EXHIBIT 10.40**PURCHASE AGREEMENT**          THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 19thday of April, 2007 byand among LCC International, Inc., a Delaware corporation (the “Company”), and the Investors setforth on the signature pages affixed hereto (each an “Investor” and collectively the “Investors”).**Recitals**          A. The Company and the Investors are executing and delivering this Agreement in reliance uponthe exemption from securities registration afforded by the provisions of Regulation D (“RegulationD”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the SecuritiesAct of 1933, as amended; and          B. The Investors wish to purchase from the Company on a several and not joint basis, and theCompany wishes to sell and issue to the Investors, upon the terms and conditions stated in thisAgreement, the number of shares (the “Shares”) of the Company’s Class A Common Stock, par value$0.01 per share, determined in accordance with the terms of this Agreement at a per share purchaseprice equal to $3.35 (the “Per Share Purchase Price”); and          C. Contemporaneous with the sale of the Common Stock, the parties hereto will execute anddeliver a Registration Rights Agreement, in the form attached hereto as Exhibit A (the“Registration Rights Agreement”), pursuant to which the Company will agree to provide certainregistration rights under the Securities Act of 1933, as amended, and the rules and regulationspromulgated thereunder, and applicable state securities laws with respect to the Securities.          In consideration of the mutual promises made herein and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, the parties heretoagree as follows:     1. Definitions. In addition to those terms defined above and elsewhere in thisAgreement, for the purposes of this Agreement, the following terms shall have the meanings setforth below:          “Affiliate” means, with respect to any Person, any other Person which directly orindirectly through one or more intermediaries Controls, is controlled by, or is under commoncontrol with, such Person.          “Board” means the board of directors of the Company.
 

 
          “Business Day” means a day, other than a Saturday or Sunday, on which banks in NewYork City are open for the general transaction of business.          “Company’s Knowledge” means the actual knowledge of the executive officers (as definedin Rule 405 under the 1933 Act) of the Company, after due inquiry.          “Company Plan” means any “employee benefit plan” (within the meaning of Section 3(3)of ERISA), stock purchase, stock option, severance, employment, change-in-control, fringe benefit,bonus, incentive, deferred compensation and all other employee benefit plans, programs or policies,whether or not subject to ERISA, under which any current or former director, officer, independentcontractor or employee of the Company or its Subsidiaries has any present or future right tobenefits and under which the Company or its Subsidiaries is obligated to contribute for suchcurrent or former directors, officers, independent contracts or employees.          “Confidential Information” means any non-public information, including but not limitedto ideas, formulae, compositions, processes, procedures and techniques, research and developmentinformation, computer program code, performance specifications, support documentation, drawings,specifications, designs, business and marketing plans, business methods, financial information andcustomer and supplier lists and related information.          “Control” (including the terms “controlling”, “controlled by” or “under common controlwith”) means the possession, direct or indirect, of the power to direct or cause the direction ofthe management and policies of a Person, whether through the ownership of voting securities, bycontract or otherwise.          “Effective Date” means the date on which the initial Registration Statement isdeclared effective by the SEC.          “Intellectual Property” means all of the following: (i) patents, patent applications,patent disclosures, inventions, formulae, compositions, procedures, techniques, processes, designs,technology and know-how, (whether or not patentable and whether or not reduced to practice); (ii)trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internetdomain names, together with all goodwill associated with each of the foregoing; (iii) copyrightsand copyrightable works; (iv) registrations, applications and renewals for any of the foregoing;and (v) proprietary computer software (including but not limited to data, data bases anddocumentation).          “Material Adverse Effect” means a material adverse effect on (i) the assets,liabilities, results of operations, condition (financial or otherwise), or business of the Companyand its Subsidiaries, taken as a whole, or (ii) the ability of the Company to perform itsobligations under the Transaction Documents.          “Material Contract” means (A) any agreement which requires future expenditures by theCompany or any Subsidiary in excess of $1,000,000 or which might result in payments to the Companyor any Subsidiary in excess of $1,000,000, (B) any purchase or task order which
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might result in payments to the Company or any Subsidiary in excess of $1,000,000, (C) anyemployment agreements between the Company or its Subsidiaries and members of executive management,and (D) any agreement that is or would be required to be filed by the Company as an exhibit to theSEC Reports pursuant to Item 601(b)(10) of Regulation S-K of the Commission.          “Nasdaq” means The Nasdaq Stock Market, Inc.          “Person” means an individual, corporation, partnership, limited liability company,trust, business trust, association, joint stock company, joint venture, sole proprietorship,unincorporated organization, governmental authority or any other form of entity not specificallylisted herein.          “Purchase Price” means the aggregate purchase price for the Shares to be acquired bythe Investors in accordance with the terms hereof.          “Registration Statement” has the meaning set forth in the Registration RightsAgreement.          “SEC Filings” has the meaning set forth in Section 4.6.          “Securities” means the Shares.          “Subsidiary” of any Person means another Person, an amount of the voting securities,other voting ownership or voting partnership interests of which is sufficient to elect at least amajority of its Board of Directors or other governing body, 50% or more of the equity interests ofwhich or general or managing partnership interest or similar position of which is owned directly orindirectly by such first Person in such Person, except that with respect to the Company, Subsidiaryshall not include any Person which is not a significant subsidiary of the Company as defined inRule 1-02 of Regulation S-X under the Exchange Act.          “Trading Day” means (a) any day on which the Common Stock is listed or quoted andtraded on the Nasdaq Global Market or any other principal stock exchange or market; or (b) if theCommon Stock is not listed or quoted and traded on the Nasdaq Global Market or any other principalstock exchange or market, then any Business Day.          “Transaction Documents” means this Agreement and the Registration Rights Agreement.          “1933 Act” means the Securities Act of 1933, as amended, or any successor statute, andthe rules and regulations promulgated thereunder.          “1934 Act” means the Securities Exchange Act of 1934, as amended, or any successorstatute, and the rules and regulations promulgated thereunder.
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     2. Purchase and Sale of the Shares. Subject to the terms and conditions of thisAgreement, on the Closing Date, each of the Investors shall severally, and not jointly, purchase,and the Company shall sell and issue to the Investors, the Shares free and clear of all liens,encumbrances and restrictions in the respective amounts set forth opposite the Investors’ names onthe signature pages attached hereto in exchange for the portion of the Purchase Price set forthopposite the Investors’ names on the signature pages attached hereto, as specified in Section 3below.     3. Closing; Payment of Purchase Price. The closing (the “Closing”) of the purchaseand sale of the Shares shall take place on April 19, 2007 (the “Closing Date”) at such time as theCompany and the Investors shall mutually agree. Upon confirmation that the other conditions toclosing specified herein have been satisfied or duly waived, on the Closing Date or within three(3) Trading Days thereof, each Investor shall cause a wire transfer in same day funds to be sent tothe account of the Company as instructed in writing by the Company, in an amount representing suchInvestor’s pro rata portion of the Purchase Price as set forth on the signature pages to thisAgreement. The Closing of the purchase and sale of the Shares shall take place at the offices ofHogan & Hartson L.L.P., 555 13th St. N.W., Washington, D.C. 20004, or at such otherlocation and on such other date as the Company and the Investors shall mutually agree,and in the event that not all Investors fund on the same day, the Company may sell to theInvestors that have funded such Investors’ respective Shares, so the Closing may occur over thethree (3) Trading Day period as funds are received.     4. Representations and Warranties of the Company. The Company hereby represents andwarrants to the Investors that, except as set forth in the schedules delivered herewith to theextent referenced herein (collectively, the “Disclosure Schedules”):          4.1 Organization, Good Standing and Qualification; Subsidiaries.               (a) Except as set forth on Schedule 4.1(a), each of the Company and itsSubsidiariesis a corporation duly organized, validly existing and in good standing under the laws of thejurisdiction of its incorporation or organization and has all requisite corporate power andauthority to carry on its business as now conducted and to own its properties. The Company and itsSubsidiaries are duly qualified to do business as a foreign corporation and is in good standing ineach jurisdiction in which the conduct of its business or its ownership or leasing of propertymakes such qualification or leasing necessary unless the failure to so qualify has not had andwould not reasonably be expected to have, individually or in the aggregate, a Material AdverseEffect. The non-significant subsidiaries of the Company do not constitute in the aggregate amaterial portion of the Company’s assets, liabilities or business.               (b) Except as set forth on Schedule 4.1(b), Exhibit 21 to the Company’s Annual Reporton Form10-K for the fiscal year ended December 31, 2005 accurately sets forth each significant subsidiary(as defined in Rule 1-02 of Regulation S-X under the Exchange Act) of the Company, including itsname, place of incorporation or formation, and if not wholly-owned directly or indirectly by theCompany, the record ownership of all capital
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stock or other equity interests issued thereby. Except as set forth on Schedule 4.1(b), all sharesof capital stock or other equity interests of any Subsidiary directly or indirectly owned by theCompany have been duly authorized and validly issued and are fully paid, nonassessable and free ofpre-emptive rights and were issued in full compliance with applicable state and federal securitieslaw and any rights of third parties and are directly or indirectly owned by the Company free andclear of any liens, encumbrance and restrictions. There are no outstanding warrants, options,convertible securities or other rights (including preemptive rights and rights of first refusal),agreements or arrangements of any character under which a Subsidiary is or may be obligated toissue any equity securities of any kind. All of the Subsidiaries of the Company are consolidatedfor accounting purposes. Except for the Subsidiaries and except as set forth on Schedule 4.1(b),the Company does not own any capital stock, membership interests, security or other interest in anyother Person which would, if a subsidiary of the Company, constitute a significant subsidiary (asdefined in Rule 1-02 of Regulation S-X under the Exchange Act), and which represents more than 5%of the issued and outstanding equity or ownership interests of such person, and neither the Companynor any of its Subsidiaries has any written or oral understanding or agreement to make anyinvestment (in the form of a loan, capital contribution or otherwise) in, any other Person.     4.2 Authorization. The Company has full power and authority and has taken allrequisite action on the part of the Company, its officers, directors and stockholders necessary for(i) the due authorization, execution and delivery of the Transaction Documents, (ii) theauthorization of the performance of all obligations of the Company hereunder and under the otherTransaction Documents, and (iii) the authorization, issuance (or reservation for issuance) anddelivery of the Securities. Approval of the Company’s stockholders is not required under the rulesof the Nasdaq for the authorization, execution, delivery or performance of the TransactionDocuments (including the issuance of the Shares). This Agreement constitutes, and the otherTransaction Documents will constitute when executed and delivered, the legal, valid and bindingobligations of the Company, enforceable against the Company in accordance with their terms, subjectto bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws ofgeneral applicability, relating to or affecting creditors’ rights generally.     4.3 Capitalization. Schedule 4.3 sets forth (a) the authorized capital stockof the Company on the date hereof; (b) the number of shares of capital stock issued andoutstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stockplans (copies of which have been filed in SEC Filings); and (d) the number of shares of capitalstock issuable and reserved for issuance pursuant to securities (other than the Shares) exercisablefor, or convertible into or exchangeable for any shares of capital stock of the Company. All ofthe issued and outstanding shares of the Company’s capital stock have been duly authorized andvalidly issued and are fully paid, nonassessable and free of pre-emptive rights and were issued infull compliance with applicable state and federal securities law and any rights of third parties.No Person is entitled to pre-emptive or similar statutory or contractual rights with respect to anysecurities of the Company. Except as set forth on Schedule 4.3, there are no outstandingwarrants, options, convertible securities or other rights (including preemptive rights and rightsof first refusal), agreements or arrangements of any character under which the Company is or may
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be obligated to issue any equity securities of any kind, and except as contemplated by thisAgreement or in connection with incentive compensation arrangements entered into by the Company inthe ordinary course of its business, the Company is not currently in negotiations for the issuanceof any equity securities of any kind. Except as described on Schedule 4.3 and except forthe Registration Rights Agreement, there are no voting agreements, buy-sell agreements, votingtrust, proxy, stockholder rights, option or right of first purchase agreements or other agreementsof any kind among the Company and any of the securityholders of the Company relating to thesecurities of the Company held by them. Except as set forth on Schedule 4.3 and except asprovided in the Registration Rights Agreement, no Person has the right to require the Company toregister any securities of the Company under the 1933 Act, whether on a demand basis or inconnection with the registration of securities of the Company for its own account or for theaccount of any other Person.     The issuance and sale of the Securities hereunder will not obligate the Company to issueshares of Common Stock or other securities to any other Person (other than the Investors) and willnot result in the adjustment of the exercise, conversion, exchange or reset price of anyoutstanding security.     The Company does not have outstanding stockholder purchase rights or “poison pill” or anysimilar arrangement in effect giving any Person the right to purchase any equity interest in theCompany or its Subsidiaries upon the occurrence of certain events.     4.4 Valid Issuance. The Shares have been duly and validly authorized and, when issuedand paid for pursuant to this Agreement, will be validly issued, fully paid and nonassessable, andshall be free and clear of all encumbrances and restrictions (other than those created by theInvestors), except for restrictions on transfer set forth in the Transaction Documents or imposedby applicable securities laws.     4.5 Consents. Except as set forth on Schedule 4.5, the execution, deliveryand performance by the Company of the Transaction Documents and the offer, issuance and sale of theSecurities require no consent of, action by or in respect of, or filing with, any Person,governmental body, agency, official or stockholders of the Company other than filings that havebeen made pursuant to applicable state securities laws and post-sale filings pursuant to applicablestate and federal securities laws which the Company undertakes to file within the applicable timeperiods. Subject to the accuracy of the representations and warranties of each Investor set forthin Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and saleof the Securities, and (ii) the other transactions contemplated by the Transaction Documents fromthe provisions of any stockholder rights plan or other “poison pill” arrangement, Section 203 ofthe General Corporation Law of the State of Delaware, any anti-takeover, business combination orcontrol share law or statute binding on the Company or to which the Company or any of its assetsand properties may be subject and any provision of the Company’s Certificate of Incorporation orBylaws that is or would reasonably be expected to become applicable to the Investors as a result ofthe transactions contemplated hereby, including without limitation, the issuance of the Securitiesand the ownership, disposition or voting of the Securities by the
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Investors or the exercise of any right granted to the Investors pursuant to this Agreement or theother Transaction Documents.     4.6 Delivery of SEC Filings; Business. The Company has made available to theInvestors through the EDGAR system, true and complete copies of all reports, registrationstatements and prospectuses filed by the Company under the 1933 Act and the 1934 Act since January1, 2006 (collectively, the “SEC Filings”). Except as set forth on Schedule 4.6, the SECFilings are the only filings required of the Company pursuant to the 1933 Act and 1934 Act for suchperiod. The Company is engaged in all material respects only in the business described in the SECFilings and the SEC Filings contain a complete and accurate description in all material respects ofthe business of the Company.     4.7 Use of Proceeds. The net proceeds of the sale of the Shares hereunder shall beused by the Company for the purposes set forth on Schedule 4.7.     4.8 No Material Adverse Change. Since December 31, 2006, except as identified anddescribed in the SEC Filings filed prior to April 16, 2007 or as set forth on Schedule 4.8,there has not been:          (i) any change in the consolidated assets, liabilities, financial condition or operatingresults of the Company or its Subsidiaries from that reflected in the unaudited balance sheet andincome statement for the year ended December 31, 2006 included as an exhibit to the Company’sCurrent Report on Form 8-K filed on March 12, 2007 (the “Unaudited 2006 Financial Statements”),except for changes in the ordinary course of business which have not had and would not reasonablybe expected to have a Material Adverse Effect, individually or in the aggregate;          (ii) any declaration or payment of any dividend, or any authorization or payment of anydistribution, on any of the capital stock of the Company or its non-wholly-owned Subsidiaries, orany redemption or repurchase of any securities of the Company or its non-wholly-owned Subsidiaries;          (iii) any damage, destruction or loss, whether or not covered by insurance to any assets orproperties of the Company or its Subsidiaries, in each case in excess of $150,000 individually or$500,000 in the aggregate;          (iv) any waiver, not in the ordinary course of business, by the Company or its Subsidiaries ofa material right or of a material debt owed to it;          (v) any satisfaction or discharge of any lien, claim or encumbrance by the Company or itsSubsidiaries, except in the ordinary course of business and which is not material to the assets,properties, financial condition, operating results or business of the Company or its Subsidiaries(as such business is presently conducted);
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          (vi) (A) any change or amendment to the Company’s Certificate of Incorporation or Bylaws, or(B) any material change to any Material Contract, other than, in the case of clause (B) above, anysuch change made in the ordinary course of business;          (vii) any material labor difficulties with respect to employees of the Company or itsSubsidiaries;          (viii) any material transaction entered into by the Company or its Subsidiaries other than inthe ordinary course of business;          (ix) the loss of the services, termination or change of status of any key employee, ormaterial change in the composition or duties of the senior management of the Company;          (x) the loss of any customer which has had or would reasonably be expected to have,individually or in the aggregate, a Material Adverse Effect; or          (xi) any other event or condition of any character that has had or would reasonably beexpected to have, individually or in the aggregate, a Material Adverse Effect.     4.9 SEC Filings.          (a) Except as set forth on Schedule 4.9(a), at the time of filing thereof, allreports, registration statements and prospectuses filed by the Company under the 1933 Act and the1934 Act from and after March 23, 2005 complied as to form in all material respects with therequirements of the 1933 Act and 1934 Act and did not contain any untrue statement of a materialfact or omit to state any material fact necessary in order to make the statements made therein, inthe light of the circumstances under which they were made, not misleading.          (b) The Unaudited 2006 Financial Statements were prepared in accordance with generallyaccepted accounting principles applied on a consistent basis (“GAAP”). The Unaudited 2006Financial Statements present fairly, in all material respects, the financial position of theCompany and its consolidated Subsidiaries as of such date and their results of operations and cashflows for the 12-month period then ended. The Unaudited 2006 Financial Statements were preparedafter completion of a substantial portion of the Company’s auditors’ review of the Company’sfinancial statements for the fiscal year ended December 31, 2006, and except as set forth onSchedule 4.9(b), the information contained in the audited financial statements for thefiscal year ended December 31, 2006 when filed is not expected to differ materially from similarinformation contained in the Unaudited 2006 Financial Statements.     4.10 No Conflict, Breach, Violation or Default. The execution, delivery andperformance of the Transaction Documents by the Company and the issuance and sale of the Securitieswill not conflict with or result in a material breach or material violation of any of the terms andprovisions of, or constitute a material default under (i) the Company’s Certificate ofIncorporation or the Company’s Bylaws, both as in effect on the date hereof (true and complete
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copies of which have been made available to the Investors through the EDGAR system), or (ii)(a) anystatute, rule, regulation or order of any governmental agency or body or any court, domestic orforeign, having jurisdiction over the Company or its Subsidiaries or any of their assets orproperties, (b) any agreement or instrument to which the Company or its Subsidiaries is a party orby which it is bound or to which any of its assets or properties is subject, or (iii) any MaterialContract, except, in the case of clause (ii) above, for any conflict, breach, violation or defaultthat has not had or would not reasonably be expected to have, individually or in the aggregate, aMaterial Adverse Effect.     4.11 Tax Matters. The Company has prepared and filed all tax returns required to havebeen filed by the Company or its Subsidiaries with all appropriate governmental agencies and paidall taxes (including withholding) shown thereon or otherwise owed by it, except those that arebeing contested in good faith by appropriate proceedings diligently conducted and for whichadequate reserves have been provided in accordance GAAP or where the failure to make such paymentor filing has not had or would not reasonably be expected to have, individually or in theaggregate, a Material Adverse Effect. There is no proposed tax assessment against the Company thatwould, if made, have, individually or in the aggregate, a Material Adverse Effect. The Company isnot a party to any tax sharing or indemnity agreement.     4.12 Title to Properties. The Company and its Subsidiaries have good and marketabletitle to all real properties necessary or used in the ordinary conduct of their business, exceptfor such defects in title as could not, individually or in the aggregate, reasonably be expected tohave a Material Adverse Effect; and the Company and its Subsidiaries hold any leased real orpersonal property under valid and enforceable leases with no exceptions that would materiallyinterfere with the use made thereof by them. Except as set forth on Schedule4.12, the property of the Company and its Subsidiaries are not subject to any liens orencumbrances.     4.13 Certificates, Authorities and Permits. The Company and each of its Subsidiariespossess adequate certificates, authorities or permits issued by appropriate governmental agenciesor bodies necessary to conduct the business now operated by it, except where the failure to sopossess has not had or would not reasonably be expected to have a Material Adverse Effect,individually or in the aggregate, and the Company and its Subsidiaries have not received anywritten notice of proceedings relating to the revocation or modification of any such certificate,authority or permit that, if determined adversely to the Company or its Subsidiaries, wouldreasonably be expected to have a Material Adverse Effect, individually or in the aggregate.     4.14 Labor Matters.          (a) With respect to the Company’s and its Subsidiaries’ employees and business operations inthe United States:               (i) The Company and its Subsidiaries are not a party to or bound by any collective bargainingagreements or other agreements with labor organizations. The Company and its Subsidiaries have notviolated in any material respect any laws,
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regulations, orders or contract terms, affecting the collective bargaining rights of employeesor labor organizations.               (ii) (A) There are no labor disputes existing, or to the Company’s Knowledge,threatened,involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any otherdisruptions of or by the Company’s or its Subsidiaries’ employees, (B) there are no unfair laborpractices or petitions for election pending or, to the Company’s Knowledge, threatened before theNational Labor Relations Board or any other federal, state or local labor commission relating tothe Company’s or its Subsidiaries’ employees, (C) no demand for recognition or certificationheretofore made by any labor organization or group of employees is pending with respect to theCompany or its Subsidiaries and (D) to the Company’s Knowledge, the Company and its Subsidiariesenjoy good labor and employee relations with its employees.               (iii) The Company and its Subsidiaries are in compliance in all material respects with allapplicable laws respecting employment (including laws relating to classification of employees andindependent contractors) and employment practices, terms and conditions of employment, employmentdiscrimination, equal employment opportunity, employees’ health, safety, and welfare, wages andhours, and immigration and naturalization. There are no claims pending against the Company or itsSubsidiaries before the Equal Employment Opportunity Commission or any other administrative body orin any court asserting any violation of Title VII of the Civil Rights Act of 1964, the AgeDiscrimination Act of 1967, the Americans with Disabilities Act, 42 U.S.C. § 1981 or any otherfederal, state or local Law, statute or ordinance barring discrimination in employment.               (iv) To the Company’s Knowledge, each of the Company’s and its Subsidiaries’employees is aPerson who is either a United States citizen, a permanent resident, or otherwise entitled to workin the United States. To the Company’s Knowledge, neither the Company nor its Subsidiaries has noliability for the improper classification by it of such employees as independent contractors orleased employees prior to the Closing.          (b) With respect to the employees and business operations of the foreign Subsidiaries of theCompany, except set forth on Schedule 4.14(b):               (i) The Company and its Subsidiaries have not violated in any material respect any laws,regulations, orders or contract terms, affecting the collective bargaining rights of employees orlabor organizations.               (ii) (A) There are no labor disputes existing, or to the Company’s Knowledge,threatened,involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any otherdisruptions of or by the Company’s or its Subsidiaries’ employees, and (B) to the Company’sKnowledge, the Company and its Subsidiaries enjoy good labor and employee relations with itsemployees.
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               (iii) The Company and its Subsidiaries are in compliance in all material respects with allapplicable laws respecting employment, employment practices, terms and conditions of employment,employment discrimination, equal opportunity employment, employees’ health, safety, and welfare,wages and hours, and eligibility to work. There are no claims pending against the Company or itsSubsidiaries alleging non-compliance with such laws.          (c) Except as disclosed in the SEC Filings or as set forth on Schedule 4.14, withrespect to officers of the Company, as defined in Rule 16a-1(f) under the 1934 Act, the Company andits Subsidiaries are not a party to, or bound by, any employment or other contract or agreementthat contains any severance or termination pay liability or obligation, including, withoutlimitation, any “excess parachute payment,” as defined in Section 2806(b) of the Internal RevenueCode.          (d) With respect to each Company Plan, no liability has been incurred and there exists nocondition or circumstances in connection with which the Company or its Subsidiaries wouldreasonably be expected to be subject to any liability that is reasonably likely, individually or inthe aggregate, to have a Material Adverse Effect, in each case under the Employee Retirement IncomeSecurity Act of 1974, as amended (“ERISA”), the Internal Revenue Code of 1986, as amended, or anyother applicable law, rule or regulation. The Company and its Subsidiaries do not have any definedbenefit plans.     4.15 Intellectual Property. The Company and its Subsidiaries own, or possessthe legal right to use all Intellectual Property reasonably necessary for the operation of theirrespective businesses. All of the Intellectual Property owned by the Company or its Subsidiariesthat is reasonably necessary for the operation of their respective businesses is valid, enforceableand has not been abandoned. Except for such claims and infringements that could not reasonably beexpected to have, individually or in the aggregate, a Material Adverse Effect, no claim has beenasserted and is pending by any person challenging or questioning the use of any IntellectualProperty by the Company or its Subsidiaries or the validity or effectiveness of any IntellectualProperty rights; and to the Knowledge of the Company, the use of any Intellectual Property by theCompany or its Subsidiaries or the granting of a right or a license in respect of any IntellectualProperty from the Company or any Subsidiary does not infringe on the rights of any Person.     4.16 Environmental Matters. Each of Company and its Subsidiaries (i) is not inviolation of any statute, rule, regulation, decision or order of any governmental agency or body orany court, domestic or foreign, relating to the use, disposal or release of hazardous or toxicsubstances or relating to the protection or restoration of the environment or human exposure tohazardous or toxic substances (collectively, “Environmental Laws”), (ii) to the Company’sKnowledge, does not own or operate any real property contaminated with any substance that issubject to any Environmental Laws, (iii) is not liable for any off-site disposal or contaminationpursuant to any Environmental Laws, or (iv) is not subject to any claim relating to anyEnvironmental Laws, in each case which violation, contamination, liability or claim has had orwould reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;and there is no pending or, to the Company’s Knowledge, threatened investigation that might lead tosuch a claim.
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     4.17 Litigation. There are no pending actions, suits or proceedings against oraffecting the Company, its Subsidiaries or any of their properties that have had or wouldreasonably be expected to have a Material Adverse Effect, individually or in the aggregate; and tothe Company’s Knowledge, no such actions, suits or proceedings are threatened or contemplated.     4.18 Financial Statements. Except as set forth on Schedule 4.18, thefinancial statements included in each SEC Filing (the “Financial Statements”) present fairly, inall material respects, the financial position of the Company and its Subsidiaries as of the datesshown and their results of operations and cash flows for the periods shown, and such FinancialStatements have been prepared in conformity with GAAP (except as may be disclosed therein or in thenotes thereto, and, in the case of quarterly financial statements, as permitted by Form 10-Q underthe 1934 Act). Except as set forth on Schedule 4.18 or in the Unaudited 2006 FinancialStatements, neither the Company nor its Subsidiaries has incurred any liabilities, contingent orotherwise, except those incurred in the ordinary course of business, consistent (as to amount andnature) with past practices since the date of such financial statements, none of which,individually or in the aggregate, have had or would reasonably be expected to have, individually orin the aggregate, a Material Adverse Effect.     4.19 Insurance Coverage. The Company maintains in full force and effect insurancecoverage, including directors’ and officers’ liability insurance, that is customary carried bycompanies engaged in similar businesses and owning similar properties in localities where theCompany or its Subsidiaries operates, and the Company reasonably believes such insurance coverageto be adequate against all liabilities, claims and risks against which it is customary forcomparably situated companies to insure.     4.20 Nasdaq Continued Listing Requirements. Except as set forth on Schedule4.20, (a) the Company is in compliance with applicable Nasdaq continued listing requirements;(b) there are no proceedings pending or, to the Company’s Knowledge, threatened against the Companyrelating to the continued listing of the Common Stock on Nasdaq and (c) the Company has notreceived any notice of, nor to the Company’s Knowledge is there any basis for, the delisting of theCommon Stock from Nasdaq.     4.21 No Directed Selling Efforts or General Solicitation. Neither the Company nor anyPerson acting on its behalf has conducted any general solicitation or general advertising (as thoseterms are used in Regulation D) in connection with the offer or sale of any of the Securities.     4.22 No Integrated Offering. Neither the Company nor any of its Affiliates, nor anyPerson acting on its or their behalf has, directly or indirectly, made any offers or sales of anyCompany security or solicited any offers to buy any security, under circumstances that (a) wouldadversely affect reliance by the Company on Section 4(2) for the exemption from registration forthe transactions contemplated hereby; (b) would require registration of the Securities under the
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1933 Act or (c) would be integrated with the offer or sale of the Securities for purposes ofNasdaq rules and regulations.     4.23 Private Placement. The offer and sale of the Securities to the Investors ascontemplated hereby is exempt from the registration requirements of the 1933 Act.     4.24 Questionable Payments. Neither the Company, its Subsidiaries nor, to theCompany’s Knowledge, any of its respective current or former stockholders, directors, officers,employees, agents or other Persons acting on behalf of the Company or its Subsidiaries, has onbehalf of the Company, its Subsidiaries or in connection with their business: (a) used anycorporate funds for unlawful contributions, gifts, entertainment or other unlawful expensesrelating to political activity; (b) made any direct or indirect unlawful payments to anygovernmental officials or employees from corporate funds; (c) established or maintained anyunlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitiousentries on the books and records of the Company or its Subsidiaries; or (e) made any unlawfulbribe, rebate, payoff, influence payment, kickback or other unlawful payment of any nature.Neither the Company, any Subsidiary nor, to the Company’ Knowledge, any employee of the Company orany Subsidiary has violated the United States Foreign Corrupt Practices Act, as amended, in anymaterial respect.     4.25 Transactions with Affiliates. Except as disclosed in the SEC Filings filed priorto April 16, 2007 or as set forth on Schedule 4.25, none of the officers or directors ofthe Company (or, to the Company’s Knowledge, 5% or more beneficial owner of the Company’s equitysecurities that is not eligible to file a Form 13G under the 1934 Act to report such ownership) ispresently a party to any transaction with the Company (other than as holders of stock optionsand/or warrants, and for services as officers and directors), including any contract, agreement orother arrangement providing for the furnishing of services to or by, providing for rental of realor personal property to or from, or otherwise requiring payments to or from any officer or directoror, to the Company’s Knowledge, any entity in which any officer or director has a substantialinterest or is an officer, director, trustee or partner or 5% or more beneficial owner of theCompany’s equity securities that is not eligible to file a Form 13G under the 1934 Act to reportsuch ownership.     4.26 Internal Controls. Except as set forth on Schedule 4.26: (a) the Company andits Subsidiaries are in material compliance with the provisions of the Sarbanes-Oxley Act of 2002(including the rules and regulations promulgated thereunder) currently applicable to the Companyand/or its Subsidiaries; (b) the Company and its Subsidiaries maintain a system of internalaccounting controls sufficient to provide reasonable assurance that (i) transactions are executedin accordance with management’s general or specific authorizations, (ii) transactions are recordedas necessary to permit preparation of financial statements in conformity with GAAP and to maintainasset accountability, (iii) access to assets is permitted only in accordance with management’sgeneral or specific authorization, and (iv) the recorded accountability for assets is compared withthe existing assets at reasonable intervals and appropriate action is taken with respect to anydifferences; (c) the Company and its Subsidiaries have established disclosure controls andprocedures (as defined in 1934 Act Rules 13a-15 and 15d-15) for the Company and
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its Subsidiaries and designed such disclosure controls and procedures to ensure that materialinformation relating to the Company and its Subsidiaries is made known to the certifying officersby others within the Company, particularly during the period in which the Company’s most recentlyfiled period report under the 1934 Act, as the case may be, is being prepared; (d) the Company’scertifying officers have evaluated the effectiveness of the Company’s controls and procedures as ofthe end of the period covered by the most recently filed periodic report under the 1934 Act (suchdate, the “Evaluation Date”); (e) the Company presented in its most recently filed periodic reportunder the 1934 Act the conclusions of the certifying officers about the effectiveness of thedisclosure controls and procedures based on their evaluations as of the Evaluation Date; (f) sincethe Evaluation Date, there have been no significant changes in the Company’s or its Subsidiaries’internal controls (as such term is defined in Item 308 of Regulation S-K) or, to the Company’sKnowledge, in other factors that could significantly affect the Company’s internal controls; and(g) the Company and its Subsidiaries maintain and will continue to maintain a standard system ofaccounting established and administered in accordance with GAAP and the applicable requirements ofthe 1934 Act.     4.27 Disclosures.          (a) Neither the Company nor any Person acting on its behalf has provided the Investors ortheir agents or counsel with any information that constitutes material, non-public information,other than the following information, which could include material, non-public information: (1)the existence of this Agreement and the other Transaction Documents and the transactionscontemplated hereby and thereby, (2) information contained in the draft Form 10-K for 2006,regarding potential acquisitions or as otherwise specifically referred to in the disclosureschedules as being made available to Investors, and (3) financial models and other informationrequested by certain Investors, which has been provided only to those Investors requesting suchinformation.          (b) No representation or warranty of the Company contained in this Section 4, as qualified bythe Disclosure Schedules, contains any untrue statement of a material fact or omits to state amaterial fact necessary in order to make the statements contained herein not misleading in light ofthe circumstances under which they were made.     4.28 Material Contracts. Except as set forth on Schedule 4.28, (a) assumingthe due execution and delivery by the other parties thereto, each of the Material Contracts islegal, valid and binding, and in full force and effect, and enforceable in accordance with itsterms, subject to (i) laws of general application relating to bankruptcy, insolvency, and relief ofdebtors and (ii) rules of law governing specific performance, injunctive relief, or other equitableremedies; (b) there is no material breach, violation or default by the Company or any of theSubsidiaries (or, to the Company’s knowledge, any other party) under any such Material Contract,and no event (including, without limitation, the transactions contemplated by the TransactionDocuments) has occurred which, with notice or lapse of time or both, would (1) constitute amaterial breach, violation or default by the Company or any Subsidiary (or, to the Company’sknowledge, any other party) under any such Material Contract, or (2) give rise to any lien orencumbrance or right of termination, modification, cancellation, prepayment, suspension,
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limitation, revocation or acceleration against the Company or any Subsidiary under any suchMaterial Contract; and (c) neither the Company nor any Subsidiary is and, to the Company’sknowledge, no other party to any such Material Contract is in arrears in respect of the performanceor satisfaction of any material terms or conditions on its part to be performed or satisfied underany of such Material Contract, and neither the Company nor any Subsidiary has and, to the Company’sknowledge, no other party thereto has granted or been granted any material waiver or indulgenceunder any of such Material Contract or repudiated any provision thereof.          4.29 Compliance. Except as set forth on Schedule 4.29, neither the Companynor any Subsidiary (a) is in default under or in violation of (and no event has occurred that hasnot been waived that, with notice or lapse of time or both, would result in a default by theCompany or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claimthat it is in default under or that it is in violation of, any indenture, loan or credit agreementor any other agreement or instrument to which it is a party or by which it or any of its propertiesis bound (whether or not such default or violation has been waived); (b) is in violation of anyorder of any court, arbitrator or governmental body; or (c) is or has been in violation of anystatute, rule or regulation of any court or arbitrator or federal, state, local or foreigngovernmental or regulatory authority, including without limitation all foreign, federal, state andlocal laws relating to taxes, environmental protection, occupational health and safety, productquality and safety and employment and labor matters; except in the case of (a), (b) and (c) ascould not, individually or in the aggregate, have, or could reasonably be expected to result in,individually or in the aggregate, a Material Adverse Effect.          4.30 Auditors. KPMG LLP (“KPMG”), who have audited the Financial Statements of theCompany and its Subsidiaries, are independent registered public accountants as required by the 1933Act and by the rules of the Public Company Accounting Oversight Board. Since January 1, 2006,there have been no disagreements between the Company and KMPG on any matter of accountingprinciples or practices, financial statement disclosure, or auditing scope or procedures, whichdisagreements, if not resolved to the satisfaction of KPMG, would have caused KPMG to makereference thereto in their report on the Financial Statements for such year.          4.31 Brokers and Finders. Except as set forth on Schedule 4.31, no Personwill have, as a result of the transactions contemplated by the Transaction Documents, any validright, interest or claim against or upon the Company or an Investor for any commission, fee orother compensation pursuant to any agreement, arrangement or understanding entered into by or onbehalf of the Company.     5. Representations and Warranties of the Investors. Each of the Investors herebyseverally, and not jointly, represents and warrants to the Company that:          5.1 Organization and Existence. Such Investor (if an entity) is a validly existingcorporation, limited partnership or limited liability company and has all requisite
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corporate, partnership or limited liability company power and authority to invest in the Securitiespursuant to this Agreement.     5.2 Authorization. The execution, delivery and performance by such Investor of theTransaction Documents to which such Investor is a party have been duly authorized, and thisAgreement constitutes, and the other Transaction Documents will constitute when executed anddelivered, the valid and legally binding obligations of such Investor, enforceable against suchInvestor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulenttransfer, reorganization, moratorium and similar laws of general applicability, relating to oraffecting creditors’ rights generally.     5.3 Purchase Entirely for Own Account. The Securities to be received by such Investorhereunder will be acquired for such Investor’s own account, not as nominee or agent, and not with aview to the resale or distribution of any part thereof in violation of the 1933 Act, and suchInvestor has no present intention of selling, granting any participation in, or otherwisedistributing the same in violation of the 1933 Act without prejudice, however, to such Investor’sright at all times to sell or otherwise dispose of all or any part of such Securities in compliancewith applicable federal and state securities laws**.**Nothing contained herein shall be deemed arepresentation or warranty by such Investor to hold the Securities for any period of time. SuchInvestor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged ina business that would require it to be so registered.     5.4 Investment Experience. Such Investor acknowledges that it can bear the economicrisk and complete loss of its investment in the Securities and has such knowledge and experience infinancial or business matters that it is capable of evaluating the merits and risks of theinvestment contemplated hereby.     5.5 Disclosure of Information. Such Investor has had an opportunity to receive allinformation related to the Company requested by it and to ask questions of and receive answers fromthe Company regarding the Company, its business and the terms and conditions of the offering of theSecurities. Such Investor acknowledges receipt of copies of the SEC Filings. Neither suchinquiries nor any other due diligence investigation conducted by such Investor shall modify, amendor affect such Investor’s right to rely on the Company’s representations and warranties containedin this Agreement.     5.6 Restricted Securities. Such Investor understands that the Securities arecharacterized as “restricted securities” under the U.S. federal securities laws inasmuch as theyare being acquired from the Company in a transaction not involving a public offering and that undersuch laws and applicable regulations such securities may be resold without registration under the1933 Act only in certain limited circumstances.     5.7 Legends. It is understood that, except as provided below, certificates evidencingthe Securities may bear the following or any similar legend:
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          (a) “The securities represented hereby may not be transferred unless (i) such securities havebeen registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securitiesmay be sold pursuant to Rule 144, or (iii) the Company has received an opinion of counselreasonably satisfactory to it that such transfer may lawfully be made without registration underthe Securities Act of 1933 or qualification under applicable state securities laws.”          (b) If required by the authorities of any state in connection with the issuance of sale of theSecurities, the legend required by such state authority.     5.8 Accredited Investor. Such Investor is an accredited investor as defined in Rule501(a) of Regulation D, as amended, under the 1933 Act.     5.9 No General Solicitation. Such Investor did not learn of the investment in theSecurities as a result of any public advertising or general solicitation.     5.10 Investor’s Brokers and Finders. No Person will have, as a result of thetransactions contemplated by the Transaction Documents, any valid right, interest or claim againstor upon the Company or an Investor for any commission, fee or other compensation pursuant to anyagreement, arrangement or understanding entered into by or on behalf of such Investor.     5.11 Prohibited Transactions. During the last thirty (30) days prior to the datehereof, neither such Investor nor any Affiliate of such Investor which (x) had knowledge of thetransactions contemplated hereby, (y) has or shares discretion relating to such Investor’sinvestments or trading or information concerning such Investor’s investments, including in respectof the Securities, or (z) is subject to such Investor’s review or input concerning such Affiliate’sinvestments or trading (collectively, “Trading Affiliates”, but excluding any broker-dealeraffiliated with an Investor other than with respect to transactions effected on behalf of suchInvestor) has, directly or indirectly, effected or agreed to effect any short sale, whether or notagainst the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the1934 Act) with respect to the Common Stock, borrowed or pre-borrowed any shares of Common Stock,granted any other right (including, without limitation, any put or call option) with respect to theCommon Stock or with respect to any security that includes, relates to or derived any significantpart of its value from the Common Stock or otherwise sought to hedge its position in the Securities(each, a “Prohibited Transaction”). Prior to the earlier to occur of (i) the termination of thisAgreement, or (ii) the Effective Date, such Investor shall not, and shall cause its TradingAffiliates not to, (A) engage, directly or indirectly, in a Prohibited Transaction, or (B) effectany sale, assignment, pledge, hypothecation, put, call, transfer or other disposition of anySecurities.     5.12 Ownership. Such Investor, together with its Affiliates and any other partyacting in concert therewith, will not, following its investment in the Securities, beneficially ownmore than 19.9% of the currently outstanding shares of Common Stock of the Company.
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          5.13 Independence. Each Investor acknowledges and agrees that it has actedindependently from all other Investors (other than those under common ownership and control) andthat each such Investor has conducted its own due diligence and reviewed (or had the opportunity toreview) the Transaction Documents with its own independent counsel. Each Investor hasindependently determined the merits and risks associated with an investment on the basis set forthin the Transaction Documents and without any agreements, understandings or arrangements other thanthose expressly set forth in the Transaction Documents.     6. Conditions to Closing.          6.1 Conditions to the Investors’ Obligations. The obligation of each Investor topurchase the Shares at the Closing is subject to the fulfillment to such Investor’s satisfaction,on or prior to the Closing Date, of the following conditions, any of which may be waived by suchInvestor (as to itself only):               (a) The representations and warranties made by the Company in Section 4 hereof qualifiedas tomateriality shall be true and correct at all times prior to and on the Closing Date with the sameforce and effect as if they had been made on and as of said date, except to the extent any suchrepresentation or warranty expressly speaks as of an earlier date, in which case suchrepresentation or warranty shall be true and correct as of such earlier date, and, therepresentations and warranties made by the Company in Section 4 hereof not qualified as tomateriality shall be true and correct in all respects as of the date hereof and true and correct inall material respects at all times prior to and on the Closing Date with the same force and effectas if they had been made on and as of said date, except to the extent any such representation orwarranty expressly speaks as of an earlier date, in which case such representation or warrantyshall be true and correct in all material respects as of such earlier date. The Company shall haveperformed in all material respects all obligations and covenants herein required to be performed byit on or prior to the Closing Date.               (b) The Company shall have obtained any and all consents, permits, approvals, registrationsand waivers (including, without limitation, approval in accordance with applicable law and theapplicable requirements of any stock exchange or market on which the Common Stock is traded orquoted) necessary for consummation of the purchase and sale of the Securities and the consummationof the other transactions contemplated by the Transaction Documents, all of which shall be in fullforce and effect; provided, however, that it shall not be a condition to eachInvestor’s obligation to purchase the Shares at the Closing that the Company obtain the waiver ofany “piggyback” registration rights held by the Company’s securityholders under written agreementsentered into by the Company prior to the date hereof.               (c) The Company shall have executed and delivered the Registration Rights Agreement.               (d) The Company shall have taken all action necessary to effect the listing of the Shares onthe Nasdaq Global Market upon official notice of issuance.
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               (e) No judgment, writ, order, injunction, award or decree of or by any court, or judge,justice or magistrate, including any bankruptcy court or judge, or any order of or by anygovernmental authority, shall have been issued, and no action or proceeding shall have beeninstituted by any governmental authority, enjoining or preventing the consummation of thetransactions contemplated hereby or in the other Transaction Documents.               (f) The Company shall have delivered a Certificate, executed on behalf of the Company by itsChief Executive Officer, dated as of the Closing Date, certifying to the fulfillment of theconditions specified in subsections (a), (b), (d), (e) (which subsection (e) shall be qualified tothe Company’s Knowledge) and (i) of this Section 6.1.               (g) The Company shall have delivered a Certificate, executed on behalf of the Company by itsSecretary, dated as of the Closing Date, certifying the resolutions adopted by the Board approvingthe transactions contemplated by this Agreement and the other Transaction Documents and theissuance of the Securities, certifying the current versions of the Certificate of Incorporation andBylaws of the Company and certifying as to the signatures and authority of persons signing theTransaction Documents and related documents on behalf of the Company.               (h) The Investors shall have received an opinion from Hogan & Hartson L.L.P., theCompany’soutside counsel, dated as of the Closing Date, in form and substance reasonably acceptable to theInvestors and addressing such legal matters as set forth on Exhibit B attached hereto.               (i) No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or anyother governmental or regulatory body with respect to public trading in the Common Stock.          6.2 Conditions to Obligations of the Company. The Company’s obligation to sell andissue the Shares at the Closing is subject to the fulfillment to the satisfaction of the Company onor prior to the Closing Date of the following conditions, any of which may be waived by theCompany:               (a) The representations and warranties made by the Investors in Section 5 hereof, otherthanthe representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8, 5.9 and 5.12(the “Investment Representations”), shall be true and correct in all material respects when made,and shall be true and correct in all material respects as of the Closing Date with the same forceand effect as if they had been made on and as of said date. The Investment Representations shallbe true and correct in all respects when made, and shall be true and correct in all respects on theClosing Date with the same force and effect as if they had been made on and as of said date. TheInvestors shall have performed in all material respects all obligations and covenants hereinrequired to be performed by them on or prior to the Closing Date.
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          (b) The Investors shall have executed and delivered the Registration Rights Agreement.          (c) The Investors shall have delivered the Purchase Price to the Company in the mannercontemplated by Section 3.          (d) The Company shall have obtained any and all consents, permits, approvals, registrationsand waivers (including, without limitation, approval in accordance with applicable law and theapplicable requirements of any stock exchange or market on which the Common Stock is traded orquoted) necessary or appropriate for consummation of the purchase and sale of the Securities andthe consummation of the other transactions contemplated by the Transaction Documents, all of whichshall be in full force and effect; provided, however, that it shall not be acondition to the Company’s obligation to sell and issue the Shares that the Company obtain thewaiver of any “piggyback” registration rights held by the Company’s securityholders under writtenagreements entered into by the Company prior to the date hereof.          (e) No judgment, writ, order, injunction, award or decree of or by any court, or judge,justice or magistrate, including any bankruptcy court or judge, or any order of or by anygovernmental authority, shall have been issued, and no action or proceeding shall have beeninstituted by any governmental authority, enjoining or preventing the consummation of thetransactions contemplated hereby or in the other Transaction Documents.     6.3 Termination of Obligations to Effect Closing; Effects.          (a) The obligations of the Company, on the one hand, and the Investors, on the other hand, toeffect the Closing may be terminated as follows:               (i) Upon the mutual written consent of the Company and the Investors;               (ii) By the Company if any of the conditions set forth in Section 6.2 shall have becomeincapable of fulfillment, and shall not have been waived by the Company;               (iii) By an Investor (with respect to itself only) if any of the conditions set forth inSection 6.1 shall have become incapable of fulfillment, and shall not have been waived by theInvestor; or               (iv) By either the Company or any Investor (with respect to itself only) if the Closing hasnot occurred on or prior to the date that is three Trading Days after the date hereof; provided,however, that, except in the case of clause (i) above, the party seeking to terminate itsobligation to effect the Closing shall not then be in breach of any of its representations,warranties, covenants or agreements contained in this Agreement or the other Transaction Documentsif such breach has resulted in the circumstances giving rise to such party’s seeking to terminateits obligation to effect the Closing.
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               (b) In the event of termination by any Investor of its obligations to effect the Closingpursuant to this Section 6.3 (such Investor, a “Terminating Investor”), written notice thereofshall forthwith be given to the other Investors, and each other Investor shall have the right (butnot the obligation) to purchase at a price per Share equal to the Per Share Purchase Price a prorata portion of the Terminating Investor’s allocated portion of the total number of Shares to beacquired by all Investors under this Agreement (or such greater portion of the TerminatedInvestor’s allocated portion of the Shares as otherwise agreed to among each of the other Investorselecting to purchase a portion of the Terminated Investor’s allocated portion of the Shares).Nothing in this Section 6.3 shall be deemed to release any party from any liability for any breachby such party of the terms and provisions of this Agreement or the other Transaction Documents orto impair the right of any party to compel specific performance by any other party of itsobligations under this Agreement or the other Transaction Documents.     7. Covenants and Agreements of the Company and the Investors.          7.1 Authorized Common Stock. The Company has a sufficient number of authorized andunissued shares of Common Stock (after taking into account shares reserved for issuance under stockplans and for other purposes) to permit the issuance of the Shares hereunder.          7.2 No Conflicting Agreements. The Company will not take any action, enter into anyagreement or make any commitment that would conflict or interfere in any material respect with theCompany’s obligations to the Investors under the Transaction Documents.          7.3 Compliance with Laws. The Company will comply in all material respects with allapplicable laws, rules, regulations, orders and decrees of all governmental authorities.          7.4 Listing of Underlying Shares and Related Matters. The Company has taken allnecessary action to cause the Shares to be listed on the Nasdaq Global Market no later than theClosing Date. Further, if the Company applies to have its Common Stock or other securities tradedon any other principal stock exchange or market, it shall include in such application the Sharesand will take such other action as is necessary to cause such Common Stock to be so listed. TheCompany will use commercially reasonable efforts to continue the listing and trading of its CommonStock on Nasdaq and, in accordance, therewith, will use commercially reasonable efforts to complyin all respects with the Company’s reporting, filing and other obligations under the bylaws orrules of such market or exchange, as applicable.          7.5 Termination of Covenants. The provisions of Sections 7.2 through 7.4 and 7.8shall terminate and be of no further force and effect on the date on which the Company’sobligations under the Registration Rights Agreement to register or maintain the effectiveness ofany registration covering the Registrable Securities (as such term is defined in the RegistrationRights Agreement) shall terminate.
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          7.6 Removal of Legends. Upon the earlier of (i) the sale of any Shares under aregistration statement, (ii) Rule 144(k) becoming available with respect to the Shares, (iii) anysale pursuant to Rule 144 (assuming the transferor is not an Affiliate of the Company) or (iv) suchtime as a legend is no longer required under applicable requirements of the 1933 Act (includingcontrolling judicial interpretations and pronouncements issued by the SEC), the Company shall (A)deliver to the transfer agent for the Common Stock (the “Transfer Agent”) irrevocable instructionsthat the Transfer Agent shall reissue a certificate representing shares of Common Stock withoutlegends upon receipt by such Transfer Agent of the legended certificates for such shares, togetherwith either (1) a customary representation by the Investor that all conditions permitting theremoval of the legends have been met, including that Rule 144(k) applies to the shares of CommonStock represented thereby or that the shares have been sold pursuant to Rule 144 or (2) inconnection with any sale of Common Stock by any Investor pursuant to the registration contemplatedby the Registration Rights Agreement, a statement by such Investor that it has sold the shares ofCommon Stock represented thereby in accordance with the Plan of Distribution contained in theRegistration Statement, and (B) cause its counsel to deliver to the Transfer Agent one or moreblanket opinions to the effect that the removal of such legends in such circumstances may beeffected under the 1933 Act. From and after the earlier of such dates, upon an Investor’s writtenrequest, the Company shall promptly cause certificates evidencing the Investor’s Securities to bereplaced with certificates which do not bear such restrictive legends. When the Company isrequired to cause an unlegended certificate to replace a previously issued legended certificate,if: (1) the unlegended certificate is not delivered to an Investor within three (3) Business Daysof submission by that Purchaser of a legended certificate and supporting documentation to theTransfer Agent as provided above and (2) prior to the time such unlegended certificate is receivedby the Investor, the Investor, or any third party on behalf of such Investor or for the Investor’saccount, purchases (in an open market transaction or otherwise) shares of Common Stock to deliverin satisfaction of a sale by the Investor of shares represented by such certificate (a “Buy-In”),then the Company shall pay in cash to the Investor (for costs incurred either directly by suchPurchaser or on behalf of a third party) the amount by which the total purchase price paid forCommon Stock as a result of the Buy-In (including brokerage commissions, if any) exceeds theproceeds received by such Investor as a result of the sale to which such Buy-In relates. TheInvestor shall provide the Company written notice indicating the amounts payable to the Investor inrespect of the Buy-In.          7.7 Subsequent Placements. From the date hereof until the Effective Date, the Companywill not, directly or indirectly, effect any transaction or series of transactions in which theCompany or any Subsidiary sells or otherwise disposes of (or announces any sale or otherdisposition of) $5 million or more of its or any Subsidiary’s equity or equity equivalentsecurities for cash. The restrictions contained in this Section 7.7 shall not apply to (a)securities issued pursuant to acquisitions, strategic transactions (as reasonably determined by theBoard of Directors of the Company in which the Company receives benefits in addition to theinvestment of funds and where the Company is not issuing securities primarily for the purpose ofraising capital or to an entity whose primary business is investing in securities) or a bona fidepublic offering; or (b) the issuance of Common Stock or rights or options to purchase Common Stockto vendors or similar Persons, other than Affiliates of the Company, providing goods or services tothe Company or in connection with any issuance of shares or grant of other equity awards to
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employees, officers, directors or consultants of the Company pursuant to a stock plan or otheremployee benefit plan.          7.8 Furnishing of Information. The Company will use all reasonable efforts to file itsForm 10-K for the year ended December 31, 2006 no later than April 30, 2007 and will conductdiscussions with Nasdaq so that no adverse consequences with respect to the Company’s Nasdaqlisting status result from the failure to timely file the Form 10-K. The Company presently doesnot expect to be late in filing any other reports with the SEC and is not aware of any facts thatwould be reasonably expected to result in the Company’s failure to timely file such reports withthe SEC.          7.9 Delivery of Shares.               (a) Within three (3) Trading Days after the Closing Date, certificates evidencing theSharesshall be delivered by the Company to the Investors. The Company shall, upon request of theInvestor, use its reasonable best efforts to deliver the Shares hereunder electronically throughthe Depository Trust Corporation or another established clearing corporation performing similarfunctions.               (b) Issuance and delivery of certificates for shares of Common Stock shall be made withoutcharge to the Investor for any issue or transfer tax, withholding tax, transfer agent fee or otherincidental tax or expense in respect of the issuance of such certificates, other than any tax whichmay be payable in respect of any transfer involved in the registration of any certificates forShares in a name other than that of the Investor or an Affiliate thereof.     8. Survival and Indemnification.          8.1 Survival. The representations, warranties, covenants and agreements contained inthis Agreement shall survive the Closing of the transactions contemplated by this Agreement;provided, however, that any claim for Losses as a result of a breach of a representation orwarranty (other than with respect Section 4.2 and 4.4) contained herein must be must be made, if atall, within twelve (12) months of the Closing; provided that any claims for Losses s a result of abreach of Section 4.2, Section 4.4 or any covenant or agreement may be made at any time after theClosing.          8.2 Indemnification. The Company agrees to indemnify and hold harmless each Investorand its Affiliates and their respective directors, officers, employees, attorneys and agents fromand against, without duplication, (a) any and all losses, claims, damages, liabilities and expenses(including without limitation reasonable attorneys fees and disbursements and other expensesincurred in connection with investigating, preparing or defending any action, claim or proceeding,pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which suchPerson may become subject as a result of any breach of representation, warranty, covenant oragreement made by or to be performed on the part of the Company under the Transaction Documents(including in a Certificate).
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          8.3 Conduct of Indemnification Proceedings***.***Promptly after receipt by any Person(the **"**Indemnified Person”) of notice of any demand, claim or circumstances which would or mightgive rise to a claim or the commencement of any action, proceeding or investigation in respect ofwhich indemnity may be sought pursuant to Section 8.2, such Indemnified Person shall promptlynotify the Company in writing and the Company shall assume the defense thereof, including theemployment of counsel reasonably satisfactory to such Indemnified Person, and shall assume thepayment of all fees and expenses; provided, however, that the failure of anyIndemnified Person so to notify the Company shall not relieve the Company of its obligationshereunder except to the extent that the Company is materially prejudiced by such failure to notify.In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, butthe fees and expenses of such counsel shall be at the expense of such Indemnified Person unless:(i) the Company and the Indemnified Person shall have mutually agreed to the retention of suchcounsel; (ii) in the reasonable judgment of counsel to such Indemnified Person representation ofboth parties by the same counsel would be inappropriate due to actual or potential differinginterests between them; or (iii) if the Company does not assume defense thereof with reasonablysatisfactory counsel within a reasonable period of time. The Company shall not be liable for anysettlement of any proceeding effected without its written consent, which consent shall not beunreasonably withheld, but if settled with such consent, or if there be a final judgment for theplaintiff, the Company shall indemnify and hold harmless such Indemnified Person from and againstany loss or liability (to the extent stated above) by reason of such settlement or judgment.Without the prior written consent of the Indemnified Person, the Company shall not effect anysettlement of any pending or threatened proceeding in respect of which any Indemnified Person is orcould have been a party and indemnity could have been sought hereunder by such Indemnified Party,unless such settlement includes an unconditional release of such Indemnified Person from allliability arising out of such proceeding and does not impose any injunction or similar restrictionon such Indemnified Person.     9. Miscellaneous.          9.1 Successors and Assigns. This Agreement may not be assigned by a party heretowithout the prior written consent of the Company or the Investors, as applicable, provided,however, that an Investor may assign its rights and delegate its duties hereunder in whole or inpart to an Affiliate or to a third party acquiring some or all of its Securities in a privatetransaction without the prior written consent of the Company or the other Investors, after noticeduly given by such Investor to the Company provided, that no such assignment or obligation shallaffect the obligations of such Investor hereunder. The provisions of this Agreement shall inure tothe benefit of and be binding upon the respective permitted successors and assigns of the parties.Nothing in this Agreement, express or implied, is intended to confer upon any party other than theparties hereto or their respective successors and assigns any rights, remedies, obligations, orliabilities under or by reason of this Agreement, except as expressly provided in this Agreement(including in Section 9.6).
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          9.2 Counterparts; Faxes. This Agreement may be executed in two or more counterparts,each of which shall be deemed an original, but all of which together shall constitute one and thesame instrument. This Agreement may also be executed via facsimile, which shall be deemed anoriginal.          9.3 Titles and Subtitles. The titles and subtitles used in this Agreement are usedfor convenience only and are not to be considered in construing or interpreting this Agreement.          9.4 Notices. Unless otherwise provided, any notice required or permitted under thisAgreement shall be given in writing and shall be deemed effectively given as hereinafter described(i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)if given by telex or telecopier, then such notice shall be deemed given upon receipt ofconfirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemedgiven upon the earlier of (A) receipt of such notice by the recipient or (B) seven days after suchnotice is deposited in first class mail, postage prepaid, and (iv) if given by an internationallyrecognized overnight air courier, then such notice shall be deemed given one Business Day afterdelivery to such carrier. All notices shall be addressed to the party to be notified at theaddress as follows, or at such other address as such party may designate by ten days’ advancewritten notice to the other party:If to the Company:LCC International, Inc.