Document:

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                                                                     EXHIBIT 4.1

                                   HIFN, INC.

                          SECURITIES PURCHASE AGREEMENT

         This Securities Purchase Agreement (this "AGREEMENT") is made and
entered into as of February 6, 2004, by and among Hifn, Inc., a Delaware
corporation (the "COMPANY"), and each of the purchasers listed on Exhibit A
attached hereto (collectively, the "PURCHASERS" and individually, a
"PURCHASER").

                                    RECITALS

         WHEREAS, the Company desires to issue and sell to the Purchasers, and
the Purchasers desire to purchase from the Company, up to 2,200,000 shares of
common stock, par value $0.001 per share, of the Company (the "COMMON STOCK"),
on the terms and conditions set forth in this Agreement; and

         WHEREAS, the Company and each Purchaser are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by the provisions of Regulation D ("REGULATION D"), as promulgated by
the United States Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "SECURITIES ACT").

         NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1.       AGREEMENT TO PURCHASE AND SELL STOCK.

                  (a)      Authorization. The Company's Board of Directors has
authorized the issuance and sale, pursuant to the terms and conditions of this
Agreement, of up to 2,200,000 shares of Common Stock (the "PURCHASED SHARES").

                  (b)      Agreement to Purchase and Sell Securities. Subject to
the terms and conditions of this Agreement, each Purchaser severally agrees to
purchase, and the Company agrees to sell and issue to each Purchaser, at the
Closing (as defined below), that number of shares of Common Stock set forth
opposite such Purchaser's name on Exhibit A attached hereto. The purchase price
of each share of Common Stock (the "PER SHARE PRICE") shall be $15.00.

                  (c)      Use of Proceeds. The Company intends to apply the net
proceeds from the sale of the Purchased Shares for working capital and general
corporate purposes, as well as for strategic purposes in connection with
selected acquisitions that may be considered in the future to expand its product
and service offerings.

                  (d)      Obligations Several Not Joint. The obligations of
each Purchaser under this Agreement 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 this
Agreement. Nothing contained herein, and no action taken by any

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Purchaser pursuant hereto, 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
this Agreement. Each Purchaser shall be entitled to independently protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.

         2.       CLOSING. The purchase and sale of the Purchased Shares shall
take place at the offices of Wilson Sonsini Goodrich & Rosati, PC, at 10 a.m.
pacific time, on February 6, 2004, or at such other time and place as the
Company and Purchasers representing a majority of the Purchased Shares to be
purchased, mutually agree upon (which time and place are referred to in this
Agreement as the "CLOSING"). At the Closing, the Company shall, against delivery
of payment for the Purchased Shares by wire transfer of immediately available
funds in accordance with the Company's instructions, authorize its transfer
agent to issue to each Purchaser one or more stock certificates (the
"CERTIFICATES") registered in the name of each Purchaser (or in such nominee
name(s) as designated by such Purchaser in a Stock Certificate Questionnaire
(substantially in the form attached hereto as Appendix I), representing the
number of Purchased Shares set forth opposite the appropriate Purchaser's name
on Exhibit A hereto, and bearing the legend set forth in Section 4(j) herein.
Closing documents may be delivered by facsimile with original signature pages
sent by overnight courier. The date of the Closing is referred to herein as the
CLOSING DATE.

         3.       REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE
COMPANY. The Company hereby represents and warrants to each Purchaser that the
statements in this Section 3 are true and correct, except as set forth in the
SEC Documents (as defined below):

                  (a)      Organization Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all corporate power and
authority required to: (i) carry on its business as presently conducted; and
(ii) enter into this Agreement and the other agreements, instruments and
documents contemplated hereby, and to consummate the transactions contemplated
hereby and thereby. The Company is qualified to do business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
Material Adverse Effect. As used in this Agreement, "MATERIAL ADVERSE EFFECT"
means a material adverse effect on, or a material adverse change in, or a group
of such effects on or changes in, the business, operations, financial condition,
results of operations, assets or liabilities of the Company and its
subsidiaries, taken as a whole.

                  (b)      Capitalization. The capitalization of the Company,
without listing the Purchased Shares to be purchased pursuant to this Agreement,
is as follows:

                           (i)      The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock and 10,000,000 shares of
preferred stock, $0.001 par value per share (the "PREFERRED STOCK").

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                           (ii)     As of January 26, 2004, the issued and
outstanding capital stock of the Company consisted of 11,440,905 shares of
Common Stock. The shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable
and have not been issued in violation of or are not otherwise subject to any
preemptive or other similar rights.

                           (iii)    As of January 26, 2004, there were no issued
and outstanding shares of Preferred Stock.

                           (iv)     As of January 26, 2004, the Company had (1)
3,828,736 shares of Common Stock reserved for issuance upon exercise of
outstanding options granted under the Company's Amended and Restated 1996 Equity
Incentive Plan (the "OPTION PLAN") and (2) zero shares of Common Stock reserved
for issuance upon exercise of outstanding warrants.

                           (v)      As of January 26, 2004, the Company had
1,740,529 shares of Common Stock available for future grant under the Option
Plan.

                           (vi)     As of January 26, 2004, the Company had zero
shares of Common Stock reserved for future purchase by employees of the Company
under the Company's 1998 Employee Stock Purchase Plan.

         With the exception of the foregoing in this Section 3(b), there are no
outstanding subscriptions, options, warrants, convertible or exchangeable
securities or other rights granted to or by the Company to purchase shares of
Common Stock or other securities of the Company and there are no commitments,
plans or arrangements to issue any shares of Common Stock or any security
convertible into or exchangeable for Common Stock.

                  (c)      Subsidiaries. Except for Hifn Limited and Hifn
Netherlands B.V. (collectively, the "SUBSIDIARIES"), the Company does not have
any subsidiaries, and, except as set forth in the Disclosure Letter attached
hereto as Exhibit B, the Company does not own any capital stock of, assets
comprising the business of, obligations of, or any other interest (including any
equity or partnership interest) in, any person or entity.

                  (d)      Due Authorization. All corporate actions on the part
of the Company necessary for the authorization, execution, delivery of, and the
performance of all obligations of the Company under this Agreement and the
authorization, issuance, reservation for issuance and delivery of all of the
Purchased Shares being sold under this Agreement have been taken, no further
consent or authorization of the Company or the Board of Directors or its
stockholders is required (including with respect to NASD Marketplace Rule
4350(i)(1)(D)), and this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except: (i) as may be limited by (1) applicable bankruptcy,
insolvency, reorganization or others laws of general application relating to or
affecting the enforcement of creditors' rights generally; and (2) the effect of
rules of law governing the availability of equitable remedies; and (ii) as
rights to indemnity or contribution may be limited under federal or state
securities laws or by principles of public policy thereunder.

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                  (e)      Valid Issuance of Purchased Shares.

                           (i)      Purchased Shares. The Purchased Shares will
be, upon payment therefor by the Purchasers in accordance with this Agreement,
duly authorized, validly issued, fully paid and non-assessable, free from all
pledges, liens, and encumbrances with respect to the issuance of such Purchased
Shares and will not be subject to any pre-emptive rights or similar rights.

                           (ii)     Compliance with Securities Laws. Subject to
the accuracy of the Purchasers' representations and warranties in Section 4
hereof, the offer, sale and issuance of the Purchased Shares in conformity with
the terms of this Agreement constitute transactions exempt from the registration
requirements of Section 5 of the Securities Act and from the registration or
qualification requirements of the laws of any applicable state or United States
jurisdiction.

                  (f)      Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, or notice to, any federal, state or local governmental authority or
self regulatory agency on the part of the Company is required in connection with
the issuance of the Purchased Shares to the Purchasers, or the consummation of
the other transactions contemplated by this Agreement, except: (i) such filings
as have been made prior to the date hereof; (ii) the filing of a notification
form with The Nasdaq National Market ("NASDAQ"); and (iii) such additional
post-Closing filings as may be required to comply with applicable state and
federal securities laws and the listing requirements of Nasdaq.

                  (g)      Non-Contravention. The execution, delivery and
performance of this Agreement by the Company, and the consummation by the
Company of the transactions contemplated hereby (including issuance of the
Purchased Shares): do not (i) contravene or conflict with the Certificate of
Incorporation (the "CERTIFICATE OF INCORPORATION") or Bylaws (the "BYLAWS") of
the Company; (ii) constitute a violation of any provision of any federal, state,
local or foreign law, rule, regulation, order or decree applicable to the
Company; or (iii) constitute a default or require any consent under, give rise
to any right of termination, cancellation or acceleration of, or to a loss of
any material benefit to which the Company is entitled under, or result in the
creation or imposition of any lien, claim or encumbrance on any assets of the
Company under, any material contract filed as an exhibit with its most recent
filings made pursuant to the Securities Exchange Act of 1934, as amended, or
that would be required to be filed as an exhibit to an Annual Report on Form
10-K filed with the SEC on the date hereof.

                  (h)      Litigation. There is no action, suit, proceeding,
claim, arbitration or investigation ("ACTION") pending or, to the Company's
knowledge, threatened in writing: (i) against the Company, its activities,
properties or assets, or, to the Company's knowledge, any officer, director or
employee of the Company in connection with such officer's, director's or
employee's relationship with, or actions taken on behalf of, the Company, that
is reasonably likely to have a Material Adverse Effect on the Company, or (ii)
that seeks to prevent, enjoin, alter, challenge or delay the transactions
contemplated by this Agreement (including the issuance of the Purchased Shares).
The Company is not a party to or subject to the provisions of, any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. The Company does not intend to initiate any Action that is
reasonably likely to have a Material Adverse Effect on the Company.

                                       -4-
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                  (i)      Compliance with Law and Charter Documents. The
Company is not in violation or default of any provisions of its Certificate of
Incorporation or Bylaws. The Company has complied and is currently in compliance
with all applicable statutes, laws, rules, regulations and orders of the United
States of America and all states thereof, foreign countries and other
governmental bodies and agencies having jurisdiction over the Company's business
or properties, except for any instance of non-compliance that would not
reasonably be expected to have, a Material Adverse Effect.

                  (j)      Material Non-Public Information. The Company has not
provided to the Purchasers any material non-public information other than
information related to the transactions contemplated by this Agreement, all of
which information related to the transactions contemplated hereby shall, except
to the extent immaterial, be disclosed by the Company pursuant to Section 9(m)
hereof.

                  (k)      SEC Documents.

                           (i)      Reports. The Company has filed in a timely
manner all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and the rules
and regulations promulgated thereunder. The Company has made available to the
Purchasers prior to the date hereof copies of its Annual Report on Form 10-K for
the fiscal year ended September 30, 2003 (the "FORM 10-K"), its Proxy Statement
for its Annual Meeting of Stockholders to be held on February 23, 2004 (the
"PROXY STATEMENT"), and any Current Report on Form 8-K filed with respect to
events occurring since December 31, 2003 ("FORM 8-KS") filed by the Company with
the SEC (the Form 10-K, the Proxy Statement and the Form 8-Ks are collectively
referred to herein as the "SEC DOCUMENTS"). Each of the SEC Documents, as of the
respective dates thereof (or, if amended or superseded by a filing prior to the
Closing Date, then on the date of such filing), did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. Each SEC Document, as it may have been
subsequently amended by filings made by the Company with the SEC prior to the
date hereof, complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Document.

                           (ii)     Sarbanes-Oxley. The Chief Executive Officer
and the Chief Financial Officer of the Company have signed, and the Company has
furnished to the SEC, all certifications required by Sections 302 and 906 of the
Sarbanes-Oxley Act of 2002. Such certifications contain no qualifications or
exceptions to the matters certified therein and have not been modified or
withdrawn; and neither the Company nor any of its officers has received notice
from any governmental entity questioning or challenging the accuracy,
completeness, form or manner of filing or submission of such certifications. The
Company is otherwise in compliance in all material respects with all applicable
effective provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations issued thereunder by the SEC.

                           (iii)    Financial Statements. The financial
statements of the Company in the SEC Documents present fairly, in accordance
with United States generally accepted

                                       -5-
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accounting principles ("GAAP"), consistently applied, the financial position of
the Company as of the dates indicated, and the results of its operations and
cash flows for the periods therein specified, subject, in the case of unaudited
financial statements for interim periods, to normal year-end audit adjustments.

                  (l)      Absence of Certain Changes Since the Balance Sheet
Date. Except as set forth in the Disclosure Letter since September 30, 2003, the
business and operations of the Company have been conducted in the ordinary
course consistent with past practice, and there has not been:

                           (i)      any declaration, setting aside or payment of
any dividend or other distribution of the assets of the Company with respect to
any shares of capital stock of the Company or any repurchase, redemption or
other acquisition by the Company or any subsidiary of the Company of any
outstanding shares of the Company's capital stock;

                           (ii)     any damage, destruction or loss, whether or
not covered by insurance, except for such occurrences, individually and
collectively, that have not had, and would not reasonably be expected to have, a
Material Adverse Effect;

                           (iii)    any waiver by the Company of a valuable
right or of a material debt owed to it, except for such waivers, individually
and collectively, that have not had, and would not reasonably be expected to
have, a Material Adverse Effect;

                           (iv)     any material change or amendment to, or any
waiver of any material right under a material contract or arrangement by which
the Company or any of its assets or properties is bound or subject;

                           (v)      any change by the Company in its accounting
principles, methods or practices or in the manner in which it keeps its
accounting books and records, except any such change required by a change in
GAAP or by the SEC; or

                           (vi)     any other event or condition of any
character, except for such events and conditions that have not resulted, and are
not expected to result, either individually or collectively, in a Material
Adverse Effect.

                  (m)      Intellectual Property. The Company owns or possesses
sufficient rights to use all trade secrets, know-how, trademarks, service marks,
trade names, copyrights or other information, and to the Company's knowledge,
all patents, patent rights and inventions (collectively, "INTELLECTUAL
PROPERTY"), which are necessary to conduct its businesses as currently
conducted, except where the failure to currently own or possess would not
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect. The Company has not received any written notice of, and
has no actual knowledge of, any infringement of or conflict with asserted rights
of others by the Company with respect to any Intellectual Property which, either
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.

                  (n)      Registration Rights. Except as provided in Section 5
herein, effective upon the Closing, the Company is not currently subject to any
agreement providing any person

                                       -6-
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or entity any rights (including piggyback registration rights) to have any
securities of the Company registered with the SEC or registered or qualified
with any other governmental authority. The Company hereby agrees not to enter
into any agreement providing any person or entity any rights (including
piggyback registration rights) to have any securities of the Company registered
with the SEC or registered or qualified with any other governmental authority
prior to the effectiveness of the Registration Statement (as defined in Section
5(a)(ii) hereof).

                  (o)      Title to Property and Assets. The properties and
assets of the Company are owned by the Company free and clear of all material
mortgages, deeds of trust, liens, charges, encumbrances and security interests
except for: (i) statutory liens for the payment of current taxes that are not
yet delinquent; and (ii) liens, encumbrances and security interests that arise
in the ordinary course of business and do not in any material respect affect the
properties and assets of the Company. With respect to the property and assets it
leases, the Company is in compliance with such leases in all material respects.

                  (p)      Taxes. The Company has filed or has valid extensions
of the time to file all necessary federal, state, and foreign income and
franchise tax returns due prior to the date hereof and has paid or accrued all
taxes shown as due thereon, and the Company has no knowledge of any material tax
deficiency which has been or might be asserted or threatened against it.

                  (q)      Insurance. The Company maintains insurance of the
types and in the amounts that the Company reasonably believes is prudent and
adequate for its business, all of which insurance is in full force and effect.

                  (r)      Labor Relations. No material labor dispute exists or,
to the knowledge of the Company, is imminent with respect to any of the
employees of the Company.

                  (s)      Internal Accounting Controls. The Company and the
Subsidiaries maintain a system of internal accounting controls that provide
reasonable assurance that: (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

                  (t)      Transactions With Officers and Directors. Except as
set forth in the Disclosure Letter, none of the officers or directors of the
Company has entered into any transaction with the Company or any Subsidiary that
would be required to be disclosed pursuant to Item 404(a), (b) or (c) of
Regulation S-K of the SEC.

                  (u)      General Solicitation. Neither the Company nor, to the
Company's knowledge, any other person or entity authorized by the Company to act
on its behalf has engaged in a general solicitation or general advertising
(within the meaning of Regulation D of the Securities Act) of investors with
respect to offers or sales of the Purchased Shares.

                                       -7-
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                  (v)      Registration Statement Matters. The Company meets the
eligibility requirements for use of a registration statement on Form S-3 for the
resale of the Purchased Shares by the Purchasers. Assuming the completion and
timely delivery to the Company by each Purchaser of a Registration
Statement/Suitability Questionnaire substantially in the form attached hereto as
Appendix II, the Company is not aware of any facts or circumstances that could
reasonably be expected to prohibit or materially delay the preparation and
filing of a registration statement with respect to the Registrable Shares (as
defined below).

                  (w)      No Integrated Offering. Neither the Company, nor any
Affiliate (as hereafter defined) of the Company, nor any person acting on its or
their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Purchased Shares to be integrated with prior
offerings by the Company for purposes of the Securities Act, any applicable
state securities laws or any applicable stockholder approval provisions,
including, without limitation, under the rules and regulations of any national
securities exchange or automated quotation system on which any of the securities
of the Company are listed or designated, nor will the Company take any action or
steps that would cause the offering of the Purchased Shares to be integrated
with other offerings.

                  (x)      Nasdaq Listing Matters. The Common Stock of the
Company is registered and listed on Nasdaq under the ticker symbol "HIFN." The
Company has not received any notice that it is not in compliance with the
listing or maintenance requirements of Nasdaq. The issuance and sale of the
Purchased Shares under this Agreement does not contravene the rules and
regulations of Nasdaq.

                  (y)      Investment Company. The Company is not now, and after
the sale of the Purchased Shares under this Agreement and under all other
agreements and the application of the net proceeds from the sale of the
Purchased Shares described in Section 1(c) herein will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

         4.       REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE
PURCHASERS. Each Purchaser hereby represents and warrants to the Company,
severally and not jointly, and agrees that:

                  (a)      Organization Good Standing and Qualification. The
Purchaser has all corporate, membership or partnership power and authority
required to enter into this Agreement and the other agreements, instruments and
documents contemplated hereby, and to consummate the transactions contemplated
hereby and thereby.

                  (b)      Authorization. The execution of this Agreement has
been duly authorized by all necessary corporate, membership or partnership
action on the part of the Purchaser. This Agreement constitutes the Purchaser's
legal, valid and binding obligation, enforceable in accordance with its terms,
except: (i) as may be limited by (1) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors' rights generally; and (2) the effect of rules of law
governing the availability of

                                       -8-
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equitable remedies; and (ii) as rights to indemnity or contribution may be
limited under federal or state securities laws or by principles of public policy
thereunder.

                  (c)      Litigation. There is no Action pending to which such
Purchaser is a party that is reasonably likely to prevent, enjoin, alter or
delay the transactions contemplated by this Agreement.

                  (d)      Purchase for Own Account. The Purchased Shares are
being acquired for investment for the Purchaser's own account, not as a nominee
or agent, and not with a view to the public resale or distribution thereof
within the meaning of the Securities Act, without prejudice, however, to such
Purchaser's right at all times to sell or otherwise dispose of all or any part
of such securities in compliance with applicable federal and state securities
laws and as otherwise contemplated by this Agreement. The Purchaser also
represents that it has not been formed for the specific purpose of acquiring the
Purchased Shares.

                  (e)      Investment Experience. The Purchaser understands that
the purchase of the Purchased Shares involves substantial risk. The Purchaser
has experience as an investor in securities of companies and acknowledges that
it can bear the economic risk of its investment in the Purchased Shares and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of this investment in the Purchased
Shares and protecting its own interests in connection with this investment.

                  (f)      Accredited Purchaser Status. The Purchaser is an
"accredited investor" within the meaning of Regulation D promulgated under the
Securities Act.

                  (g)      Reliance Upon Purchaser's Representations. The
Purchaser understands that the issuance and sale of the Purchased Shares to it
will not be registered under the Securities Act on the ground that such issuance
and sale will be exempt from registration under the Securities Act pursuant to
Section 4(2) thereof, and that the Company's reliance on such exemption is based
on each Purchaser's representations set forth herein.

                  (h)      Receipt of Information. The Purchaser has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the issuance and sale of the Purchased Shares and the
business, properties, prospects and financial condition of the Company and to
obtain any additional information requested and has received and considered all
information it deems relevant to make an informed decision to purchase the
Purchased Shares. 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 such information and the Company's representations and
warranties contained in this Agreement.

                  (i)      Restricted Securities. The Purchaser understands that
the Purchased Shares have not been registered under the Securities Act and will
not sell, offer to sell, assign, pledge, hypothecate or otherwise transfer any
of the Purchased Shares unless: (i) pursuant to an effective registration
statement under the Securities Act; (ii) such holder provides the Company with
an opinion of counsel, in a generally acceptable form, to the effect that a
sale, assignment or transfer of the Purchased Shares may be made without
registration under the Securities Act and

                                       -9-
<PAGE>

the transferee agrees to be bound by the terms and conditions of this Agreement;
(iii) such holder provides the Company with reasonable assurances (in the form
of seller and broker representation letters) that the Purchased Shares can be
sold pursuant to Rule 144 promulgated under the Securities Act ("RULE 144"); or
(iv) pursuant to Rule 144(k) promulgated under the Securities Act following the
applicable holding period. Notwithstanding anything to the contrary contained in
this Agreement, including but not limited to in Section 5(c)(i) below, the
Purchaser may transfer (without restriction and without the need for an opinion
of counsel) the Purchased Shares to its Affiliates (as defined below) provided
that each such Affiliate is an "accredited investor" under Regulation D, and
such Affiliate agrees to be bound by the terms and conditions of this Agreement.

         For the purposes of this Agreement, an "AFFILIATE" of any specified
Purchaser means any other person or entity directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified
Purchaser. For purposes of this definition, "CONTROL" means the power to direct
the management and policies of such person or firm, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.

                  (j)      Legends on Certificates Representing Purchased
Shares. Each Purchaser agrees that the Certificates for the Purchased Shares
shall bear the following legend:

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                  "SECURITIES ACT") OR WITH ANY STATE SECURITIES COMMISSION, AND
                  MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE
                  ABSENCE OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER
                  THE SECURITIES ACT AND APPLICABLE STATE LAWS AND RULES, OR,
                  UNLESS, IMMEDIATELY PRIOR TO THE TIME SET FOR TRANSFER, IN THE
                  OPINION OF THE COUNSEL TO THE COMPANY, SUCH TRANSFER MAY BE
                  EFFECTED WITHOUT VIOLATION OF THE SECURITIES ACT AND OTHER
                  APPLICABLE STATE LAWS AND RULES."

         In addition, each Purchaser agrees that the Company may place stop
transfer orders with its transfer agent with respect to such Certificates in
order to implement the restrictions on transfer set forth in this Agreement. The
appropriate portion of the legend and the stop transfer orders will be removed
promptly upon delivery to the Company of such satisfactory evidence as
reasonably may be required by the Company that such legend or stop orders are
not required to ensure compliance with the Securities Act.

                  (k)      Questionnaires. The Purchaser has completed or caused
to be completed a Stock Certificate Questionnaire and a Registration
Statement/Suitability Questionnaire substantially in the forms attached hereto
as Appendix I and Appendix II, respectively (together, the "QUESTIONNAIRES") for
use in preparation of the Registration Statement (as defined in Section 5(a)(ii)
below), and the answers to such Questionnaires are true and correct as of the
date of this Agreement; provided, that the Purchasers shall be entitled to
update such information by

                                      -10-
<PAGE>

providing written notice thereof to the Company before the effective date of the
Registration Statement.

                  (l)      Restrictions on Short Sales. The Purchaser
represents, warrants and covenants neither the Purchaser nor any Affiliate of
such Purchaser which: (i) had knowledge of the transactions contemplated hereby;
(ii) has or shares discretion relating to such Purchaser's investments or
trading or information concerning such Purchaser's investments, including in
respect of the Purchased Shares; or (iii) is subject to such Purchaser's review
or input concerning such Affiliate's investments or trading, has or will,
directly or indirectly, during the period beginning on the date on which the
Company or a financial advisor to the Company, first contacted such Purchaser
regarding the transactions contemplated by this Agreement (and involving the
Company) and ending on the Closing Date, engage in: (1) any "short sales" (as
such term is defined in Rule 3b-3 promulgated under the Exchange Act) of the
Common Stock, including, without limitation, the maintaining of any short
position with respect to, establishing or maintaining a "put equivalent
position" (within the meaning of Rule 16a-1(h) under the Exchange Act) with
respect to, entering into any swap, derivative transaction or other arrangement
(whether any such transaction is to be settled by delivery of Common Stock,
other securities, cash or other consideration) that transfers to another, in
whole or in part, any economic consequences or ownership, or otherwise dispose
of, any of the Purchased Shares by the Purchaser; or (2) any hedging transaction
which establishes a net short position with respect to the Purchased Shares
(clauses (1) and (2) together, a "SHORT SALE"); except for (A) Short Sales by
the Purchaser or Affiliate of such Purchaser which was, prior to the date on
which such Purchaser was first contacted by the Company or a financial advisor
to the Company regarding the transactions contemplated by this Agreement, a
market maker for the Common Stock, provided that such Short Sales are in the
ordinary course of business of such Purchaser or Affiliate of such Purchaser and
are in compliance with the Securities Act, the rules and regulations of the
Securities Act and such other securities laws as may be applicable, (B) Short
Sales by the Purchaser or an Affiliate of such Purchaser which by virtue of the
procedures of such Purchaser are made without knowledge of the transactions
contemplated by this Agreement or (C) Short Sales by the Purchaser or an
Affiliate of such Purchaser to the extent that such Purchaser or Affiliate of
such Purchaser is acting in the capacity of a broker-dealer executing
unsolicited third-party transactions.

                  (m)      Confidentiality. The Purchaser agrees to use any
information it receives in the course of and in connection with this transaction
for the sole purpose of evaluating a possible investment in the Purchased Shares
and the Purchaser hereby acknowledges that it is prohibited from reproducing or
distributing any such information, this Agreement, or any other offering
materials provided by the Company in connection with the Purchaser's
consideration of its investment in the Company, in whole or in part, or
divulging or discussing any of their contents except to its advisors and
representatives for the purpose of evaluating such investment. The foregoing
agreements shall not apply to any information that is or becomes publicly
available through no fault of the Purchaser, or that the Purchaser is legally
required to disclose; provided, however, that if the Purchaser is requested or
ordered to disclose any such information pursuant to any court or other
governmental order or any other applicable legal procedure, it shall provide the
Company with reasonably prompt notice of any such request or order to enable the
Company to seek an appropriate protective order and shall provide the Company
with reasonable assistance in obtaining such protective order at the Company's
sole expense. The Company acknowledges

                                      -11-
<PAGE>

that it has not provided to the Purchasers any non-public information other than
information related to the transactions contemplated by this Agreement, all of
which information related to the transactions contemplated hereby shall, except
to the extent immaterial, be disclosed by the Company pursuant to Section 9(m)
hereof. Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure. However, any such information relating to the tax treatment or tax
structure is required to be kept confidential to the extent necessary to comply
with any applicable federal or state securities laws.

         5.       FORM D FILING; REGISTRATION; COMPLIANCE WITH THE SECURITIES
ACT.

                  (a)      Form D Filing; Registration of the Purchased Shares.
The Company hereby agrees that it shall:

                           (i)      file in a timely manner a Form D relating to
the sale of the Purchased Shares under this Agreement, pursuant to Regulation D
promulgated under the Securities Act;

                           (ii)     prepare and file with the SEC as soon as
practicable, and in no event later than thirty (30) days following the Closing,
a registration on Form S-3 and if prior to effectiveness of such registration
statement on Form S-3 the Company does not meet the eligibility requirements of
Form S-3, prepare and file with the SEC as soon as practicable, and in no event
later than thirty (30) days following the date on which the Company ceases to
meet the eligibility requirements of Form S-3, a registration statement on Form
S-1 (such registration statement on Form S-3 or, if required, on Form S-1, the
"REGISTRATION STATEMENT"), to enable the resale of the Purchased Shares
(together with any shares of Common Stock issued as a dividend or other
distribution with respect to, or in exchange for, or in replacement of, the
Purchased Shares, the "REGISTRABLE SHARES") by the Purchasers from time to time
on Nasdaq and use all commercially reasonable efforts to cause such Registration
Statement to be declared effective as promptly as possible after filing, but in
any event, within ninety (90) days following the Closing Date or, in the event
of a review of the Registration Statement by the SEC, within one hundred twenty
(120) days following the Closing Date, and to remain continuously effective
until the earlier of (1) the second anniversary of the effective date of the
Registration Statement, (2) the date on which all Registrable Shares purchased
by the Purchasers pursuant to this Agreement have been sold thereunder or (3)
the date on which the Registrable Shares can be sold by nonaffiliates of the
Company pursuant to Rule 144(k) promulgated under the Securities Act (the
"REGISTRATION PERIOD"). In the event that the Company does not meet the
requirements for the use of Form S-3, the Company shall use such other form as
is available for such a registration, and shall convert such other form to Form
S-3, or file a replacement registration statement on Form S-3, promptly after
the first date on which it meets such requirements;

                           (iii)    prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the Prospectus (as

                                      -12-
<PAGE>

defined below) used in connection therewith as may be necessary to keep the
Registration Statement effective at all times until the end of the Registration
Period;

                           (iv)     furnish to the Purchasers with respect to
the Registrable Shares registered under the Registration Statement such
reasonable number of copies of any Prospectus (as defined below) in conformity
with the requirements of the Securities Act and such other documents as the
Purchaser may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Registrable Shares by the Purchasers;

                           (v)      use its commercially reasonable efforts to
file documents required of the Company for normal blue sky clearance in states
specified in writing by the Purchasers; provided, however, that the Company
shall not be required to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or has not so consented;

                           (vi)     take all such action as is required of it to
cause the Registrable Shares to be listed on Nasdaq on the Closing Date;

                           (vii)    promptly notify the Purchasers in writing
when the Registration Statement has been declared effective;

                           (viii)   promptly notify the Purchasers in writing of
the existence of any fact or the happening of any event, during the Registration
Period (but not as to the substance of any such fact or event), that makes any
statement of a material fact made in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the statements
therein not misleading (provided, however, that no notice by the Company shall
be required pursuant to this subsection (viii) in the event that the Company
either contemporaneously files a prospectus supplement to update the Prospectus
or a Form 8-K or other appropriate Exchange Act report that is incorporated by
reference into the Registration Statement, which, in either case, contains the
requisite information with respect to such material event that results in such
Registration Statement no longer containing any such untrue or misleading
statements); and

                           (ix)     furnish to each Purchaser upon written
request, from the date of this Agreement until the end of the Registration
Period, one copy of its periodic reports filed with the SEC pursuant to the
Exchange Act and the rules and regulations promulgated thereunder; and

                           (x)      bear all expenses in connection with the
procedures described in paragraphs (i) through (viii) of this Section 5(a) and
the registration of the Registrable Shares pursuant to the Registration
Statement other than fees and expenses, if any, of legal counsel or other
advisers to the Purchasers or underwriting discounts, brokerage fees and
commissions incurred by the Purchasers, if any.

         It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 5(a) with respect to Registrable Shares
held by a Purchaser that such Purchaser shall timely furnish to the Company a
completed Registration Statement /Suitability Questionnaire on or before the
Closing Date and such other written information regarding itself,

                                      -13-
<PAGE>

the Registrable Shares to be sold by such Purchaser, and the intended method of
disposition of the Registrable Shares as shall be required to effect the
registration of the Registrable Shares. The Purchasers shall update such
information as and when necessary by written notice to the Company.

                  (b)      Liquidated Damages.

                           (i)      Delay in Effectiveness of Registration
Statement. In the event that the Registration Statement is not declared
effective within ninety (90) days following the Closing Date or, in the event of
a review of the Registration Statement by the SEC, within one hundred twenty
(120) days following the Closing Date, the Company shall pay to each Purchaser
liquidated damages at a rate equal to one percent (1%) of the total purchase
price of the Purchased Shares purchased by such Purchaser pursuant to this
Agreement per month (pro rata on a 30-day basis). Such liquidated damages shall
be payable in cash. Other than the remedy of specific enforcement, Purchaser
agrees that payment pursuant to the terms of this Section 5(b)(i) shall be the
sole and exclusive remedy against the Company for a delay in the effectiveness
of the Registration Statement.

                           (ii)     Lapse in Effectiveness of Registration
Statement. In the event that the Registration Statement is filed and declared
effective but, during the Registration Period, shall thereafter cease to be
effective or useable or the prospectus included in the Registration Statement
(the "PROSPECTUS," as amended or supplemented by any prospectus supplement and
by all other amendments thereto and all material incorporated by reference in
such Prospectus) ceases to be usable, in either case, in connection with resales
of Registrable Shares, and other than during a period of permitted suspension as
provided in Section 5(c) below, without such lapse being cured within ten (10)
business days (the "CURE PERIOD") by a post-effective amendment to the
Registration Statement, a supplement to the Prospectus or a report filed with
the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that
cures such lapse, then the Company shall pay to each Purchaser, liquidated
damages, for the period from and including the first day following the
expiration of the Cure Period until, but excluding, the earlier of (1) the date
on which such failure is cured; and (2) the date on which the Registration
Period expires, at a rate equal to one percent (1%) of the total purchase price
of the Purchased Shares purchased by such Purchaser pursuant to this Agreement
per month (pro rata on a 30-day basis). Such liquidated damages shall be payable
monthly in cash. Purchaser agrees that payment pursuant to the terms of this
Section 5(b)(ii) shall be the sole and exclusive remedy against the Company for
a lapse in the effectiveness of the Registration Statement.

                  (c)      Transfer of Registrable Shares After Registration;
Suspension.

                           (i)      The Purchasers agree that they will not
offer to sell or make any sale, assignment, pledge, hypothecation or other
transfer with respect to the Registrable Shares that would constitute a sale
within the meaning of the Securities Act except pursuant to either: (1) the
Registration Statement; (2) Rule 144 of the Securities Act; or (3) any other
exemption from registration under the Securities Act, and that they will
promptly notify the Company of any changes in the information set forth in the
Registration Statement after it is prepared regarding the Purchaser or its plan
of distribution to the extent required by applicable law.

                                      -14-
<PAGE>

                           (ii)     In addition to any suspension rights under
paragraph (iii) below, upon the happening of any pending corporate development,
public filing with the SEC or similar event, that, in the judgment of the
Company's Board of Directors, renders it advisable to suspend use of the
Prospectus or upon the request by an underwriter in connection with an
underwritten public offering of the Company's securities, the Company may, on
not more than two (2) non-consecutive occasions for not more than forty-five
(45) days on each such occasion, suspend use of the Prospectus, on written
notice to each Purchaser (which notice will not disclose the content of any
material non-public information and will indicate the date of the beginning and
end of the intended period of suspension, if known), in which case each
Purchaser shall discontinue disposition of Registrable Shares covered by the
Registration Statement or Prospectus until copies of a supplemented or amended
Prospectus are distributed to the Purchasers or until the Purchasers are advised
in writing by the Company that sales of Registrable Shares under the applicable
Prospectus may be resumed and have received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in any such Prospectus. The suspension and notice thereof described in this
Section 5(c)(ii) shall be held in strictest confidence and shall not be
disclosed by the Purchasers.

                           (iii)    Subject to paragraph (iv) below, in the
event of: (1) any request by the SEC or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement for
amendments or supplements to a Registration Statement or related prospectus or
for additional information; (2) the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(3) the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation of any
proceeding for such purpose; or (4) any event or circumstance which necessitates
the making of any changes in the Registration Statement or Prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so
that, in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and that in the case of the Prospectus, it will not contain any untrue statement
of a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, then the Company shall
deliver a certificate in writing to the Purchasers (the "SUSPENSION NOTICE") to
the effect of the foregoing (which notice will not disclose the content of any
material non-public information and will indicate the date of the beginning and
end of the intended period of suspension, if known), and, upon receipt of such
Suspension Notice, the Purchasers will discontinue disposition of Registrable
Shares covered by to the Registration Statement or Prospectus (a "SUSPENSION")
until the Purchasers' receipt of copies of a supplemented or amended Prospectus
prepared and filed by the Company, or until the Purchasers are advised in
writing by the Company that the current Prospectus may be used, and have
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in any such prospectus. In the event of any
Suspension, the Company will use its commercially reasonable efforts to cause
the use of the Prospectus so suspended to be resumed as soon as possible after
delivery of a Suspension Notice to the Purchasers. The Suspension and Suspension
Notice described in this Section 5(c)(iii) shall be held in strictest confidence
and shall not be disclosed by the Purchasers.

                                      -15-
<PAGE>

                           (iv)     Provided that a Suspension is not then in
effect, the Purchasers may sell Registrable Shares under the Registration
Statement, provided that the selling Purchaser arranges for delivery of a
current Prospectus to the transferee of such Registrable Shares to the extent
such delivery is required by applicable law.

                           (v)      In the event of a sale of Registrable Shares
by a Purchaser, such Purchaser must also deliver to the Company's transfer
agent, with a copy to the Company, a certificate of subsequent sale reasonably
satisfactory to the Company, so that ownership of the Registrable Shares may be
properly transferred. The Company will cooperate to facilitate the timely
preparation and delivery of certificates (unless otherwise required by
applicable law) representing Registrable Shares sold.

                  (d)      Indemnification. For the purpose of this Section
5(d), the term "REGISTRATION STATEMENT" shall include any preliminary or final
Prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 5(a).

                           (i)      Indemnification by the Company. The Company
agrees to indemnify and hold harmless each of the Purchasers and each person, if
any, who controls any Purchaser within the meaning of the Securities Act, to the
fullest extent permitted by law, against any and all losses, claims, damages,
liabilities or expenses, joint or several, to which such Purchasers or such
controlling person may become subject, under the Securities Act, the Exchange
Act or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company, which consent shall not be
unreasonably withheld), insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon: (A) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them, in light of
the circumstances under which they were made, not misleading; or (B) any
misrepresentation, breach or inaccuracy, or any allegation by a third party
that, if true, would constitute a breach or inaccuracy, of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement, and will reimburse each Purchaser and each such controlling person
for any reasonable legal and other expenses as such reasonable expenses are
incurred by such Purchaser or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage,
liability, expense or action arises out of or is based upon: (1) an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment to or supplement of
the Registration Statement or Prospectus made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the
Purchaser expressly for use in the Registration Statement or the Prospectus; (2)
the failure of such Purchaser to comply with the covenants and agreements
contained in this Agreement respecting resale of the Purchased Shares; (3) the
inaccuracy of any representations made by such Purchaser in this Agreement; or
(4) any untrue statement or omission of a material fact required to make such
statement not

                                      -16-
<PAGE>

misleading in any Prospectus that is corrected in any subsequent Prospectus that
was delivered to the Purchaser before the pertinent sale or sales by the
Purchaser.

                           (ii)     Indemnification by the Purchaser. Each
Purchaser will severally and not jointly indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act, to the fullest extent provided by law, against any and
all losses, claims, damages, liabilities or expenses to which the Company, its
directors, its officers who signed the Registration Statement and any
controlling persons may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Purchaser, which consent shall not be
unreasonably withheld) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement to the Registration Statement or Prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Purchaser expressly for use therein, and
the Purchaser will reimburse the Company, each of its directors, each of its
officers who signed the Registration Statement, and any controlling persons for
any legal and other expense reasonably incurred by the Company, its directors,
its officers who signed the Registration Statement or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action provided, however, that
the Purchaser shall not be liable for any such untrue or alleged untrue
statement or omission or alleged omission with respect to which the Purchaser
has delivered to the Company in writing a correction before the occurrence of
the event from which such loss was incurred. Notwithstanding the provisions of
this Section 5(d), the Purchaser shall not be liable for any indemnification
obligation under this Agreement in excess of the aggregate amount of net
proceeds received by the Purchaser from the sale of the Registrable Shares
pursuant to the Registration Statement.

                           (iii)    Indemnification Procedure.

                                    (1)      Promptly after receipt by an
indemnified party under this Section 5(d) of notice of the threat or
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5(d),
promptly notify the indemnifying party in writing of the claim; but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise under the
indemnity agreement contained in this Section 5(d) or otherwise, to the extent
it is not prejudiced as a result of such failure.

                                    (2)      In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party,

                                      -17-
<PAGE>

the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 5(d) for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless:

                                             (A)      the indemnified party
shall have employed such counsel in connection with the assumption of legal
defenses in accordance with the proviso to the preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel, approved by such indemnifying party,
representing all of the indemnified parties who are parties to such action); or

                                             (B)      the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of
commencement of the action against the indemnified party,

in each of which cases the reasonable fees and expenses of counsel for the
indemnified party shall be at the expense of the indemnifying party.

                           (iv)     Contribution. If the indemnification
provided for in this Section 5(d) is required by its terms but is for any reason
held to be unavailable to, or is otherwise insufficient to hold harmless, an
indemnified party under this Section 5(d) with respect to any losses, claims,
damages, liabilities or expenses referred to in this Agreement, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of any losses, claims, damages, liabilities or
expenses referred to in this Agreement:

                                    (1)      in such proportion as is
appropriate to reflect the relative faults of the Company and the Purchaser in
connection with the statements or omissions or inaccuracies in the
representations and warranties in this Agreement that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations, or

                                    (2)      if the allocation provided by
clause (1) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative faults referred to in clause (1)
above but the relative benefits received by the Company and the Purchaser from
the sale of the Purchased Shares.

                                      -18-
<PAGE>

         The respective relative benefits received by the Company on the one
hand and each Purchaser on the other shall be deemed to be in the same
proportion as the amount to which the consideration paid by such Purchaser to
the Company pursuant to this Agreement for the Purchased Shares purchased by
such Purchaser that were sold pursuant to the Registration Statement bears to
the difference (the "DIFFERENCE") between the amount such Purchaser paid for the
Purchased Shares that were sold pursuant to the Registration Statement and the
amount received by such Purchaser from such sale. The relative fault of the
Company and each Purchaser shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate material fact relates to information supplied by the Company
or by such Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 5(d)(iii), any reasonable legal
or other fees or expenses incurred by such party in connection with
investigating or defending any such action or claim. The provisions set forth in
Section 5(d)(iii) with respect to the notice of the threat or commencement of
any threat or action shall apply if a claim for contribution is to be made under
this Section 5(d)(iv); provided, however, that no additional notice shall be
required with respect to any threat or action for which notice has been given
under Section 5(d)(iii) for purposes of indemnification. The Company and each
Purchaser agree that it would not be just and equitable if contribution pursuant
to this Section 5(d)(iv) were determined solely by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
5(d)(iv), no Purchaser shall be required to contribute any amount in excess of
the amount by which the Difference exceeds the amount of any damages that such
Purchaser 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 is not guilty of such
fraudulent misrepresentation. The Purchasers' obligations to contribute pursuant
to this Section 5(d)(iv) are several and not joint.

                  (e)      Rule 144 Information. For two (2) years after the
date of this Agreement, the Company shall file in a timely manner all reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder and shall take such further action
to the extent required to enable the Purchasers to sell the Purchased Shares
pursuant to Rule 144 under the Securities Act (as such rule may be amended from
time to time).

         6.       ADVISORY FEE. The Purchasers acknowledge that the Company
intends to pay to C.E. Unterberg, Towbin, as financial advisor, a fee in respect
of the sale of the Purchased Shares. Each of the parties to this Agreement
hereby represents that, on the basis of any actions and agreements by it, there
are no other brokers or finders entitled to compensation in connection with the
sale of the Purchased Shares to the Purchasers. The Company shall indemnify and
hold harmless the Purchasers from and against all fees, commissions or other
payments owing by the Company to C.E. Unterberg, Towbin, or any other person
or firm acting on behalf of the Company hereunder. Each Purchaser agrees,
severally and not jointly, to indemnify and hold

                                      -19-
<PAGE>

harmless the Company and each of the other Purchasers from any liability for any
commission or compensation in the nature of a finder's fee to the extent such
Purchaser, or any of its officers, employees or representatives, was responsible
for the incurrence of such fee.

         7.       CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT CLOSING. The
obligations of the Purchasers under Section 1(b) of this Agreement are subject
to the fulfillment or waiver, on or before the Closing, of each of the following
conditions:

                  (a)      Representations and Warranties True. Each of the
representations and warranties of the Company contained in Section 3 shall be
true and correct in all material respects on and as of the date hereof
(provided, however, that such qualification shall only apply to representations
or warranties not otherwise qualified by materiality) and on and as of the date
of the Closing with the same effect as though such representations and
warranties had been made as of the Closing.

                  (b)      Performance. The Company shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing and shall have obtained all
approvals, consents and qualifications necessary to complete the purchase and
sale described herein; provided, however, that the Company may furnish to each
Purchaser a facsimile copy of the stock certificate representing the Purchased
Shares, with the original stock certificate held in trust by counsel for the
Company until delivery thereof on the next business day.

                  (c)      Compliance Certificate. The Company will have
delivered to the Purchasers a certificate signed on its behalf by its Chief
Executive Officer or Chief Financial Officer certifying that the conditions
specified in Sections 7(a) and 7(b) hereof have been fulfilled.

                  (d)      Agreement. The Company shall have executed and
delivered to the Purchasers this Agreement.

                  (e)      Securities Exemptions. The offer and sale of the
Purchased Shares to the Purchasers pursuant to this Agreement shall be exempt
from the registration requirements of the Securities Act and the registration
and/or qualification requirements of all applicable state securities laws.

                  (f)      No Suspension of Trading or Listing of Common Stock.
The Common Stock of the Company: (i) shall be designated for quotation or listed
on Nasdaq; and (ii) shall not have been suspended from trading on Nasdaq.

                  (g)      Good Standing Certificates. The Company shall have
delivered to the Purchasers a certificate of the Secretary of State of the State
of Delaware, dated as of a date within five (5) days of the date of the Closing,
with respect to the good standing of the Company.

                  (h)      Secretary's Certificate. The Company shall have
delivered to the Purchasers a certificate of the Company executed by the
Company's Secretary attaching and certifying to the truth and correctness of:
(1) the Certificate of Incorporation; (2) the Bylaws; and

                                      -20-
<PAGE>

(3) the resolutions adopted by the Company's Board of Directors in connection
with the transactions contemplated by this Agreement.

                  (i)      Opinion of Company Counsel. The Purchasers will have
received an opinion on behalf of the Company, dated as of the date of the
Closing, from Wilson Sonsini Goodrich & Rosati, P.C. counsel to the Company, in
substantially the form attached as Exhibit C.

                  (j)      No Statute or Rule Challenging Transaction. No
statute, rule, regulation, executive order, decree, ruling, injunction, action,
proceeding or interpretation shall have been enacted, entered, promulgated,
endorsed or adopted by any court or governmental authority of competent
jurisdiction or any self-regulatory organization or the staff of any of the
foregoing, having authority over the matters contemplated hereby which questions
the validity of, or challenges or prohibits the consummation of, any of the
transactions contemplated by this Agreement.

                  (k)      Other Actions. The Company shall have executed such
certificates, agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by the Purchasers in
connection with the transactions contemplated hereby.

         8.       CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The
obligations of the Company to the Purchasers under this Agreement are subject to
the fulfillment or waiver, on or before the Closing, of each of the following
conditions:

                  (a)      Representations and Warranties True. The
representations and warranties of the Purchasers contained in Section 4 shall be
true and correct in all material respects on and as of the date hereof
(provided, however, that such qualification shall only apply to representations
and warranties not otherwise qualified by materiality) and on and as of the date
of the Closing with the same effect as though such representations and
warranties had been made as of the Closing.

                  (b)      Performance. The Purchasers shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing and shall have obtained all
approvals, consents and qualifications necessary to complete the purchase and
sale described herein.

                  (c)      Agreement. The Purchasers shall have executed and
delivered to the Company this Agreement (and Appendix I and II hereto).

                  (d)      Securities Exemptions. The offer and sale of the
Purchased Shares to the Purchasers pursuant to this Agreement shall be exempt
from the registration requirements of the Securities Act and the registration
and/or qualification requirements of all applicable state securities laws.

                                      -21-
<PAGE>

                  (e)      Payment of Purchase Price. The Purchasers shall have
delivered to the Company by wire transfer of immediately available funds, full
payment of the purchase price for the Purchased Shares as specified in Section
1(b).

                  (f)      Other Actions. The Purchasers shall have executed
such certificates, agreements, instruments and other documents, and taken such
other actions as shall be customary or reasonably requested by the Company in
connection with the transactions contemplated hereby.

                  (g)      No Statute or Rule Challenging Transaction. No
statute, rule, regulation, executive order, decree, ruling, injunction, action,
proceeding or interpretation shall have been enacted, entered, promulgated,
endorsed or adopted by any court or governmental authority of competent
jurisdiction or any self-regulatory organization or the staff of any of the
foregoing, having authority over the matters contemplated hereby which questions
the validity of, or challenges or prohibits the consummation of, any of the
transactions contemplated by this Agreement.

         9.       MISCELLANEOUS.

                  (a)      Successors and Assigns. The terms and conditions of
this Agreement will inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the Purchasers holding at least a majority of the total aggregate
number of Purchased Shares then outstanding (excluding any shares sold to the
public pursuant to Rule 144 or otherwise). Any Purchaser may assign its rights
under this Agreement to any person to whom the Purchaser assigns or transfers
any Purchased Shares, provided that such transferee agrees in writing to be
bound by the terms and provisions of this Agreement, and such transfer is in
compliance with the terms and provisions of this Agreement and permitted by
federal and state securities laws.

                  (b)      Governing Law. This Agreement will be governed by and
construed and enforced under the internal laws of the State of Delaware, without
reference to principles of conflict of laws or choice of laws. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

                  (c)      Survival. The representations and warranties of the
Company and the Purchasers contained in Sections 3 and 4 of this Agreement shall
survive until the first (1st) anniversary of the Closing Date.

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

                  (e)      Headings. The headings and captions used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. All

                                      -22-
<PAGE>

references in this Agreement to sections, paragraphs, exhibits and schedules
will, unless otherwise provided, refer to sections and paragraphs hereof and
exhibits and schedules attached hereto, all of which exhibits and schedules are
incorporated herein by reference.

                  (f)      Notices. Any notices and other communications
required or permitted under this Agreement shall be in writing and shall be
delivered: (i) personally by hand or by courier; (ii) mailed by United States
first-class mail, postage prepaid; or (iii) sent by facsimile directed (1) if to
a Purchaser, at the Purchaser's address or facsimile number set forth on Exhibit
A to this Agreement, or at such address or facsimile number as the Purchaser may
designate by giving at least ten days' advance written notice to the Company or
(2) if to the Company, to its address or facsimile number set forth below, or at
such other address or facsimile number as the Company may designate by giving at
least ten days' advance written notice to the Purchaser. All such notices and
other communications shall be deemed given upon: (A) receipt or refusal of
receipt, if delivered personally; (B) three days after being placed in the mail,
if mailed; or (C) confirmation of facsimile transfer, if faxed.

         The address of the Company for the purpose of this Section 9(f) is as
follows:

                           HIFN, INC.
                           750 University Avenue
                           Los Gatos, CA 95032
                           Tel: 408-399-3500
                           Fax: 408-399-3501
                           Attention: Chief Financial Officer

                           with a copy to:
                           Steve Bochner
                           Wilson Sonsini Goodrich & Rosati, P.C.
                           650 Page Mill Road
                           Palo Alto, CA 94304
                           Tel: 650-493-9300
                           Fax: 650-493-6811

                  (g)      Amendments and Waivers. This Agreement may be amended
and the observance of any term of this Agreement may be waived only with the
written consent of the Company and the Purchasers holding at least a majority of
the total aggregate number of Purchased Shares then outstanding (excluding any
shares sold to the public pursuant to Rule 144 or otherwise). Any amendment
effected in accordance with this Section 9(g) will be binding upon the
Purchasers, the Company and their respective successors and permitted assigns.

                  (h)      Severability. If any provision of this Agreement is
held to be unenforceable under applicable law, such provision will be excluded
from this Agreement and the balance of the Agreement will be interpreted as if
such provision were so excluded and will be enforceable in accordance with its
terms.

                  (i)      Entire Agreement. This Agreement, together with all
exhibits and schedules hereto, constitutes the entire agreement and
understanding of the parties with respect

                                      -23-
<PAGE>

to the subject matter hereof and supersedes any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties with respect to the subject matter hereof.

                  (j)      Further Assurances. From and after the date of this
Agreement, upon the request of the Company or the Purchasers, the Company and
the Purchasers will execute and deliver such instruments, documents or other
writings, and take such other actions, as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.

                  (k)      Meaning of Include and Including. Whenever in this
Agreement the word "include" or "including" is used, it shall be deemed to mean
"include, without limitation" or "including, without limitation," as the case
may be, and the language following "include" or "including" shall not be deemed
to set forth an exhaustive list.

                  (l)      Fees, Costs and Expenses. Except as otherwise
provided for in this Agreement, all fees, costs and expenses (including
attorneys' fees and expenses) incurred by any party hereto in connection with
the preparation, negotiation and execution of this Agreement and the exhibits
and schedules hereto and the consummation of the transactions contemplated
hereby and thereby (including the costs associated with any filings with, or
compliance with any of the requirements of any governmental authorities), shall
be the sole and exclusive responsibility of such party.

                  (m)      8-K Filing and Publicity. As soon as practicable
following the Closing, but in no event later than 9:00 am EST on the day
following the Closing, the Company shall issue a press release, as permitted and
described below. Following the Closing Date, the Company shall file a Current
Report on Form 8-K with the SEC describing the terms of the transactions
contemplated by this Agreement and attaching this Agreement and the press
release referred to below as exhibits to such filing (including all attachments,
the "8-K FILING"). Neither the Company nor any Purchaser shall issue any press
releases or any other public statements with respect to the transactions
contemplated by this Agreement; provided, however, that the Company shall be
entitled, without the prior approval of any Purchaser, to issue any press
release or make any other public disclosure (including a press release
(concerning the offering of the Purchased Shares) pursuant to Rule 135(c) under
the Securities Act) with respect to such transactions: (i) in substantial
conformity with the 8-K Filing; and (ii) as is required by applicable law,
regulations, and Nasdaq rules; and, provided further, that no such release may
identify a Purchaser unless such Purchaser has consented, or as required by law.

                  (n)      Stock Splits, Dividends and other Similar Events. The
provisions of this Agreement shall be appropriately adjusted to reflect any
stock split, stock dividend, reorganization or other similar event that may
occur with respect to the Company after the date hereof.

                  (o)      Remedies. In addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages,
each Purchaser and the Company will be entitled to specific performance under
this Agreement. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of

                                      -24-
<PAGE>

obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

                  (p)      Waiver of Potential Conflicts of Interest. Each of
the Purchasers and the Company acknowledges that Wilson Sonsini Goodrich &
Rosati, P.C. ("WSGR") may have represented and may currently represent certain
of the Purchasers. In the course of such representation, WSGR may have come into
possession of confidential information relating to such Purchaser. Each of the
Purchasers and the Company acknowledges that WSGR is representing only the
Company in this transaction. Pursuant to Rule 3-310 of the Rules of Professional
Conduct promulgated by the State Bar of California, an attorney must avoid
representations in which the attorney has or had a relationship with another
party interested in the representation without the informed written consent of
all parties affected. By executing this Agreement, each of the Purchasers and
the Company hereby waives any actual or potential conflict of interest which may
arise as a result of WSGR's representation of such persons and entities, WSGR's
possession of such confidential information (so long as WSGR does not release
such confidential information) and the participation by WSGR's affiliate in the
financing. Each of the Purchasers and the Company represents that it has had the
opportunity to consult with independent counsel concerning the giving of this
waiver.

                                      -25-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.

                                     HIFN, INC.

                                     By: /s/ William R. Walker

                                     Name: WILLIAM R. WALKER

                                     Title: CHIEF FINANCIAL OFFICER

                      [PURCHASER SIGNATURE PAGES TO FOLLOW]

<PAGE>

                                SIGNATURE PAGE TO

                          SECURITIES PURCHASE AGREEMENT

                          DATED AS OF FEBRUARY 6, 2004

                                  BY AND AMONG

                                   HIFN, INC.

                        AND EACH PURCHASER NAMED THEREIN

         The undersigned hereby executes and delivers to Hifn, Inc., the
Securities Purchase Agreement (the "AGREEMENT") to which this signature page is
attached effective as of the date of the Agreement, which Agreement and
signature page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.

                                     Number of Purchased Shares: __________

                                     PURCHASER

                                     Signature: ________________________________

                                     Name: _____________________________________

                                     Title: ____________________________________

                                     Address: __________________________________

                                              __________________________________

                                              __________________________________

                                     Tel:     __________________________________

                                      Fax:    __________________________________

                                     Tax ID Number: ____________________________exv4w19

 

Exhibit 4.19

FIFTH AMENDMENT TO CREDIT AGREEMENT

     THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Fifth Amendment”), dated
as of December 5, 2003, is entered into among ELKCORP (formerly known as Elcor
Corporation), a Delaware corporation (the “Borrower”), the lenders listed on
the signature pages hereof as Lenders (the “Lenders”), BANK ONE, N.A., as
Documentation Agent, and BANK OF AMERICA, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer.

BACKGROUND

     A.     The Borrower, certain of the Lenders, the Documentation Agent, the
Syndication Agent, the Administrative Agent, the Swing Line lender and the L/C
Issuer are parties to that certain Credit Agreement, dated as of November 30,
2000, as amended by that certain First Amendment to Credit Agreement, dated as
of March 31, 2001, that certain Second Amendment to Credit Agreement, dated as
of June 5, 2002, that certain Third Amendment to Credit Agreement, dated as of
February 20, 2003, and that certain Fourth Amendment to Credit Agreement, dated
as of March 7, 2003 (said Credit Agreement, as amended, the “Credit Agreement”). The terms defined in the Credit Agreement and not otherwise defined herein
shall be used herein as defined in the Credit Agreement.

     B.     The Borrower has requested (a) certain amendments to the Credit
Agreement, (b) to add Wells Fargo Bank, National Association (the “New Lender”)
and (c) to remove Washington Mutual Bank, FA (“Washington Mutual”) and Comerica
Bank (“Comerica”) (collectively, “Exiting Lenders”) as lenders under the Credit
Agreement.

     C.     The Lenders, the Documentation Agent, the Administrative Agent, the
Swing Line Lender and the L/C Issuer hereby agree to amend the Credit
Agreement, subject to the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Borrower,
the Lenders, the Swing Line Lender, the L/C Issuer and the Administrative Agent
covenant and agree as follows:

     1.     AMENDMENTS.

     (a)  The definition of “Maturity Date” set forth in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:

		
	 	     “Maturity Date” means (a) November 30, 2008 or (b) such earlier date
upon which the Commitments may be terminated in accordance with the terms
hereof.

     (b)  Schedule 2.01 is hereby amended to be in the form of Schedule 2.01 to
this Fifth Amendment, and the Commitment of each Lender, after giving effect to
this Fifth Amendment, is set forth on such Schedule 2.01.

1

 

     (c)  Section 10.08 of the Credit Agreement is hereby amended by adding the
following sentence to the end thereof to read as follows:

		
	 	     Notwithstanding anything to the contrary, “Information” shall not
include, and the Administrative Agent and each Lender may disclose without
limitation of any kind, any information with respect to the “tax
treatment” and “tax structure” (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated
hereby and all materials of any kind (including opinions or other tax
analyses) that are provided to the Administrative Agent or such Lender
relating to such tax treatment and tax structure; provided that with
respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the
transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loans, Letters of Credit and
transactions contemplated hereby.

     (d)  Article X of the Credit Agreement is hereby amended by adding a new
Section 10.23 thereto to read as follows:

		
	 	     10.23 USA Patriot Act Notice. Each Lender and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.

     2.     REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF
DEFAULT. By its execution and delivery hereof, the Borrower represents and
warrants that, as of the date hereof:

     (a)  the representations and warranties contained in the Credit Agreement
and the other Loan Documents are true and correct on and as of the date hereof
as made on and as of such date;

     (b)  no event has occurred and is continuing which constitutes a Default or
an Event of Default;

     (c)  (i) the Borrower has full power and authority to execute and deliver
this Fifth Amendment, the Revolving Loan Note payable to the order of the New
Lender (the “New Note”), the replacement Revolving Loan Note payable to the
order of each Lender whose Commitment has been amended pursuant to this Fifth
Amendment (collectively, the “Replacement Notes”), (ii) this Fifth Amendment,
the New Note and the Replacement Notes have been duly executed and delivered by
the Borrower, and (iii) this Fifth Amendment, the New Note and the Replacement
Notes and the Credit Agreement, as amended hereby, constitute the legal, valid
and binding obligations of the Borrower, enforceable in accordance with their
respective terms, except as enforceability may be limited by applicable debtor
relief laws and by

2

 

general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and except as rights to indemnity may be
limited by federal or state securities laws;

     (d)  neither the execution, delivery and performance of this Fifth
Amendment, the New Note, the Replacement Notes or the Credit Agreement, as
amended hereby, nor the consummation of any transactions contemplated herein or
therein, will conflict with any Law or Organization Documents of the Borrower,
or any indenture, agreement or other instrument to which the Borrower or any of
its property is subject; and

     (e)  no authorization, approval, consent, or other action by, notice to, or
filing with, any governmental authority or other Person not previously obtained
is required for the execution, delivery or performance by the Borrower of this
Fifth Amendment, the New Note or the Replacement Notes.

     3.     CONDITIONS TO EFFECTIVENESS. This Fifth Amendment shall be effective
upon satisfaction or completion of the following:

     (a)  the Administrative Agent shall have received counterparts of this
Fifth Amendment executed by each the Lenders;

     (b)  the Administrative Agent shall have received counterparts of this
Fifth Amendment executed by the Borrower and acknowledged by each Guarantor;

     (c)  the Administrative Agent shall have received a certified resolution of
the Board of Directors of the Borrower authorizing the execution, delivery and
performance of this Fifth Amendment, the New Note and the Replacement Notes;

     (d)  the Administrative Agent shall have received an opinion of counsel to
the Borrower, in form and substance satisfactory to the Administrative Agent,
with respect to matters set forth in Sections 2(c), (d) and (e) of this Fifth
Amendment;

     (e)  the Administrative Agent shall have received a duly executed (i) New
Note for the New Lender and (ii) Replacement Note for each Lender whose
Commitment is being amended by this Fifth Amendment;

     (f)  Washington Mutual and Comerica shall each have received payment in
full of all amounts due and owing to them under the Credit Agreement;

     (g)  the Administrative Agent shall have received from the Borrower in
immediately available funds for each Lender an amount equal to the product of
(i) 0.150% and (ii) the amount of each Lender’s Commitment after giving effect
to this Fifth Amendment; and

     (h)  the Administrative Agent shall have received, in form and substance
satisfactory to the Administrative Agent and its counsel, such other documents,
certificates and instruments as the Administrative Agent shall require.

3

 

     4.     PURCHASE BY NEW LENDER. Simultaneously with the satisfaction of
conditions of effectiveness set forth in Section 3 hereof, each Lender shall
purchase or sell (as the case may be), without recourse, an amount of Loans and
L/C Obligations outstanding such that after giving effect to this Fifth
Amendment, the amount of each Lender’s Commitment under the Credit Agreement
which has been utilized shall be pro rata among the Lenders in the proportion
that their respective Commitments bear to the Aggregate Commitment. If, as a
result of purchase or sale provided for in this Section 4, any Lender incurs
any funding loss in respect of a Eurodollar Rate Loan, the Borrower agrees to
compensate such Lender as provided in Section 3.05 of the Credit Agreement.
The parties hereto agree that the provisions of Section 10.07 of the Credit
Agreement shall not be applicable to the addition of the New Lender pursuant to
this Fifth Amendment. The New Lender represents and warrants to the
Administrative Agent as follows:

     (a)  it has received a copy of the Credit Agreement and all amendments
thereto, together with copies of the most recent financial statements of the
Borrower delivered pursuant thereto, and it is an Eligible Assignee;

     (b)  it has the full power and authority and the legal right to make,
deliver and perform, and has taken all necessary action, to authorize the
execution, delivery and performance of this Fifth Amendment, and any and all
other documents delivered by it in connection herewith and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Fifth Amendment and the other Loan Documents, and no consent or authorization
of, filing with, or other act by or in respect of any Governmental Authority,
is required in connection herewith or therewith;

     (c)  under applicable Laws no tax will be required to be withheld by the
Administrative Agent or the Borrower with respect to any payments to be made to
such New Lender under any Loan Document, and no tax forms described in Section
10.15 of the Credit Agreement are required to be delivered by it; and

     (d)  it has received and reviewed such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Fifth Amendment and become a party to the Credit Agreement. It has
independently and without reliance upon the Administrative Agent or any other
Person, and based on such information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Fifth Amendment and become
a party to the Credit Agreement. It will, independently and without reliance
upon the Administrative Agent or any other Lender, and based upon such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement.

     5.     EXITING LENDERS. Upon satisfaction of the conditions set forth in
Section 3 of this Fifth Amendment, (a) no Exiting Lender shall (i) be a Lender
under the Credit Agreement or (ii) have any rights or obligations with respect
to being a Lender, except for those that expressly survive termination of the
Credit Agreement or termination of any commitments thereunder and (b) each
Exiting Lender shall mark its Revolving Loan Note “PAID IN FULL”, and promptly
return its Revolving Loan Note to the Borrower.

4

 

     6.     REFERENCE TO THE CREDIT AGREEMENT.

     (a)  Upon the effectiveness of this Fifth Amendment, each reference in the
Credit Agreement to “this Agreement”, “hereunder”, or words of like import
shall mean and be a reference to the Credit Agreement, as affected and amended
hereby.

     (b)  The Credit Agreement, as amended by the amendments referred to above,
shall remain in full force and effect and is hereby ratified and confirmed.

     7.     COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
costs and expenses of the Administrative Agent in connection with the
preparation, reproduction, execution and delivery of this Fifth Amendment and
the other instruments and documents to be delivered hereunder (including the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent with respect thereto).

     8.     GUARANTOR’S ACKNOWLEDGMENT. By signing below, each Guarantor (a)
acknowledges, consents and agrees to the execution, delivery and performance by
the Borrower of this Fifth Amendment, (b) acknowledges and agrees that its
obligations in respect of its Guaranty (i) are not released, diminished,
waived, modified, impaired or affected in any manner by this Fifth Amendment or
any of the provisions contemplated herein, (c) ratifies and confirms its
obligations under its Guaranty, and (d) acknowledges and agrees that it has no
claims or offsets against, or defenses or counterclaims to, its Guaranty.

     9.     EXECUTION IN COUNTERPARTS. This Fifth Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which when taken together shall constitute but one
and the same instrument. For purposes of this Fifth Amendment, a counterpart
hereof (or signature page thereto) signed and transmitted by any Person party
hereto to the Administrative Agent (or its counsel) by facsimile machine,
telecopier or electronic mail is to be treated as an original. The signature
of such Person thereon, for purposes hereof, is to be considered as an original
signature, and the counterpart (or signature page thereto) so transmitted is to
be considered to have the same binding effect as an original signature on an
original document.

     10.     GOVERNING LAW; BINDING EFFECT. This Fifth Amendment shall be governed
by and construed in accordance with the laws of the State of Texas applicable
to agreements made and to be performed entirely within such state, provided
that each party shall retain all rights arising under federal law, and shall be
binding upon the parties hereto and their respective successors and assigns.

     11.     HEADINGS. Section headings in this Fifth Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Fifth Amendment for any other purpose.

     12.     ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FIFTH
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED

5

 

BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

6

 

     IN WITNESS WHEREOF, this Fifth Amendment is executed as of the date first
set forth above.

	 	 	 	 	 
	 	 	ELKCORP
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Harold Beattie, Jr.
	 	 	 	 	Senior Vice President, Chief Financial
	 	 	 	 	Officer and Treasurer

7

 

	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Administrative Agent
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as a Lender, L/C Issuer
and Swing Line Lender
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	BANK ONE, N.A., as a Lender and Documentation
Agent
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	THE NORTHERN TRUST COMPANY, as a Lender
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

8

 

	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, as a Lender
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	COMPASS BANK, as a Lender
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	HIBERNIA NATIONAL BANK, as a Lender
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	BRANCH BANKING AND TRUST

COMPANY, as a Lender
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

9

 

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED FOR PURPOSES OF SECTION 5 HEREOF ONLY:
	 	 	 	 	 
	COMERICA BANK
	 	 	 	 	 
	By:	 	 	 	 
	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	WASHINGTON MUTUAL BANK, FA
	 	 	 	 	 
	By:	 	 	 	 
	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

10

 

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED TO:

	ELK PREMIUM BUILDING PRODUCTS, INC.
	     (formerly known as Elk Corporation of Dallas)
	ELK CORPORATION OF TEXAS
	ELK CORPORATION OF AMERICA
	ELK CORPORATION OF ARKANSAS
	ELK CORPORATION OF ALABAMA
	OEL, LTD.
	CHROMIUM CORPORATION
	CYBERSHIELD OF GEORGIA, INC. CYBERSHIELD, INC.
	CYBERSHIELD INTERNATIONAL, INC.
	CYBERSHIELD OF TEXAS, INC.
	(formerly known as Chromium Corporation)
	ELK TECHNOLOGY GROUP, INC.
	ELK TECHNOLOGIES, INC.
	ELK PERFORMANCE NONWOVEN FABRICS, INC.
	ELK COMPOSITE BUILDING PRODUCTS, INC.
	 	 	 	 	 
	By:	 	 	 	 
	 	 	

	 	 	Harold Beattie, Jr.
	 	 	Vice President for All
	 	 	 	 	 
	NELPA, INC.
	 	 	 	 	 
	By:	 	 	 	 
	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

11

 

	 	 	 
	ELK GROUP, L.P.
	(formerly known as Elcor Service Limited Partnership)
	 	 	 
	By:	 	
ELK GROUP, INC.
	 	 	
(formerly known as Elcor Management Corporation), Its General Partner
	 	 	 
	By:	 	 
	 	 	

	 	 	
Harold Beattie, Jr.
	 	 	
Senior Vice President
	 	 	 
	ELK GROUP, INC.
	(formerly known as Elcor Management Corporation)
	 	 	 
	By:	 	 
	 	 	

	 	 	
Harold Beattie, Jr.
	 	 	
Senior Vice President

12

 

SCHEDULE 2.01

COMMITMENTS

AND PRO RATA SHARES

	 	 	 	 	 	 	 	 	 	 
	Lender	 	Commitment	 	Pro Rata Share
	
	 	
	 	

	Bank of America, N.A.
	 	$	25,000,000	 	 	 	22.727272727	%
	Bank One, N.A.
	 	$	20,000,000	 	 	 	18.181818182	%
	Wells Fargo Bank, National Association
	 	$	16,500,000	 	 	 	15.000000000	%
	Compass Bank
	 	$	15,000,000	 	 	 	13.636363636	%
	Branch Banking and Trust Company
	 	$	15,000,000	 	 	 	13.636363636	%
	The Northern Trust Company
	 	$	11,000,000	 	 	 	10.000000000	%
	Hibernia National Bank
	 	$	7,500,000	 	 	 	6.818181818	%
	 	Total
	 	$	110,000,000.00	 	 	 	100.000000000	%

Schedule 2.01

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