exv10w1






Exhibit 10.1




INX INC.




900,000 Shares of Common Stock, par value $0.01 per share




PLACEMENT AGENCY AGREEMENT




June 19, 2008               




Raymond James & Associates, Inc.

880 Carillon Parkway

St. Petersburg, FL 33716




Dear Sir or Madam:




     INX Inc., a Delaware corporation (the “Company”), proposes to issue and sell 900,000 shares
(the “Shares”) of common stock, par value $0.01 per share (the “Common Stock”), to certain
investors (collectively, the “Investors”). The Company desires to engage you as its placement
agent (the “Placement Agent”) in connection with such issuance and sale. The Shares are more fully
described in the Registration Statement (as hereinafter defined).



     The Company hereby confirms as follows its agreements with the Placement Agent.



          Agreement to Act as Placement Agent. On the basis of the representations, warranties
and agreements of the Company herein contained and subject to all the terms and conditions of this
Agreement, the Company hereby appoints the Placement Agent and the Placement Agent agrees to act as
the Company’s exclusive placement agent, on a best efforts basis, in connection with the issuance
and sale by the Company of the Shares to the Investors during the period commencing on the date
hereof and expiring on July 16, 2008. The Placement Agent shall use commercially reasonable
efforts to assist the Company in obtaining performance by each Investor whose offer to purchase
Shares has been solicited by the Placement Agent and accepted by the Company, but the Placement
Agent shall not, except as otherwise provided in this Agreement, have any liability to the Company
in the event any such purchase is not consummated for any reason. The Company shall have the sole
right to accept offers to purchase Shares and may reject any such offer, in whole or in part. The
Company shall pay to the Placement Agent an aggregate amount equal to 6.50% of the proceeds
received by the Company from the sale of the Shares, if any, actually sold as set forth on the
cover page of the Prospectus (as hereinafter defined) upon the closing of the transactions
contemplated hereby. The Placement Agent, without the prior consent of the Company, may appoint
any co-agents or sub-agents in connection with the issuance and sale of the Shares and may allocate
any portion of such fee to such co-agents or sub-agents.




2









 








          Delivery and Payment. At 10:00 a.m., New York City time, on June 25, 2008, or at such
other time on such other date as may be agreed upon by the Company and the
Placement Agent (such date is hereinafter referred to as the “Closing Date”), the Placement
Agent shall cause the Investors to wire an amount equal to the price per share as shown on the
cover page of the Prospectus (as hereinafter defined) for each and all of the Shares offered
pursuant to the Prospectus to an account designated by the Company and the Company shall deliver
the Shares to the Investors, which delivery may be made through the facilities of The Depository
Trust Company. The closing (the “Closing”) shall take place at the office of Morrison & Foerster
LLP, 1290 Avenue of the Americas, New York, New York 10104. All actions taken at the Closing shall
be deemed to have occurred simultaneously.




          Representations and Warranties of the Company. The Company represents and warrants
and covenants to the Placement Agent on the date hereof, and shall be deemed to represent and
warrant and covenant to the Placement Agent on the Closing Date, that:




               A “shelf” registration statement on Form S-3 (File No. 333-146710) with respect to the Common
Stock and certain other securities of the Company has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the “Act”), and the rules and
regulations (the “Rules and Regulations”) of the Securities and Exchange Commission (the
“Commission”) thereunder, and has been filed with the Commission. The Company and the transactions
contemplated by this Agreement meet the requirements and comply with the conditions for the use of
Form S-3. The Registration Statement meets the requirements of Rule 415(a)(1)(x) under the Act and
complies in all materials respects with said rule. As used in this Agreement:



     (i) “Applicable Time” means 7:30 p.m., New York City time, on the date of this Agreement;



     (ii) “Company’s Knowledge” means the actual knowledge of James H. Long, Brian Fontana and
Larry Lawhorn;



     (iii) “Effective Date” means any date as of which any part of the Registration Statement
became, or is deemed to have become, effective under the Act in accordance with the Rules and
Regulations;



     (iv) “Issuer Free Writing Prospectus” means each “issuer free writing prospectus” (as defined
in Rule 433 of the Rules and Regulations) prepared by or on behalf of the Company or used or
referred to by the Company in connection with the offering of the Shares, each as listed on
Schedule 3 hereto;



     (v) “Preliminary Prospectus” means any preliminary prospectus relating to the Shares included
in the Registration Statement or filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, including any preliminary prospectus supplement thereto relating to the Shares;



     (vi) “Pricing Disclosure Materials” means, as of the Applicable Time, the most recent
Preliminary Prospectus, together with each Issuer Free Writing Prospectus filed or used by the
Company on or before the Applicable Time, and the information set forth on Schedule 4 hereto;



     (vii) “Prospectus” means the final prospectus relating to the Shares including any prospectus
supplement thereto relating to the Shares and the documents incorporated by



3









 







reference therein, as
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations; and



     (viii) “Registration Statement” means, collectively, the various parts of such registration
statement, each as amended as of the Effective Date for such part, including any Preliminary
Prospectus or the Prospectus and all exhibits to such registration statement.
Any reference to any Preliminary Prospectus, the Prospectus or the Registration Statement shall be
deemed to refer to and include any documents incorporated or deemed to be incorporated by reference
therein pursuant to Form S-3 under the Act as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be. Any reference herein to the terms “amend”, “amendment” or
“supplement” with respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any document filed under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), after the effective date of the Registration
Statement, the date of such Preliminary Prospectus or the date of the Prospectus, as the case may
be, which is incorporated therein by reference.



               The Registration Statement has heretofore become effective under the Act or, with respect to
any registration statement to be filed to register the offer and sale of Shares pursuant to Rule
462(b) under the Act, will be filed with the Commission and become effective under the Act no later
than 10:00 p.m., New York City time, on the date of determination of the public offering price for
the Shares; no stop order of the Commission preventing or suspending the use of any Prospectus, or
the effectiveness of the Registration Statement, has been issued, and no proceedings for such
purpose have been instituted or, to the Company’s Knowledge, are contemplated by the Commission.



               The Company was not at the time of the initial filing of the Registration Statement, has not
been since the date of such filing, and will not be on the Closing Date, an “ineligible issuer” (as
defined in Rule 405 under the Act). The Company has been since the time of initial filing of the
Registration Statement and continues to be eligible to use Form S-3 for the offering of the Shares.



               The Registration Statement, at the time it became effective, as of the date hereof, and at the
Closing Date conformed and will conform in all material respects to the requirements of the Act and
the rules and regulations of the Commission promulgated thereunder (the “Rules and Regulations”).
The Preliminary Prospectus conformed, and the
Prospectus will conform, when filed with the Commission pursuant to Rule 424(b) and on the
Closing Date to the requirements of the Act and the Rules and Regulations. The documents
incorporated by reference in any Preliminary Prospectus or the Prospectus conformed, and any
further documents so incorporated will conform, when filed with the Commission, to the requirements
of the Exchange Act or the Act, as applicable, and the Rules and Regulations.



               The Registration Statement did not, as of the Effective Date, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.



               The Prospectus will not, as of its date and on the Closing Date, contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation or warranty
with respect to any statement contained in the Prospectus in reliance



4









 







upon and in conformity with
information concerning the Placement Agent and furnished in writing by the Placement Agent to the
Company expressly for use in the Prospectus, as set forth in Section 8(b).



               The documents incorporated by reference in any Preliminary Prospectus or the Prospectus did
not, and any further documents filed and incorporated by reference therein will not, when filed
with the Commission, contain an untrue statement of a material fact or omit to state a material
fact required to be stated in such document or necessary to make the statements in such document,
in light of the circumstances under which they were made, not misleading.



               The Pricing Disclosure Materials, including each Issuer Free Writing Prospectus, did not, as
of the Applicable Time, contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however, that
the Company makes no representation or warranty with respect to any statement contained in the
Pricing Disclosure Materials in reliance upon and in conformity with information concerning the
Placement Agent and furnished in writing by the Placement Agent to the Company expressly for use in
the Pricing Disclosure Materials, as set forth in Section 8(b).



               Each Issuer Free Writing Prospectus conformed or will conform in all material respects to the
requirements of the Act and the Rules and Regulations on the date of first use, and the Company has
complied or will comply with any filing requirements applicable to such Issuer Free Writing
Prospectus pursuant to the Rules and Regulations. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the public offer and sale of the
Shares, did not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement, the Pricing Disclosure
Materials or the Prospectus, including any document incorporated by reference therein that has not
been superseded or modified. The Company has not made any offer relating to the Shares that would
constitute an Issuer Free Writing Prospectus without the prior written consent of the Placement
Agent. The Company has retained in accordance with the Rules and Regulations all Issuer Free
Writing Prospectuses that were not required to be filed pursuant to the Rules and Regulations.



               The Company is, and at the Closing Date will be, duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company (i) has, and at the Closing Date
will have, full power and authority to conduct all the activities conducted by it, to own or lease
all the assets owned or leased by it and to conduct its business as described in the Registration
Statement and the Prospectus and (ii) is, and at the Closing Date will be, duly licensed or
qualified to do business and in good standing as a foreign organization in all jurisdictions in
which the nature of the activities conducted by it or the character of the assets owned or leased
by it makes such licensing or qualification necessary; except, in each case, where the failure to
be so qualified or in good standing or have such power or authority would not, individually or in
the aggregate, have a material adverse effect or would not reasonably be expected to have a
material adverse effect on or affecting the business, properties, management, consolidated
financial position, stockholders’ equity, prospects or results of operations of the Company and its
Subsidiaries taken as a whole (a “Material



5









 







Adverse Effect”). Complete and correct copies of the
articles or certificate of incorporation and of the bylaws of the Company and all amendments
thereto have been delivered or made available to the Placement Agent, and no changes therein will
be made subsequent to the date hereof and prior to the Closing Date.



               The Company’s only subsidiaries (each a “Subsidiary” and collectively the “Subsidiaries”) are
listed on Schedule 1 to this Agreement. Each Subsidiary has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of formation. Each
Subsidiary is duly qualified and in good standing as a foreign corporation in each jurisdiction in
which the character or location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for those failures to be so
qualified or in good standing which will not, individually or in the aggregate, have a Material
Adverse Effect. All of the shares of issued capital stock of each subsidiary of the Company have
been duly authorized and validly issued, are fully paid and non-assessable and are owned directly
or indirectly by the Company, free and clear of any lien, encumbrance, claim, security interest,
restriction on transfer, shareholders’ agreement, voting trust or other defect of title whatsoever.



               The issued and outstanding shares of capital stock of the Company have been validly issued,
are fully paid and nonassessable and, other than as set forth in the Registration Statement, are
not subject to any preemptive rights, rights of first refusal or similar rights. The Company has
an authorized, issued and outstanding capitalization as set forth in the Prospectus as of the dates
referred to therein. The descriptions of the securities of the Company in the Registration
Statement and the Prospectus are, and at the Closing Date will be, complete and accurate in all
respects. Except as set forth in the Registration Statement and the Prospectus, the Company does
not have outstanding any rights (other than stock options or other equity awards under the
Company’s equity incentive and stock purchase plans) or warrants to subscribe for, or any
securities or obligations convertible into, or exchangeable for, or any contracts or commitments to
issue or sell, any shares of capital stock or other securities.



               The Company has full legal right, power and authority to enter into this Agreement and the
proposed purchase agreements to be executed by each Investor and the Company, substantially in the
form attached hereto as Exhibit A (the “Investor Purchase Agreements,” and together with this
Agreement, the “Transaction Documents”) and perform the transactions contemplated hereby and
thereby. The Transaction Documents have been authorized and validly executed and delivered by the
Company and are legal, valid and binding
agreements of the Company enforceable against the Company in accordance with their respective
terms, subject to the effect of applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights generally and equitable principles of general applicability.



               The issuance and sale of the Shares have been duly authorized by the Company, and the Shares,
when issued and paid for in accordance with the Transaction Documents, will be duly and validly
issued, fully paid and nonassessable and will not be subject to preemptive or similar rights. The
holders of the Shares will not be subject to personal liability by reason of being such holders.
The Shares, when issued, will conform in all material respects to the description thereof set forth
in or incorporated into Pricing Disclosure Materials and the Prospectus.



6









 





               The consolidated financial statements and the related notes included in the Registration
Statement, the Pricing Disclosure Materials and the Prospectus present fairly, in all material
respects, the financial condition of the Company and its consolidated Subsidiaries as of the dates
thereof and the results of operations and cash flows at the dates and for the periods covered
thereby in conformity with generally accepted accounting principles (“GAAP”). Any pro forma
financial statements or data included in the Registration Statement, the Pricing Disclosure
Materials and the Prospectus comply in all material respects with the requirements of the Act and
the Exchange Act, and the assumptions used in the preparation of such pro forma financial
statements and data are reasonable, the pro forma adjustments used therein are appropriate to give
effect to the transactions or circumstances described therein and the pro forma adjustments have
been properly applied to the historical amounts in the compilation of those statements and data.
No other financial statements or schedules of the Company, any Subsidiary or any other entity are
required by the Act or the Rules and Regulations to be included in the Registration Statement, the
Pricing Disclosure Materials or the Prospectus. All disclosures contained in the Registration
Statement, the Pricing Disclosure Materials and the Prospectus regarding “non-GAAP financial
measures” (as such term is defined by the Rules and Regulations) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to the extent applicable. The Company
and the Subsidiaries do not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations or any “variable interest entities” within the meaning
of Financial Accounting Standards Board Interpretation No. 46), of a character required to be
described in or to be filed as an exhibit to the Registration Statement that are not disclosed in
the Registration Statement, the Pricing Disclosure Materials and the Prospectus or so filed.



               Grant Thornton LLP (the “Accountants”), who have reported on such consolidated financial
statements and schedules, are registered independent public accountants with respect to the Company
as required by the Act and the Rules and Regulations and by the rules of the Public Accounting
Oversight Board. The consolidated financial statements of the Company and the related notes and
schedules included in the Registration Statement and the Prospectus have been prepared in
conformity with the requirements of the Act and the Rules and Regulations and present fairly the
information shown therein.



               Except as set forth in the Registration Statement, the Pricing Disclosure Materials and the
Prospectus, there is and has been no material failure on the part of the Company, or to the
Company’s Knowledge after due inquiry, any of the Company’s directors or officers, in their
capacities as such, to comply with any applicable provisions of the Sarbanes Oxley Act of 2002 and
the rules and regulations promulgated therewith (the “Sarbanes Oxley
Act”). Each of the principal executive officer and the principal financial officer of the
Company (or each former principal executive officer of the Company and each former principal
financial officer of the Company as applicable) has made all certifications required by Sections
302 and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms, statements and
other documents required to be filed by it with the Commission. For purposes of the preceding
sentence, “principal executive officer” and “principal financial officer” shall have the meanings
given to such terms in the Sarbanes-Oxley Act. The Company has taken all reasonable actions
necessary to ensure that it is in compliance in all material respects with all provisions of the
Sarbanes-Oxley Act that are in effect and with which the Company is required to comply.



7









 





               The Company and its Subsidiaries maintain systems of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting principles and
to maintain asset accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure
controls and procedures to provide reasonable assurance that material information relating to the
Company and its Subsidiaries is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as the case may be, is being prepared. The Company’s certifying
officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of
the end of the period covered by the Form 10-K for the year ended December 31, 2007 (such date, the
“Evaluation Date”). The Company presented in its Form 10-K for the year ended December 31, 2007
the conclusions of the certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date.



               Except as set forth in or otherwise contemplated or disclosed in the Registration Statement,
the Pricing Disclosure Materials and the Prospectus, since the date of the most recent consolidated
financial statements of the Company included or incorporated by reference in the most recent
Preliminary Prospectus, (i) there has not been any change in the capital stock of the Company or
long-term debt of the Company or any Subsidiary or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any class of capital stock, or any
material adverse change, in the business, properties, management, consolidated financial position,
stockholders’ equity, or results of operations of the Company and its Subsidiaries taken as a whole
(a “Material Adverse Change”), (ii) there has not been any change or any development involving a
prospective Material Adverse Change whether or not occurring in the ordinary course of business,
and (iii) neither the Company nor any Subsidiary has sustained any material loss or material
interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor disturbance or dispute or any action, order or decree of
any court or arbitrator or governmental or regulatory authority.



               Except as set forth in or otherwise contemplated or disclosed in the Registration Statement,
the Pricing Disclosure Materials and the Prospectus, since the date as
of which information is given in the most recent Preliminary Prospectus or the Pricing
Disclosure Materials, neither the Company nor any Subsidiary has entered into any transaction or
agreement, not in the ordinary course of business, that is material to the Company and its
Subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, not in
the ordinary course of business, that is material to the Company and its Subsidiaries taken as a
whole.



               The Company and each Subsidiary has good and valid title in fee simple to all items of real
property and good and valid title to all tangible personal property described



8









 







in the Registration
Statement, the Pricing Disclosure Materials or the Prospectus as being owned by them that are
material to the businesses of the Company and its Subsidiaries taken as a whole, in each case free
and clear of all liens, encumbrances and claims except those that (i) do not materially interfere
with the use made and proposed to be made of such property by the Company and its Subsidiaries or
(ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect. Any real property described in the Registration Statement, the Pricing Disclosure
Materials or the Prospectus as being leased by the Company or any Subsidiary that is material to
the business of the Company and its Subsidiaries taken as a whole is held by them under valid,
existing and enforceable leases, except where the failure of such leases to be valid or enforceable
(A) does not materially interfere with the use made or proposed to be made of such property by the
Company and its Subsidiaries or (B) would not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect.



               The Company is not, nor upon completion of the transactions contemplated herein will it be, an
“investment company” or “promoter” or “principal underwriter” for an “investment company,” as such
terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).



               There are no legal, governmental or regulatory actions, suits or proceedings pending, nor any
legal, governmental or regulatory investigations, to which the Company or any Subsidiary is a party
or to which any property of the Company or any Subsidiary is the subject that, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Company to perform its obligations under the Transaction
Documents (collectively, the “Actions”); to the Company’s Knowledge, no such Actions are threatened
by any governmental or regulatory authority or threatened by others; and there are no current or,
to the Company’s Knowledge, pending legal, governmental or regulatory investigations, actions,
suits or proceedings that are required under the Act to be described in the Registration Statement,
the Pricing Disclosure Materials or the Prospectus that are not so described.



               The Company and each Subsidiary has, and at the Closing Date will have, (i) all governmental
licenses, permits, consents, orders, approvals and other authorizations necessary to carry on its
respective business as presently conducted except where the failure to have such governmental
licenses, permits, consents, orders, approvals and other authorizations would not have a Material
Adverse Effect, (ii) complied with all laws, regulations and orders applicable to either it or its
business, except where the failure to so comply would not have a Material Adverse Effect, and (iii)
performed all its obligations required to be performed, and is not, and at the Closing Date will
not be, in default, under any indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement, lease, contract or other agreement or instrument
(collectively, a “contract or
other agreement”) to which it is a party or by which its property is bound or subject, except
where such default would not have a Material Adverse Effect, and, to the Company’s Knowledge, no
other party under any material contract or other agreement to which it is a party is in default in
any respect thereunder where such default would have a Material Adverse Effect. The Company and
its Subsidiaries are not in violation of any provision of their respective organizational or
governing documents.




9












 





               All consents, authorizations, approvals and orders required for the execution and delivery of
the Transaction Documents have been obtained, except such as may be required under state securities
or Blue Sky Laws or the by-laws and rules of the Financial Industry Regulatory Authority, Inc.
(“FINRA”) or the NASDAQ Global Market in connection with the distribution of the Shares by the
Placement Agent.



               Neither the execution of the Transaction Documents, nor the issuance, offering or sale of the
Shares, nor the consummation of any of the transactions contemplated herein and therein, nor the
compliance by the Company with the terms and provisions hereof and thereof will conflict with, or
will result in a breach of, any of the terms and provisions of, or has constituted or will
constitute a default under, or has resulted in or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant
to the terms of any contract or other agreement to which the Company or its Subsidiaries may be
bound or to which any of the property or assets of the Company or its Subsidiaries is subject,
except (i) such conflicts, breaches or defaults as may have been waived and (ii) such conflicts,
breaches and defaults that would not have a Material Adverse Effect; nor will such action result
(x) in any violation of the provisions of the organizational or governing documents of the Company
or any Subsidiary, or (y) in any material violation of the provisions of any statute or any order,
rule or regulation applicable to the Company or any Subsidiary or of any court or of any federal,
state or other regulatory authority or other government body having jurisdiction over the Company
or any Subsidiary.



               There is no document or contract of a character required to be described in the Registration
Statement, the Pricing Disclosure Materials or the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required. All such contracts to which
the Company is a party have been authorized, executed and delivered by the Company, constitute
valid and binding agreements of the Company, and are enforceable against the Company in accordance
with the terms thereof, subject to the effect of applicable bankruptcy, insolvency or similar laws
affecting creditors’ rights generally and equitable principles of general applicability.



               The Company and its directors, officers or controlling persons have not taken, directly or
indirectly, any action intended, or which might reasonably be expected, to cause or result, under
the Act or otherwise, in, or which has constituted, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Common Stock.



               No holder of securities of the Company has rights to the registration of any securities of the
Company as a result of the filing of the Registration Statement or the transactions contemplated by
this Agreement, except for such rights as have been waived or satisfied.



               The Common Stock is currently listed on the NASDAQ Global Market. Except as disclosed in the
Registration Statement, the Pricing Disclosure Materials or the Prospectus, the Company has not, in
the 12 months preceding the date hereof, received notice from the NASDAQ Global Market to the
effect that the Company is not in compliance with the listing or maintenance requirements. The
Company has no reason of which it is currently



10









 







aware to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements.



               The Company is not involved in any material labor dispute nor, to the Company’s Knowledge, is
any such dispute known by the Company to be threatened.



               The business and operations of the Company and each of its Subsidiaries have been and are
being conducted in compliance with all applicable laws, ordinances, rules, regulations, licenses,
permits, approvals, plans, authorizations or requirements relating to occupational safety and
health, or pollution, or protection of health or the environment (including, without limitation,
those relating to emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes into ambient air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes, whether solid, gaseous or liquid in nature) of
any governmental department, commission, board, bureau, agency or instrumentality of the United
States, any state or political subdivision thereof, or any foreign jurisdiction, and all applicable
judicial or administrative agency or regulatory decrees, awards, judgments and orders relating
thereto, except where the failure to be in such compliance will not, individually or in the
aggregate, have a Material Adverse Effect; and neither the Company nor any of its Subsidiaries has
received any notice from any governmental instrumentality or any third party alleging any material
violation thereof or liability thereunder (including, without limitation, liability for costs of
investigating or remediating sites containing hazardous substances and/or damages to natural
resources) that, individually or in the aggregate, would reasonably be expected to have a Material
Adverse Effect.



               Except as disclosed in the Registration Statement, the Pricing Disclosure Materials and the
Prospectus, (i) the Company and each Subsidiary owns or has obtained valid and enforceable licenses
or options for the inventions, patent applications, patents, trademarks (both registered and
unregistered), trade names, copyrights and trade secrets necessary for the conduct of its
respective business as currently conducted (collectively, the “Intellectual Property”); and (ii)
(a) there are no third parties who have any ownership rights to any Intellectual Property that is
owned by, or has been licensed to, the Company or any Subsidiary for the products described in the
Registration Statement that would preclude the Company or any Subsidiary from conducting its
business as currently conducted and have a Material Adverse Effect, except for the ownership rights
of the owners of the Intellectual Property licensed or optioned by the Company or a Subsidiary; (b)
there are currently no sales of any products that would constitute an infringement by third parties
of any Intellectual Property owned, licensed or optioned by the Company or any Subsidiary, which
infringement would have a Material Adverse Effect; (c) there is no pending or, to the Company’s
Knowledge, threatened action, suit, proceeding or claim by others challenging the rights of the
Company or any Subsidiary in or to any Intellectual Property owned, licensed or optioned by the
Company or any Subsidiary, other than claims which would not reasonably be expected to have a
Material Adverse Effect; (d) there is no pending or, to the Company’s Knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any Intellectual Property
owned, licensed or optioned by the Company or any Subsidiary, other than actions, suits,
proceedings and claims which would not reasonably be expected to have a Material



11









 







Adverse Effect;
and (e) there is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or
claim by others that the Company or any of any Subsidiaries infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary right of others, other than
actions, suits, proceedings and claims which would not reasonably be expected to have a Material
Adverse Effect.



               The Company and each Subsidiary has filed all necessary federal, state and foreign income and
franchise tax returns and have paid or accrued all taxes shown as due thereon, and, to the
Company’s Knowledge, there is no tax deficiency which has been or could reasonably be expected to
be asserted or threatened against it or any Subsidiary which could have a Material Adverse Effect.



               On the Closing Date, all stock transfer or other taxes (other than income taxes) which are
required to be paid in connection with the sale and transfer of the Shares to be sold hereunder
will be, or will have been, fully paid or provided for by the Company and all laws imposing such
taxes will be or will have been fully complied with.



               The Company and each Subsidiary maintains insurance of the types and in the amounts that the
Company reasonably believes is adequate for their respective businesses, including, but not limited
to, insurance covering all real and personal property owned or leased by the Company or any
Subsidiary against theft, damage, destruction, acts of vandalism and all other risks customarily
insured against by similarly situated companies, all of which insurance is in full force and
effect.



               Neither the Company nor any Subsidiary, nor, to the Company’s Knowledge, any director,
officer, agent or employee of the Company, has directly or indirectly, (i) made any unlawful
contribution to any candidate for public office, or failed to disclose fully any contribution in
violation of law, (ii) made any payment to any federal or state governmental officer or official,
or other person charged with similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof, (iii) violated or is in
violation of any provisions of the U.S. Foreign Corrupt Practices Act of 1977 or (iv) made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment.



               Each officer and director of the Company listed on Schedule 2 hereto has delivered to the
Placement Agent an agreement substantially in the form of Exhibit B hereto.



               The Company has delivered to the Placement Agent an agreement substantially in the form of
Exhibit C.



               The Company has not distributed and, prior to the later to occur of the Closing Date and
completion of the distribution of the Shares, will not distribute any offering material in
connection with the offering and sale of the Shares other than any Preliminary Prospectus, the
Prospectus and any Issuer Free Writing Prospectus to which the Placement Agent has consented.



               Except as described in the Registration Statement, the Pricing Disclosure Materials and the
Prospectus, the Company does not directly or indirectly control or have a material interest in any
other business entity.



12









 





               Each material employee benefit plan, within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or
contributed to by the Company or any of its affiliates for employees or former employees of the
Company and its Subsidiaries has been maintained in material compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations, including but not limited
to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited transaction,
within the meaning of Section 406 of ERISA
or Section 4975 of the Code, has occurred which would result in a material liability to the
Company with respect to any such plan excluding transactions effected pursuant to a statutory or
administrative exemption; and for each such plan that is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section
412 of the Code has been incurred, whether or not waived, and the fair market value of the assets
of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the
present value of all benefits accrued under such plan determined using reasonable actuarial
assumptions.



               No relationship, direct or indirect, exists between or among the Company or any Subsidiary, on
the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or
any Subsidiary, on the other, which is required by the Act to be disclosed in the Registration
Statement, the Pricing Disclosure Materials and the Prospectus and is not so disclosed.



               The Company has not sold or issued any securities that would be integrated with the offering
of the Shares contemplated by this Agreement pursuant to the Act, the Rules and Regulations or the
interpretations thereof by the Commission.



               Neither the Company nor its Subsidiaries are a party to any contract, agreement or
understanding with any person (other than this Agreement) that would give rise to a valid claim
against the Company or its Subsidiaries or the Placement Agent (or the Placement Agent’s co-agent
or sub-agent, if any) for a brokerage commission, finder’s fee or like payment in connection with
the offering and sale of the Shares.



               The operations of the Company and its Subsidiaries are and have been conducted at all times in
material compliance with applicable financial record keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes
of all jurisdictions to which the Company or its Subsidiaries are subject, the rules and
regulations thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (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 of its Subsidiaries with respect to the Money
Laundering Laws is pending or, to the Company’s Knowledge, threatened against the Company or any of
its Subsidiaries.



          Agreements of the Company. The Company covenants and agrees with the Placement Agent
as follows:




               The Registration Statement has become effective, and if Rule 430A is used or the filing of the
Prospectus is otherwise required under Rule 424(b), the Company will



13









 







file the Prospectus (properly
completed if Rule 430A has been used), subject to the prior approval of the Placement Agent,
pursuant to Rule 424(b) within the prescribed time period and will provide a copy of such filing to
the Placement Agent promptly following such filing.



               The Company will not, during such period as the Prospectus would be required by law to be
delivered in connection with sales of the Shares by an underwriter or dealer in connection with the
offering contemplated by this Agreement, file any amendment or supplement to the Registration
Statement or the Prospectus unless a copy thereof shall first
have been submitted to the Placement Agent within a reasonable period of time prior to the
filing thereof and the Placement Agent shall not have reasonably objected thereto in good faith.



               The Company will notify the Placement Agent promptly, and will, if requested, confirm such
notification in writing, (1) when any post-effective amendment to the Registration Statement
becomes effective, but only during the period mentioned in Section 4(b); (2) of any request by the
Commission for any amendments to the Registration Statement or any amendment or supplements to the
Prospectus or any Issuer Free Writing Prospectus or for additional information related to the
offering of the Shares or for additional information related to the Registration Statement, the
Prospectus or any Issuer Free Writing Prospectus, but only during the period mentioned in Section
4(b); (3) of the issuance by the Commission of any stop order preventing or suspending the
effectiveness of the Registration Statement, or the initiation of any proceedings for that purpose
or the threat thereof, but only during the period mentioned in Section 4(b); (4) of becoming aware
of the occurrence of any event during the period mentioned in Section 4(b) that in the reasonable
judgment of the Company makes any statement made in the Registration Statement, the Pricing
Disclosure Materials or the Prospectus untrue in any material respect or that requires the making
of any changes in the Registration Statement, the Pricing Disclosure Materials or the Prospectus in
order to make the statements therein, in light of the circumstances in which they are made, not
misleading; and (5) of receipt by the Company of any notification with respect to any suspension of
the qualification of the Shares for offer and sale in any jurisdiction. If at any time the
Commission shall issue any order suspending the effectiveness of the Registration Statement in
connection with the offering contemplated hereby, the Company will make every commercially
reasonable effort to obtain the withdrawal of any such order at the earliest possible moment. If
the Company has omitted any information from the Registration Statement, pursuant to Rule 430A, it
will use its commercially reasonable efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to said Rule 430A and to notify the Placement Agent
promptly of all such filings.



               If, at any time when a Prospectus relating to the Shares is required to be delivered under the
Act, the Company becomes aware of the occurrence of any event as a result of which the Prospectus,
as then amended or supplemented, would, in the reasonable judgment of counsel to the Company or
counsel to the Placement Agent, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or the Pricing Disclosure Materials, as then amended or
supplemented, would, in the reasonable judgment of counsel to the Company or counsel to the
Placement Agent, include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or the



14









 







Registration Statement, as then amended or supplemented,
would, in the reasonable judgment of counsel to the Company or counsel to the Placement Agent,
include any untrue statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading, or if for any other reason it is necessary, in the
reasonable judgment of counsel to the Company or counsel to the Placement Agent, at any time to
amend or supplement the Prospectus, the Pricing Disclosure Materials or the Registration Statement
to comply with the Act or the Rules and Regulations, the Company will promptly notify the Placement
Agent and, subject to Section 4(b) hereof, will promptly prepare and file with the Commission, at
the Company’s expense, an amendment to the Registration Statement, an amendment or supplement to
the Pricing Disclosure Materials or an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such compliance and will
deliver to the Placement Agent, without charge, such number of copies thereof as the Placement
Agent may reasonably request. The Company consents to the use of the Prospectus or any amendment
or supplement thereto by the Placement Agent.



               The Company will furnish, upon request, to the Placement Agent and its counsel, without charge
(i) one conformed copy of the Registration Statement as originally filed with the Commission and
each amendment thereto, including financial statements and schedules, and all exhibits thereto,
(ii) so long as a prospectus relating to the Shares is required to be delivered under the Act, as
many copies of each Issuer Free Writing Prospectus, Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Placement Agent may reasonably request.



               The Company will comply with all the undertakings contained in the Registration Statement.



               Prior to the sale of the Shares to the Investors, the Company will cooperate with the
Placement Agent and its counsel in connection with the registration or qualification of the Shares
for offer and sale under the state securities or Blue Sky laws of such jurisdictions as the
Placement Agent may reasonably request; provided, that in no event shall the Company be obligated
to qualify to do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction where it is not now
so subject.



               The Company will apply the net proceeds from the offering and sale of the Shares in the manner
set forth in the Pricing Disclosure Materials and the Prospectus under the caption “Use of
Proceeds.”



               The Company will use its best efforts to ensure that the Shares are listed or quoted on the
NASDAQ Global Market at the time of the Closing.



               The Company will not at any time, directly or indirectly, take any action intended, or which
might reasonably be expected, to cause or result in, or which will constitute, stabilization of the
price of the Shares to facilitate the sale or resale of any of the Shares.



          Agreements of the Placement Agent. The Placement Agent agrees that it shall not
include any “issuer information” (as defined in Rule 433 under the Act) in any “free writing
prospectus” (as defined in Rule 405) used or referred to by the Placement Agent without the



15









 






prior
consent of the Company (any such issuer information with respect to whose use the Company has given
its consent, “Permitted Issuer Information”). The Placement Agent also agrees to provide to each
Investor, prior to the Closing, a copy of the Prospectus and any amendments or supplements thereto.




          Expenses. Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay all of its costs and expenses
incident to the performance of the obligations of the Company under this Agreement, including but
not limited to costs and expenses of or relating to (1) the preparation, printing and filing of the
Registration Statement (including each pre- and post-effective amendment thereto) and exhibits
thereto, any Issuer Free Writing Prospectus, each Preliminary Prospectus, the Prospectus and any
amendments or supplements thereto, including all fees, disbursements and
other charges of counsel and accountants to the Company, (2) the preparation and delivery of
certificates representing the Shares, (3) furnishing (including costs of shipping and mailing) such
copies of the Registration Statement (including all pre- and post-effective amendments thereto),
the Prospectus and any Preliminary Prospectus or Issuer Free Writing Prospectus, and all amendments
and supplements thereto, as may be reasonably requested for use in connection with the direct
placement of the Shares, (4) the listing of the Common Stock on the NASDAQ Global Market, (5) any
filings required to be made by the Placement Agent with FINRA, and the fees, disbursements and
other charges of counsel for the Placement Agent in connection therewith, (6) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 4(g), including the reasonable fees, disbursements and
other charges of counsel to the Placement Agent in connection therewith and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (7) fees, disbursements and
other charges of counsel to the Company, and (8) fees and disbursements of the Accountants incurred
in delivering the letter(s) described in Section 7(f) of this Agreement. The Company shall
reimburse the Placement Agent for all reasonable out-of-pocket travel, legal and other
out-of-pocket expenses in an aggregate amount not to exceed $110,000.




          Conditions of the Obligations of the Placement Agent. The obligations of the
Placement Agent to place the Shares and consummate the transactions contemplated hereby on the
Closing are subject to the following conditions:




               (i) No stop order suspending the effectiveness of the Registration Statement shall have been
issued, and no proceedings for that purpose shall be pending or threatened by any securities or
other governmental authority (including, without limitation, the Commission), (ii) no order
suspending the effectiveness of the Registration Statement or the qualification or registration of
the Shares under the securities or Blue Sky laws of any jurisdiction shall be in effect and no
proceeding for such purpose shall be pending before, or threatened, to the Company’s Knowledge, in
writing by, any securities or other governmental authority (including, without limitation, the
Commission), (iii) any request for additional information on the part of the staff of any
securities or other governmental authority (including, without limitation, the Commission) shall
have been complied with to the satisfaction of the staff of the Commission or such authorities and
(iv) after the date hereof and prior to the Closing no amendment or supplement to the Registration
Statement, any Issuer Free Writing



16









 







Prospectus or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Placement Agent and the Placement Agent did not object thereto
in good faith.



               Since the respective dates as of which information is given in the Registration Statement, the
Pricing Disclosure Materials and the Prospectus, (i) there shall not have been a Material Adverse
Change, whether or not arising from transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration Statement, the Pricing Disclosure
Materials and the Prospectus and (ii) the Company shall not have sustained any material loss or
material interference with its business or properties from fire, explosion, flood or other
casualty, whether or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not set forth in the
Registration Statement, the Pricing Disclosure Materials and the Prospectus, if in the reasonable
judgment of the Placement Agent any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares to Investors as contemplated hereby.



               Since the respective dates as of which information is given in the Registration Statement, the
Pricing Disclosure Materials and the Prospectus, there shall have been no litigation or other
proceeding instituted against the Company or any of its officers or directors in their capacities
as such, before or by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, which litigation or
proceeding, in the reasonable judgment of the Placement Agent, would have a Material Adverse
Effect.



               Each of the representations and warranties of the Company contained herein shall be true and
correct in all material respects at the Closing Date, as if made on such date, and all covenants
and agreements herein contained to be performed on the part of the Company and all conditions
herein contained to be fulfilled or complied with by the Company at or prior to the Closing Date
shall have been duly performed, fulfilled or complied with in all material respects.



               The Placement Agent shall have received an opinion, dated the Closing Date of Epstein Becker &
Green, P.C., as counsel to the Company, in form and substance reasonably satisfactory to the
Placement Agent, with respect to the matters set forth in Exhibit D hereto.



               The Placement Agent shall have received an opinion, dated the Closing Date of Morrison &
Foerster LLP, as counsel to the Placement Agent, in form and substance reasonably satisfactory to
the Placement Agent.



               On the date hereof, the Accountants shall have furnished to the Placement Agent a letter,
dated the date of its delivery (the “Comfort Letter”), addressed to the Placement Agent and in form
and substance satisfactory to the Placement Agent and addressing such matters as are customary for
the type of transactions contemplated by this Agreement and the Prospectus, (i) confirming that
they are independent public accountants with respect to the Company within the meaning of the Act
and the Rules and Regulations and (ii) stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates as of which specified financial
information is given in the Pricing Disclosure



17









 







Materials and the Prospectus, as of a date not more
than five days prior to the date hereof), the conclusions and findings of such firm with respect to
the financial information and other matters ordinarily covered by accountants’ “comfort letters” in
connection with registered public offerings. At the Closing Date, the Accountants shall have
furnished to the Placement Agent a letter, dated the date of its delivery (the “Bring-Down
Letter”), addressed to the Placement Agent and in form and substance satisfactory to the Placement
Agent, (i) confirming that they are independent public accountants with respect to the Company
within the meaning of the Act and the Rules and Regulations, (ii) stating, as of the date of the
Bring-Down Letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the Pricing Disclosure
Materials and the Prospectus, as of a date not more than five days prior to the date of the
Bring-Down Letter), the conclusions and findings of such firm with respect to the financial
information and other matters covered by the Comfort Letter and (iii) confirming in all material
respects the conclusions and findings set forth in the Comfort Letter.



               At the Closing Date, there shall be furnished to the Placement Agent a certificate, dated the
date of its delivery, signed by each of the Chief Executive Officer and the
Chief Financial Officer of the Company, in form and substance satisfactory to the Placement
Agent to the effect that each signer has carefully examined the Registration Statement, the
Prospectus and the Pricing Disclosure Materials, and that to each of such person’s knowledge:




               1. (A) As of the date of such certificate, (x) the Registration Statement does 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 not misleading and
(y) neither the Prospectus nor the Pricing Disclosure Materials contains 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, not misleading and (B) no event has occurred as a result of which it
is necessary to amend or supplement the Prospectus in order to make the statements therein
not untrue or misleading in any material respect.




               2. Each of the representations and warranties of the Company contained in this
Agreement were, when originally made, and are, at the time such certificate is delivered,
true and correct in all material respects.




               3. Each of the covenants required herein to be performed by the Company on or prior to
the date of such certificate has been duly, timely and fully performed in all material
respects and each condition herein required to be complied with by the Company on or prior
to the delivery of such certificate has been duly, timely and fully complied with in all
material respects.




               4. Subsequent to the date of the most recent financial statements in the Prospectus,
there has been no Material Adverse Change.




               5. No stop order suspending the effectiveness of the Registration Statement or of any
part thereof has been issued, and no proceedings for that purpose have been instituted or
are pending or, to the Company’s Knowledge,



18









 







threatened by any securities or other
governmental authority (including, without limitation, the Commission).




               6. No order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction are in effect and no proceeding for such purpose is pending before, or
threatened, to the Company’s Knowledge, in writing by, any securities or other governmental
authority (including, without limitation, the Commission).



               At the Closing Date, there shall be furnished to the Placement Agent a certificate, dated the
date of its delivery, signed by the Secretary of the Company, in form and substance satisfactory to
the Placement Agent as to matters customary to the closing of the transactions of the type
contemplated hereby.



               The Shares shall be qualified for sale in such states as the Placement Agent may reasonably
request, subject to the limitations set forth in the proviso in Section 4(g).



               The Company shall have furnished or caused to be furnished to the Placement Agent such
customary closing certificates, in addition to those specifically
mentioned herein, as the Placement Agent may have reasonably requested as to the accuracy and
completeness at the Closing Date of any statement in the Registration Statement, the Pricing
Disclosure Materials or the Prospectus, as to the accuracy at the Closing Date of the
representations and warranties of the Company as to the performance by the Company of its
obligations hereunder, or as to the fulfillment of the conditions concurrent and precedent to the
obligations hereunder of the Placement Agent.



               The Placement Agent shall have received the letters referred to in Section 3(ll) and (mm)
hereof substantially in the form of Exhibits B and C.



          Indemnification.




               The Company shall indemnify and hold harmless the Placement Agent, its respective directors,
officers, employees and agents and each person, if any, who controls the Placement Agent within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages, joint or several, (including any and all
investigative, legal and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to which it, or any of
them, may become subject under the Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out
of or are based on (i) any untrue statement or alleged untrue statement made by the Company in
Section 3 of this Agreement, (ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) any Preliminary Prospectus, the Registration Statement or the Prospectus or
any amendment or supplement thereto, (B) any Issuer Free Writing Prospectus or any amendment or
supplement thereto or (C) any Permitted Issuer Information used or referred to in any “free writing
prospectus” (as defined in Rule 405) used or referred to by the Placement Agent and (D) any
application or other document, or any amendment or supplement thereto, executed by the Company
based upon written information furnished by or on behalf of the Company filed in



19









 







any jurisdiction
in order to qualify the Shares under the securities or Blue Sky laws thereof or filed with the
Commission or any securities association or securities exchange (each, an “Application”), or
(iii) the omission or alleged omission to state in any Preliminary Prospectus, the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus, or any amendment or supplement
thereto, or in any Permitted Issuer Information or any Application a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading; provided, however, that the Company will not be
liable to the extent that such loss, claim, liability, expense or damage arises from the sale of
the Shares in the public offering to any person and is based solely on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in conformity with
information relating to the Placement Agent furnished in writing to the Company by the Placement
Agent expressly for inclusion in the Registration Statement, any Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto or in any
Permitted Issuer Information or any Application (as set forth in Section 8(b) below); and provided
further, that such indemnity with respect to any Preliminary Prospectus, Issuer Free Writing
Prospectus or any Permitted Issuer Information shall not inure to the benefit of the Placement
Agent (or any person controlling the Placement Agent) from whom the person asserting any such loss,
claim, damage, liability or action purchased Shares which are the subject thereof to the extent
that any such loss, claim, damage or liability (i) results from the fact that the Placement Agent
failed to send or give a
copy of the Prospectus (as amended or supplemented) to such person at or prior to the
confirmation of the sale of such Shares to such person in any case where such delivery is required
by the Act and (ii) arises out of or is based upon an untrue statement or omission of a material
fact contained in such Preliminary Prospectus, Issuer Free Writing Prospectus or any Permitted
Issuer Information that was corrected in the Prospectus (or any amendment or supplement thereto),
unless such failure to deliver the Prospectus (as amended or supplemented) was the result of
noncompliance by the Company with Section 4(d). This indemnity agreement will be in addition to
any liability which the Company may otherwise have.



               The Placement Agent will indemnify and hold harmless the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
each director of the Company and each officer of the Company who signs the Registration Statement
to the same extent as the foregoing indemnity from the Company to the Placement Agent, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in reliance on and in conformity
with information relating to the Placement Agent furnished in writing to the Company by the
Placement Agent expressly for use in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus. This indemnity agreement will be in addition to
any liability that the Placement Agent might otherwise have. The Company acknowledges that, for
all purposes under this Agreement, the name of the Placement Agent and the paragraph relating to
placement agents’ fees and reimbursement of expenses appearing under the caption “Plan of
Distribution” in the Prospectus constitute the only information relating to the Placement Agent
furnished in writing to the Company by the Placement Agent expressly for inclusion in the
Registration Statement, any Preliminary Prospectus or the Prospectus.




20












 





               Any party that proposes to assert the right to be indemnified under this Section 8 will,
promptly after receipt of notice of commencement of any action against such party in respect of
which a claim is to be made against an indemnifying party or parties under this Section 8, notify
each such indemnifying party of the commencement of such action, enclosing a copy of all papers
served, but the omission so to notify such indemnifying party will not relieve it from any
liability that it may have to any indemnified party under the foregoing provisions of this Section
8 unless, and only to the extent that, such omission results in the forfeiture of substantive
rights or defenses by the indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the commencement of the action
from the indemnified party, jointly with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after
notice from the indemnifying party to the indemnified party of its election to assume the defense,
the indemnifying party will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation subsequently incurred
by the indemnified party in connection with the defense. The indemnified party will have the right
to employ its own counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on written advice of counsel) that a conflict exists (based
on advice of counsel to the indemnified party) between the indemnified party and the indemnifying
party that would prevent the counsel selected by the indemnifying party from representing the
indemnified party (in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (3) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the reasonable fees, disbursements
and other charges of counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such jurisdiction at any one
time for all such indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred following submission of
invoices (including time and expense descriptions) to the indemnifying party. The indemnifying
party will not, without the prior written consent of the indemnified party (which consent will not
be unreasonably withheld or delayed), settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of which indemnification
has been sought hereunder, unless such settlement, compromise or consent includes an unconditional
release of the indemnified party from all liability arising out of such claim, action, suit or
proceeding. An indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably withheld).



               In order to provide for just and equitable contribution in circumstances in which the
indemnification provided for in the foregoing paragraphs of this Section 8 is applicable in
accordance with its terms but for any reason is held to be
unavailable from the



21









 




Company or the
Placement Agent, the Company and the Placement Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any contribution received
by the Company from persons other than the Placement Agent such as persons who control the Company
within the meaning of the Act or the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be liable for contribution) to
which the Company and the Placement Agent may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand and the Placement Agent on
the other. The relative benefits received by the Company on the one hand and the Placement Agent
on the other shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting Company expenses) received by the Company as set forth in the table on
the cover page of the Prospectus bear to the fee received by the Placement Agent hereunder. If,
but only if, the allocation provided by the foregoing sentence is not permitted by applicable law,
the allocation of contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Placement Agent on the other, with respect to the statements or
omissions which resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to such offering.
Such relative fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or the Placement Agent, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent such statement or
omission. The Company and the Placement Agent agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in this Section 8(d)
shall be deemed to include, for purpose of this Section 8(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 8(d), the Placement Agent
shall not be required to contribute any amount in excess of the fee received by it, and no person
found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) will
be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8(d), any person who controls a party to this
Agreement within the meaning of the Act or the Exchange Act will have the same rights to
contribution as that party, and each officer of the Company who signed the Registration Statement
will have the same rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim for contribution may be made under this
Section 8(d), will notify any such party or parties from whom contribution may be sought, but the
omission so to notify will not relieve the party or parties from whom contribution may be sought
from any other obligation it or they may have under this Section 8(d). No party will be liable for
contribution with respect to any action or claim settled without its written consent (which consent
will not be unreasonably withheld).




22









 








          Termination.




               The obligations of the Placement Agent under this Agreement may be terminated at any time
prior to the Closing Date, by notice to the Company from the Placement Agent, without liability on
the part of the Placement Agent to the Company if, prior to delivery and payment for the Shares, in
the sole judgment of the Placement Agent (i) trading in the Common Stock of the Company shall have
been suspended by the Commission or by the NASDAQ Global Market, (ii) trading in securities
generally on the NASDAQ Global Market shall have been suspended or limited or minimum or maximum
prices shall have been generally established on any of such exchange or additional material
governmental restrictions, not in force on the date of this Agreement, shall have been imposed upon
trading in securities generally by any of such exchange or by order of the Commission or any court
or other governmental authority, (iii) a general banking moratorium shall have been declared by
Federal or New York State authorities, or (iv) any material adverse change in the financial or
securities markets in the United States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or other calamity or crisis shall
have occurred, the effect of any of which is such as to make it, in the sole judgment of the
Placement Agent, impracticable or inadvisable to market the Shares on the terms and in the manner
contemplated by the Prospectus.



               In the event the transactions contemplated hereby shall not have been consummated by July 16,
2008, this Agreement shall expire or may be terminated by the Company.



               If this Agreement shall expire or be terminated pursuant to any of the provisions hereof, or
if the sale of the Shares provided for herein is not consummated because any condition to the
obligations of the Placement Agent set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein or comply with any
provision hereof, the Company will, subject to demand by the Placement Agent, reimburse the
Placement Agent for all out-of-pocket expenses incurred in connection herewith in an aggregate
amount not to exceed $110,000.



          No Fiduciary Duty. The Company acknowledges and agrees that in connection with this
offering, sale of the Shares or any other services the Placement Agent may be deemed to be
providing hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between
the parties or any oral representations or assurances previously or subsequently made by the
Placement Agent: (i) no fiduciary or agency relationship between the Company and any other person,
on the one hand, and the Placement Agent, on the other, exists; (ii) the Placement Agent is not
acting as an advisor, expert or otherwise, to the Company, including, without limitation, with
respect to the determination of the offering price of the Shares, and such relationship between the
Company, on the one hand, and the Placement Agent, on the other, is entirely and solely commercial,
based on arms-length negotiations; (iii) any duties and obligations that the Placement Agent may
have to the Company shall be limited to those duties and obligations specifically stated herein;
and (iv) the Placement Agent and its respective affiliates may have interests that differ from
those of the Company. The Company hereby waives any claims that the Company may have against the
Placement Agent with respect to any breach of fiduciary duty in connection with this offering.




23









 








          Notices. Notice given pursuant to any of the provisions of this Agreement shall be in
writing and, unless otherwise specified, shall be mailed or delivered (a) if to the Company, at the
office of the Company, 6401 Southwest Freeway, Houston, TX 77074, Attention: Chief Financial
Officer, with copies to Epstein Becker & Green, P.C., 250 Park Avenue, New York, NY 10172,
Attention: Sharon L. Ferko, Esq., or (b) if to the Placement Agent, 880 Carillon Parkway, St.
Petersburg, FL 33716, Attention: Ryan Lund, with copies to Morrison & Foerster, LLP, 1290 Avenue of
the Americas, New York, NY 10104-0050, Attention: Anna T. Pinedo, Esq. Any such notice shall be
effective only upon receipt. Any notice under Section 8 may be made by facsimile or telephone, but
if so made shall be subsequently confirmed in writing.




          Survival. The respective representations, warranties, agreements, covenants,
indemnities and other statements of the Company and the Placement Agent set forth in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, the Placement Agent or any controlling person referred to in Section 8
hereof and (ii) delivery of and payment for the Shares. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.




          Successors. This Agreement shall inure to the benefit of and shall be binding upon
the Placement Agent, the Company and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and for the benefit of
no other person except that (i) the indemnification and contribution contained in Sections 8(a) and
(d) of this Agreement shall also be for the benefit of the directors, officers, employees and
agents of the Placement Agent and any person or persons who control the Placement Agent within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnification and
contribution contained in Sections 8(b) and (d) of this Agreement shall also be for the benefit of
the directors of the Company, the officers of the Company who have signed the Registration
Statement and any person or persons who control the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act. No Investor shall be deemed a successor because of such
purchase.




          Applicable Law. The validity and interpretations of this Agreement, and the terms and
conditions set forth herein, shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to any provisions relating to conflicts of laws.




          Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.




24









 





          Entire Agreement. This Agreement constitutes the entire understanding between the
parties hereto as to the matters covered hereby and supersedes all prior understandings, written or
oral, relating to such subject matter.





25









 








     Please confirm that the foregoing correctly sets forth the agreement between the Company and
the Placement Agent.



	 	 	 	 	 
	 	Very truly yours,



INX INC.

 	 
	 	By:  	/s/ Brian Fontana
 	 
	 	 	Name:  	Brian Fontana 	 
	 	 	Title:  	Vice President 	 
	 



Confirmed as of the date first

above mentioned:




RAYMOND JAMES & ASSOCIATES, INC.




	 	 	 	 	 
	By:

	 	/s/ Ryan D. Lund
 

Name: Ryan D. Lund
	 	 
	 

	 	Title: Senior Vice President