Document:

Exhibit 10.8

SECURITIES PURCHASE AGREEMENT

This Securities Purchase
Agreement (this “Agreement”) is
dated as of December 22, 2006, by and among International Fight League, Inc., a
Delaware corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser”
and collectively, the “Purchasers”).

RECITALS

A.            The Company and each
Purchaser are executing and delivering this agreement in reliance upon the
exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission under the Securities Act.

B.            Each Purchaser,
severally and not jointly, wishes to purchase, and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, that aggregate number
of shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company, set forth
below such Purchaser’s name on the signature page of this Agreement, at the
price of $1.25 per share (which aggregate amount for all Purchasers together
shall be 19,376,000 shares of Common Stock and shall be collectively referred
to herein as the “Shares”).

C.            The Company has
engaged [_______________] as its placement agent (the “Placement Agent”) for the offering of the
Shares on a “best efforts” basis.

D.            Contemporaneously with
the execution and delivery of this Agreement, the parties hereto are executing
and delivering a Registration Rights Agreement, in the form attached hereto as Exhibit
A (the “Registration Rights Agreement”),
pursuant to which, among other things, the Company will agree to provide
certain registration rights with respect to the Shares under the Securities Act
and applicable state securities laws.

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 Purchasers hereby agree as follows:

ARTICLE
I.

DEFINITIONS

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

“Action” means any action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition)
or investigation pending or, to the Company’s Knowledge, threatened in writing
against or affecting 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, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
Controls, is controlled by or is under common control with such Person, as such
terms are used in and construed under Rule 144. 
With respect to a Purchaser, any investment fund or managed account that
is managed on a discretionary basis by the same investment manager as such
Purchaser will be deemed to be an Affiliate of such Purchaser.

 

 

“Business Day” means a day, other than a Saturday or Sunday,
on which banks in New York City are open for the general transaction of
business.

“Closing” means the closing of the purchase and sale of the
Shares pursuant to this Agreement.

“Closing Date” means the Trading Day when all of the
Transaction Documents have been executed and delivered by the applicable
parties thereto, and all of the conditions set forth in Sections 2.1 and 2.2
hereof are satisfied, or such other date as the parties may agree.

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

“Common Stock” has the meaning set forth in the Recitals, and
also includes any securities into which the Common Stock may hereafter be
reclassified or changed into.

“Common Stock Equivalents” means any securities of the
Company or any Subsidiary which would entitle the holder thereof to acquire at
any time Common Stock, 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 Lowenstein Sandler PC.

“Company Deliverables” has the meaning set forth in Section
2.2(a).

“Control”
(including the terms “controlling”, “controlled by” or “under common control
with”) means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.

“Disclosure Materials” has the meaning set forth in Section
3.1(h).

“Effective Date” means the date on which the initial
Registration Statement required by Section 2(a) of the Registration Rights
Agreement is first declared effective by the Commission.

“Effectiveness Deadline” means the date on which the initial
Registration Statement is required to be declared effective by the Commission
under the terms of the Registration Rights Agreement.

“Environmental Laws” has the meaning set forth in Section
3.1(l).

“Evaluation Date” has the meaning set forth in Section
3.1(v).

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

“GAAP” means U.S. generally accepted accounting principles,
as applied by the Company.

“Indemnified Party” has the meaning set forth in Section 4.4.

“Intellectual Property” has the meaning set forth in Section
3.1(r).

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“Knowledge” means with respect to any statement made to the
knowledge of a party, that the statement is based upon the actual knowledge,
after due inquiry, of the officers of such party having responsibility for the
matter or matters that are the subject of the statement.

“Lien” means any lien, charge, claim, encumbrance, security
interest, right of first refusal, preemptive right or other restrictions of any
kind.

“Losses” has the meaning set forth in Section 4.4.

“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 financial condition of the Company and the Subsidiaries, taken as a
whole, or (iii) any material adverse impairment to the Company’s ability to
perform in any material respect on a timely basis its obligations under any
Transaction Document.

“Material Contract” means any contract of the Company that
was filed as an exhibit to the SEC Filings pursuant to Item 601(b)(4) or Item
601(b)(10) of Regulation S-K.

“Material Permits” has the meaning set forth in Section
3.1(p).

“Memorandum” means the Confidential Information Memorandum of
the Company dated as of November 2006.

“New York Courts” means the state and federal courts sitting
in the City of New York, Borough of Manhattan.

“Outside Date” means January 31, 2007.

“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 specifically listed
herein.

“Principal Trading Market” means the Trading Market on which
the Common Stock is primarily listed on and quoted for trading, which, as of
the Closing Date means the Over the Counter Bulletin Board (“OTC.BB”).

“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.

“Purchaser Deliverables” has the meaning set forth in Section
2.2(b).

“Purchaser Party” has the meaning set forth in Section 4.4.

“Registration Rights Agreement” has the meaning set forth in
the Recitals.

“Registration Statement” means a registration statement
meeting the requirements set forth in the Registration Rights Agreement and
covering the resale by the Purchasers of the Registrable Securities (as defined
in the Registration Rights Agreement).

“Required Approvals” has the meaning set forth in Section
3.1(e).

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“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).

“Secretary’s Certificate” has the meaning set forth in
Section 2.2(a)(vii).

“Securities Act” means the Securities Act of 1933, as amended.

“Short Sales” include, without limitation, all “short sales”
as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act,
whether or not against the box, and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps, “put
equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated brokers.

“Strategic Investor” means an investor who the Board
determines in good faith can provide synergistic, marketing, sponsorship,
operational or other business benefits to the Company.

“Subscription Amount” means with respect to each Purchaser,
the aggregate amount to be paid for the Shares purchased hereunder as indicated
on such Purchaser’s signature page to this Agreement next to the heading “Aggregate
Purchase Price (Subscription Amount)”.

“Subsidiary” means any “significant subsidiary” as defined in
Rule 1-02(w) of Regulation S-X promulgated by the Commission under the Exchange
Act and any other entity required to be disclosed in the SEC Reports pursuant
to Item 601(b)(21) of Regulation S-K.

“Trading Affiliate” has the meaning set forth in Section
3.2(h).

“Trading Day” means (i) a day on which the Common Stock is
listed or quoted and traded on its primary 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 National Quotation Bureau Incorporated (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 Select Market, the
NASDAQ Global Market, the NASDAQ Capital Market, or the 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 schedules
and exhibits attached hereto, the Registration Rights Agreement, the
Irrevocable Transfer Agent Instructions and any other documents or agreements
executed in connection with the transactions contemplated hereunder.

“Transfer Agent”
means American Stock Transfer, or any successor transfer agent for the Company.

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ARTICLE
II.

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
Purchaser, and each Purchaser shall, severally and not jointly, purchase from
the Company, such number of shares of Common Stock as indicated below such
Purchaser’s name on the signature page of this Agreement, for an aggregate
purchase price for such Purchaser as indicated below such Purchaser’s name on
the signature page of this Agreement. Upon confirmation that the
other conditions to closing specified herein have been satisfied or duly waived
by the Purchasers, the Company shall deliver to Company Counsel, in trust, a
certificate or certificates, registered in such name or names as the Purchasers
may designate, representing the Shares, with instructions that such
certificates are to be held for release to the Purchasers only upon payment in
full of the Subscription Amount to the Company by all the Purchasers.  Unless otherwise agreed to by the Company and
any Purchaser, upon such receipt by Company Counsel of the certificates, each
Purchaser shall promptly, but no more than one Business Day thereafter, cause a
wire transfer in same day funds to be sent to the account of the Company as
instructed in writing by the Company, in an amount representing the purchase price for such Purchaser as
indicated below such Purchaser’s name on the signature page of this Agreement.  On the date (the “Closing Date”)
the Company receives the aggregate Subscription Amounts, the certificates
evidencing the Shares shall be released to the Purchasers (the “Closing”). The
Closing of the purchase and sale of the Shares shall take place at the offices
of Lowenstein Sandler PC, 1251 Avenue of the Americas, New York, New York on
the Closing Date or at such other locations or remotely by facsimile
transmission or other electronic means as the parties may mutually agree.

2.2           Closing
Deliveries.    (a)  On or prior to the Closing, the Company shall
issue, deliver or cause to be delivered to each Purchaser the following (the “Company Deliverables”):

(i)            This
Agreement, duly executed by the Company;

(ii)           One
or more stock certificates, containing the legends provided in Section 4.1(b)
hereof, evidencing a number of Shares indicated below such Purchaser’s name on
the signature page of this Agreement, registered in the name of such Purchaser;

(iii)          a
legal opinion of Company Counsel, in the form attached hereto as Exhibit C,
executed by such counsel and addressed to the Purchasers and the Placement
Agent;

(iv)          the
Registration Rights Agreement, duly executed by the Company;

(v)           duly
executed Irrevocable Transfer Agent Instructions acknowledged in writing by the
Transfer Agent;

(vi)          a
certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as of the Closing Date,
certifying the resolutions adopted by the Board of Directors of the Company
approving the transactions contemplated by this Agreement and the other
Transaction Documents and the issuance of the Shares, certifying the current
versions of the certificate or articles of incorporation, as amended and
by-laws of the Company and certifying as to the signatures and authority of
persons signing the Transaction Documents and related documents on behalf of the
Company; and

(vii)         the
Compliance Certificate referred to in Section 5.1(h).

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

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(i)            This
Agreement, duly executed by such Purchaser;

(ii)           Its
Subscription Amount, in United States dollars and in immediately available
funds, in the amount set forth as the “Purchase Price” indicated below such
Purchaser’s name on the applicable signature page hereto by wire transfer to an
account designated in writing by the Company for such purpose, as set forth on Exhibit
E attached hereto;

(iii)          the
Registration Rights Agreement, duly executed by such Purchaser;

(iv)          a
fully completed and duly executed Selling Securityholder Notice and
Questionnaire in the form attached as Annex B to the Registration Rights
Agreement; and

(v)           a fully completed and duly executed Accredited Investor
Questionnaire and Stock Certificate Questionnaire in the forms attached hereto
as Exhibits B-1 and B-2 respectively.

ARTICLE
III.

REPRESENTATIONS AND WARRANTIES

3.1           Representations
and Warranties of the Company.  The
Company hereby represents and warrants to the Purchasers and to the Placement
Agent that, except as set forth in the Schedules delivered herewith:

(a)           Subsidiaries.  The Company has no direct or indirect
Subsidiaries other than those listed in Schedule 3.1(a) hereto.  Except as disclosed in Schedule 3.1(a)
hereto, the Company owns, directly or indirectly, all of the capital stock or
comparable equity interests of each Subsidiary free and clear of any and all
Liens, and all the issued and outstanding shares of capital stock or comparable
equity interest of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or
purchase securities.

(b)           Organization
and Qualification.  The Company and
each Subsidiary is an entity 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 or lease 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 the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the 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, could not have or reasonably
be expected to have, individually or in the aggregate, resulted in a Material
Adverse Effect and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

(c)           Authorization;
Enforcement; Validity.  The Company
has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction Documents to which it
is a party and otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery
of each of the Transaction Documents to which it is a party by the Company and
the consummation by it of the transactions contemplated hereby and thereby
(including, but not limited to, the sale and delivery of the Shares) have been
duly authorized by all necessary corporate action on the part of the Company
and no further corporate action is required by the Company, its Board of
Directors or its stockholders in connection therewith other than in connection
with the Required Approvals.  Each of the
Transaction Documents to which it is a party has been (or upon delivery will
have been) duly 

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executed by the Company and is, or 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. Except as set
forth on Schedule 3.1(c) hereto, there are no shareholder agreements, voting agreements,
or other similar arrangements with respect to the Company’s capital stock to
which the Company is a party or, to the Company’s Knowledge, between or among
any of the Company’s shareholders.

(d)           No
Conflicts.  The execution, delivery
and performance of the Transaction Documents to which it is a party by the
Company and the consummation by the Company of the transactions contemplated
hereby or thereby (including, without limitation, the issuance of the Shares)
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, (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary 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) or other
understanding 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 affected, or
(iii) subject to the Required Approvals, conflict with or 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 and the rules and regulations, assuming the correctness of the
representations and warranties made by the Purchasers herein, of any
self-regulatory organization to which the Company or its securities are
subject, including all applicable Trading Markets), or by which any property or
asset of the Company or a Subsidiary is bound or affected, except in the case
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.  Neither the
Company nor any Subsidiary is 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 (including
the issuance of the Shares), 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 applicable 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 filing
of any requisite notices and/or application(s) to the Principal Trading Market
for the issuance and sale of the Common Stock and the listing of the Common
Stock for trading or quotation, as the case may be, thereon in the time and
manner required thereby, (v) the filings required in accordance with Section
4.3 of this Agreement and (vi) those that have been made or obtained prior to the
date of this Agreement (collectively, the “Required
Approvals”).

(f)            Issuance
of the Shares.  The Shares have been
duly authorized and, when issued and paid for in accordance with the terms of
the Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens, other than restrictions on transfer
provided for in the Transaction Documents or imposed by applicable securities
laws.  Assuming the accuracy of the
representations and warranties of the Purchasers in this Agreement, the Shares
will be issued in compliance with all applicable federal and state securities
laws.

(g)           Capitalization.  The number of shares and type of all
authorized, issued and outstanding capital stock, options and other securities
of the Company (whether or not presently convertible 

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into
or exercisable or exchangeable for shares of capital stock of the Company) is
specified in Schedule 3.1(g) hereto. 
All of the outstanding shares of capital stock of the Company are duly
authorized, validly issued, fully paid and non-assessable, have been issued in
compliance in all material respects with all applicable federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase any
capital stock of the Company.  Except as
specified in Schedule 3.1(g) hereto, there are no outstanding options,
warrants or 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 the Company’s capital stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of capital stock of the Company, or
options, securities or rights convertible or exchangeable into shares of
capital stock of the Company.  Except for
customary adjustments as a result of stock dividends, stock splits, combination
of shares, reorganizations, recapitalizations, reclassifications or other
similar events, or as disclosed in Schedule 3.1(g) hereto or in any
Schedule 13D or Schedule 13G or Company report on file with the Commission,
there are no anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing rights to
security holders) and the issuance and sale of the Shares 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 Purchasers) and will
not, result in a right of any holder of securities to adjust the exercise,
conversion, exchange or reset price under such securities.

(h)           SEC Reports. 
The Company has filed all reports, schedules, forms, statements and
other documents required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, since January 1, 2004 (the
foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Reports” and together with this
Agreement and the Schedules to this Agreement (if any), the “Disclosure Materials”) on a timely basis
or has received 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 the date hereof, the Company is not
aware of any event occurring on or prior to the Closing Date (other than the
transactions contemplated by the Transaction Documents) that requires the
filing of a Form 8-K after the Closing. 
As of their respective dates, or to the extent corrected by a subsequent
restatement, 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.

(i)            Financial
Statements.          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 (or
to the extent corrected by a subsequent restatement).  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 except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all material
respects the financial position of the Company and its consolidated
subsidiaries taken as a whole 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, year-end audit adjustments.  All material agreements to which the Company
or any Subsidiary is a party or to which the property or assets of the Company
or any Subsidiary are subject are included as part of or specifically
identified in the SEC Reports.

(j)            Tax
Matters.  Each of the Company and its
Subsidiaries (i) has accurately and timely prepared and filed all foreign,
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has paid all taxes
and other governmental assessments 

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and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith, with respect to which adequate reserves have
been set aside on the books of the Company and (iii) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply,
except, in the case of clauses (i) and (ii) above, where the failure to so pay
or file any such tax, assessment, charge or return would not result in a
Material Adverse Effect.   There are no
unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction.

(k)           Material
Changes.  Since December 31, 2005,
except as specifically disclosed in the SEC Reports or as set forth in Schedule
3.1(k) hereto, (i) there have been no events, occurrences or developments
that have had or that could reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect, (ii) the
Company has not incurred any material liabilities 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 manner in which it
keeps its accounting books and records, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to its shareholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock (other than in connection with repurchases of unvested
stock issued to employees of the Company), (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except Common Stock
issued in the ordinary course as dividends on outstanding preferred stock and
pursuant to existing Company stock option or stock purchase plans or executive
and director corporate arrangements disclosed in the SEC Reports and (vi) there
has not been any material change or amendment to, or any waiver of any material
right under, any contract under which the Company, any subsidiary thereof, or
any of their assets is bound or subject.

(l)            Environmental
Matters.  To the Company’s Knowledge,
neither the Company nor any Subsidiary (i) is in violation of any statute,
rule, regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, “Environmental Laws”),
(ii) owns or operates any real property contaminated with any substance that is
in violation of any Environmental Laws, (iii) is liable for any off-site
disposal or contamination pursuant to any Environmental Laws, and (iv) is
subject to any claim relating to any Environmental Laws; which violation, contamination,
liability or claim has had or could 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 to such a
claim.

(m)          Litigation.  There is no Action which (i) adversely
affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Shares or (ii) except as specifically disclosed in
the SEC Reports and the Memorandum, could, if there were an unfavorable
decision, individually or in the aggregate, result in a judgment against the
Company or any Subsidiary in excess of $100,000 and for which no insurance is
available.  Neither the Company nor any
Subsidiary, nor, to the Company’s Knowledge, any current director or officer
thereof (in his or her capacity thereof), is or has been since December 31,
2001, 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.  There has not been and to the
Company’s Knowledge, there is not pending or contemplated, any investigation by
the Commission involving the Company or, to the Company’s Knowledge 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.

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(n)           Employment
Matters.  No material labor dispute
exists or, to the Knowledge of the Company, is imminent with respect to any of
the employees of the Company which could reasonably be expected to result in a
Material Adverse Effect.  None of the
Company’s or its Subsidiaries’ employees is a member of a union that relates to
such employee’s relationship with the Company, and neither the Company or any
of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their
employees are good.  No executive
officer, to the Knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement,
or any other contract or agreement or any restrictive covenant, and the
continued employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters.  The Company and its
Subsidiaries are in compliance with all U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

(o)           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 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 having
jurisdiction over the Company or its properties or assets, or (iii) is or has
been in violation of, or in receipt of notice that it is in violation of, any
statute, rule or regulation of any governmental authority applicable to the
Company, except in each case as could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect.

(p)           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 and the
Memorandum, except where the failure to possess such permits, individually or
in the aggregate, has not and could not reasonably be expected to result in a
Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such Material
Permits. Furthermore, the Company and the Subsidiaries possess all necessary
Material Permits and/or Required Approvals which were required in connection
with the recently completed reverse merger.

(q)           Title
to Assets.  Except for property that
is specifically the subject of, and covered by, other representations and
warranties as to ownership or title contained herein, the Company and the
Subsidiaries have 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 and Liens for the
payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties.  Any
real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases of which the
Company and the Subsidiaries are in material compliance. Neither the Company
nor any Subsidiary own any real property.

(r)            Patents
and Trademarks.  The Company and its
Subsidiaries own, possess, license or have other rights to use all foreign and
domestic patents, patent applications, trade and service marks, trade and
service mark registrations, trade names, copyrights, licenses, inventions,
trade secrets, technology, Internet domain names, know-how and other
intellectual property (collectively, the “Intellectual
Property”) 

 10
 

 

necessary
for the conduct of their respective businesses as now conducted or as proposed
to be conducted.  Except as set forth in
the SEC Reports, the Memorandum and except where such violations or
infringements would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect, (a)  there are no
rights of third parties to any such Intellectual Property; (b) to the Company’s
Knowledge, there is no infringement by third parties of any such Intellectual
Property; (c) there is no pending or, to the Company’s Knowledge, threatened
action, suit, proceeding or claim by others challenging the Company’s and its
Subsidiaries’ rights in or to any such Intellectual Property, and the Company
is unaware of any facts which would form a reasonable basis for any such claim;
(d) there is no pending or, to the Company’s Knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property; and (e) there is no pending or, to the Company’s
Knowledge, threatened action, suit, proceeding or claim by others that the
Company and/or any of its Subsidiaries infringe or otherwise violate any
patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim.

(s)           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 and location in which the Company
and the Subsidiaries are engaged. 
Neither the Company nor any Subsidiary has any knowledge that it will be
unable to renew its existing insurance coverage for the Company and the
Subsidiaries as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business without a
significant increase in cost.

(t)            Transactions
With Affiliates and Employees. 
Except as set forth in the SEC Reports made on or prior to the date
hereof, none of the officers or directors of the Company and, to the Company’s
Knowledge, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary or to a presently contemplated
transaction (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.

(u)           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.

(v)           Sarbanes-Oxley;
Disclosure Controls.  The Company is
in compliance in all material respects with all of the provisions of the
Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing
Date.  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 is made
known to the certifying officers by others within those entities.  The Company’s certifying officers have
evaluated the effectiveness of its controls and procedures as of a date within
90 days prior to the filing of the most recently filed periodic report under
the Exchange Act (such date, the “Evaluation Date”). 
The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their evaluations
as of the Evaluation Date. Since
such date there have been no significant changes in the Company’s internal
controls (as such term is defined in Item 307(b) of Regulation S-K) or, to the
Company’s Knowledge, in other factors that could significantly affect the
Company’s internal controls.

 11
 

 

 

(w)          Certain
Fees.  No person or entity will have,
as a result of the transactions contemplated by this Agreement, any valid
right, interest or claim against or upon the Company or a Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company, other than
[_______________] as placement agent with respect to the offer and sale of the
Shares (which placement agent fees are being paid by the Company). The Company
shall pay, and hold each Purchaser harmless against, any liability, loss or
expense (including, without limitation, attorney’s fees and out-of-pocket
expenses) arising in connection with any such right, interest or claim.

(x)            Private
Placement. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2 of this Agreement, no registration under
the Securities Act is required for the offer and sale of the Shares by the
Company to the Purchasers under the Transaction Documents.  As of the date of this Agreement, there are
no outstanding registration rights held by any holder of the Company’s
securities.

(y)           No
Directed Selling Efforts or General Solicitation.  Neither the Company, nor any of its Affiliates,
nor any Person acting on its or their behalf has conducted any “general
solicitation” or “general advertising” (as those terms are used in Regulation
D) in connection with the offer or sale of any of the Shares.

(z)            No
Integrated Offering.  Assuming the
accuracy of the Purchasers’ representations and warranties set forth in Section
3.2, and subject to Section 4.9 of this Agreement, neither the Company, its
Subsidiaries nor any of their Affiliates, nor any Person acting on its or their
behalf has, directly or indirectly, at any time within the past six months made
any offers or sales of any Company security or solicited any offers to buy any
security, under circumstances that would (i) eliminate the availability of the
exemption from registration under Regulation D under the Securities Act in
connection with the offer and sale by the Company of the Shares as contemplated
hereby or (ii) cause the offering of the Shares pursuant to the Transaction
Documents to be integrated with prior offerings by the Company for purposes of
any applicable law, regulation or shareholder approval provisions, including,
without limitation, under the rules and regulations of the Principal Trading
Market on which any of the securities of the Company are listed or designated.

(aa)         Exchange
Act.  The Company’s Common Stock is
registered pursuant to Section 12(g) of the Exchange Act, and the Company has
taken no action designed to terminate the registration of the Common Stock
under the Exchange Act nor has the Company received any notification that the
Commission is contemplating terminating such registration.

(bb)         Investment
Company.  Neither the Company nor any
of its Subsidiaries is required to be registered as, and is not an Affiliate
of, and immediately following the Closing will not be required to register as,
an “investment company” within the meaning of the Investment Company Act of
1940, as amended.

(cc)         Questionable
Payments.  Neither the Company
nor any of its Subsidiaries, nor, to the Company’s Knowledge, any directors, officers,
employees, agents or other Persons acting on behalf of the Company or any of
its Subsidiaries has, in the course of its actions for, or on behalf of, the
Company: (a) directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
foreign or domestic political activity; (b) made any direct or indirect
unlawful payments to any foreign or domestic governmental officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds; (c) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended or (d) made any other
unlawful bribe, rebate, payoff, 

 12
 

 

influence payment, kickback or other unlawful payment
to any foreign or domestic government official or employee.

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

(ee)         Disclosure.  All disclosure provided to the Purchasers
regarding the Company, its business and the transactions contemplated hereby,
furnished prior to the date of this Agreement by the Company or authorized by
the Company and furnished by the Placement Agent on behalf of the Company
(including the Company’s representations and warranties set forth in this
Agreement) are true and correct in all material respects 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.  No event or circumstance has occurred or
information exists with respect to the Company nor any of its Subsidiaries or
its or their business, properties, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed, except for the announcement of this Agreement and related
transactions.

(ff)           Off
Balance Sheet Arrangements.  There is
no transaction, arrangement, or other relationship between the Company and an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its Exchange Act filings and is not so disclosed or
that otherwise would be reasonably likely to have a Material Adverse Effect.

(gg)         Consultation
with Auditors. The Company has consulted its independent auditors concerning
the accounting treatment of the transactions contemplated by the Transaction
Documents, and in connection therewith has furnished such auditors complete
copies of the Transaction Documents.  The
Company intends to (but the Company cannot assure that the Commission will
allow the Company to) account for the gross proceeds raised from the financing
which is the subject of this Agreement as equity in its financial statements.

3.2           Representations and Warranties of the Purchasers.  Each Purchaser hereby, for itself and for no
other Purchaser, represents and warrants as of the date hereof and as of the
Closing Date to the Company and the Placement Agent as follows:

(a)           Organization;
Authority.  Such Purchaser is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with the requisite corporate or
partnership power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder.  The execution, delivery and performance by
such Purchaser of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate or, if such Purchaser is not a
corporation, such partnership, limited liability company or other applicable
like action, on the part of such Purchaser. 
Each of this Agreement and the Registration Rights Agreement has been
duly executed by such Purchaser, and when delivered by such Purchaser in accordance
with terms hereof, will constitute the valid and legally binding obligation of
such Purchaser, enforceable against it in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, 

 13
 

 

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 Purchaser understands
that the Shares are “restricted securities” and have not been registered under
the Securities Act or any applicable state securities law and is acquiring the
Shares, as principal for its own account and not with a view to, or for
distributing or reselling such Shares or any part thereof in violation of the
Securities Act or any applicable state securities laws, without prejudice,
however, to such Purchaser’s right, subject to the provisions of this Agreement
and the Registration Rights Agreement, at all times to sell or otherwise
dispose of all or any part of such Shares pursuant to an effective registration
statement under the Securities Act or under an exemption from such registration
and in compliance with applicable federal and state securities laws.  Such Purchaser is acquiring the Shares
hereunder in the ordinary course of its business. Such Purchaser does not
presently have any agreement, plan or understanding, directly or indirectly,
with any Person to distribute or effect any distribution of any of the Shares
(or any securities which are derivatives thereof) to or through any person or
entity; provided, however, that by making the representations herein, such
Purchaser does not agree to hold any of the Shares for any minimum period of
time.

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

(d)           General
Solicitation.  Such Purchaser is not
purchasing the Shares as a result of any advertisement, article, notice or
other communication regarding the Shares published in any newspaper, magazine
or similar media or broadcast over television or radio or presented at any
seminar or any other general advertisement.

(e)           Experience
of Such Purchaser.  Such Purchaser,
either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be capable
of evaluating the merits and risks of the prospective investment in the Shares,
and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic
risk of an investment in the Shares and, at the present time, is able to afford
a complete loss of such investment.

(f)            Access
to Information.  Such Purchaser
acknowledges that it has had the opportunity to review 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 Shares and the
merits and risks of investing in the Shares; (ii) access to information (other
than material non-public 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 Purchaser or its representatives or counsel shall
modify, amend or affect such Purchaser’s right to rely on the truth, accuracy
and completeness of the Disclosure Materials and the Company’s representations
and warranties contained in the Transaction Documents.

(g)           Residency.  Such Purchaser has, if an entity, its
principal place of business or, if an individual, its primary residence in the
jurisdiction set forth immediately below such Purchaser’s name on the signature
pages hereto.

 14
 

 

 

(h)           Certain
Trading Activities.  Other than with
respect to the transactions contemplated herein, since the earlier to occur of
(1) the time that such Purchaser was first contacted by the Company, the
Placement Agent or any other Person regarding this investment in the Company
and (2) the tenth (10th) day prior to the date of this Agreement, neither the Purchaser nor
any Affiliate of such Purchaser which (x) had knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to such Purchaser’s
investments or trading or information concerning such Purchaser’s investments,
including in respect of the Shares, and (z) is subject to such Purchaser’s
review or input concerning such Affiliate’s investments or trading
(collectively, “Trading Affiliates”)
has directly or indirectly, nor has any Person acting on behalf of or pursuant
to any understanding with such Purchaser or Trading Affiliate, effected or
agreed to effect any transactions in the securities of the Company (including,
without limitation, any Short Sales involving the Company’s securities).  Notwithstanding the foregoing, no Purchaser
makes any representation, warranty or covenant hereby that it will not engage
in Short Sales in the securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced as
described in Section 4.3.

(i)            Brokers
and Finders.  No Person will have, as
a result of the transactions contemplated by this Agreement, any valid right,
interest or claim against or upon the Company, or any Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Purchaser.

(j)            Independent Investment Decision.  Such Purchaser has independently evaluated
the merits of its decision to purchase Shares pursuant to the Transaction
Documents, and such Purchaser confirms that it has not relied on the advice of
any other Purchaser’s business and/or legal counsel in making such
decision.  Such Purchaser understands
that nothing in this Agreement or any other materials presented by or on behalf
of the Company to the Purchaser in connection with the purchase of the Shares
constitutes legal, tax or investment advice. 
Such Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Shares.  Such
Purchaser understands that the Placement Agent has acted solely as the agent of
the Company in this placement of the Shares and such Purchaser has not relied
on the business or legal advice of the Placement Agent 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
Purchaser in connection with the transactions contemplated by the Transaction
Documents.

(k)           Reliance on Exemptions.  Such Purchaser understands that the Shares
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws
and that the Company is relying in part upon the truth and accuracy of, and
such Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Shares.

(l)            No Governmental Review.  Such Purchaser understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Shares or the fairness or suitability of
the investment in the Shares nor have such authorities passed upon or endorsed
the merits of the offering of the Shares.

The Company
acknowledges and agrees that no Purchaser 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.

 15

 

ARTICLE
IV.

OTHER AGREEMENTS OF THE PARTIES

4.1           (a)           Compliance with Laws.  Notwithstanding any other provision of this
Article IV, each Purchaser covenants that the securities may only be disposed
of pursuant to an effective registration statement under, and in compliance
with the requirements of, 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 compliance with any applicable state
and federal securities laws.  In
connection with any transfer of the Shares other than (i) pursuant to an
effective registration statement, (ii) to the Company, (iii) to an Affiliate of
a Purchaser, (iv) pursuant to Rule 144 or (v) in connection with a bona fide
pledge as contemplated in Section 4.1(b), except as otherwise provided herein,
the Company may require the transferor thereof to provide to the Company an
opinion of counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Shares under the Securities Act.  As a condition of transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement
and shall have the rights of a Purchaser under this Agreement and the
Registration Rights Agreement.

(b)           Legends.  Certificates evidencing the Shares shall bear
any legend as required by the “blue sky” laws of any state and a restrictive
legend in substantially the following form, until such time as they are not
required under Section 4.1(c):

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 OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY.

The Company acknowledges and agrees that a
Purchaser may from time to time pledge, and/or grant a security interest in
some or all of the legended Shares, in connection with applicable securities
laws, pursuant to a bona fide margin agreement in compliance with a bona fide
margin loan.  Such a pledge 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 shall be required in
connection with a subsequent transfer or foreclosure following default by the
Purchaser transferee of the pledge.  No
notice shall be required of such pledge but Purchaser’s transferee shall
promptly notify the Company of any such subsequent transfer or
foreclosure.  Each Purchaser acknowledges
that the Company shall not be responsible for any pledges relating to, or the
grant of any security interest in, any of the Shares or for any agreement,
understanding or arrangement between any Purchaser and its pledgee or secured
party. The Company’s indemnification obligations pursuant to this Agreement
shall not extend to any Proceeding or Losses arising out of or related to this
Section 4.1(b). At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party
of Shares may reasonably request in connection with a pledge or transfer of the
Shares including the preparation and filing of any required prospectus
supplement under Rule 423(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling
Shareholders thereunder.  Each Purchaser
acknowledges and agrees that, except as otherwise provided in Section 4.1(c),
any Shares subject to a pledge or security interest as contemplated by this
Section 4.1(b) shall continue to 

 16
 

 

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).

(c)           Removal of Legends. 
The legend set forth in Section 4.1(b) above shall be removed and the
Company shall issue a certificate without such legend to the holder of the
Shares upon which it is stamped or issue to such holder by electronic delivery
at the applicable balance account at The Depositary Trust Company, if (i) such
Shares are sold or transferred pursuant to Rule 144 (assuming the transferor is
not an Affiliate of the Company), or (ii) such Shares are eligible for sale
under Rule 144(k).  The Company shall
cause its counsel to issue the legal opinion referred to in the Irrevocable
Transfer Agent Instructions to the Company’s transfer agent on the Effective
Date.  Any fees (with respect to the
Transfer Agent, counsel to the Company or otherwise) associated with the
issuance of such opinion or the removal of such legend shall be borne by the
Company.  Following the Effective Date,
or at such time as a legend is no longer required for certain Shares, the
Company will no later than three (3) Trading Days following the delivery by a
Purchaser to the Company or the Transfer Agent (with notice to the Company) of
a legended certificate representing such Shares (endorsed or with stock powers
attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer) and an opinion of counsel to the extent required by
Section 4.1(a), deliver or cause to be delivered to such Purchaser a
certificate representing such Shares that is free from all restrictive and
other legends. The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer
set forth in this Section.

(d)           Acknowledgement.  Each Purchaser hereby covenants with
the Company not to make any sale of the Shares under the Registration Statement
without complying with the provisions of this Agreement and without effectively
causing the prospectus delivery requirement under the Securities Act to be
satisfied, and such Purchaser acknowledges and agrees that the Shares are not
transferable on the books of the Company in connection with any sale under the
Registration Statement unless the certificate submitted to the transfer agent
evidencing the Shares is accompanied by a separate Purchaser’s Certificate of
Subsequent Sale delivered by the Purchaser: 
(i) in the form of Exhibit E hereto, (ii) executed by an officer
of, or other authorized person designated by, the Purchaser, and (iii) to the
effect that (A) the Shares have been sold in accordance with the Registration
Statement, the Securities Act and any applicable state securities or blue sky
laws and (B) the requirement of delivering a current prospectus has been
satisfied.  The Purchaser will notify the
Company promptly after each sale of Shares. 
The Purchaser acknowledges that there may occasionally be times when the
Company must suspend the use of the Prospectus forming a part of the
Registration Statement (a “Suspension”)
until such time as an amendment to the Registration Statement has been filed by
the Company and declared effective by the Commission, or until such time as the
Company has filed an appropriate report with the Commission pursuant to the
Exchange Act.  The Purchaser hereby
covenants that it will not sell any of the Shares pursuant to said Prospectus
during the period commencing at the time at which the Company gives the
Purchaser written notice of the Suspension of the use of said Prospectus and
ending at the time the Company gives the Purchaser written notice that the
Purchaser may thereafter effect sales pursuant to said Prospectus.

(e)           Irrevocable Transfer Agent Instructions.  The Company shall issue irrevocable
instructions to the Transfer Agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at The
Depository Trust Company (“DTC”),
registered in the name of each Purchaser or its respective nominee(s), for the
Shares in such amounts as specified from time to time by each Purchaser to the
Company in the form of Exhibit D attached hereto (the “Irrevocable Transfer Agent Instructions”).
The Company warrants that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section 4(e) will be given by the
Company to its transfer agent in connection with this Agreement, and that the
Shares shall otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement and the other
Transaction Documents. The Company acknowledges that a breach by it of
its obligations under this Section 4(e)
will cause irreparable harm to a Purchaser. Accordingly, the Company
acknowledges that the remedy at law for a breach of its 

 17
 

 

obligations under this Section 4(e) will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Section 4(e),
that a Purchaser shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss
and without any bond or other security being required.

4.2           Reservation
of Common Stock.  The Company shall
maintain a reserve from its duly authorized shares of Common Stock for issuance
pursuant to the Transaction Documents in such amount as may be required to
fulfill its obligations in full under the Transaction Documents.  In the event that at any time the then
authorized shares of Common Stock are insufficient for the Company to satisfy
its obligations in full under the Transaction Documents, the Company shall
promptly take such actions as may be required to increase the number of
authorized shares.

4.3           Securities Laws Disclosure; Publicity.    Promptly after the execution of this
Agreement, the Company shall issue a press release (the “Press Release”) disclosing the material terms of the
transactions contemplated hereby.  After
the Closing Date, the Company will file a Current Report on Form 8-K with the
Commission describing the terms of the Transaction Documents (and including as
exhibits to such Current Report on Form 8-K the material Transaction Documents
(including, without limitation, this Agreement and the Registration Rights
Agreement)).  Without any such Purchaser
prior consent, the Company agrees not to disclose in the Press Release
the names, addresses or any other information about a Purchaser, except as
required by law and to satisfy its obligations under the Registration Rights
Agreement.

4.4           Indemnification.  In addition to the indemnity provided in the
Registration Rights Agreement, the Company will indemnify and hold the
Purchasers and their directors, officers, shareholders, partners, members,
managers, employees and agents (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and
reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any such Purchaser 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 Purchaser 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. If and to the extent that
such indemnification is unenforceable for any reason, the Company shall make
the maximum contribution to the payment and satisfaction of such losses
permissible under applicable law.

(a)   Conduct
of Indemnification Proceedings.

(i)            If
any Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an “Indemnified Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying Party”)
in writing, and the Indemnifying Party shall have the right to assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all reasonable fees and expenses
incurred in connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have proximately and
materially adversely prejudiced the Indemnifying Party.

(ii)           An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate (but not control) in the defense thereof, but the
fees and expenses of such 

 18
 

 

counsel shall be at the expense of such Indemnified
Party or Parties unless:  (1) the
Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the
Indemnifying Party shall have failed promptly to assume the defense of such
Proceeding and to employ counsel reasonably satisfactory to such Indemnified
Party in any such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall have been advised by
counsel that a conflict of interest is likely to exist if the same counsel were
to represent such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party), provided, that
the Indemnifying Party shall not be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all Indemnified Parties.  The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld, delayed or conditioned.  No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party
from all liability on claims that are the subject matter of such Proceeding.

(iii)          All
fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing
to defend such Proceeding in a manner not inconsistent with this Section) shall
be paid to the Indemnified Party, as incurred, within twenty Trading Days of
written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided,
that the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder).

(b)   Contribution.

(i)            If
a claim for indemnification under Section 4.4 is unavailable to an Indemnified
Party (by reason of public policy or otherwise), then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission.  The
amount paid or payable by a party as a result of any Losses shall be deemed to
include, subject to the limitations set forth in Section 4.4(c), any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.

(ii)           The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4(b) were determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this
Section 4.4(d), no Holder shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the net proceeds actually received
by such Holder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of 

 19
 

 

any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.  No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

(iii)          The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties and  are not in diminution or
limitation of the indemnification provisions under the Purchase Agreement.

4.5           Listing
of Shares.  Promptly following the
date hereof, the Company shall take all necessary action to cause the Shares to
be listed upon the Principal Trading Market, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing.  Further, if the Company applies
to have its Common Stock or other securities listed on any other Trading Market
it shall include in such application the Shares and will take such other action
as is necessary to cause the Shares to be listed on such other Trading Market
as promptly as practicable.

4.6           Use of Proceeds.  The Company intends to use the net proceeds
from the sale of the Shares hereunder for expanding league events and television
production, working capital needs, repayment of outstanding indebtedness and
general corporate purposes..

4.7           Transactions and
Confidentiality After The Date Hereof. 
Each Purchaser shall not, and shall cause its Trading Affiliates not to,
engage, directly or indirectly, in any transactions in the securities of the
Company (including, without limitation, any Short Sales) involving the Company’s
securities during the period from the date hereof until such time as (i) after
the transactions contemplated by this Agreement are first publicly announced as
described in Section 4.3 or (ii) this Agreement is terminated in full pursuant
to Section 6.16.  Notwithstanding the
foregoing, in the case of a Purchaser or Trading Affiliate that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s or Trading Affiliate’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Purchaser’s or Trading
Affiliate’s assets, the representation set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Shares covered by this Agreement.  Each Purchaser understands and acknowledges,
severally and not jointly with any other Purchaser, that the Commission
currently takes the position that covering a short position established prior
to effectiveness of a resale registration statement with shares included in
such registration statement would be a violation of Section 5 of the Securities
Act, as set forth in Item 65, Section 5 under Section A, of the Manual of
Publicly Available Telephone Interpretations, dated July 1997, compiled by the
Office of Chief Counsel, Division of Corporation Finance.  Each Purchaser, severally and not jointly
with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company as
described in Section 4.6, such Purchaser will maintain the confidentiality of
all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

4.8           Furnishing of
Information.  As long as any
Purchaser owns the Shares, 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
Purchaser owns Shares, if the Company is not required to file reports pursuant
to such laws, it will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) such information as is required for
the Purchasers to sell the Shares under Rule 144. The Company further covenants
that it will take such further action as any holder of Shares, may reasonably
request, all to the extent required from time to time to enable such Person to
sell the Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144.

 20

 

4.9           Strategic Investors.  Notwithstanding anything in this Agreement or
in any Transaction Document to the contrary, nothing in this Agreement or in
any Transaction Document shall prohibit or restrict the Company’s ability to,
and the Company shall have the right to, offer, sell or otherwise issue, any of
its securities to one or more Strategic Investors; provided, however,
if, prior to the Filing Date, the Company proposes to sell its securities to
one or more Strategic Investors for gross cash proceeds in excess of
$20,000,000, then, prior to consummating such sale, the Company shall have
received the written consent from the Purchasers who, on the Closing Date,
acquired 66.6% or more of the number of Shares sold pursuant to this Agreement;
provided, further, however, each Purchaser hereby agrees
to keep the receipt and substance of any such notice confidential, until such
time as the subject transaction has been publicly disclosed by the Company or
such Purchaser has received further written notice from the Company that such
transaction has been terminated.

ARTICLE
V.

CONDITIONS PRECEDENT TO CLOSING

5.1           Conditions Precedent to the Obligations of the
Purchasers to Purchase Shares.  The
obligation of each Purchaser to acquire Shares at the Closing is subject to the
fulfillment, to such Purchaser’s satisfaction, on or prior to the Closing Date,
of each of the following conditions, any of which may be waived by such
Purchaser (as to itself only):

(a)           Representations
and Warranties.  The representations
and warranties of the Company contained herein shall be true and correct in all
material respects (except to the extent that any such representation or
warranty is already qualified by materiality, in which case it shall be true
and correct in all respects) as of the date when made and as of the Closing
Date, 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)           Consents.  The Company shall have obtained in a timely
fashion any and all consents, permits, approvals, registrations and waivers
necessary or appropriate for consummation of the purchase and sale of the
Shares, all of which shall be and remain so long as necessary in full force and
effect;

(e)           Adverse
Changes.  Since the date of execution
of this Agreement, no event or series of events shall have occurred that
reasonably could have or result in a Material Adverse Effect;

(f)            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 (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;

(g)           Company
Deliverables.  The Company shall have
delivered the Company Deliverables in 
accordance with Section 2.2(a);

 21
 

 

 

(h)           Compliance
Certificate.  The Company shall have
delivered to each Purchaser a certificate, dated as of the Closing Date and
signed by its Chief Executive Officer or its Chief Financial Officer, dated as
of the Closing Date, certifying to the fulfillment of the conditions specified
in Sections 5.1(a), (b), (c), (d) and (f); and

(i)            Termination.  This Agreement shall not have been terminated
as to such Purchaser in accordance with Section 6.16 herein.

5.2           Conditions
Precedent to the Obligations of the Company to Sell Shares.  The Company’s obligation to sell and issue
the Shares at the Closing is subject to the fulfillment to the satisfaction of
the Company on or prior to the Closing Date of the following conditions, any of
which may be waived by the Company:

(a)           Representations
and Warranties.  The representations
and warranties made by the Purchasers in Section 3.2 hereof 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.  The Purchasers 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 the Purchasers 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)           Purchasers
Deliverables.  Each Purchaser shall
have delivered its Purchaser Deliverables in accordance with Section 2.2(b);
and

(e)           Termination.  This Agreement shall not have been terminated
as to such Purchaser in accordance with Section 6.16 herein.

ARTICLE
VI.

MISCELLANEOUS

6.1           Fees
and Expenses.  The Company and the
Purchasers shall each pay the fees and expenses of their respective advisers,
counsel, accountants and other experts, if any and all other expenses incurred
by such party in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement. 
The Company shall pay all Transfer Agent fees, stamp taxes and other
taxes and duties levied in connection with the sale and issuance of the Shares
to the Purchasers. Each party acknowledges that Lowenstein Sandler PC has rendered
legal advice to the Company, and not to such party in connection with the
transactions contemplated hereby, and that such party has relied for such
matters on the advice of its own respective counsel. The Company further agrees
to pay such fees and expenses as required by it under the Engagement Agreement
with the Placement Agent, including without limitation, the reasonable fees and
expenses of the Placement Agent’s counsel.

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.  At 

 22
 

 

or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the
other such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.

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 5:00
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 5:00 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 with next day delivery
specified, 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:

  	
   

  	
   

  	
  International Fight League, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  424 West 33rd Street, Suite 650

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  New York, New York 10001

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone No.: (212) 356-4000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile No.: (212) 564-6546

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: Jonathan Rosan, Esq., General Counsel

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
   

  	
   

  	
  Lowenstein Sandler PC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  1251 Avenue of the Americas

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  New York, New York 10020

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone No.: (212) 262-6700

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile No.: (973) 597.2507

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: Steven E. Siesser, Esq.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If to a Purchaser:

  	
   

  	
   

  	
  To the address set forth under such Purchaser’s name
  on the signature page 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, in the case of an amendment prior to Closing, by the
Company and each of the Purchasers or, in the case of an amendment after
Closing, by the Company and the Purchasers then holding a majority of the
Shares, and in the case of a waiver at any time, by the party against whom
enforcement of such waiver is sought.  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.

6.5           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.

 23
 

 

 

6.6           Successors
and Assigns.  The provisions of this
Agreement shall inure to the benefit of and be binding upon the parties and
their successors and permitted assigns. 
This Agreement, or any rights or obligations hereunder, may not be
assigned by the Company without the prior written consent of the
Purchasers.  Any Purchaser may assign its
rights hereunder in whole or in part to any Person to whom such Purchaser
assigns or transfers any Shares in compliance with this agreement and
applicable law, provided such transferee shall have agreed in writing to be
bound, with respect to the transferred Shares, by the terms and conditions of
this Agreement that apply to the “Purchasers”.

6.7             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) each Purchaser Party is an intended third party beneficiary
of Section 4.4, and (ii) Placement Agent is an intended third party beneficiary
of Article III hereof, and each Purchaser Party or the Placement Agent, as the
case may be, may enforce the provisions of such Sections directly against the
parties with obligations thereunder.

6.8           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 agrees that all
Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective Affiliates, employees or
agents) shall be commenced exclusively in the New York Courts.  Each party hereto hereby irrevocably submits
to the exclusive 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
attorney’s fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Proceeding.

6.9           Survival.  Subject to applicable statute of limitations, the representations,
warranties, agreements and covenants contained herein shall survive the Closing
Date and the delivery of the Shares.

6.10         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 transmission,
or by e-mail delivery of a “.pdf” format data file, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.

6.11         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 

 24
 

 

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.

6.12         Replacement
of Shares.  If any certificate or
instrument evidencing any Shares 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 the
execution by the holder thereof of a customary lost certificate affidavit of
that fact and an agreement to indemnify and hold harmless the Company for any
losses in connection therewith.  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 Shares.  If a replacement
certificate or instrument evidencing any Shares 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.

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

6.14         Adjustments
in Share Numbers and Prices. In the event of any stock split, subdivision,
dividend or distribution payable in shares of Common Stock (or other securities
or rights convertible into, or entitling the holder thereof to receive directly
or indirectly shares of Common Stock), combination or other similar
recapitalization or event occurring after the date hereof, and before the
Closing Date, each reference in any Transaction Document to a number of shares
or a price per share shall be amended to appropriately account for such event.

6.15         Independent
Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any
Transaction Document are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction
Document.  The decision of each Purchaser
to purchase Shares pursuant to the Transaction Documents has been made by such
Purchaser independently of any other Purchaser and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or any Subsidiary which
may have been made or given by any other Purchaser or by any agent or employee
of any other Purchaser, and no Purchaser and any of its agents or employees
shall have any liability to any other Purchaser (or any other Person) relating
to or arising from any such information, materials, statement or opinions.  Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser acknowledges that no other
Purchaser has acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Shares or
enforcing its rights under the Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction 

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Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose.  The Company acknowledges that
each of the Purchasers has been provided with the same Transaction Documents
for the purpose of closing a transaction with multiple Purchasers and not
because it was required or requested to do so by any Purchaser. The Company’s
obligations to each Purchaser under this Agreement are identical to its
obligations to each other Purchaser other than such differences resulting
solely from the number of Shares purchased by such Purchaser, but regardless of
whether such obligations are memorialized herein or in another agreement
between the Company and a Purchaser.

6.16         Termination.
This Agreement may be terminated and the sale and purchase of the Shares
abandoned at any time prior to the Closing by either the Company or any
Purchaser (with respect to itself only) upon written notice to the other, if
the Closing has not been consummated on or prior to 5:00 p.m. (New York City
time) on the Outside Date; provided, however,
that the right to terminate this Agreement under this Section 6.16 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.  Nothing in
this Section 6.16 shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement or the
other Transaction Documents or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement
or the other Transaction Documents.  In
the event of a termination pursuant to this Section, the Company shall promptly
notify all non-terminating Purchasers. 
Upon a termination in accordance with this Section, the Company and the
terminating Purchaser(s) shall not have any further obligation or liability
(including arising from such termination) to the other and no Purchaser will
have any liability to any other Purchaser under the Transaction Documents as a
result therefrom.

 

 

[Signatures on next page]

 

 26

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.

	
  

  	
  INTERNATIONAL FIGHT LEAGUE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gareb Shamus

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  

 

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGES FOR PURCHASERS FOLLOW]

 

 

	
  

  	
   

  	
  NAME OF PURCHASER: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Purchase Price Per Share: $

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate Purchase Price (Subscription Amount): $

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number of Shares to be acquired: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax ID No.: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone No.:

  	
   

  
	
   

  	
   

  	
  Facsimile No.:

  	
   

  
	
   

  	
   

  	
  Attention: 

  	
   

  
	
  Delivery Instructions:

  	
   

  	
   

  
	
  (if different than above)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  c/o 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Street:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  City/State/Zip: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attention: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.: 

  	
   

  	
   

  	
   

  
							

 

 2Exhibit
10.65

LECG CORPORATION – 2003 STOCK OPTION PLAN

RESTRICTED
STOCK PURCHASE AGREEMENT

This Restricted Stock Purchase Agreement (the “Agreement”) is made as of January 1,
2007 (the “Effective Date”), by and between LECG Corporation, a Delaware corporation (the “Company”), and John C. Burke, an
employee of the Company (the “Purchaser”).  This Agreement is made pursuant to the
Company’s 2003 Stock Option Plan (the “Plan”), the
terms and conditions of which are incorporated herein by this reference.  Subject to Section 15(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and the terms
and conditions of this Agreement, the terms and conditions of the Plan will
prevail.  To the extent any capitalized
term used in this Agreement is not defined, it will have the meaning ascribed
to it in the Plan.

1.                                       Purchase
and Sale of Common Shares.

(a)                                  Purchase
and Sale of Common Shares.  As of the
Effective Date, the Company hereby sells to Purchaser, and Purchaser hereby
purchases from the Company, Five Thousand (5,000) shares (each, a “Share” and collectively, the “Shares”) of
the Company’s Common Stock at a purchase price of $0.01 per Share, for a total
purchase price of Fifty Dollars ($50.00) (the “Purchase
Price”).  All the Shares will
be subject to this Agreement and the restrictions contained herein.

(b)                                 Payment.  No later than ten (10) business days from the
Effective Date, Purchaser will deliver to the Company the Purchase Price for
the Shares in cash or by bank check.

2.                                       Repurchase
Option.

(a)                                  Definitions.  For purposes of this Agreement:

(i)                                     “Release Date” means the earlier of
(x) the effective date of the Purchaser’s voluntary retirement after the date
of the Purchaser’s 70th birthday, and (y) the third anniversary of the Effective
Date; and

(ii)                                  “Forfeiture Event” means any one of
the following events:

(A)                              Other
than Purchaser’s voluntary retirement after the date of the Purchaser’s 70th
birthday, the termination of Purchaser’s employment with the Company for any
reason, or no reason, with or without cause, including involuntary termination,
death or Disability; or

(B)                                Any
event that causes the involuntary transfer to creditors or to any other person
or entity of all or any part of the Shares.

(b)                                 Shares
Subject to Repurchase.  Purchaser
hereby grants to the Company the option (the “Repurchase
Option”) to repurchase all of the Shares at the Purchase Price
upon

 1
 

 

the occurrence of any
Forfeiture Event that occurs before the Release Date.  The Shares will vest and will no longer be
subject to the Repurchase Option as of the Release Date.

3.                                       Repurchase
Procedure.

(a)                                  Upon
the occurrence of a Forfeiture Event before the Release Date, the Company may
exercise the Repurchase Option by delivering to Purchaser (or his permitted
transferee or legal representative, as the case may be) within ninety (90) days
after the date of the Forfeiture Event (the “Repurchase
Period”) (i) written notice of the Company’s election to
exercise the Repurchase Option; and (ii) payment of the Purchase Price in cash
or by check.  Promptly thereafter, the
Company and the Purchaser will take all steps necessary to accomplish the
transfer of the repurchased Shares to the Company.  The Purchaser hereby appoints the Company
with full power of substitution, as the Purchaser’s true and lawful attorney-in-fact
with irrevocable power and authority in the name and on behalf of the Purchaser
to take any action and execute all documents and instruments, including,
without limitation, stock powers which may be necessary to transfer the
certificate or certificates evidencing such repurchased Shares to the Company.

(b)                                 If
the Company does not exercise the Repurchase Option within the Repurchase
Period with respect to any Forfeiture Event, the Shares will be released from
the Repurchase Option with respect to that Forfeiture Event upon the expiration
of the Repurchase Period.

4.                                       Treatment
of Shares.  Subject to the terms and
conditions of the Plan and this Agreement, the Purchaser will become owner of
the Shares on the date hereof.  The
Company will retain physical possession of the Shares, but except as otherwise
provided in the Plan or in this Agreement or unless the Company executes the
Repurchase Option, the Purchaser will have the same rights, preferences, and
privileges as the holders of the Company’s outstanding Common Stock, including,
but not limited to, the right to vote and the right to receive distributions,
with respect to the Shares.  Participant
agrees to sign the Assignment Separate From Certificate attached hereto as Exhibit
A as a condition to receiving the Shares.

5.                                       Adjustments.  If any change is made to the Shares before
the Release Date by reason of any change affecting the Company’s outstanding
Common Stock as a class effected without the Company’s receipt of consideration,
including, but not limited to, the merger of the Company into another
corporation, then in such event, any and all new, substituted or additional
securities, cash, or other property to which the Purchaser is entitled by
reason of his ownership of the Shares will be immediately subject to the
Repurchase Option under Section 3 above, and will be deemed to be included in
the Shares for all purposes with the same force and effect as the Shares.

6.                                       Restrictions
on Transfer.

(a)                                  No
Transfer of Shares Prior to Release Date. 
The Purchaser may not sell, encumber, transfer, pledge, assign or
otherwise dispose of any of the Shares before the Release Date.

 2
 

 

(b)                                 Restrictions
on Transfer of Shares.  After the
Release Date, the Purchaser may not sell, encumber, transfer, or dispose of the
Shares in any way, whether voluntarily, involuntarily, or by operation of law,
except in compliance with applicable securities law.

7.                                       Investment
Representations.  In connection with
the purchase of the Shares, the Purchaser represents to the Company the
following:

(a)                                  Investment
Intent; Capacity to Protect Interests. 
The Purchaser is purchasing the Shares solely for his own account for
investment and not with a view to or for sale in connection with any
distribution of the Shares or any portion thereof and not with any present
intention of selling, offering to sell or otherwise disposing of or
distributing the Shares or any portion thereof in any transaction other than a
transaction exempt from registration under the Securities Act of 1993, as
amended.  The Purchaser also represents
that the entire legal and beneficial interest of the Shares is being purchased,
and will be held, for the Purchaser’s account only, and neither in whole or in
part for any other person.  The Purchaser
represents that by reason of his pre-existing business relationship with the
Company and his business or financial experience, the Purchaser is capable of
evaluating the merits and risks of an investment in the Company and of
protecting his own interests in connection with this transaction.

(b)                                 Residence.  The Purchaser’s principal residence is
located at the address indicated beneath the Purchaser’s signature below.

(c)                                  Information
Concerning Company.  The Purchaser
has heretofore discussed the Company and its plans, operations and financial
condition with the Company’s officers and has heretofore received all such
information as the Purchaser has deemed necessary and appropriate to enable the
Purchaser to evaluate the financial risk inherent in making an investment in
the Shares.  The Purchaser has received
satisfactory and complete information concerning the business and financial
condition of the Company in response to all inquiries in respect thereof.

(d)                                 Economic
Risk.  The Purchaser realizes that the
purchase of the Shares will be a highly speculative investment and involves a
high degree of risk, and the Purchaser is able, without impairing his financial
condition, to hold the Shares for an indefinite period of time and to suffer a
complete loss of the Purchaser’s investment.

8.                                       Restrictive
Legends.

(a)                                Legends.  The Purchaser understands that the
certificate evidencing the Shares will bear the following legend (as well as
any legends required by applicable state and federal corporate and securities
laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF THE COMPANY’S 2003 STOCK
OPTION PLAN AND A RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND
THE REGISTERED HOLDER OR HIS PREDECESSOR IN INTEREST, A COPY OF EACH OF WHICH
IS ON FILE WITH THE SECRETARYOF THE COMPANY. 
THE

 3
 

 

AGREEMENTS MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF
THE COMPANY DURING NORMAL BUSINESS HOURS.

(b)                               Refusal
to Transfer.  The Company is not
required (i) to transfer on its books any Shares that have been sold or
otherwise transferred in violation of any of the provisions of this Agreement
or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares have been so
transferred.

9.                                       No
Effect on Terms of Employment Relationship. 
This Agreement does not alter, amend or expand upon any
rights that the Purchaser may have to continue in the employ of the
Company.  Receipt of the Shares does not confer
upon the Purchaser any right with respect to the Purchaser’s employment status,
nor does it interfere in any way with the Purchaser’s right or the Company’s
right to terminate the Purchaser’s employment at any time, with or without
cause.

10.                                 Compliance
With Income Tax Laws.  The Purchaser
acknowledges that the Company has made no warranties or representations to the
Purchaser with respect to the income tax consequences of Purchaser’s receipt of
the Shares, and the Purchaser is in no manner relying on the Company or its
representatives for an assessment of such tax consequences.  The Purchaser further acknowledges that the
Company has advised the Purchaser that the Purchaser should consult his own tax
advisor regarding such tax treatment. 
Notwithstanding the foregoing, the Purchaser authorizes the Company to
withhold in accordance with applicable law from any compensation payable to him
any taxes required to be withheld by Federal, state or local laws as a result
of the Purchaser’s receipt of the Shares. 
Furthermore, in the event of any determination that the Company has
failed to withhold a sum sufficient to pay all withholding taxes due in
connection with the Shares, the Purchaser agrees to pay the Company the amount
of such deficiency in cash within five (5) days after receiving a written
demand from the Company to do so, regardless of whether the Purchaser is an
Purchaser of the Company at that time.

11.                                 Election
Pursuant to Section 83(b) of Internal Revenue Code of 1986, as Amended.  The Purchaser understands that Section 83 of
the Internal Revenue Code of 1986, as amended (the “Code”),
taxes as ordinary income the difference between the amount paid for the Shares
and the fair market value of the Shares as of the date any restrictions on the
Shares lapse.  In this context, “restriction”
includes the potential forfeiture of the Shares upon the occurrence of a
Forfeiture Event, and “restriction” with respect to officers, directors and ten
percent (10%) shareholders of the Company also means the six-month period after
the Release Date during which such officers, directors and ten percent (10%)
shareholders are subject to suit under Section 16(b) of the Exchange Act.  The Purchaser understands that the Purchaser
may elect to be taxed, for United States income tax purposes, at the time the
Shares are received, rather than on the Release Date or when the six-month
Section 16(b) period expires, by filing an election under Section 83(b) of the
Code with the Internal Revenue Service within thirty (30) days from the date of
issuance of the Shares.  State tax law in
the state of the Purchaser’s residence may also require filing of a similar
election.  A draft form for making this
election is attached as Exhibit B hereto.  However, it will be the responsibility of the
Purchaser and his own advisors to determine the contents of the election and
the form and manner in which it is filed. 
The Purchaser understands that failure to make a timely and proper
filing may result in the recognition of ordinary income by the Purchaser, on
the Release Date, or after the lapse of the

 4
 

 

six-month Section 16(b)
period, on the fair market value of the Shares at the time such restrictions
lapse.  The Purchaser further understands
that under certain circumstances, a Section 83(b) election, even if timely and
properly filed, may later be determined to be ineffective.

12.                                 THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER’S SOLE
RESPONSIBILITY AND NOT THE COMPANY’S TO TIMELY FILE THE ELECTION UNDER SECTION
83(b) AND/OR ANY APPLICABLE STATE LAWS, EVEN IF THE PURCHASER REQUESTS THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER’S
BEHALF.  FURTHER, THE PURCHASER WILL
DETERMINE THE MANNER IN WHICH THE ELECTION IS MADE, AND UNDER NO CIRCUMSTANCES
WILL THE COMPANY, OR ITS REPRESENTATIVES, BE LIABLE IF SUCH ELECTION IS
DETERMINED TO BE INEFFECTIVE.

13.                                 Miscellaneous.

(a)                                  Governing
Law.  This Agreement will be governed
by the laws of the State of California (without giving effect to the choice of
law provisions of that jurisdiction).

(b)                                 Interpretation
of this Agreement.  The Company and
the Purchaser agree that the purchase and sale of the Shares is governed by the
terms of the Plan and this Agreement. 
The Purchaser has reviewed the Plan and this Agreement in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of the Plan and
this Agreement.  The Purchaser hereby
agrees to accept as binding, conclusive and final all decisions or interpretations
of the Administrator upon any questions relating to the Plan and this
Agreement.  The Purchaser further agrees
to notify the Company upon any change in the residence address indicated below.

(c)                                  Entire
Agreement; Enforcement of Rights. 
This Agreement and the Plan constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Purchaser
with respect to the subject matter hereof, and may not be modified adversely to
the Purchaser’s interest except by means of a writing signed by the Company and
the Purchaser.

[Signature Page Follows]

 5
 

 

IN WITNESS
WHEREOF, the parties have executed this Restricted Stock Purchase Agreement
effective as of the Effective Date.

	
  

  	
  COMPANY:

  LECG CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary Yellin

  	
   

  
	
   

  	
  Name: Gary Yellin

  
	
   

  	
  Title: Chief Accounting Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John C. Burke

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
  Name:John C. Burke

  
	
   

  	
  Address:

  
	
   

  	
   

  

 6
 

 

EXHIBIT A

ASSIGNMENT
SEPARATE FROM certificate

FOR VALUE RECEIVED and pursuant to the Restricted
Stock Purchase Agreement (the “Agreement”)
dated as of January 1, 2007 by and between the undersigned (“Shareholder”) and LECG Corporation
(the “Company”), Shareholder hereby
assigns and transfers unto the Company                               
shares of the common stock of the Company, standing in Shareholder’s name on
the books of the Company and represented by Certificates No.                                           .   Shareholder hereby irrevocably appoints                                          
as attorney in fact to transfer said stock with full power of substitution in
the premises.  THIS ASSIGNMENT MAY ONLY
BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY AMENDMENTS THERETO.

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
  Name of
  Shareholder:

  	
   

  	
   

  

 

Shareholder: Please do not fill in any blanks other
than the signature line for yourself. 
The Secretary of the Company, or the Secretary’s designee, will complete
the rest of this form when the share certificate is prepared.

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ELECTION
TO INCLUDE VALUE OF RESTRICTED PROPERTY IN GROSS INCOME IN YEAR OF TRANSFER
UNDER CODE §83(b)

The undersigned taxpayer hereby elects, pursuant to
§83(b) of the Internal Revenue Code, to include in taxpayer’s gross income for
the current taxable year, the amount of any compensation taxable to taxpayer in
connection with his receipt of the property described below, and supplies the
following information in accordance with the regulations promulgated
thereunder:

1.                                       The name, address and
taxpayer identification number of the undersigned are:

	
  Name:

  	
   

  	
   

  
	
  Address: 

  	
   

  	
   

  
	
  Address: 

  	
   

  	
   

  
	
  SSN:

  	
   

  	
   

  

 

2.                                      Description
of the property with respect to which the election is being made:

               
shares (“Shares”) of common stock of LECG Corporation, a Delaware corporation (“Company”).

3.                                      The
date on which the property was transferred is                      ,
20          .

The taxable year to which this election relates is
calendar year 20
            .

4.                                      The nature of the restriction(s)
to which the property is subject is:

The Shares are subject to a vesting period pursuant to
a Restricted Stock Purchase Agreement. 
The Shares may be forfeited during this vesting period due to
termination of employment for any reason, including without limitation death or
disability, or involuntary transfer of the Shares to creditors.

5.                                      Fair market value:

The fair market value at the time of transfer
(determined without regard to any restrictions other than restrictions which by
their terms will never lapse) of the Shares is            
dollars per share, for a total market value of $                    .

6.                                      Amount paid for the property:

The amount paid by the taxpayer for the Shares is
Fifty Dollars ($50.00).

7.                                      Furnishing statement to employer:

A copy of this election has been furnished to the
Company.

Dated:                 ,
2007

	
  

  	
   

  	
   

  
	
   

  	
  [Name]

  

 

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INSTRUCTIONS
FOR COMPLETING THE SECTION 83(B) ELECTION

THE
SECTION 83(b) ELECTION MUST BE FILED NO LATER THAN THIRTY (30) DAYS AFTER THE
DATE ON WHICH THE SHARES ARE ISSUED TO YOU. 
ASSUMING A JANUARY 1, 2007 ISSUANCE, THE ELECTION WILL BE DUE NO LATER
THAN JANUARY 31, 2007 (“DUE DATE”).

Execute four copies of the Election.

a.                                       Retain
one executed copy for your files.

b.                                      Deliver
one executed copy to Mary Murphy at the following address by the Due Date:

LECG,
LLC

2000
Powell Street, Suite 600

Emeryville,
CA 94608

Attention:  Mary Murphy, Stock Administrator

c.                                       No
later than the Due Date, mail one executed copy to the Internal Revenue Service
location where your federal income tax returns are filed.

d.                                      No
later than the Due Date, mail one executed copy to the California Franchise Tax
Board location where your California tax returns are filed.  If your state tax return is not filed in
California, provide the location where your state tax returns are filed.  Inform Mary Murphy if you expect to file
income tax returns in multiple states.

To insure that you have
adequate proof of timely filing, all copies should be mailed to the tax
authorities by certified mail, return receipt requested, with the certified
mail receipt hand-canceled at the Post Office and retained as evidence of
timely mailing.

2.                                       Submit a copy of the election with both
your 2007 federal and state tax returns.

 9

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