described above (“accredited investors”). ALL EQUITY OWNERS MUST COMPLETE
“EXHIBIT A” ATTACHED HERETO.

9.A   Do you have sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks associated with
investing in the Company?

    _______     _______     Yes     No

ANSWER QUESTION 9B ONLY IF THE ANSWER TO QUESTION 9A WAS “NO.”

9.B   If the answer to Question 9A was “NO,” do you have a financial or
investment adviser (a) that is acting in the capacity as a purchaser
representative and (b) who has sufficient knowledge and experience in financial
and business matters so as to be capable of evaluating the merits and risks
associated with investing in the Company?

    _______     _______     Yes     No

If you have a financial or investment adviser(s), please identify each such
person and indicate his or her business address and telephone number in the
space below. (Each such person must complete, and you must review and
acknowledge, a separate Purchaser Representative Questionnaire which will be
supplied at your request).

_____________________________________________________________________________________________

_____________________________________________________________________________________________

39

 

 

10.      You have the right, will be afforded an opportunity, and are encouraged
to investigate the Company and review relevant factors and documents pertaining
to the officers of the Company, and the Company and its business and to ask
questions of a qualified representative of the Company regarding this investment
and the properties, operations, and methods of doing business of the Company.

Have you or has your purchaser representative, if any, conducted any such
investigation, sought such documents or asked questions of a qualified
representative of the Company regarding this investment and the properties,
operations, and methods of doing business of the Company?

    _______     _______     Yes     No

If so, briefly describe:
__________________________________________________________________________

_____________________________________________________________________________________________

If so, have you completed your investigation and/or received satisfactory
answers to your questions?

    _______     _______     Yes     No

11.      Do you understand the nature of an investment in the Company and the
risks associated with such an investment?

    _______     _______     Yes     No

12.      Do you understand that there is no guarantee of any financial return on
this investment and that you will be exposed to the risk of losing your entire
investment?

    _______     _______     Yes     No

13.      Do you understand that this investment is not liquid?

    _______     _______     Yes     No

14.      Do you have adequate means of providing for your current needs and
personal contingencies in view of the fact that this is not a liquid investment?

    _______     _______     Yes     No

15.      Are you aware of the Company’s business affairs and financial
condition, and have you acquired all such information about the Company as you
deem necessary and appropriate to enable you to reach an informed and
knowledgeable decision to acquire the Interests?

    _______     _______     Yes     No

40

 

16.      Do you have a “pre-existing relationship” with the Company or any of
the officers of the Company?

    _______     _______     Yes     No

(For purposes hereof, “pre-existing relationship” means any relationship
consisting of personal or business contacts of a nature and duration such as
would enable a reasonably prudent investor to be aware of the character,
business acumen, and general business and financial circumstances of the person
with whom such relationship exists.)

If so, please name the individual or other person with whom you have a
pre-existing relationship and describe the relationship:

______________________________________________________________________________

______________________________________________________________________________

17.      Exceptions to the representations and warranties made in Section 3.2 of
the Securities Purchase Agreement (if no exceptions, write “none” – if left
blank, the response will be deemed to be “none”):
___________________________________________________

_____________________________________________________________________________

Dated: _______________, 2015

If purchaser is one or more individuals (all individuals must sign):

_____________________________________________________________________________________________

(Type or print name of prospective purchaser)

_____________________________________________________________________________________________

Signature of prospective purchaser

_____________________________________________________________________________________________

Social Security Number

_____________________________________________________________________________________________

(Type or print name of additional purchaser)

_____________________________________________________________________________________________

Signature of spouse, joint tenant, tenant in common or other signature, if
required

_____________________________________________________________________________________________

Social Security Number

41

 

Annex A

Definition of Accredited Investor

The securities will only be sold to investors who represent in writing in the
Subscription Agreement that they are accredited investors, as defined in
Regulation D, Rule 501 under the Act which definition is set forth below:

1.   A natural person whose net worth, or joint net worth with spouse, at the
time of purchase exceeds $1 million (excluding home); or

2.   A natural person whose individual gross income exceeded $200,000 or whose
joint income with that person’s spouse exceeded $300,000 in each of the last two
years, and who reasonably expects to exceed such income level in the current
year; or

3.   A trust with total assets in excess of $5 million, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person described in Regulation D; or

4.   A director or executive officer of the Company; or

5.   The investor is an entity, all of the owners of which are accredited
investors; or

6.   (a) bank as defined in Section 3(a)(2) of the Act, or any savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the Act,
(b) any broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, (c) an insurance Company as defined in Section 2(13) of
the Act, (d) an investment Company registered under the Investment Company Act
of 1940 or a business development Company as defined in Section 2(a)(48) of such
Act, (e) a Small Business Investment Company licensed by the United States Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958, (f) an employee benefit plan established and maintained
by a state, its political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, if such plan has total assets in excess of
$5 million, (g) an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Securities Act of 1974, and the employee benefit plan
has assets in excess of $5 million, or the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such act, that is either a bank,
savings and loan institution, insurance Company, or registered investment
advisor, or, if a self-directed plan, with an investment decisions made solely
by persons that are accredited investors, (h) a private business development
company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940,
or (i) an organization described in Section 501(c)(3) of the Internal Revenue
code, corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with assets
in excess of $5 million.

 

42

 

EXHIBIT “A” TO ACCREDITED INVESTOR QUESTIONNAIRE

ACCREDITED CORPORATIONS, PARTNERSHIPS, LIMITED LIABILITY COMPANIES, TRUSTS OR
OTHER ENTITIES INITIALING QUESTION 8B(xi) MUST PROVIDE THE FOLLOWING
INFORMATION.

I hereby certify that set forth below is a complete list of all equity owners in
__________________ [NAME OF ENTITY], a
                                               [TYPE OF ENTITY] formed pursuant
to the laws of the State of                                     . I also certify
that EACH SUCH OWNER HAS INITIALED THE SPACE OPPOSITE HIS OR HER NAME and that
each such owner understands that by initialing that space he or she is
representing that he or she is an accredited individual investor satisfying the
test for accredited individual investors indicated under “Type of Accredited
Investor.”

 

  __________________________________________   signature of authorized corporate
officer, general partner or trustee

 

Name of Equity Owner Type of Accredited Investor[1]

1.
___________________________________________________________________________________________

2.
___________________________________________________________________________________________

3.
___________________________________________________________________________________________

4.
___________________________________________________________________________________________

5.
___________________________________________________________________________________________

6.
___________________________________________________________________________________________

7.
___________________________________________________________________________________________

8.
___________________________________________________________________________________________

9.
___________________________________________________________________________________________

10.
__________________________________________________________________________________________

 

 

___________________

[1]      Indicate which Subparagraph of 8.1 - 8.3 the equity owner satisfies.

43

 

 

RULE 506 BAD ACTOR DISQUALIFICATION QUESTIONNAIRE

 

____________________________________ ______________ ___, 2015 Name  

 

Dataram Corporation (the “Company”) is about to close a private placement of
Common Stock pursuant to the terms of a Securities Purchase Agreement. Under an
SEC Rule effective September 23, 2013, the Company is requesting each director
and executive officer to complete and execute this questionnaire. Please answer
yes or no to all questions listed below.

 

DEFINITION OF PROMOTERS

Under the Securities Act of 1933 (the “Act”) Rule 405 defines a promoter as any
person—individual or legal entity—that either alone or with others, directly or
indirectly takes initiative in founding the business or enterprise of the
issuer, or, in connection with such founding or organization, directly or
indirectly receives 10% or more of any class of issuer securities or 10% or more
of the proceeds from the sale of any class of issuer securities (other than
securities received solely as underwriting commissions or solely in exchange for
property).  The test considers activities “alone or together with others,
directly or indirectly”; therefore, the result does not change if there are
other legal entities (which may themselves be promoters) in the chain between
that person and the issuer.

 

DEFINITION OF INVESTMENT MANAGERS AND PRINCIPALS OF POOLED INVESTMENT FUND
ISSUERS

 

For issuers that are pooled investment funds, the rule covers investment
advisers and other investment managers of the fund; the directors, general
partners, managing members, executive officers and other officers participating
in the offering of such investment managers; and the directors, executive
officers and other officers participating in the offering of the investment
managers’ general partners or managing members.

 

DEFINITION OF COMPENSATED SOLICITORS

 

Persons compensated for soliciting investors as well as their directors, general
partners, managing members, executive officers and officers participating in the
offering.  This category covers any persons compensated for soliciting investors
but will typically involve broker-dealers and other intermediaries.

 

DEFINITION OF DIRECTORS, GENERAL PARTNERS AND MANAGING MEMBERS OF THE ISSUER

 

Members of the Board of Directors (for issuers that are corporations), general
partners (for issuers that are partnerships) and managing members (for issuers
that are limited liability companies).

 

DEFINITION OF EXECUTIVE OFFICERS AND PARTICIPATING OFFICERS OF THE ISSUER

 

The term “executive officer” means a company’s president, any vice president in
charge of a principal business unit, division or function (such as sales,
administration or finance), any other officer who performs a policy-making
function or any other person who performs similar policy-making functions. The
term “officer” means a president, vice president, secretary, treasurer or
principal financial officer, comptroller or principal accounting officer, as
well as any person who routinely performs corresponding functions. 
Participation in an offering would have to be more than transitory or incidental
involvement, and could include activities such as participation or involvement
in due diligence activities, involvement in the preparation of disclosure
documents, and communication with the issuer, prospective investors or other
offering participants.

 

DEFINITION OF 20% BENEFICIAL OWNERS OF THE ISSUER

 

Beneficial owners of 20% or more of the issuer’s outstanding equity securities,
calculated on the basis of total voting power rather than on the basis of
ownership of any single class of securities.

 

NOTE ON REFERENCES TO THE COMPANY

 

All references to the Company made herein include its predecessors and
affiliated issuers.

 

44

 

 

1.      Criminal Convictions: Within the past 10 years (or five years, in the of
case the Company), have you or the Company been convicted of any felony or
misdemeanor

(a)      In connection with the purchase or sale of a security

YES ___      NO ___

(b)      Involving the making of a false filing with the Securities and Exchange
Commission (the “SEC”)

YES ___      NO ___

(c)      Arising out of the conduct of the business of an underwriter, broker,
dealer, municipal securities dealer, investment adviser or paid solicitor of
purchasers of securities.

YES ___      NO ___

 

2.      Court injunctions and restraining orders: Within the past five years,
have you or the Company been the subject of a court injunction or restraining
order

(a)      In connection with the purchase or sale of a security

YES ___      NO ___

(b)      Involving the making of a false filing with the SEC

YES ___      NO ___

(c)      Arising out of the conduct of the business of an underwriter, broker,
dealer, municipal securities dealer, investment adviser or paid solicitor of
purchasers of securities.

YES ___      NO ___

 

3.      Final orders of certain state and federal regulators: Have you or the
Company been the subject of any final orders of state regulators of securities,
insurance, banking, savings associations or credit unions; federal banking
agencies; the Commodity Futures Trading Commission and the National Credit Union
Administration that

(a)      Bar you or the Company from associating with a regulated entity,
engaging in the business of securities, insurance or banking, or engaging in
savings association or credit union activities or

YES ___      NO ___

(b) Are based on a violation of a law or regulation that prohibits fraudulent,
manipulative, or deceptive conduct and were issued within the last 10 years

YES ___      NO ___

 

45

 

 

4.      SEC disciplinary orders: Are you or the Company currently the subject of
any SEC disciplinary orders relating to brokers, dealers, municipal securities
dealers, investment companies, and investment advisers and their associated
persons under Section 15(b) or 15B(c) of the Securities Exchange Act of 1934, or
Section 203(e) or (f) of the Investment Advisers Act that

(a)     Suspends or revokes your or the Company’s registration as a broker,
dealer, municipal securities dealer or investment adviser

YES ___      NO ___

(1)  Places limitations on your or the Company’s activities, functions or
operations

 

YES ___      NO ___

(2)  Bars you or the Company from being associated with any entity or from
participating in the offering of any penny stock

 

YES ___      NO ___

 

5.      SEC cease-and-desist orders: Within the last five years, have you or the
Company been the subject of SEC orders to cease and desist from committing or
causing a violation or future violations of

(a) The scienter-based anti-fraud provisions of the federal securities laws

YES ___      NO ___

(b) Section 5 of the Act

YES ___      NO ___

 

6.      Suspension or expulsion from membership in an SRO or from association
with an SRO member: Have you or the Company been suspended or expelled from
membership in, or suspended or barred from association with a member of, a
securities self-regulatory organization or “SRO” (i.e., a registered national
securities exchange or national securities association, such as FINRA) for any
act or omission to act constituting conduct inconsistent with just and equitable
principles of trade.

YES ___      NO ___

 

46

 

 

7.      SEC stop orders:

(a) Within the last five years, have you, as an officer or director of an
issuer, or the Company filed a registration statement or Regulation A offering
statement that was the subject of a SEC refusal order, stop order or order
suspending the Regulation A exemption, or are you now the subject of an
investigation or proceeding to determine whether such an order should be issued.

YES ___      NO ___

(b) Within the last five years, have you or the Company been, or been named as,
an underwriter of securities under a registration statement or Regulation A
offering statement that was the subject of a Commission refusal order, stop
order or order suspending the Regulation A exemption, or are you now the subject
of an investigation or proceeding to determine whether such an order should be
issued.

YES ___      NO ___

 

8.      U.S. Postal Service false representation orders: Within the last five
years have you or the Company been subject to a U. S Postal Service false
representation order, temporary restraining order or preliminary injunction with
respect to conduct alleged by the U.S. Postal Service to constitute a scheme or
device for obtaining money or property through the mail by means of false
representations.

 

YES ___      NO ___

 

The foregoing answers are true and correct in all respects. I understand that a
“yes” answer will disqualify the issuer from relying on exemption under Rule 506
under the Securities Act of 1933.

 

 

 

  Dated: ____________________, 2015 __________________________     Signature

 

 

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