Securities Purchase Agreement



 Exhibit 10.1 
 SECURITIES PURCHASE AGREEMENT 
 This Securities Purchase Agreement (this
“Agreement”) is dated as of November 1, 2006, among I-many, Inc., a Delaware corporation (the “Company”), and the investors identified on the signature pages hereto (each, an “Investor” and
collectively, the “Investors”). 
 WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act (as defined below) and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Investor, and each Investor, severally and not jointly, desires to purchase from the Company certain
securities of the Company, as more fully described in this Agreement. 
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained
in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows: 
 ARTICLE 1. 
 DEFINITIONS 
 1.1. Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1: 
 “Action” means any Proceeding, inquiry, notice of violation or investigation pending or threatened in writing against the Company, any
Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange or trading facility.

 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person, as such terms are used in and construed under Rule 144. 
 “Business Day” means
any day except Saturday, Sunday and any day which is a federal legal holiday or a day on which banking institutions in the State of New York or State of New Jersey are authorized or required by law or other governmental action to close. 

“Buy-In” has the meaning set forth in Section 4.1(c). 
 “Closing” means the closing of the purchase and sale of the Securities pursuant to Article 2. 
 “Closing Date” means the Business Day on which all of the conditions set forth in Sections 5.1 and 5.2 hereof are satisfied, or such
other date as the parties may agree. 
 “Commission” means the Securities and Exchange Commission. 
  

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 “Common Stock” means the common stock of the Company, par value $.0001 per share, and
any securities into which such common stock may hereafter be reclassified. 
 “Common Stock Equivalents” means any
securities of the Company or any Subsidiary which entitle the holder thereof to acquire Common Stock at any time, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible
into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock. 
 “Company Counsel” means Wilmer Cutler Pickering Hale and Dorr LLP. 
 “Company Deliverables” has the meaning set forth in Section 2.2(a). 
 “Disclosure Materials” has the meaning set forth in Section 3.1(h). 
 “Effective Date” means the date that the initial Registration Statement required by Section 2(a) of the Registration Rights
Agreement is first declared effective by the Commission. 
 “Exchange Act” means the Securities Exchange Act of 1934, as
amended. 
 “GAAP” means U.S. generally accepted accounting principles. 
 “Intellectual Property Rights” has the meaning set forth in Section 3.1(p). 
 “Investment Amount” means, with respect to each Investor, the product of the Per Unit Purchase Price multiplied by the number of Shares
being purchased by such Investor (as indicated on such Investor’s signature page to this Agreement). 
 “Investor
Deliverables” has the meaning set forth in Section 2.2(b). 
 “Investor Party” has the meaning set forth in
Section 4.7. 
 “Lien” means any lien, charge, encumbrance, security interest, right of first refusal or other
restrictions of any kind. 
 “Material Adverse Effect” means any of (i) a material and adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or
(iii) an adverse impairment to the Company’s ability to perform on a timely basis its obligations under any Transaction Document. 
 “New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan. 
 “Outside Date” means November 20, 2006. 
  

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 “Per Share Purchase Price” equals $1.94. 
 “Per Unit Purchase Price” equals $1.98 (the sum of the Per Share Purchase Price and the Per Warrant Share Purchase Price). 

“Per Warrant Share Purchase Price” equals the product of (i) 30%, multiplied by (ii) $0.125. 
 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
 “Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date of this Agreement, by and among the
Company and the Investors, in the form of Exhibit B hereto. 
 “Registration Statement” means a registration
statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Investors of the Shares and the Warrant Shares. 
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule. 
 “SEC Reports” has the meaning set forth in
Section 3.1(h). 
 “Securities” means the Shares, the Warrants and the Warrant Shares. 
 “Securities Act” means the Securities Act of 1933, as amended. 
 “Share Delivery Date” has the meaning set forth in Section 4.1(c). 
 “Shares” means the shares of Common Stock issued or issuable to the Investors pursuant to this Agreement. 
 “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the
Exchange Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers. 
 “Strategic Transaction” means a transaction or relationship in which the Company issues shares
of Common Stock or other securities of the Company to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the 
  

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 business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily to an entity whose primary business is investing in securities. Strategic Transaction includes bona fide equipment or real property leases, sale and leaseback, or licensing
agreements. 
 “Subsidiary” means any “significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X
promulgated by the Commission under the Exchange Act. 
 “Trading Day” means (i) a day on which the Common Stock is
traded on a Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as
reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the Pink Sheets LLC (or any similar organization or
agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 
 “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market, the NASDAQ
Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question. 
 “Transaction Documents” means this Agreement, the Warrants, the Registration Rights Agreement, and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
 “Warrants” means the Common Stock purchase warrants in the form of Exhibit A, which are issuable to the Investors at the Closing.

 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants. 
 ARTICLE 2. 
 PURCHASE AND SALE 
 2.1. Closing. Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell to each Investor,
and each Investor shall, severally and not jointly, purchase from the Company, the Shares and the Warrants representing such Investor’s Investment Amount. The Closing shall take place at the offices of Bryan Cave LLP, 1290 Avenue of the
Americas, New York, NY 10104 on the Closing Date or at such other location or time as the parties may agree. 
 2.2. Closing
Deliveries. (a) At the Closing, the Company shall deliver or cause to be delivered to each Investor the following (the “Company Deliverables”): 
 (i) a certificate evidencing the number of Shares indicated on such Investor’s signature page to this Agreement, registered in the name of such Investor; 
  

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 (ii) a Warrant, registered in the name of such Investor, pursuant to which such Investor shall have the
right to acquire the number of shares of Common Stock equal to 30% of the number of Shares issuable to such Investor pursuant to Section 2.2(a)(i); 
 (iii) the legal opinion of Company Counsel, in agreed form, addressed to the Investors; and 
 (iv) the
Registration Rights Agreement, duly executed by the Company. 
 (b) At the Closing, each Investor shall deliver or cause to be delivered to
the Company the following (the “Investor Deliverables”): 
 (i) its Investment Amount, in United States dollars and in
immediately available funds, by wire transfer to an account designated in writing by the Company for such purpose; 
 (ii) the Registration
Rights Agreement, duly executed by such Investor; and 
 (iii) the Investor Questionnaire attached hereto as Schedule A. 
 ARTICLE 3. 
 REPRESENTATIONS AND WARRANTIES

 3.1. Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to each
Investor: 
 (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than as specified in the SEC Reports. Except as
disclosed in Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital stock of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable (where such concepts are legally applicable) and free of preemptive and similar rights. 
 (b)
Organization and Qualification. The Company and each Subsidiary are duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with
the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents. Each of the Company and its Subsidiaries is duly qualified to conduct its respective businesses and is in good standing as a foreign corporation or other entity (in each instance
where such concepts are legally applicable) in each jurisdiction in which the nature of the 
  

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 business conducted or property owned by it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. 
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to
carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company in connection therewith. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application. 
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated thereby do not and will not
(i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility,
debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound, or (iii) result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound; except in the case of each of clauses (ii) and (iii), such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 (e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (ii) filings required by state securities laws, (iii) the filing of a
Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) the filings required in accordance with Section 4.5, (v) filings and/or notices required by any Trading Market and
(vi) those that have been made or obtained prior to the date of this Agreement. 
  

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 (f) Issuance of the Securities. The Securities have been duly authorized and, when issued and
paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens. The Company has reserved from its duly authorized capital stock the shares of Common Stock issuable
pursuant to this Agreement and upon exercise of the Warrants in order to issue the Shares and the Warrant Shares. 
 (g)
Capitalization. The number of shares and type of all authorized, issued and outstanding capital stock of the Company, and all shares of Common Stock reserved for issuance under the Company’s various option and incentive plans, are
specified in the SEC Reports. Except as specified in the SEC Reports, no securities of the Company are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction Documents. Except as specified in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements, in each
instance, by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. The issue and sale of the Securities will not,
immediately or with the passage of time, obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. 
 (h) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such shorter period as the Company was required by law
to file such reports) (the foregoing materials being collectively referred to herein as the “SEC Reports” and, together with the Schedules to this Agreement (if any), the “Disclosure Materials”) on a timely basis or
has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the
periods involved, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. 
  

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 (i) Press Releases. The press releases disseminated by the Company during the twelve months
preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made and when made, not misleading. 
 (j) Material Changes. Since the date of the latest audited
financial statements included within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice
and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting or the
identity of its auditors, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock,
and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential
treatment of information. 
 (k) Litigation. There is no Action which (i) adversely affects or challenges the legality, validity
or enforceability of any of the Transaction Documents or the Securities or (ii) except as specifically disclosed in the SEC Reports, would, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof (in his or her capacity as such), is the subject of any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty, except as specifically disclosed in the SEC Reports. There has not been, and to the knowledge of the Company, there is not pending any investigation by the Commission involving the Company or
any current or former director or officer of the Company (in his or her capacity as such). The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary
under the Exchange Act or the Securities Act. 
 (l) Labor Relations. No material labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company. 
 (m) Compliance. Neither the Company nor any Subsidiary
(i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary
received written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any 
  

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 governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect. The Company is in compliance with all effective requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, that are applicable to it, except where such noncompliance would not have or reasonably be
expected to result in a Material Adverse Effect. 
 (n) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such
permits would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation or
modification of any such permits. 
 (o) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee
simple to all real property owned by them that is material to their respective businesses and good and marketable title in all personal property owned by them that is material to their respective businesses, in each case free and clear of all Liens,
except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance, except as would not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect. 
 (p) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as described in the SEC
Reports and which the failure to so have would, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any
Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. Except as set forth in the SEC Reports, to the knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. 
 (q) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in
which the Company and the Subsidiaries are engaged. The Company does not believe that it will not be able to renew its and the Subsidiaries’ existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business on terms consistent with market for the Company’s and such Subsidiaries’ respective lines of business. 
  

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 (r) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of
the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and
directors), that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act. 
 (s)
Internal Accounting Controls. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general
or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has
established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including its
Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s Form 10-K or 10-Q, as the case may be, is being prepared. The Company’s certifying officers have
evaluated the effectiveness of the Company’s controls and procedures in accordance with Item 307 of Regulation S-K under the Exchange Act for the Company’s most recently ended fiscal quarter or fiscal year-end (such date, the
“Evaluation Date”). The Company presented in its most recently filed Form 10-K or Form 10-Q the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as
of the Evaluation Date. Since the Evaluation Date, there have been no material changes in the Company’s internal controls (as such term is defined in Item 308(c) of Regulation S-K under the Exchange Act) or, to the Company’s
knowledge, in other factors that would materially affect the Company’s internal controls. 
 (t) Solvency. Based on the
financial condition of the Company as of the Closing Date (and assuming that the Closing shall have occurred), (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent liabilities) as they mature and (ii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay
such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). 
 (u) Certain
Fees. Except as described in Schedule 3.1(u), no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by this Agreement. The Investors shall have no obligation with respect to any fees or with respect to any claims (other than such fees or 
  

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 commissions owed by an Investor pursuant to written agreements executed by such Investor which fees or commissions shall
be the sole responsibility of such Investor) made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement. 
 (v) Certain Registration Matters. Assuming the accuracy of the Investors’ representations and warranties set forth in
Section 3.2(b)-(e), no registration under the Securities Act is required for the offer of the Securities and sale of the Shares and Warrant Shares by the Company to the Investors under the Transaction Documents. The Company is eligible to
register its Common Stock for resale by the Investors under Form S-3 promulgated under the Securities Act. Except as specified in Schedule 3.1(v), the Company has not granted or agreed to grant to any Person any rights (including
“piggy-back” registration rights) to have any securities of the Company registered with the Commission or any other governmental authority that have not been satisfied, other than any such rights as are not applicable to the registration
to be effected pursuant to the Registration Statement. 
 (w) Listing and Maintenance Requirements. Except as specified in the SEC
Reports, the Company has not, in the two years preceding the date hereof, received written notice from any Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements thereof. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to be, in compliance with the listing and maintenance requirements for continued listing of the Common Stock on the Trading Market on which the Common Stock is currently
listed or quoted. The issuance and sale of the Securities under the Transaction Documents does not contravene the rules and regulations of the Trading Market on which the Common Stock is currently listed or quoted, and no approval of the
shareholders of the Company thereunder is required for the Company to issue and deliver to the Investors the Securities contemplated by Transaction Documents. 
 (x) Investment Company. The Company is not, and immediately following the Closing will not have become, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 (y) Application of Takeover Protections. The Company has taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to the Investors as a result of the Investors and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
the Company’s issuance of the Securities and the Investors’ ownership of the Securities. 
 (z) No Additional Agreements.
The Company does not have any agreement or understanding with any Investor with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents. 
 (aa) Disclosure. The Company confirms that neither it nor to its knowledge any Person acting on its behalf has provided any Investor or its
respective agents or counsel 
  

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 (other than any Investor who is involved in the management of, or is on the Board of Directors of, the Company), with any
information that the Company believes constitutes material, non-public information, except for the Company’s earnings press release scheduled for public release on October 31, 2006, except pursuant to a non-disclosure agreement with the
Company and insofar as the existence and terms of the proposed transactions contemplated hereunder may constitute such information. The Company understands and confirms that the Investors will rely on the foregoing representations and warranties in
effecting transactions in securities of the Company. All disclosure provided to the Investors regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company (including the Company’s
representations and warranties set forth in this Agreement) are true and correct and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. 
 3.2. Representations and Warranties of the Investors. Each Investor
hereby, for itself and for no other Investor, represents and warrants to the Company as follows: 
 (a) Organization; Authority. Such
Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate, partnership or limited liability company power and authority to enter into and to
consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Investor of the transactions contemplated by this Agreement has
been duly authorized by all necessary corporate or, if such Investor is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Investor. Each of this Agreement and the Registration Rights
Agreement has been duly executed by such Investor, and when delivered by such Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Investor, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other
equitable principles of general application. 
 (b) Investment Intent. Such Investor is acquiring the Securities as principal for its
own account for investment purposes only and not with a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any
part of such Securities in compliance with applicable federal and state securities laws. Subject to the immediately preceding sentence, nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for
any period of time. Such Investor is acquiring the Securities hereunder in the ordinary course of its business. Such Investor does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

 (c) Investor Status. At the time such Investor was offered the Securities, it was, and at the date hereof it is, and on each date
on which it exercises Warrants it will be, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Such Investor is not a registered broker-dealer under Section 15 of the Exchange Act. 
  

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 (d) General Solicitation. Such Investor is not purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general
advertisement. 
 (e) Access to Information. Such Investor acknowledges that it has reviewed the Disclosure Materials and has been
afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of
investing in the Securities; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the
investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Investor or its representatives or counsel shall modify, amend or affect such Investor’s right to rely on the truth and accuracy of the Disclosure
Materials and the Company’s representations and warranties contained in the Transaction Documents. 
 (f) Limited Ownership. The
purchase by such Investor of the Securities issuable to it at the Closing will not result in such Investor (individually or together with any other Person with whom such Investor has identified, or will have identified, itself as part of a
“group” in a public filing made with the Commission involving the Company’s securities) acquiring, or obtaining the right to acquire, in excess of 19.999% of the outstanding shares of Common Stock or the voting power of the Company on
a post transaction basis that assumes that the Closing shall have occurred. Such Investor does not presently intend to, alone or together with others, make a public filing with the Commission to disclose that it has (or that it together with such
other Persons have) acquired, or obtained the right to acquire, as a result of the Closing (when added to any other securities of the Company that it or they then own or have the right to acquire), in excess of 19.999% of the outstanding shares of
Common Stock or the voting power of the Company on a post transaction basis that assumes that the Closing shall have occurred. 
 (g)
Certain Trading Activities. Such Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, engaged in any transactions in the securities of the Company (including,
without limitations, any Short Sales involving the Company’s securities) since the time that such Investor was first contacted by the Company or Roth Capital Partners, LLC regarding an investment in the Company. Such Investor covenants that
neither it nor any Person acting on its behalf or pursuant to any understanding with it will engage in any transactions in the securities of the Company (including Short Sales) prior to the time that the transactions contemplated by this Agreement
are publicly disclosed. 
  

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 (h) Independent Investment Decision. Such Investor has independently evaluated the merits of its
decision to purchase Securities pursuant to the Transaction Documents, and such Investor confirms that it has not relied on the advice of any other Investor’s business and/or legal counsel in making such decision. Such Investor has not relied
on the business or legal advice of Roth Capital Partners, LLC or any of its agents, counsel or Affiliates in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to such Investor
in connection with the transactions contemplated by the Transaction Documents. 
 (i) Investment Experience. Such Investor
acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and it has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment
contemplated hereby. Such Investor has significant experience in making private investments, similar to the purchase of the Securities hereunder. Such Investor understands that its investment in the Securities involves a high degree of risk.

 (j) Reliance on Exemptions. Such Investor understands that (i) the Securities are being offered and sold in reliance upon
specific exemptions from the registration requirements of the U.S. federal and state securities laws and (ii) the Company is relying upon the truth and accuracy of, and such Investor’s compliance with, the representations, warranties,
agreements, acknowledgements and understandings of such Investor set forth herein in order to determine the availability of such exemptions and the eligibility of such Investor to acquire Securities. Such Investor understands that no U.S. federal or
state agency or any other government or governmental agency has passed upon the validity of or made any recommendation or endorsement of the Securities. 
 (k) Restricted Securities. Such Investor understands that the Securities are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. 
 The Company acknowledges and agrees that no Investor has made or makes any representations or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Section 3.2. 
 ARTICLE 4. 
 OTHER AGREEMENTS OF THE PARTIES 
 4.1. (a) Securities may only be disposed of in
compliance with state and federal securities laws. In connection with any transfer of the Securities other than pursuant to an effective registration statement, to the Company, to an Affiliate of an Investor or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. 
  

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 (b) Certificates evidencing the Securities will contain the following legend, until such time as they are
not required under Section 4.1(c): 
 [NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN
REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. [THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES] [THESE SECURITIES] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES. 
 The Company acknowledges and agrees that an Investor may from time to time pledge, and/or grant a security interest in some or all of the Securities
pursuant to a bona fide margin agreement in connection with a bona fide margin account and, if required under the terms of such agreement or account, such Investor may transfer pledged or secured Securities to the pledgees or secured parties. Such a
pledge or transfer would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion may be required in
connection with a subsequent transfer following default by the Investor transferee of the pledge. No notice shall be required of such pledge. At the appropriate Investor’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the
Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder. Each Investor acknowledges and agrees that, except as otherwise provided in Section 4.1(c), any Securities
subject to a pledge or security interest as contemplated by this Section 4.1(b) shall continue to bear the legend set forth in this Section 4.1(b) and be subject to the restrictions on transfer set forth in Section 4.1(a). 

 

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 (c) Certificates evidencing Shares and Warrant Shares shall not contain any legend (including the legend
set forth in Section 4.1(b)): (i) while a registration statement covering the resale of such Shares and Warrant Shares is effective under the Securities Act, (ii) following a sale or transfer of such Shares or Warrant Shares pursuant
to an effective registration statement (including a Registration Statement), (iii) following a sale or transfer of such Shares or Warrant Shares pursuant to Rule 144 (assuming the transferee is not an Affiliate of the Company), or
(iv) while such Shares or Warrant Shares are eligible for sale under Rule 144(k). Following such time as restrictive legends are not required to be placed on certificates representing Shares or Warrant Shares pursuant to the preceding sentence,
the Company will, no later than three Trading Days following the delivery by an Investor to the Company or the Company’s transfer agent of a certificate representing Shares containing a restrictive legend, deliver or cause to be delivered to
such Investor a certificate representing such Shares that is free from all restrictive or other legends (such third Trading Day, the “Share Delivery Date”). If by the Share Delivery Date, the Company fails to deliver the required
number of Shares free from all legends, and if after the Share Delivery Date and prior to the receipt of such Shares free from restrictive legends, the Investor, or any third party on behalf of such Investor, purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Investor of such Shares (a “Buy-In”), then the Company shall pay in cash to the Investor (for costs incurred either directly by such Investor or on
behalf of a third party) the amount by which the total purchase price paid for Common Stock as a result of the Buy-In (including brokerage commissions, if any) exceed the proceeds received by such Investor as a result of the sale to which such
Buy-In relates. The Investor shall provide the Company written notice indicating the amounts payable to the Investor in respect of the Buy-In. 
 4.2. Furnishing of Information. As long as the Company is subject to the reporting requirements of the Exchange Act, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as any Investor owns Securities that are not eligible for resale under Rule 144(k), if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Investors and make publicly available in accordance with Rule 144(c) such information as is required for the Investors to sell the Shares and Warrant Shares under Rule 144. 

4.3. Integration. The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under
the Securities Act of the sale of the Securities to the Investors, or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market in a manner that would require stockholder
approval of the sale of the Securities to the Investors. 
 4.4. Subsequent Registrations. Other than pursuant to the Registration
Statement, prior to the Effective Date, the Company may not file any registration statement (other than on Form S-8) with the Commission with respect to any securities of the Company. 
  

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 4.5. Securities Laws Disclosure; Publicity. By 9:00 a.m. (New York time) on the Trading Day
following the execution of this Agreement, and by 9:00 a.m. (New York time) on the Trading Day following the Closing Date, the Company shall issue press releases disclosing the transactions contemplated hereby and the Closing. On the Trading Day
following the execution of this Agreement the Company will file a Current Report on Form 8-K disclosing the material terms of the Transaction Documents (and attach as exhibits thereto the Transaction Documents), and on the Trading Day following the
Closing Date the Company will file an additional Current Report on Form 8-K to disclose the Closing. In addition, the Company will make such other filings and notices in the manner and time required by the Commission and the Trading Market on which
the Common Stock is listed. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Investor, or include the name of any Investor in any filing with the Commission (other than the Registration Statement, any prospectus
relating to the Registration Statement and any exhibits to filings made in respect of this transaction in accordance with periodic filing requirements under the Exchange Act) or any regulatory agency or Trading Market, without the prior written
consent of such Investor, except to the extent such disclosure is required by law or Trading Market regulations. 
 4.6. Limitation on
Issuance of Future Priced Securities. During the one year following the Closing Date, the Company shall not issue any “Future Priced Securities” as such term is described by NASD IM-4350-1. 
 4.7. Indemnification of Investors. In addition to the indemnity provided in the Registration Rights Agreement, the Company will indemnify and hold
the Investors and their directors, officers, shareholders, partners, employees and agents (each, an “Investor Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any such Investor Party may suffer or incur as a result of or relating to
any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction Document. In addition to the indemnity contained herein, the Company will reimburse each Investor Party for its
reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 4.7 shall be the same as those set forth in Section 5 of the Registration Rights Agreement. 
 4.8. Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Investor
or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Investor shall have executed a written agreement regarding the confidentiality and use of such
information. The Company understands and confirms that each Investor shall be relying on the foregoing representations in effecting transactions in securities of the Company. 
 4.9. Listing of Securities. The Company agrees, (i) if the Company applies to have the Common Stock traded on any other Trading Market, it
will include in such application the Shares and Warrant Shares, and will take such other action as is necessary or desirable to cause 
  

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 the Shares and Warrant Shares to be listed on such other Trading Market as promptly as possible, and (ii) it will
take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all material respects with the Company’s reporting, filing and other obligations under the bylaws or rules of
the Trading Market. 
 4.10. Use of Proceeds. The Company will use the net proceeds from the sale of the Securities hereunder for
working capital purposes and not for the satisfaction of any portion of the Company’s debt (other than payment of trade payables and accrued expenses in the ordinary course of the Company’s business and consistent with prior practices), or
to redeem any Common Stock or Common Stock Equivalents. 
 4.11. Participation Right. If, at any time prior to the eighteen month
anniversary of the Closing Date, the Company offers any Common Stock or Common Stock Equivalents (collectively, the “Offered Securities”) in a subsequent transaction (“Subsequent Placement”), the Company shall first
offer the Offered Securities to the Investors in accordance with the following provisions: 
 (a) The Company shall deliver to each Investor a
written notice (the “Offer”) of any proposed or intended issuance or sale or exchange of the Offered Securities in a Subsequent Placement, which Offer shall (w) identify and describe the Offered Securities, (x) identify
the price and other terms upon which the Offered Securities are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged (but need not identify the offerees) and (z) offer to issue and
sell to or exchange with each Investor such Investor’s pro rata portion (based upon such Investor’s percentage ownership of the total number of issued and outstanding Shares) of up to 35% of the Offered Securities, for the price and upon
the terms and conditions set forth in the Offer (the “Basic Amount”). 
 (b) To accept an Offer, in whole or in part, an
Investor must deliver a written notice to the Company prior to the end of the third (3) Trading Day from the delivery of the Offer, setting forth the portion of the Investor’s Basic Amount that such Investor elects to purchase (the
“Notice of Acceptance”). 
 (c) The Company shall have ten (10) Trading Days from the expiration of the period set
forth in Section 4.11(b) above to issue, sell or exchange all or any part of, and publicly announce the transaction with respect to, such Offered Securities as to which a Notice of Acceptance has not been given by the Investors (the
“Refused Securities”), but only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons than those set forth in the Offer. If by the
end of the ten (10) Trading Days referenced in this subsection the Company has not made a public announcement with respect to the transaction involving such Offered Securities, such transaction shall be deemed terminated and knowledge of such
transaction shall no longer be deemed material, non-public information. 
 (d) Upon the closing of the issuance, sale or exchange of all or
less than all of the Refused Securities, each Investor shall acquire from the Company, and the Company shall issue to each Investor, the number or amount of Offered Securities specified in such Investor’s Notice of Acceptance upon the terms and
conditions specified in the Offer. 
  

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 (e) The rights contained in this Section shall not apply to the issuance by the Company, from time to
time hereafter, of (i) shares of Common Stock or Common Stock Equivalents to consultants, employees, officers, or directors of the Company, as compensation for their services to the Company or any of its direct or indirect Subsidiaries pursuant
to arrangements approved by the Board of Directors of the Company, (ii) Securities pursuant to the Transaction Documents, (iii) shares of Common Stock issued and sold in a firm commitment underwritten public offering (which shall not
include an equity line of credit, shelf takedown, or similar financing arrangement) resulting in net proceeds to the Company of in excess of $15,000,000, (iv) shares of Common Stock issued as consideration for the acquisition of another company
or business in which the shareholders of the Company do not have an ownership interest, which acquisition has been approved by the Board of Directors of the Company, (v) shares of Common Stock or Common Stock Equivalents issued in connection
with Strategic Transactions, (vi) shares of Common Stock or Common Stock Equivalents as a stock dividend to holders of Common Stock or upon any subdivision or combination of shares of Common Stock, or (vii) any shares of Common Stock upon
conversion of Common Stock Equivalents. 
 ARTICLE 5. 
 CONDITIONS PRECEDENT TO CLOSING 
 5.1. Conditions Precedent to the Obligations of the Investors to
Purchase Securities. The obligation of each Investor to acquire Securities at the Closing is subject to the satisfaction or waiver by such Investor, at or before the Closing, of each of the following conditions: 
 (a) Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing as though made on and as of such date; 
 (b) Performance. The Company shall
have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing; 
 (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents; 
 (d) Adverse Changes. Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or
result in a Material Adverse Effect; 
 (e) No Suspensions of Trading in Common Stock; Listing. Trading in the Common Stock shall not
have been suspended by the Commission or any Trading Market 
  

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 (except for any suspensions of trading of not more than one Trading Day solely to permit dissemination of material
information regarding the Company) at any time since the date of execution of this Agreement, and the Common Stock shall have been at all times since such date listed for trading on a Trading Market; 
 (f) Nasdaq Listing. If applicable, the Nasdaq Stock Market shall have waived application of the 15 calendar day prior notice contained in NASD
Marketplace Rule 4310(c)(17)(D) or such timeframe shall have expired without objection; 
 (g) Minimum Subscriptions. The aggregate of
all Investors’ Investment Amounts delivered to the Company in accordance with this Agreement shall not be less than $7,000,000; 
 (h)
Company Deliverables. The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a); and 
 (i)
Termination. This Agreement shall not have been terminated as to such Investor in accordance with Section 6.5. 
 5.2.
Conditions Precedent to the Obligations of the Company to sell Securities. The obligation of the Company to sell Securities at the Closing is subject to the satisfaction or waiver by the Company, at or before the Closing, of each of the
following conditions: 
 (a) Representations and Warranties. The representations and warranties of each Investor contained herein shall
be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date; 
 (b) Performance. Each Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by
such Investor at or prior to the Closing; 
 (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents; and

 (d) Investors Deliverables. Each Investor shall have delivered its Investors Deliverables in accordance with Section 2.2(b);

 (e) Nasdaq Listing. If applicable, the Nasdaq Stock Market shall have waived application of the 15 calendar day prior notice
contained in NASD Marketplace Rule 4310(c)(17)(D) or such timeframe shall have expired without objection; 
 (f) Minimum
Subscriptions. The aggregate of all Investors’ Investment Amounts delivered to the Company in accordance with this Agreement shall not be less than $7,000,000; and 
  

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 (g) Termination. This Agreement shall not have been terminated as to such Investor in accordance
with Section 6.5. 
 ARTICLE 6. 
 MISCELLANEOUS 
 6.1. Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The Company shall pay all stamp and other taxes and duties levied in
connection with the sale of the Securities. 
 6.2. Entire Agreement. The Transaction Documents, together with the Exhibits and
Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which
the parties acknowledge have been merged into such documents, exhibits and schedules. 
 6.3. Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile
(provided the sender receives a machine-generated confirmation of successful transmission) at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as
follows: 
  

			
	If to the Company:	  	I-many, Inc.
		  	399 Thornall Street, 12th Floor
		  	Edison, New Jersey 08837
		  	Facsimile: (732) 516-2619
		  	Attention: President
		
	With a copy to:	  	Wilmer Cutler Pickering Hale and Dorr LLP
		  	60 State Street
		  	Boston, Massachusetts 02109
		  	Facsimile: (617) 526-5000
		  	Attention: Jeffrey A. Stein, Esq.
		
	and:	  	I-many, Inc.
		  	511 Congress Street
		  	Portland, Maine 04101
		  	Facsimile: (207) 828-0492
		  	Attention: Robert G. Schwartz, Jr.

  

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	If to an Investor:	  	To the address set forth under such Investor’s name on the signature pages hereof;

 or such other address as may be designated in writing hereafter, in the same manner, by such Person. 

6.4. Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or amended except in a written instrument
signed by the Company and the Investors holding a majority of the Shares. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any
subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. No consideration shall be
offered or paid to any Investor to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same consideration is also offered to all Investors who then hold Securities. 
 6.5. Termination. This Agreement may be terminated prior to Closing: 
 (a) by written agreement of the Investors and the Company; and 
 (b) by the Company or an Investor (as to
itself but no other Investor) upon written notice to the other, if the Closing shall not have taken place by 6:30 p.m. Eastern time on the Outside Date; provided, that the right to terminate this Agreement under this Section 6.5(b) shall
not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time. 
 In the event of a termination pursuant to this Section, the Company shall promptly notify all non-terminating Investors. Upon a termination in accordance
with this Section 6.5, the Company and the terminating Investor(s) shall not have any further obligation or liability (including as arising from such termination) to the other and no Investor will have any liability to any other Investor under
the Transaction Documents as a result therefrom. 
 6.6. Construction. The headings herein are for convenience only, do not constitute
a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement or any of the Transaction Documents. 
 6.7. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The Company may not assign 
  

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 this Agreement or any rights or obligations hereunder without the prior written consent of the Investors. Any Investor
may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions
hereof that apply to the “Investors.” The preceding sentence shall not apply to (a) any Shares or Warrant Shares that have been registered under the Securities Act pursuant to an effective registration statement filed thereunder and
disposed of in accordance with such registration statement, or (b) any Shares or Warrant Shares that have been publicly sold pursuant to Rule 144. 
 6.8. No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except (i) Roth Capital Partners, LLC and (ii) as otherwise set forth in Section 4.7 (as to each Investor Party). 
 6.9. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of conflicts of law thereof. Each party hereto hereby irrevocably submits to the jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of the any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any
provisions of a Transaction Document, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred in connection with the investigation, preparation
and prosecution of such Proceeding. 
 6.10. Survival. The representations, warranties, agreements and covenants contained herein
shall survive the Closing and the delivery of the Securities. 
 6.11. Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature is delivered by facsimile or other electronic transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or other electronic signature page were an original thereof. 
  

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 6.12. Severability. If any provision of this Agreement is held to be invalid or unenforceable in
any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 
 6.13. Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights. 
 6.14. Replacement of Securities.
If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation
thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement. 
 6.15. Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and in such an event agrees to waive the defense that a
remedy at law would be adequate. 
 6.16. Payment Set Aside. To the extent that the Company makes a payment or payments to any
Investor pursuant to any Transaction Document or an Investor enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy
law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred. 
  

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 6.17. Independent Nature of Investors’ Obligations and Rights. The obligations of each
Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under any Transaction
Document. The decision of each Investor to purchase Securities pursuant to the Transaction Documents has been made by such Investor independently of any other Investor. Nothing contained herein or in any Transaction Document, and no action taken by
any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor acknowledges that no other Investor has acted as agent for such Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. The Company
acknowledges that each of the Investors has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple Investors and not because it was required or requested to do so by any Investor. 
 6.18. Limitation of Liability. Notwithstanding anything herein to the contrary, the Company acknowledges and agrees that the liability of an
Investor arising directly or indirectly, under any Transaction Document of any and every nature whatsoever shall be satisfied solely out of the assets of such Investor, and that no trustee, officer, other investment vehicle or any other Affiliate of
such Investor or any investor, shareholder or holder of shares of beneficial interest of such a Investor shall be personally liable for any liabilities of such Investor. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOLLOW] 
  

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

			
	I-MANY, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	


 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOR INVESTORS FOLLOW] 
  

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

			
	NAME OF INVESTOR
	
	  

		
	By:	 	  




			
	Name:	 	
	Title:	 	



			
		
	Number of Shares being purchased:	 	  




			
		
	Tax ID No.:	 	  




			
	
	ADDRESS FOR NOTICE
		
	c/o:	 	  

		
	Street:	 	  

		
	City/State/Zip:	 	  

		
	Attention:	 	  

		
	Tel:	 	  

		
	Fax:	 	  

	
	DELIVERY INSTRUCTIONS
	    (if different from above)
		
	c/o:	 	  

		
	Street:	 	  

		
	City/State/Zip:	 	  

		
	Attention:	 	  

		
	Tel:	 	  



  

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 Schedule A 
 I-MANY, INC. 
 INVESTOR QUESTIONNAIRE 
 FOR NON-INDIVIDUAL INVESTORS 
 (ALL INFORMATION FURNISHED IN THIS 
 QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY) 
 Responses to this Questionnaire will be used by I-many, Inc. (the “Company”) to qualify prospective investors for purposes of federal and state securities laws. 
 If you wish to purchase shares of common stock of the Company and warrants to acquire shares of the Company’s common stock, please complete and
return one copy of this Questionnaire as soon as possible to: Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, MA 02109, Facsimile (617) 526-5000, Attention: Laurie J. Harrison. 
 If the answer to any question below is “none” or “not applicable”, please so indicate. 
  

	1.	IDENTIFICATION 

 Name:
                                        
                                        
                 
 Address of Principal

 Place of Business:
                                        
                                        
     
 Year and Jurisdiction of 
 Formation or Incorporation: 
 _____________________________________                                 
                                        
                
 Type of Entity 
 (corporation, partnership, etc.): 
 _____________________________________             
 Was entity formed for the specific
purpose of this investment? 
  

	Yes   ̈            No   ̈	

 If answer is yes, each equity owner (shareholder, partner, etc.) of the
entity must complete an Investor Questionnaire for Individual Investors. 
  

	2.	PROPOSED INVESTMENT 

 Please indicate the amount of the entity’s
proposed investment in the Company. $                     








	3.	BUSINESS 

 Please indicate which, if any, of the following accurately
describes the entity: 
  

			
	 [        ]
	  	a bank as defined in section 3(a)(2) of the Securities Act of 1933 (the “Securities Act”) or a savings and loan association or other institution as defined in section 3(a)(5)(A) of the
Securities Act, acting in either an individual or fiduciary capacity;
		
	[        ]	  	a broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934;
		
	[        ]	  	an insurance company as defined in section 2(13) of the Securities Act;
		
	[        ]	  	an investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act;
		
	[        ]	  	a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958;
		
	[        ]	  	a plan established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, which plan
has total assets in excess of $5,000,000;
		
	[        ]	  	an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, which satisfies one of the following criteria: (i) the investment decision for such plan is
made by a plan fiduciary, as defined in section 3(21) of such Act, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser; (ii) such plan has total assets in excess of $5,000,000; or (iii)
such plan is a self-directed plan and its investment decisions are made solely by persons who are “accredited investors” within the meaning of Rule 501(a) under the Securities Act;
		
	[        ]	  	a private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;
		
	[        ]	  	an organization described in section 501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, which was not formed for the specific
purpose of investing in the Company, and which has total assets in excess of $5,000,000;

  

 2 









			
	[        ]	  	a trust with total assets in excess of $5,000,000, which was not formed for the specific purpose of investing in the Company and whose investment in the Company is directed by a person with such
knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of an investment in the Company; and
		
	[        ]	  	any entity in which all of the equity owners are “accredited investors” within the meaning of Rule 501(a) under the Securities Act.

 If paragraph (k) is checked, each equity owner (shareholder, partner, etc.) of the entity
must complete an Investor Questionnaire for Individual Investors. 
  

	4.	AFFILIATION 

 If the entity has any pre-existing
personal or business relationship with the Company or any of its officers, directors or controlling persons, please describe the nature and duration of such relationship. 
  

	
	 
	
	 

  

	5.	INVESTMENT EXPERIENCE 

 Please provide information
detailing the business, financial and investment experience of the entity and/or the investment manager of such entity which gives such entity or investment manager the capacity to evaluate the merits and risks of the proposed investment.

  

	
	 
	
	 
	
	 

  

 3 








 The above information is true and correct in all material respects. The undersigned recognizes
that the Company is relying on the truth and accuracy of such information so that it may rely on certain exemptions from registration contained in the Securities Act of 1933, as amended, and the securities laws of certain states. The undersigned
agrees to notify the Company promptly of any changes in the foregoing information which may occur prior to the investment. 
  

			
		 	Date:                    , 2006
		
		 	  

		 	Name of Entity
		
	By:	 	  

		 	Signature of Authorized Representative
		
		 	  

		 	Printed Name of Authorized Representative
		
		 	  

		 	Printed Title of Authorized Representative


  

 4