**EXHIBIT 10.1**

 

**SECURITIESPURCHASE AGREEMENT**

 

This Securities Purchase Agreement (this “Agreement”)is dated as of March 27, 2007, among VendingData Corporation, a Nevadacorporation (the “Company”), and each purchaser identified on thesignature pages hereto (each, including its successors and assigns, a “Purchaser”and collectively the “Purchasers”).

 

RECITALS

 

WHEREAS, subject to the terms and conditions setforth in this Agreement and pursuant to Section 4(2) of theSecurities Act of 1933, as amended (the “Securities Act”) and Rule 506promulgated thereunder, the Company desires to issue and sell to eachPurchaser, and each Purchaser, severally and not jointly, desires to purchasefrom the Company, securities of the Company as more fully described in thisAgreement.

 

AGREEMENT

 

NOW, THEREFORE, IN CONSIDERATION of the mutualcovenants contained in this Agreement, and for other good and valuableconsideration the receipt and adequacy of which are hereby acknowledged, theCompany and each Purchaser agree as follows:

 

# ARTICLE I.DEFINITIONS

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1.1                                 Definitions.  In addition to the termsdefined elsewhere in this Agreement, for all purposes of this Agreement, thefollowing terms have the meanings indicated in this Section 1.1:

 

“Action” shall havethe meaning ascribed to such term in Section 3.1(j).

 

“Affiliate” means anyPerson that, directly or indirectly through one or more intermediaries,controls or is controlled by or is under common control with a Person as suchterms are used in and construed under Rule 144 under the SecuritiesAct.  With respect to a Purchaser, anyinvestment fund or managed account that is managed on a discretionary basis bythe same investment manager as such Purchaser will be deemed to be an Affiliateof such Purchaser.

 

“Business Day” meansany day except Saturday, Sunday and any day which shall be a federal legalholiday in the United States.

 

“Closing” means theClosing of the purchase and sale of the Shares pursuant to Section 2.1.

 

“Closing Date” meansthe Business Day when all of the Transaction Documents have been executed anddelivered by the applicable parties thereto, and all conditions precedent to (i) thePurchasers’ obligations to pay the Subscription Amount and (ii) theCompany’s obligations to deliver the applicable Shares have been satisfied orwaived.

 

“Commission” meansthe Securities and Exchange Commission.

 

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“Common Stock” meansthe common stock of the Company, par value $0.001 per share, and any otherclass of securities into which such securities may hereafter be reclassified orchanged into.

 

“Common Stock Equivalents”means any securities of the Company or the Subsidiaries which would entitle theholder thereof to acquire at any time Common Stock, including, withoutlimitation, any debt, preferred stock, rights, options, warrants or otherinstrument that is at any time convertible into or exercisable or exchangeablefor, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Disclosure Schedules”means the Disclosure Schedules of the Company delivered in connection with theClosing.

 

“Effective Date”means the date that the initial Registration Statement filed by the Companypursuant to the Registration Rights Agreement is first declared effective bythe Commission.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Proceeding” means anaction, claim, suit, investigation or proceeding (including, withoutlimitation, an investigation or partial proceeding, such as a deposition),whether commenced or threatened.

 

“Registration RightsAgreement” means the Registration Rights Agreement, dated the date hereof,among the Company and the Purchasers, in the form of Exhibit Aattached hereto.

 

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“Registration Statement”means a registration statement meeting the requirements set forth in theRegistration Rights Agreement and covering the resale by the Purchasers of theShares.

 

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

 

“Rule 144” meansRule 144 promulgated by the Commission pursuant to the Securities Act, assuch Rule may be amended from time to time, or any similar rule orregulation hereafter adopted by the Commission having substantially the sameeffect as such Rule.

 

“Securities” meansthe Shares, the Warrants and the Underlying Shares.

 

“SEC Reports” shallhave the meaning ascribed to such term in Section 3.1(h).

 

“Shares” means theOne Million, Six Hundred and Twenty Five Thousand (1,625,000) shares of CommonStock issued or issuable to the Purchasers pursuant to this Agreement.

 

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

 

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

 

“Subsidiary” meansany subsidiary of the Company as set forth on Schedule 3.1(a).

 

“Trading Market”means the following markets or exchanges on which the Common Stock is listed orquoted for trading on the date in question: the American Stock Exchange, theNew York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ GlobalMarket, the NASDAQ Capital Market or the OTC Bulletin Board.

 

“Transaction Documents”means this Agreement, the Warrants and the Registration Rights Agreementexecuted in connection with the transactions contemplated hereunder.

 

“Underlying Shares”means the shares of Common Stock issuable upon exercise of the Warrants.

 

“Warrant” and “Warrants”means a Common Stock purchase warrant, in the form of Exhibit B,and all Warrants collectively.

 

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# ARTICLE II.PURCHASE AND SALE

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2.1                                 Closing.  Upon the terms and subject to the conditionsset forth herein, the Company agrees to sell, and each Purchaser agrees topurchase, severally and not jointly, the number of Shares and Warrants setforth on each respective Purchaser’s signature page attached hereto, forthe Subscription Amount set forth thereon, which in the aggregate shall equalup to Four Million, Three Hundred and Six Thousand and Two Hundred and FiftyDollars ($4,306,250) of Shares.  On theClosing Date (the “Closing Date”), each Purchaser shall deliver to theCompany, via wire transfer or a certified check, immediately available fundsequal to their Subscription Amount, and the Company shall deliver to eachPurchaser their respective Shares and Warrants to be issued at the Closing (the“Closing”) at the Closing.  Uponsatisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closingshall occur at the offices of Greenberg Traurig, LLP, 650 Town Center Drive, Suite 1700,Costa Mesa, California 92626, or such other location as the parties shallmutually agree.

 

2.2                                 Deliveries.

 

### (a)                                  On or prior to the Closing Date, theCompany shall deliver or cause to be delivered to each Purchaser the following:

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#### (i)                                     this Agreement duly executed by theCompany;

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#### (ii)                                  one or more stock certificates evidencingthat number of Shares purchased by each Purchaser hereunder, registered inthe name of such Purchaser;

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#### (iii)                               an originally executed Warrant evidencingthat number of Warrants purchased by each Purchaser hereunder, registeredin the name of such Purchaser;

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#### (iv)                              the Registration Rights Agreement dulyexecuted by the Company;

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#### (v)                                 an opinion of Greenberg Traurig, LLP (“CompanyCounsel”), dated as of the Closing Date, in substantially the form of Exhibit Cattached hereto;

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#### (vi)                              a certificate evidencing theincorporation and good standing of the Company and each of its U.S domiciledoperating Subsidiaries in such corporation’s state of incorporation issued bythe Secretary of State of such state of incorporation as of a date within 10days of the Closing Date; and

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#### (vii)                           a certificate, executed by the Secretaryof the Company and dated as of the Closing Date, as to (i) the resolutionsconsistent with Section 3.1(c) as adopted by the Company’s Board ofDirectors in a form reasonably acceptable to such Purchaser, (ii) theCertificate of Incorporation and (iii) the Bylaws, each as in effect atthe Closing, in the form attached hereto as Exhibit D.

 

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

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#### (i)                                     this Agreement duly executed by suchPurchaser;

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#### (ii)                                  such Purchaser’s Subscription Amount bywire transfer or cashier’s check to the account as specified by the Company inwriting; and

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#### (iii)                               the Registration Rights Agreement dulyexecuted by such Purchaser.

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2.3                                 ClosingConditions. 

 

(a)                                  Theobligations of the Company hereunder in connection with the Closing are subjectto the following conditions being met:

 

#### (i)                                     the representations and warranties of thePurchasers shall be true and correct in all material respects (except for thoserepresentations and warranties that are qualified by materiality or MaterialAdverse Effect, which shall be true and correct in all respects) as of the datewhen made and as of the Closing Date as though made at that time (except forrepresentations and warranties that speak as of a specific date, which shallremain true and correct as of such specific date);

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#### (ii)                                  all obligations, covenants and agreementsof the Purchasers required to be performed at or prior to the Closing Dateshall have been performed; and

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#### (iii)                               the delivery by the Purchasers of theitems set forth in Section 2.2(b) of this Agreement.

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

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#### (i)                                     the representations and warranties of theCompany and its Subsidiaries shall be true and correct in all material respects(except for those representations and warranties that are qualified bymateriality or Material Adverse Effect, which shall be true and correct in allrespects) as of the date when made and as of the Closing Date as though made atthat time (except for representations and warranties that speak as of aspecific date, which shall remain true and correct as of such specific date);

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#### (ii)                                  all obligations, covenants and agreementsof the Company required to be performed at or prior to the Closing Date shallhave been performed;

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#### (iii)                               the delivery by the Company of the itemsset forth in Section 2.2(a) of this Agreement;

 

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#### (iv)                              the Common Stock (I) shall be listed onthe Principal Market and (II) shall not have been suspended, as of the ClosingDate, by the SEC or the Principal Market from trading on the Principal Marketnor shall suspension by the SEC or the Principal Market have been threatened,as of the Closing Date, either (A) in writing by the SEC or the PrincipalMarket or (B) by falling below the minimum listing maintenancerequirements of the Principal Market; and

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#### (v)                                 the Company shall have obtained allgovernmental, regulatory or third party consents and approvals, if any,necessary for the sale of the Shares and the Warrants.

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# ARTICLE III.REPRESENTATIONS AND WARRANTIES

#  

3.1                                 Representationsand Warranties of the Company. Except as set forth under the corresponding section of thedisclosure schedules delivered to the Purchasers concurrently herewith (the “DisclosureSchedules”) which Disclosure Schedules shall be deemed a part hereof, theCompany hereby makes the representations and warranties set forth below to eachPurchaser:

 

### (a)                                  Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forthon Schedule 3.1(a).  TheCompany owns, directly or indirectly, all of the capital stock or other equityinterests of each Subsidiary free and clear of any Liens, and all the issuedand outstanding shares of capital stock of each Subsidiary are validly issuedand are fully paid, non-assessable and free of preemptive and similar rights tosubscribe for or purchase securities.

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### (b)                                 Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporatedor otherwise organized, validly existing and in good standing under the laws ofthe jurisdiction of its incorporation or organization (as applicable), with therequisite power and authority to own and use its properties and assets and tocarry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of anyof the provisions of its respective certificate or articles of incorporation,bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries isduly qualified to conduct business and is in good standing as a foreigncorporation or other entity in each jurisdiction in which the nature of thebusiness conducted or property owned by it makes such qualification necessary,except where the failure to be so qualified or in good standing, as the casemay be, could not have or reasonably be expected to result in (i) amaterial adverse effect on the legality, validity or enforceability of anyTransaction Document, (ii) a material adverse effect on the business,properties, assets, operations, prospects, results of operations or financialcondition of the Company and the Subsidiaries, taken as a whole, or (iii) amaterial adverse effect on the Company’s ability to perform in any materialrespect on a timely basis its obligations under any Transaction Document (anyof (i), (ii) or (iii), a “Material Adverse Effect”) and noProceeding has been instituted in any such jurisdiction revoking, limiting orcurtailing or seeking to revoke, limit or curtail such power and authority orqualification.

 

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### (c)                                  Authorization; Enforcement. The Company has the requisite corporate power and authority to enterinto and to consummate the transactions contemplated by each of the TransactionDocuments and otherwise to carry out its obligations hereunder andthereunder.  The execution and deliveryof each of the Transaction Documents by the Company and the consummation by itof the transactions contemplated hereby and thereby have been duly authorizedby all necessary action on the part of the Company and no further action isrequired by the Company, its board of directors or its stockholders inconnection therewith other than in connection with the required approvals setforth on Schedule 3.1(c) attached hereto (the “RequiredApprovals”).  Each TransactionDocument has been (or upon delivery will have been) duly executed by theCompany and, when delivered in accordance with the terms hereof and thereof,will constitute the valid and binding obligation of the Company enforceableagainst the Company in accordance with its terms except (i) as limited bygeneral equitable principles and applicable bankruptcy, insolvency,reorganization, moratorium and other laws of general application affectingenforcement of creditors’ rights generally, (ii) as limited by lawsrelating to the availability of specific performance, injunctive relief orother equitable remedies and (iii) insofar as indemnification andcontribution provisions may be limited by applicable law.

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### (d)                                 No Conflicts. The execution, delivery and performance of the Transaction Documents bythe Company, the issuance and sale of the Securities and the consummation bythe Company of the other transactions contemplated hereby and thereby do notand will not (i) conflict with or violate any provision of the Company’sor any Subsidiary’s certificate or articles of incorporation, bylaws or otherorganizational or charter documents, or (ii) conflict with, or constitutea default (or an event that with notice or lapse of time or both would become adefault) under, result in the creation of any Lien upon any of the propertiesor assets of the Company or any Subsidiary, or give to others any rights oftermination, amendment, acceleration or cancellation (with or without notice,lapse of time or both) of, any agreement, credit facility, debt or otherinstrument (evidencing a Company or Subsidiary debt or otherwise) or otherunderstanding to which the Company or any Subsidiary is a party or by which anyproperty or asset of the Company or any Subsidiary is bound or affected, or (iii) subjectto the Required Approvals, conflict with or result in a violation of any law,rule, regulation, order, judgment, injunction, decree or other restriction ofany court or governmental authority to which the Company or a Subsidiary issubject (including federal and state securities laws and regulations), or bywhich any property or asset of the Company or a Subsidiary is bound oraffected; except in the case of each of clauses (ii) and (iii), such ascould not have or reasonably be expected to result in a Material AdverseEffect.

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### (e)                                  Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorizationor order of, give any notice to, or make any filing or registration with, anycourt or other federal, state, local or other governmental authority or otherPerson in connection with the execution, delivery and performance by theCompany of the Transaction Documents, other than (i) filings requiredpursuant to Section 4.4 of this Agreement, (ii) the filing with theCommission of the Registration Statement, (iii) application(s) to eachapplicable Trading Market for the listing of the

 

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### Shares and theUnderlying Shares for trading thereon in the time and manner required thereby,and (iv) the filing of Form D with the Commission and such filings asare required to be made under applicable state securities laws (collectively,the “Required Approvals”).

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### (f)                                    Issuance of the Securities. The Securities are duly authorized and, when issued and paid for inaccordance with the applicable Transaction Documents, will be duly and validlyissued, fully paid and nonassessable, free and clear of all Liens imposed bythe Company other than restrictions on transfer provided for in the TransactionDocuments.  The Company has reserved fromits duly authorized capital stock the Shares and Underlying Shares issuablepursuant to this Agreement.

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### (g)                                 Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g).  No Person has any right of first refusal,preemptive right, right of participation, or any similar right to participatein the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and saleof the Securities or as set forth on Schedule 3.1(g), there are nooutstanding options, warrants, script rights to subscribe to, calls orcommitments of any character whatsoever relating to, or securities, rights orobligations convertible into or exercisable or exchangeable for, or giving anyPerson any right to subscribe for or acquire, any shares of Common Stock, orcontracts, commitments, understandings or arrangements by which the Company orany Subsidiary is or may become bound to issue additional shares of CommonStock or Common Stock Equivalents.  Theissuance and sale of the Securities will not obligate the Company to issueshares of Common Stock or other securities to any Person (other than thePurchasers) and will not result in a right of any holder of Company securitiesto adjust the exercise, conversion, exchange or reset price under any of suchsecurities. All of the outstanding shares of capital stock of the Company arevalidly issued, fully paid and nonassessable, have been issued in compliancewith all federal and state securities laws, and none of such outstanding shareswas issued in violation of any preemptive rights or similar rights to subscribefor or purchase securities.  No furtherapproval or authorization of any stockholder, the Board of Directors of theCompany or others is required for the issuance and sale of the Securities.  Except as set forth on Schedule 3.1(g),there are no stockholders agreements, voting agreements or other similaragreements with respect to the Company’s capital stock to which the Company isa party or, to the knowledge of the Company, between or among any of theCompany’s stockholders.

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### (h)                                 SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements andother documents required to be filed by it under the Securities Act and theExchange Act, including pursuant to Section 13(a) or 15(d) thereof,for the period commencing on January 1, 2006 through the date hereof (theforegoing materials, including the exhibits thereto and documents incorporatedby reference therein, being collectively referred to herein as the “SECReports”) on a timely basis or has received a valid extension of such timeof filing and has filed any such SEC Reports prior to the expiration of anysuch extension.  As of their respectivedates, the SEC Reports complied in all material respects with the requirementsof the Securities Act and the Exchange Act and the rules and regulationsof the Commission promulgated thereunder, as applicable, and none of the SECReports, when filed, contained any untrue

 

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### statement of amaterial fact or omitted to state a material fact required to be stated thereinor necessary in order to make the statements therein, in the light of thecircumstances under which they were made, not misleading.  The financial statements of the Companyincluded in the SEC Reports complied in all material respects with applicableaccounting requirements and the rules and regulations of the Commissionwith respect thereto as in effect at the time of filing.  Such financial statements have been preparedin accordance with United States generally accepted accounting principlesapplied on a consistent basis during the periods involved (“GAAP”),except as may be otherwise specified in such financial statements or the notesthereto and except that unaudited financial statements may not contain allfootnotes required by GAAP, and fairly present in all material respects thefinancial position of the Company and its consolidated subsidiaries as of andfor the dates thereof and the results of operations and cash flows for theperiods then ended, subject, in the case of unaudited statements, to normal,immaterial, year-end audit adjustments.

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### (i)                                     Material Changes; Undisclosed Events,Liabilities or Developments.  Since thedate of the latest audited financial statements included within the SECReports, except as specifically disclosed in a subsequent SEC Report, (i) therehas been no event, occurrence or development that has had or that couldreasonably be expected by the Company to result in a Material Adverse Effect, (ii) theCompany has not incurred any liabilities (contingent or otherwise) other than (A) tradepayables and accrued expenses incurred in the ordinary course of businessconsistent with past practice and (B) liabilities not required to bereflected in the Company’s financial statements pursuant to GAAP or disclosedin filings made with the Commission, (iii) the Company has not altered itsmethod of accounting, (iv) the Company has not declared or made anydividend or distribution of cash or other property to its stockholders orpurchased, redeemed or made any agreements to purchase or redeem any shares ofits capital stock and (v) the Company has not issued any equity securitiesto any officer, director or Affiliate, except pursuant to existing Companystock option plans.  The Company does nothave pending before the Commission any request for confidential treatment ofinformation.

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### (j)                                     Litigation.  There is noaction, suit, inquiry, notice of violation, proceeding or investigation pendingor, to the knowledge of the Company, threatened against or affecting theCompany, any Subsidiary or any of their respective properties before or by anycourt, arbitrator, governmental or administrative agency or regulatoryauthority (federal, state, county, local or foreign) (collectively, an “Action”)which materially adversely affects or challenges the legality, validity orenforceability of any of the Transaction Documents or the Securities.  The Commission has not issued any stop orderor other order suspending the effectiveness of any registration statement filedby the Company or any Subsidiary under the Exchange Act or the Securities Act.

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### (k)                                  Labor Relations. No material labor dispute exists or, to the knowledge of the Company, isimminent with respect to any of the employees of the Company which couldreasonably be expected to result in a Material Adverse Effect.  None of the Company’s or its Subsidiaries’employees is a member of a union that relates to such employee’s relationshipwith the Company, and neither the Company or any of its Subsidiaries is a partyto a collective bargaining agreement, and the Company and its

 

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### Subsidiariesbelieve that their relationships with their employees are good.  No executive officer, to the knowledge of theCompany, is, or is now expected to be, in violation of any material term of anyemployment contract, confidentiality, disclosure or proprietary informationagreement or non-competition agreement, or any other contract or agreement orany restrictive covenant, and the continued employment of each such executiveofficer does not subject the Company or any of its Subsidiaries to anyliability with respect to any of the foregoing matters.  The Company and its Subsidiaries are incompliance with all U.S. federal, state, local and foreign laws and regulationsrelating to employment and employment practices, terms and conditions ofemployment and wages and hours, except where the failure to be in compliancecould not, individually or in the aggregate, reasonably be expected to have aMaterial Adverse Effect.

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### (l)                                     Compliance.  Neither theCompany nor any Subsidiary (i) is in default under or in violation of (andno event has occurred that has not been waived that, with notice or lapse oftime or both, would result in a default by the Company or any Subsidiaryunder), nor has the Company or any Subsidiary received notice of a claim thatit is in default under or that it is in violation of, any indenture, loan orcredit agreement or any other agreement or instrument to which it is a party orby which it or any of its properties is bound (whether or not such default orviolation has been waived), (ii) is in violation of any order of any court,arbitrator or governmental body, or (iii) is or has been in violation ofany statute, rule or regulation of any governmental authority, includingwithout limitation all foreign, federal, state and local laws applicable to itsbusiness and all such laws that affect the environment, except in each case ascould not have or reasonably be expected to result in a Material AdverseEffect.

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### (m)                               Regulatory Permits. The Company and the Subsidiaries possess all certificates,authorizations and permits issued by the appropriate federal, state, local orforeign regulatory authorities necessary to conduct their respective businessesas described in the SEC Reports, except where the failure to possess suchpermits could not have or reasonably be expected to result in a MaterialAdverse Effect (“Material Permits”), and neither the Company nor anySubsidiary has received any notice of proceedings relating to the revocation ormodification of any Material Permit.

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### (n)                                 Title to Assets. The Company and the Subsidiaries have good and marketable title in feesimple to all real property owned by them that is material to the business ofthe Company and the Subsidiaries and good and marketable title in all personalproperty owned by them that is material to the business of the Company and theSubsidiaries, in each case free and clear of all Liens, except for Liens as donot materially affect the value of such property and do not materiallyinterfere with the use made and proposed to be made of such property by theCompany and the Subsidiaries and Liens for the payment of federal, state orother taxes, the payment of which is neither delinquent nor subject topenalties.  Any real property andfacilities held under lease by the Company and the Subsidiaries are held bythem under valid, subsisting and enforceable leases with which the Company andthe Subsidiaries are in compliance.

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### (o)                                 Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, allpatents, patent applications, trademarks, trademark applications, service

 

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### marks, tradenames, trade secrets, inventions, copyrights, licenses and other intellectualproperty rights and similar rights necessary or material for use in connectionwith their respective businesses as described in the SEC Reports and which thefailure to so have could have a Material Adverse Effect (collectively, the “IntellectualProperty Rights”).  Neither theCompany nor any Subsidiary has received a notice (written or otherwise) thatthe Intellectual Property Rights used by the Company or any Subsidiary violatesor infringes upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rightsare enforceable and there is no existing infringement by another Person of anyof the Intellectual Property Rights.  TheCompany and its Subsidiaries have taken reasonable security measures to protectthe secrecy, confidentiality and value of all of their intellectual properties,except where failure to do so could not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect.

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### (p)                                 Insurance.  The Companyand the Subsidiaries are insured by insurers of recognized financialresponsibility against such losses and risks and in such amounts as are prudentand customary in the businesses in which the Company and the Subsidiaries areengaged, including, but not limited to, directors and officers insurancecoverage at least equal to the aggregate Subscription Amount.  Neither the Company nor any Subsidiary hasany reason to believe that it will not be able to renew its existing insurancecoverage as and when such coverage expires or to obtain similar coverage fromsimilar insurers as may be necessary to continue its business without a significantincrease in cost.

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### (q)                                 Transactions With Affiliates andEmployees.  Except as set forth in the SEC Reports, noneof the officers or directors of the Company and, to the knowledge of theCompany, none of the employees of the Company is presently a party to anytransaction with the Company or any Subsidiary (other than for services asemployees, officers and directors), including any contract, agreement or otherarrangement providing for the furnishing of services to or by, providing forrental of real or personal property to or from, or otherwise requiring paymentsto or from any officer, director or such employee or, to the knowledge of theCompany, any entity in which any officer, director, or any such employee has asubstantial interest or is an officer, director, trustee or partner, in eachcase in excess of $60,000 other than (i) for payment of salary orconsulting fees for services rendered, (ii) reimbursement for expensesincurred on behalf of the Company and (iii) for other employee benefits,including stock option agreements under any stock option plan of the Company.

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### (r)                                    Sarbanes-Oxley; Internal AccountingControls.  The Company is in material compliance withall provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it asof the Closing Date.  The Companymaintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) underthe Exchange Act) that are effective in ensuring that information required tobe disclosed by the Company in the reports that it files or submits under theExchange Act is recorded, processed, summarized and reported, within the timeperiods specified in the rules and forms of the SEC, including, withoutlimitation, controls and procedures designed in to ensure that informationrequired to be disclosed by the Company in the reports that it files or submits

 

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### under the ExchangeAct is accumulated and communicated to the Company’s management, including itsprincipal executive officer or officers and its principal financial officer orofficers, as appropriate, to allow timely decisions regarding requireddisclosure.

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### (s)                                  Certain Fees. No brokerage or finder’s fees or commissions are or will be payable bythe Company to any broker, financial advisor or consultant, finder, placementagent, investment banker, bank or other Person with respect to the transactionscontemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or withrespect to any claims made by or on behalf of other Persons for fees of a typecontemplated in this Section that may be due in connection with thetransactions contemplated by the Transaction Documents as a result of anyaction taken by the Company or its Affiliates.

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### (t)                                    Private Placement. Assuming the accuracy of the Purchasersrepresentations and warranties set forth in Section 3.2, no registrationunder the Securities Act is required for the offer and sale of the Securitiesby the Company to the Purchasers as contemplated hereby.  The issuance and sale of the Securitieshereunder does not contravene the rules and regulations of the TradingMarket.

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### (u)                                 Investment Company. The Company is not, and is not anAffiliate of, and immediately after receipt of payment for the Securities, willnot be or be an Affiliate of, an “investment company” within the meaning of theInvestment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will notbecome subject to the Investment Company Act.

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### (v)                                 Registration Rights. Other than each of the Purchasers, no Person has any right to cause theCompany to effect the registration under the Securities Act of any securitiesof the Company.

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### (w)                               Listing and Maintenance Requirements. The Company’s Common Stock is registered pursuant to Section 12(b) or12(g) of the Exchange Act, and the Company has taken no action designedto, or which to its knowledge is likely to have the effect of, terminating theregistration of the Common Stock under the Exchange Act nor has the Companyreceived any notification that the Commission is contemplating terminating suchregistration.  The Company has not, inthe 12 months preceding the date hereof, received notice from any TradingMarket on which the Common Stock is or has been listed or quoted to the effectthat the Company is not in compliance with the listing or maintenancerequirements of such Trading Market. The Company is, and has no reason tobelieve that it will not in the foreseeable future continue to be, in compliancewith all such listing and maintenance requirements.

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### (x)                                   Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action,if any, in order to render inapplicable any control share acquisition, businesscombination, poison pill (including any distribution under a rights agreement)or other similar anti-takeover provision under the Company’s Certificate ofIncorporation (or similar charter documents) or the laws of its state of

 

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### incorporation thatis or could become applicable to the Purchasers as a result of the Purchasersand the Company fulfilling their obligations or exercising their rights underthe Transaction Documents, including without limitation as a result of theCompany’s issuance of the Securities and the Purchasers’ ownership of theSecurities.

###  

### (y)                                 Disclosure.  Alldisclosure furnished by or on behalf of the Company to the Purchasers regardingthe Company, its business and the transactions contemplated hereby, includingthe Disclosure Schedules to this Agreement, with respect to the representationsand warranties made herein are true and correct with respect to suchrepresentations and warranties and do not contain any untrue statement of a materialfact or omit to state any material fact necessary in order to make thestatements made therein, in light of the circumstances under which they weremade, not misleading.

###  

### (z)                                   No Integrated Offering. Assuming the accuracy of the Purchasers’representations and warranties set forth in Section 3.2, neither theCompany, nor any of its Affiliates, nor any Person acting on its or theirbehalf has, directly or indirectly, made any offers or sales of any security orsolicited any offers to buy any security, under circumstances that would causethis offering of the Securities to be integrated with prior offerings by theCompany for purposes of the Securities Act or any applicable shareholderapproval provisions of any Trading Market on which any of the securities of theCompany are listed or designated.

###  

### (aa)                            Tax Status.  Except formatters that would not, individually or in the aggregate, have or reasonably beexpected to result in a Material Adverse Effect, the Company and eachSubsidiary has filed all necessary federal, state and foreign income andfranchise tax returns and has paid or accrued all taxes shown as due thereon,and the Company has no knowledge of a tax deficiency which has been asserted orthreatened against the Company or any Subsidiary.

###  

### (bb)                          No General Solicitation. Neither the Company nor any person acting on behalf of the Company hasoffered or sold any of the Securities by any form of general solicitation orgeneral advertising.  The Company hasoffered the Securities for sale only to the Purchasers and certain other “accreditedinvestors” within the meaning of Rule 501 under the Securities Act.

###  

### (cc)                            Insolvency.  The Companyis not as of the date hereof, and after giving effect to the transactionscontemplated hereby to occur at the Closing, will not be Insolvent (as definedbelow).  For purposes of this Section 3.1(cc),“Insolvent” means, with respect to any Person , (i) the presentfair saleable value of such Person’s assets is less than the amount required topay such Person’s total indebtedness, (ii) such Person is unable to payits debts and liabilities, subordinated, contingent or otherwise, as such debtsand liabilities become absolute and matured, (iii) such Person intends toincur or believes that it will incur debts that would be beyond its ability topay as such debts mature or (iv) such Person has unreasonably smallcapital with which to conduct the business in which it is engaged as suchbusiness is now conducted and is proposed to be conducted.

 

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### (dd)                          Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between theCompany and an unconsolidated or other off balance sheet entity that isrequired to be disclosed by the Company in its Exchange Act filings and is notso disclosed or that otherwise would be reasonably likely to have a MaterialAdverse Effect.

###  

### (ee)                            No Undisclosed Events, Liabilities,Developments or Circumstances.  Except forthe transactions contemplated by this Agreement, no event, liability,development or circumstance has occurred or exists with respect to the Companyor its business, properties, prospects, operations or financial condition, thatwould be required to be disclosed by the Company under applicable securities lawson a Current Report on Form 8-K filed with the SEC.

###  

### (ff)                                Environmental Laws. The Company is in compliance with any and all Environmental Laws (ashereinafter defined), (ii) have received all permits, licenses or otherapprovals required of them under applicable Environmental Laws to conduct theirrespective businesses and (iii) are in compliance with all terms andconditions of any such permit, license or approval where, in each of theforegoing clauses (i), (ii) and (iii), the failure to so comply would bereasonably expected to have, individually or in the aggregate, a MaterialAdverse Effect.  The term “EnvironmentalLaws” means all federal, state, local or foreign laws relating to pollution orprotection of human health or the environment (including, without limitation,ambient air, surface water, groundwater, land surface or subsurface strata),including, without limitation, laws relating to emissions, discharges, releasesor threatened releases of chemicals, pollutants, contaminants, or toxic or hazardoussubstances or wastes (collectively, “Hazardous Materials”) into theenvironment, or otherwise relating to the manufacture, processing,distribution, use, treatment, storage, disposal, transport or handling ofHazardous Materials, as well as all authorizations, codes, decrees, demands ordemand letters, injunctions, judgments, licenses, notices or notice letters,orders, permits, plans or regulations issued, entered, promulgated or approvedthereunder.

###  

### (gg)                          Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalfhas taken, directly or indirectly, any action designed to cause or to result inthe stabilization or manipulation of the price of any security of the Companyto facilitate the sale or resale of any of the Securities.

###  

### (hh)                          Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor to the Company’sknowledge, any director, officer, agent, employee or other Person acting onbehalf of the Company or any of its Subsidiaries has, in the course of itsactions for, or on behalf of, the Company (i) used any corporate funds forany unlawful contribution, gift, entertainment or other unlawful expensesrelating to political activity; (ii) made any direct or indirect unlawfulpayment to any foreign or domestic government official or employee fromcorporate funds; (iii) violated or is in violation of any provision of theU.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made anyunlawful bribe, rebate, payoff, influence payment, kickback or other unlawfulpayment to any foreign or domestic government official or employee.

 

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3.2                                 Representationsand Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser, representsand warrants as of the date hereof and as of the Closing Date to the Company asfollows:

 

### (a)                                  Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in goodstanding under the laws of the jurisdiction of its organization with fullright, corporate or partnership power and authority to enter into and toconsummate the transactions contemplated by the Transaction Documents andotherwise to carry out its obligations hereunder and thereunder. The execution,delivery and performance by such Purchaser of the transactions contemplated bythis Agreement have been duly authorized by all necessary corporate or similaraction on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executedby such Purchaser, and when delivered by such Purchaser in accordance with theterms hereof, will constitute the valid and legally binding obligation of suchPurchaser, enforceable against it in accordance with its terms, except (i) aslimited by general equitable principles and applicable bankruptcy, insolvency,reorganization, moratorium and other laws of general application affectingenforcement of creditors’ rights generally, (ii) as limited by lawsrelating to the availability of specific performance, injunctive relief orother equitable remedies and (iii) insofar as indemnification andcontribution provisions may be limited by applicable law.

###  

### (b)                                 Own Account. Such Purchaser understands that the Securities are “restrictedsecurities” and have not been registered under the Securities Act or anyapplicable state securities law and is acquiring the Securities as principalfor its own account and not with a view to or for distributing or resellingsuch Securities or any part thereof in violation of the Securities Act or anyapplicable state securities law, has no present intention of distributing anyof such Securities in violation of the Securities Act or any applicable statesecurities law and has no direct or indirect arrangement or understandings withany other persons to distribute or regarding the distribution of suchSecurities (this representation and warranty not limiting such Purchaser’sright to sell the Shares and Underlying Shares pursuant to the RegistrationStatement or otherwise in compliance with applicable federal and statesecurities laws) in violation of the Securities Act or any applicable statesecurities law.  Such Purchaser isacquiring the Securities hereunder in the ordinary course of its business.

###  

### (c)                                  Purchaser Status. At the time such Purchaser was offered the Shares and Warrants, it was,and at the date hereof it is, an “accredited investor” as defined in Rule 501(a)(1),(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.  Such Purchaser is not required to be registeredas a broker-dealer under Section 15 of the Exchange Act.

###  

### (d)                                 Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, hassuch knowledge, sophistication and experience in business and financial mattersso as to be capable of evaluating the merits and risks of the prospectiveinvestment in the Securities, and has so evaluated the merits and risks of suchinvestment.  Such Purchaser is able tobear the economic risk of an investment in the Securities and, at the presenttime, is able to afford a complete loss of such investment.

 

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### (e)                                  General Solicitation. Such Purchaser is not purchasing the Securities as a result of anyadvertisement, article, notice or other communication regarding the Securitiespublished in any newspaper, magazine or similar media or broadcast overtelevision or radio or presented at any seminar or any other generalsolicitation or general advertisement.

###  

### (f)                                    Short Sales and Confidentiality Prior ToThe Date Hereof.  Other than the transaction contemplatedhereunder, such Purchaser has not directly or indirectly, nor has any Personacting on behalf of or pursuant to any understanding with such Purchaser,engaged in any transaction, including Short Sales, in the securities ofthe Company since the earlier to occur of (i) the time that such Purchaserwas first contacted by the Company regarding an investment in the Company, or (ii) the30th day prior to the date of this Agreement (such earlier date, “DiscussionDate”).  Notwithstanding theforegoing, in the case of a Purchaser that is a multi-managed investmentvehicle whereby separate portfolio managers manage separate portions of suchPurchaser’s assets and the portfolio managers have no direct knowledge of theinvestment decisions made by the portfolio managers managing other portions ofsuch Purchaser’s assets, the representation set forth above shall only applywith respect to the portion of assets managed by the portfolio manager thatmade the investment decision to purchase the Securities covered by thisAgreement.  Other than to other Personsparty to this Agreement, such Purchaser has maintained the confidentiality ofall disclosures made to it in connection with this transaction (including theexistence and terms of this transaction).

###  

### (g)                                 Access to Information. Such Purchaser acknowledges that it has received and had the opportunityto review (i) copies of the SEC Reports, and (ii) all exhibitsthereto.  Such Purchaser furtheracknowledges that it or its representatives have been afforded (iii) theopportunity to ask such questions as it has deemed necessary of, and to receiveanswers from, representatives of the Company concerning the terms andconditions of the offering of the Securities, the merits and risks of investingin the Securities, (iv) access to information about the Company and theCompany’s financial condition, results of operations, business, properties,management and prospects sufficient to enable it to evaluate its investment inthe Securities; and (v) the opportunity to obtain such additionalinformation which the Company possesses or can acquire without unreasonableeffort or expense that is necessary to verify the accuracy and completeness ofthe information contained in the SEC Reports.

###  

### (h)                                 Restrictions on Securities. Such Purchaser understands that the Securities have not been registeredunder the Securities Act and may not be offered, resold, pledged or otherwisetransferred except (a) pursuant to an exemption from registration underthe Securities Act or pursuant to an effective registration statement incompliance with Section 5 under the Securities Act and (b) inaccordance with all applicable securities laws of the states of the UnitedStates and other jurisdictions.

 

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# ARTICLE IV.OTHER AGREEMENTS OF THE PARTIES

 

4.1                                 TransferRestrictions.  

 

### (a)                                  The Securities may only be disposed of incompliance with state and federal securities laws.  In connection with any transfer of Securitiesother than pursuant to an effective registration statement or Rule 144,the Company may require the transferor thereof to provide to the Company anopinion of counsel to the Company, the form and substance of which opinionshall be reasonably satisfactory to the Company, to the effect that suchtransfer does not require registration of such transferred Securities under theSecurities Act.

###  

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

###  

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THEU.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATEAND ARE “RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144 UNDER THESECURITIES ACT.  SUCH SECURITIES MAY NOTBE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TOAN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND THE APPLICABLESTATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER,THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE SATISFACTIONOF COUNSEL TO THE ISSUER.

 

4.2                                 Furnishing of Information.  Aslong as any Purchaser owns Securities, the Company covenants to timely file (orobtain extensions in respect thereof and file within the applicable graceperiod) all reports required to be filed by the Company after the date hereofpursuant to the Exchange Act.  As long asany Purchaser owns Securities, if the Company is not required to file reportspursuant to the Exchange Act, it will prepare and furnish to the Purchasers andmake publicly available in accordance with Rule 144(c) suchinformation as is required for the Purchasers to sell the Shares and UnderlyingShares under Rule 144. The Company further covenants that it will takesuch further action as any holder of Shares and Underlying Shares mayreasonably request, to the extent required from time to time to enable suchPerson to sell such Shares and Underlying Shares without registration under theSecurities Act within the requirements of the exemption provided by Rule 144.

 

4.3                                 Integration.  The Company shall not sell,offer for sale or solicit offers to buy or otherwise negotiate in respect ofany security (as defined in Section 2 of the Securities Act) that would beintegrated with the offer or sale of the Securities in a manner that wouldrequire the registration under the Securities Act of the sale of the Securitiesto the Purchasers or that would be integrated with the offer or sale of theSecurities for purposes of the rules and regulations of any Trading Marketsuch that it would require shareholder approval prior to the closing of such

 

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othertransaction unless shareholder approval is obtained before the closing of suchsubsequent transaction.

 

4.4                                 SecuritiesLaws Disclosure; Publicity.  TheCompany shall, within one Business Day of the Closing Date, issue a pressrelease disclosing the material terms of the transactions contemplated hereby,and shall file a Current Report on Form 8-K (the “Closing 8-K”)which shall attach the Transaction Documents thereto by the first Business Dayfollowing the Closing Date.  The pressrelease and the Closing 8-K shall be acceptable to the Purchasers in theirreasonable discretion.  No Purchasershall issue any such press release or otherwise make any such public statementwithout the prior consent of the Company. The Company shall not publicly disclose the name of any Purchaser, orinclude the name of any Purchaser in any filing with the Commission or anyregulatory agency or Trading Market, without the prior written consent of suchPurchaser, except (i) as required by federal securities law in connectionwith (A) any registration statement contemplated by the RegistrationRights Agreement and (B) the filing of final Transaction Documents(including signature pages thereto) with the Commission and (ii) tothe extent such disclosure is required by law or Trading Market regulations, inwhich case the Company shall provide the Purchasers with prior notice of suchdisclosure permitted under this subclause (ii).

 

4.5                                 Useof Proceeds.  The Company shall usethe net proceeds from the sale of the Shares hereunder as set forth on Schedule 4.5of the Disclosure Schedule.

 

4.6                                 Listing of Common Stock.  TheCompany hereby agrees to use best efforts to maintain the listing of the CommonStock on a Trading Market, and as soon as reasonably practicable following theClosing to list all of the Shares and Underlying Shares on such Trading Market.The Company further agrees, if the Company applies to have the Common Stocktraded on any other Trading Market, it will include in such application all ofthe Shares and Underlying Shares, and will take such other action as isnecessary to cause all of the Shares and Underlying Shares to be listed on suchother Trading Market as promptly as possible. The Company will take all action reasonably necessary to continue thelisting and trading of its Common Stock on a Trading Market and will comply inall respects with the Company’s reporting, filing and other obligations underthe bylaws or rules of the Trading Market.

 

4.7                                 ShortSales and Confidentiality After The Date Hereof.  Each Purchaser, severally and not jointlywith the other Purchasers, covenants that neither it nor any Affiliate actingon its behalf or pursuant to any understanding with it will engage in anytransactions, including any Short Sales, in the securities of the Companyduring the period commencing at the Discussion Time and ending at the time thatthe transactions contemplated by this Agreement are first publicly announced asdescribed in Section 4.4.  Each Purchaser, severally andnot jointly with the other Purchasers, covenants that neither it nor any Affiliateacting on its behalf or pursuant to any understanding with it will engage inany Short Sales in the securities of the Company during the period commencingat the Discussion Time and ending on the date the Closing 8-K is filed with theSEC (“Black-out Termination Date”).Each Purchaser, severally and not jointlywith the other Purchasers, covenants that until such time as the transactionscontemplated by this Agreement are publicly disclosed by the Company asdescribed in Section 4.4, such Purchaser will maintain the confidentialityof all disclosures made to it in connection with this transaction (includingthe existence and terms of this transaction). Each Purchaser understands and

 

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acknowledges, severally and not jointly with any other Purchaser, thatthe Commission currently takes the position that coverage of short sales ofshares of the Common Stock “against the box” prior to the Effective Date of theRegistration Statement with respect to the Shares is a violation of Section 5of the Securities Act, as set forth in Item 65, Section A, of the Manualof Publicly Available Telephone Interpretations, dated July 1997, compiledby the Office of Chief Counsel, Division of Corporation Finance.  Notwithstandingthe foregoing, no Purchaser makes any representation, warranty or covenanthereby that it will not engage in Short Sales in the securities of the Companyafter the Black-out Termination Date.  Notwithstandingthe foregoing, in the case of a Purchaser that is a multi-managed investmentvehicle whereby separate portfolio managers manage separate portions of suchPurchaser’s assets and the portfolio managers have no direct knowledge of theinvestment decisions made by the portfolio managers managing other portions ofsuch Purchaser’s assets, the covenant set forth above shall only apply withrespect to the portion of assets managed by the portfolio manager that made theinvestment decision to purchase the Securities covered by this Agreement.

 

4.8                                 Form D;Blue Sky Filings.  The Company agreesto timely file a Form D with respect to the Securities as required underRegulation D and to provide a copy thereof, promptly upon request of anyPurchaser. The Company shall take such action as the Company shall reasonablydetermine is necessary in order to obtain an exemption for, or to qualify theSecurities for, sale to the Purchasers at the Closing under applicablesecurities or “Blue Sky” laws of the states of the United States, and shallprovide evidence of such actions promptly upon request of any Purchaser.

 

4.9                                 ClosingDocuments.  On or prior to fourteen(14) calendar days after the Closing Date, the Company agrees to deliver, orcause to be delivered, to each Purchaser and Schulte Roth & Zabel LLPexecuted copies of the Transaction Documents, Securities and any other documentrequired to be delivered to any party pursuant to Section 2.2 hereof.

 

4.10                           AdditionalIssuances of Securities.

 

### (a)                                  For purposes of this Section 4.10,the following definitions shall apply.

###  

#### (i)                                     “Approved Stock Plan” means anyemployee benefit plan which has been approved by the Board of Directors of theCompany, pursuant to which the Company’s securities may be issued to anyemployee, officer or director for services provided to the Company.

####  

#### (ii)                                  “Common Stock Equivalents” means,collectively, Options and Convertible Securities.

####  

#### (iii)                               “Convertible Securities” means anystock or securities (other than Options) convertible into or exercisable orexchangeable for shares of Common Stock.

####  

#### (iv)                              “Excluded Securities” means (i) anyCommon Stock or Options issued or issuable in connection with any ApprovedStock Plan; (ii) any Common Stock issuable upon the exercise of theWarrants; (iii) any Common Stock issuable upon conversion, exercise or exchangeof any Options or Convertible Securities which are outstanding on the dayimmediately preceding the date hereof, provided that the terms of any suchOptions or Convertible Securities

 

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#### are not amended, modifiedor changed on or after the date hereof; or (iv) any Common Stock or CommonStock Equivalents issued (whether in exchange for Options or ConvertibleSecurities or otherwise) in any Change of Control Transaction (as definedbelow).

####  

#### (v)                                 “Options” means any rights,warrants or options to subscribe for or purchase shares of Common Stock orConvertible Securities.

####  

#### (vi)                              “Ownership Interest”  means, with respect to any Purchaser at anygiven time, the quotient of (x) the Purchaser Securities Amount of suchPurchaser and (y) the sum of (I) the Common Stock Deemed Outstanding (asdefined in the Warrants) as of such time and (II) the Warrant Shares issuableupon exercise of the Warrants held by, or issuable to, such Purchaser pursuantto the Transaction Documents as of such time, without regard for anylimitations on exercise in the Warrants held by such Purchaser.

####  

#### (vii)                           “Purchaser Securities Amount”means, with respect to any Purchaser at any given time, the number of Sharesand Common Stock issuable upon exercise of the Warrants held by, or issuableto, such Purchaser pursuant to the Transaction Documents as of such time,without regard for any limitations on exercise in the Warrants held by suchPurchaser.

####  

#### (viii)                        “Subsequent Placement” means anyoffer or sale by or on behalf of the Company of the Company’s equity or equityequivalent securities, including without limitation any debt, preferred stockor other instrument or security that is, at any time during its life and underany circumstances, convertible into or exchangeable or exercisable for sharesof Common Stock or Common Stock Equivalents, for direct or indirectconsideration of cash or cash equivalents, pursuant to either (a) atransaction exempt from Section 5 of the Securities Act; (b) a bonafide underwritten public offering with a nationally recognized underwriterwhich generates gross proceeds to the Company of less than $10,000,000; (c) abona fide underwritten public offering with a nationally recognized underwriterwhich generates gross proceeds to the Company of at least $10,000,000 in an “at-the-marketoffering” as defined in Rule 415(a)(4) under the 1933 Act orcontaining any “equity lines”; or (d) an offering pursuant to aregistration statement filed under Section 5 of the Securities Act otherthan a bona fide underwritten public offering with a nationally recognizedunderwriter which generates gross proceeds to the Company of at least$10,000,000.

####  

### (b)                                 From the date hereof until the date thatis sixty (60) Trading Days following the Effective Date (the “Trigger Date”),the Company will not, directly or indirectly, (x) file any registrationstatement with the SEC prior to the filing of the Registration Statement (asdefined in the Registration Rights Agreement) or (y) cause any registrationstatement filed on or after the date hereof to become effective under the 1933Act prior to the Effective Date (as defined in the Registration RightsAgreement); provided, that, the Company shall not be required to comply withclause (y) above if the Company has acted in good faith with respect to itsagreements and obligations set forth in the Registration Rights Agreement andused its reasonable best efforts to have the Registration Statement declaredeffective under the 1933 Act prior to the Effective Date.

###  

### (c)                                  From the Trigger Date until the earlierto occur of (x) the second anniversary of the Closing Date and (y) such dateafter which the Company has, directly or

 

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### indirectly, in one ormore related transactions (collectively, the “Change of Control Transaction”):(I) allowed another Person to make a purchase, tender or exchange offer that isaccepted by the holders of more than 50% of the outstanding shares of CommonStock (not including any shares of Common Stock held by the Person or Personsmaking or party to, or associated or affiliated with the Persons making orparty to, such purchase, tender or exchange offer) or (II) consummated a stockpurchase agreement or other business combination (including, withoutlimitation, a merger or consolidation, reorganization, recapitalization,spin-off or scheme of arrangement) with another Person whereby such otherPerson, after giving effect to such Change of Control Transaction, is thebeneficial owner of 50% or more of the outstanding shares of Common Stock, theCompany will not, directly or indirectly, effect any Subsequent Placementunless the Company shall have first complied with this Section 4.10(c).

###  

#### (i)                                     The Company shall deliver to eachPurchaser an irrevocable written notice (the ”Offer Notice”) of anyproposed or intended issuance or sale (the ”Offer”) of thesecurities being offered (the “Offered Securities”) in a SubsequentPlacement, which Offer Notice shall (w) identify and describe the OfferedSecurities, (x) describe the price and other terms upon which they are tobe issued or sold, and the number or amount of the Offered Securities to beissued or sold, (y) identify the persons or entities (if known) to whichor with which the Offered Securities are to be offered, issued or sold and (z)offer to issue and sell to such Purchasers such percentage of the OfferedSecurities that would permit the Purchasers to maintain their aggregateOwnership Interest in the Company as in effect immediately prior to theconsummation of such Subsequent Placement, allocated among such Purchasers (a) basedon such Purchaser’s pro rata portion of the aggregate Purchaser SecuritiesAmount of all the Purchasers at such time (the “Basic Amount”), and (b) withrespect to each Purchaser that elects to purchase its Basic Amount, anyadditional portion of the Offered Securities attributable to the Basic Amountsof other Purchasers as such Purchaser shall indicate it will purchase oracquire should the other Purchasers subscribe for less than their Basic Amounts(the “Undersubscription Amount”), which process shall be repeated untilthe Purchasers shall have an opportunity to subscribe for any remainingUndersubscription Amount.

####  

#### (ii)                                  To accept an Offer, in whole or in part,such Purchaser must deliver a written notice to the Company prior to the end ofthe fifth (5th) Business Day after such Purchaser’s receipt of theOffer Notice (the “Offer Period”), setting forth the portion of suchPurchaser’s Basic Amount that such Purchaser elects to purchase and, if suchPurchaser shall elect to purchase all of its Basic Amount, theUndersubscription Amount, if any, that such Purchaser elects to purchase (ineither case, the “Notice of Acceptance”).  If the Basic Amounts subscribed for by allPurchasers are less than the total of all of the Basic Amounts, then eachPurchaser who has set forth an Undersubscription Amount in its Notice ofAcceptance shall be entitled to purchase, in addition to the Basic Amountssubscribed for, the Undersubscription Amount it has subscribed for; provided,however, that if the Undersubscription Amounts subscribed for exceed thedifference between the total of all the Basic Amounts and the Basic Amountssubscribed for (the “Available Undersubscription Amount”), eachPurchaser who has subscribed for any Undersubscription Amount shall be entitledto purchase only that portion of the Available Undersubscription Amount as theBasic Amount of such

 

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#### Purchaser bears tothe total Basic Amounts of all Purchasers that have subscribed forUndersubscription Amounts, subject to rounding by the Company to the extent itsdeems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amendthe terms and conditions of the Offer prior to the expiration of the OfferPeriod, the Company may deliver to the Purchasers a new Offer Notice and theOffer Period shall expire on the third (3rd) Business Day after suchPurchaser’s receipt of such new Offer Notice.

####  

#### (iii)                               The Company shall have twenty (20)Business Days from the expiration of the Offer Period above to offer, issue orsell all or any part of such Offered Securities as to which a Notice ofAcceptance has not been given by the Purchasers (the “Refused Securities”)pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”),but only upon terms and conditions (including, without limitation, unit pricesand interest rates) that are not more favorable to the acquiring person or personsor less favorable to the Company than those set forth in the Offer Notice.

####  

#### (iv)                              In the event the Company shall propose tosell less than all the Refused Securities (any such sale to be in the mannerand on the terms specified in Section 4.10(c)(iii) above), then eachPurchaser may, at its sole option and in its sole discretion, reduce the numberor amount of the Offered Securities specified in its Notice of Acceptance to anamount that shall be not less than the number or amount of the Offered Securitiesthat such Purchaser elected to purchase pursuant to Section 4.10(c)(ii) abovemultiplied by a fraction, (a) the numerator of which shall be the numberor amount of Offered Securities the Company actually proposes to issue or sell(including Offered Securities to be issued or sold to Purchasers pursuant to Section 4.10(c)(iii) aboveprior to such reduction) and (b) the denominator of which shall be theoriginal amount of the Offered Securities. In the event that any Purchaser so elects to reduce the number or amountof Offered Securities specified in its Notice of Acceptance, the Company maynot issue or sell more than the reduced number or amount of the OfferedSecurities unless and until such securities have again been offered to thePurchasers in accordance with Section 4.10(c)(i) above.

####  

#### (v)                                 Upon the closing of the issuance or saleof all or less than all of the Refused Securities, the Purchasers shall acquirefrom the Company, and the Company shall issue to the Purchasers, the number oramount of Offered Securities specified in the Notices of Acceptance, as reducedpursuant to Section 4.10(c)(iv) above if the Purchasers have soelected, upon the terms and conditions specified in the Offer. The purchase bythe Purchasers of any Offered Securities is subject in all cases to thepreparation, execution and delivery by the Company and the Purchasers of apurchase agreement relating to such Offered Securities reasonably satisfactoryin form and substance to the Purchasers and their respective counsel.

####  

#### (vi)                              Any Offered Securities not acquired bythe Purchasers or other persons in accordance with Section 4.10(c)(iii) abovemay not be issued or sold until they are again offered to the Purchasers underthe procedures specified in this Agreement.

 

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#### (vii)                           The Company and the Purchasers agree thatif any Purchaser elects to participate in the Offer, (x) neither the SubsequentPlacement Agreement with respect to such Offer nor any other transactiondocuments related thereto (collectively, the “Subsequent Placement Documents”)shall include any term or provisions whereby any Purchaser shall be required toagree to any restrictions in trading as to any securities of the Company ownedby such Purchaser prior to such Subsequent Placement, and (y) such Purchasershall be entitled to registration rights, if any, no less favorable than suchregistration rights, if any, provided to any other Persons acquiring securitiesin such Subsequent Placement.

####  

#### (viii)                        Notwithstanding anything to the contraryin this Section 4.10 and unless otherwise agreed to by the Purchasers, theCompany shall either confirm in writing to the Purchasers that the transactionwith respect to the Subsequent Placement has been abandoned or shall publicly discloseits intention to issue the Offered Securities, in either case in such a mannersuch that the Purchasers will not be in possession of material non-publicinformation, by the twentieth (20th) Business Day following theexpiration of the Offer Period (the “Offer Information Deadline”).  If by the Offer Information Deadline nopublic disclosure regarding a transaction with respect to the OfferedSecurities has been made, and no notice regarding the abandonment of suchtransaction has been received by the Purchasers, such transaction shall bedeemed to have been abandoned and the Purchasers shall not be deemed to be inpossession of any material, non-public information with respect to theCompany.  Should the Company decide topursue such transaction with respect to the Offered Securities, the Companyshall provide each Purchaser with another Offer Notice and each Purchaser willagain have the right of participation set forth in this Section 4.10(c).  After any Offer Information Deadline, theCompany shall not be permitted to deliver an additional Offer Notice to thePurchasers prior to the fifth (5th) Business Day after such Offer InformationDeadline.

####  

#### (ix)                                The restrictions contained in subsections(b) and (c) of this Section 4.10 shall not apply in connectionwith the issuance of any Excluded Securities.

####  

4.11                           FairMarket Value.  The Company herebycovenants and agrees that the fair market value of the Securities for purposesof Article IX of the Charter or any repurchase of any of the Securities inaccordance with applicable law by the Company shall be the Subscription Amountof such Securities.

 

# ARTICLE V.MISCELLANEOUS

#  

5.1                                 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’sobligations hereunder only and without any effect whatsoever on the obligationsbetween the Company and the other Purchasers, or the Company by written noticeto the other parties, if the Closing has not been consummated on or before April 15,2007, provided, however, that no such termination will affect theright of any party to sue for any breach by the other party (or parties).

 

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5.2                                 Feesand Expenses.  Except as expresslyset forth in the Transaction Documents to the contrary, each party shall paythe fees and expenses of its advisers, counsel, accountants and other experts,if any, and all other expenses incurred by such party incident to thenegotiation, preparation, execution, delivery and performance of thisAgreement.  The Company shall pay alltransfer agent fees, stamp taxes and other taxes and duties levied inconnection with the delivery of any Securities to the Purchasers.

 

5.3                                 EntireAgreement.  The TransactionDocuments, together with the exhibits and schedules thereto, contain the entireunderstanding of the parties with respect to the subject matter hereof andsupersede all prior agreements and understandings, oral or written, withrespect to such matters, which the parties acknowledge have been merged intosuch documents, exhibits and schedules.

 

5.4                                 Notices.  Any and all notices or other communicationsor deliveries required or permitted to be provided hereunder shall be inwriting and shall be deemed given and effective on the earliest of (a) thedate of transmission, if such notice or communication is delivered viafacsimile at the facsimile number set forth on the signature pages attachedhereto prior to 3:30 p.m. (Las Vegas time) on a Business Day, (b) thenext Business Day after the date of transmission, if such notice or communicationis delivered via facsimile at the facsimile number set forth on the signature pages attachedhereto on a day that is not a Business Day or later than 3:30 p.m. (LasVegas time) on any Business Day, (c) the 2nd Business Dayfollowing the date of mailing, if sent by U.S. nationally recognized overnightcourier service, or (d) upon actual receipt by the party to whom suchnotice is required to be given.  Theaddress for such notices and communications shall be as set forth on thesignature pages attached hereto, and a copy of any notices to anyPurchaser (for informational purposes only) shall also be delivered to:

 
| Schulte Roth & Zabel LLP |
|-----------------------------------|
| 919 Third Avenue                  |
| New York, New York   10022   |
|                              |
| Telephone:                        | (212) 756-2000 |
| Facsimile:                        | (212) 593-5955 |
| Attention:                        | Eleazer N. Klein, Esq. |

 

5.5                                 Amendments;Waivers.  No provision of thisAgreement may be waived or amended except in a written instrument signed, inthe case of an amendment, by the Company and the Purchasers holding not lessthan 51% of the Shares or, in the case of a waiver, by the party against whomenforcement of any such waived provision is sought.  No waiver of any default with respect to anyprovision, condition or requirement of this Agreement shall be deemed to be acontinuing waiver in the future or a waiver of any subsequent default or awaiver of any other provision, condition or requirement hereof, nor shall anydelay or omission of any party to exercise any right hereunder in any mannerimpair the exercise of any such right.

 

5.6                                 Indemnification.  

 

### (a)                                  In consideration of each Purchaser’sexecution and delivery of the Transaction Documents and acquiring theSecurities thereunder and in addition to all of the

 

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### Company’s otherobligations under the Transaction Documents, the Company shall defend, protect,indemnify and hold harmless each Purchaser and all of their stockholders,partners, members, officers, directors, employees and direct or indirectinvestors and any of the foregoing Persons’ agents or other representatives(including, without limitation, those retained in connection with thetransactions contemplated by this Agreement) (collectively, the “Indemnitees”)from and against any and all actions, causes of action, suits, claims, losses, costs,penalties, fees, liabilities and damages, and expenses in connection therewith(irrespective of whether any such Indemnitee is a party to the action for whichindemnification hereunder is sought), and including reasonable attorneys’ feesand disbursements (the “Indemnified Liabilities”), incurred by anyIndemnitee as a result of, or arising out of, or relating to (i) anymisrepresentation or breach of any representation or warranty made by theCompany in the Transaction Documents or any other certificate, instrument ordocument contemplated hereby or thereby, (ii) any breach of any covenant,agreement or obligation of the Company contained in the Transaction Documentsor any other certificate, instrument or document contemplated hereby or therebyor (iii) any cause of action, suit or claim brought or made against suchIndemnitee by a third party (including for these purposes a derivative actionbrought on behalf of the Company) and arising out of or resulting from (x) theexecution, delivery, performance or enforcement of the Transaction Documents orany other certificate, instrument or document contemplated hereby or thereby or(y) any transaction financed or to be financed in whole or in part, directly orindirectly, with the proceeds of the issuance of the Securities, in each case,solely to the extent arising with respect to any willful misconduct, grossnegligence or fraud of the Company or any of its Subsidiaries, or any of theirdirectors, officers, employees, agents, or representatives, respectively.  To the extent that the foregoing undertakingby the Company may be unenforceable for any reason, the Company shall make themaximum contribution to the payment and satisfaction of each of the IndemnifiedLiabilities which is permissible under applicable law.

###  

### (b)                                 Promptly after receipt by an Indemniteeunder this Section 5.6  of notice ofthe commencement of any action or proceeding (including any governmental actionor proceeding) involving an Indemnified Liability, such Indemnitee shall, if aclaim for indemnification in respect thereof is to be made against anyindemnifying party under this Section 5.6, deliver to the indemnifyingparty a written notice of the commencement thereof, and the indemnifying partyshall have the right to participate in, and, to the extent the indemnifyingparty so desires, jointly with any other indemnifying party similarly noticed,to assume control of the defense thereof with counsel mutually satisfactory tothe indemnifying party and the Indemnitee; provided, however, that anIndemnitee shall have the right to retain its own counsel with the fees andexpenses of not more than one counsel for such Indemnitee to be paid by theindemnifying party, if, in the reasonable opinion of the Indemnitee, therepresentation by such counsel of the Indemnitee and the indemnifying partywould be inappropriate due to actual or potential conflicts of interestsbetween such Indemnitee and any other party represented by such counsel in suchproceeding.  Legal counsel referred to inthe immediately preceding sentence shall be selected by the Investors holdingat least a majority of the Shares.  TheIndemnitee shall cooperate fully with the indemnifying party in connection withany negotiation or defense of any such action or Indemnified Liabilities by theindemnifying party and shall furnish to the indemnifying party all informationreasonably available to the Indemnitee that relates to such action orIndemnified Liabilities.  Theindemnifying party shall keep the Indemnitee fully apprised at all times as tothe status of the defense or any settlement negotiations with respect

 

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### thereto.  No indemnifying party shall be liable for anysettlement of any action, claim or proceeding effected without its priorwritten consent, provided, however, that the indemnifying party shall notunreasonably withhold, delay or condition its consent.  No indemnifying party shall, without theprior written consent of the Indemnitee, consent to entry of any judgment orenter into any settlement or other compromise which does not include as anunconditional term thereof the giving by the claimant or plaintiff to suchIndemnitee of a release from all liability in respect to such IndemnifiedLiabilities or litigation.  Followingindemnification as provided for hereunder, the indemnifying party shall besubrogated to all rights of the Indemnitee with respect to all third parties,firms or corporations relating to the matter for which indemnification has beenmade.  The failure to deliver writtennotice to the indemnifying party within a reasonable time of the commencementof any such action shall not relieve such indemnifying party of any liabilityto the Indemnitee under this Section 5.6, except to the extent that theindemnifying party is prejudiced in its ability to defend such action.

 

### (c)                                  The indemnification required by this Section 5.6shall be made by periodic payments of the amount thereof during the course ofthe investigation or defense, as and when bills become due or IndemnifiedLiabilities become due.

###  

### (d)                                 The indemnity agreements contained hereinshall be in addition to (x) any cause of action or similar right of theIndemnitee against the indemnifying party or others, and (y) any liabilitiesthe indemnifying party may be subject to pursuant to the law.

###  

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

 

5.8                                 Successorsand Assigns.  This Agreement shall bebinding upon and inure to the benefit of the parties and their successors andpermitted assigns.  The Company shall notassign this Agreement or any rights or obligations hereunder without the priorwritten consent of the Required Holders, including by way of a FundamentalTransaction (unless the Company is in compliance with the applicable provisionsgoverning Fundamental Transactions set forth in the Warrants).  No Purchaser may assign any of its rightshereunder without the consent of the Company.

 

5.9                                 NoThird-Party Beneficiaries.  ThisAgreement is intended for the benefit of the parties hereto and theirrespective successors and permitted assigns and is not for the benefit of, normay any provision hereof be enforced by, any other Person.

 

5.10                           GoverningLaw.  All questions concerning theconstruction, validity, enforcement and interpretation of the TransactionDocuments shall be governed by and construed and enforced in accordance withthe internal laws of the State of New York, without regard to the principles ofconflicts of law thereof.  Each partyagrees that all legal proceedings concerning the interpretations, enforcementand defense of the transactions contemplated by this Agreement and any otherTransaction Documents (whether brought against a party hereto or its respectiveaffiliates, directors, officers, shareholders, employees or agents) shall becommenced exclusively in the state and federal courts sitting in the State ofNew York. Each party hereby irrevocably submits to the exclusive jurisdictionof the state and federal courts sitting in the State of New York, for theadjudication of any dispute hereunder or in connection herewith or with any

 

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transaction contemplated hereby or discussed herein, and herebyirrevocably 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 suchcourt, that such suit, action or proceeding is brought in an inconvenient forumor that the venue of such suit, action or proceeding is improper.  Nothing contained herein shall be deemed tolimit in any way any right to serve process in any manner permitted by law.  **EACHPARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TOREQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR INCONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONCONTEMPLATED HEREBY.**  Ifeither party shall commence an action or proceeding to enforce any provisionsof the Transaction Documents, then the prevailing party in such action orproceeding shall be reimbursed by the other party for its reasonable attorneys’fees and other costs and expenses incurred with the investigation, preparationand prosecution of such action or proceeding.

 

5.11                           Survival.  The representations and warranties containedherein shall survive the Closing and the delivery of the Shares.

 

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

 

5.13                           Severability.  If any term, provision, covenant orrestriction of this Agreement is held by a court of competent jurisdiction tobe invalid, illegal, void or unenforceable, the remainder of the terms,provisions, covenants and restrictions set forth herein shall remain in fullforce and effect and shall in no way be affected, impaired or invalidated, andthe parties hereto shall use their commercially reasonable efforts to find andemploy an alternative means to achieve the same or substantially the sameresult as that contemplated by such term, provision, covenant or restriction.It is hereby stipulated and declared to be the intention of the parties that theywould have executed the remaining terms, provisions, covenants and restrictionswithout including any of such that may be hereafter declared invalid, illegal,void or unenforceable.

 

5.14                           Rescissionand Withdrawal Right. Notwithstanding anything to the contrary contained in (and withoutlimiting any similar provisions of) any of the other Transaction Documents,whenever any Purchaser exercises a right, election, demand or option under aTransaction Document and the Company does not timely perform its relatedobligations within the periods therein provided, then such Purchaser mayrescind or withdraw, in its sole discretion from time to time upon writtennotice to the Company, any relevant notice, demand or election in whole or inpart without prejudice to its future actions and rights.

 

5.15                           Replacementof Securities.  If any certificate orinstrument evidencing any Securities is mutilated, lost, stolen or destroyed,the Company shall issue or cause to be issued in exchange and substitution forand upon cancellation thereof (in the case of mutilation), or in lieu

 

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of and substitution therefor, a new certificate or instrument, but onlyupon receipt of evidence reasonably satisfactory to the Company of such loss,theft or destruction.  The applicant fora new certificate or instrument under such circumstances shall also pay anyreasonable third-party costs (including customary indemnity) associated withthe issuance of such replacement Securities.

 

5.16                           Construction.The parties agree that each of them and/or their respective counsel hasreviewed and had an opportunity to revise the Transaction Documents and,therefore, the normal rule of construction to the effect that anyambiguities are to be resolved against the drafting party shall not be employedin the interpretation of the Transaction Documents or any amendments hereto.

 

*(SignaturePages Follow)*

 

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

 

 
| **VENDINGDATA CORPORATION** | Address for Notice:                    |                |
|-----------------------------|----------------------------------------|---------------------|
|                        |                                   |                |
|                        |                                   |                |
| By:                         | */s/ Mark  R. Newburg*                 |                | 1120 Town Center |   |
|                        | Mark R. Newburg,                       | Suite 260      |   |
|                        | President and Chief  Executive Officer | Las Vegas, NV 89144 |   |
|                        | Fax: 702.733.7197                      |                |
|                             |                                        |                     |  |  |  |

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

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

 

 
| **GLG NORTH AMERICAN OPPORTUNITY FUND** | Address for Notice:                                         |
|-----------------------------------------|-------------------------------------------------------------|
|                                    |                                                        |
|                                    |                                                        |
| By*:*                                   | */s/ Tim  Kuschill*                                         |   | Walker House |
|                                    | Name: Tim Kuschill                                          | 87 Mary Street |
|                                    | Title: Legal Counsel, GLG Partners LP                       | George Town |
|                                    | Grand Cayman K41-9002                                       |
|                                    | Cayman Islands                                              |
| Subscription Amount: $4,306,250         |                                                        |
|                                    | with a copy to:                                             |
| Shares: 1,625,000                       |                                                        |
|                                    | c/o GLG Partners, LP                                        |
| Warrants: 1,625,000                     | 1 Curzon Street                                             |
|                                    | London WIJ 5HB                                              |
|                                    | Facsimile: +44 20 7016 7200                                 |
|                                    | Telephone: +44 20 7016 7302                                 |
|                                    | Attention: Antonio Dossantos                                |
|                                    | E-mail:  antonio.dossantos@glgpartners.com                  |
|                                    |                                                        |
|                                    | Address for Delivery of Shares and  Warrants for Purchaser: |
|                                    |                                                        |
|                                    | c/o GLG Partners, LP                                        |
|                                    | 1 Curzon Street                                             |
|                                    | London WIJ 5HB                                              |
|                                    | Facsimile: +44 20 7016 7200                                 |
|                                    | Telephone: +44 20 7016 7302                                 |
|                                    | Attention: Antonio Dossantos                                |
|                                    | E-mail:  antonio.dossantos@glgpartners.com                  |
|                                         |                                                             |  |  |

 

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